Upcoming changes to what Supervisory Boards in Poland can and cannot do.

The Ministry of State Assets has prepared a draft amendment to the Code of Commercial Companies. The project is currently at the stage of public consultations, which will last until September 19, 2020. The changes include introducing regulations to the holding law, but also strengthening the role of the Supervisory Board.

The most important changes are:

• The Supervisory Board has the right to request from members of the management board, liquidators, proxies, employees of the company (including those employed under civil law contracts) to prepare or submit any information, documents, reports or explanations needed for supervision over the company. The completion date is set at max. 2 weeks with the possibility of its extension by the Supervisory Board.

• introduces the obligation to inform the key statutory auditor about the meetings of the Supervisory Board, the subject of which are issues discussed before the AGM and the obligation for the statutory auditor to participate in such meetings.

• The Supervisory Board will be able to appoint an advisor to the Supervisory Board to investigate, at the company’s expense, a specific issue related to the company’s operations or its financial standing.

• the principle of open voting of the Supervisory Board is introduced, with the possibility of a different regulation in the statute or the SB regulations.

• meetings of the Supervisory Board will have to be convened at least once a quarter (currently three times a year).

• the draft explicitly provides for the possibility of appointing Supervisory Board committees. Until now, the provisions did not regulate this issue, with the exception of obligatory committees (eg the Audit Committee).

• the role of the chairman in organizing the work of the Supervisory Board was underlined. The statutory requirements for convening Supervisory Board meetings were made more precise.
  Invitations will need to contain the information we already provide (date, time and place of the meeting and the proposed agenda
  the meeting) and the way of using means of distance communication when holding the meeting. The minimum notice period will be specified in the statutes.

• it is proposed to clarify the issue of liability of Supervisory Board members. The draft stipulates that a member of the Supervisory Board should, in the performance of his duties, exercise due diligence resulting from the professional nature of his activity and be loyal to the company. The obligation to keep the company’s secrets will also apply after the mandate has expired.
  At the same time, it is proposed to add a provision according to which: “A member of the management board, supervisory board, audit committee and liquidator does not violate the obligation to exercise due diligence if acting loyally to the company, he acts within the limits of justified economic risk, including on the basis of information, analyzes and opinions which, in the circumstances, should be taken into account when making a careful assessment. “

Information courtesy of chudzik.pl, in my opinion an excellent law firm, based in Lodz, for corporate legal and CoSec issues in Poland at the highest level.

From myself, I would just add that this is what is already in place in most advanced economies, and that there is nothing unhelpful, for once, in this draft legislation.