Corporate governance in Poland and Central and Eastern Europe
Creating a good corporate governance system is necessary, but very difficult. Such system should be beneficial to corporations, and observing it should help companies to increase their value.
Chair:
Professor Grzegorz Domański, Partner, Domański Zakrzewski Palinka LLP, Chairman of the Corporate Governance Code Committee
Speakers:
-Holly J. Gregory, Partner in the Corporate Governance Group, Weil, Gotshal & Manges LLP, USA
-Professor Lutgart Van Den Berghe, Director for External Relations, Vlerick Leuven Gent Management School and Competence Centre Entrepreneurship, Governance and Strategy, Belgium
-Tomasz Bieske, Partner and Director, Financial Markets Group, Ernst & Young, Poland
The seminar was commenced by Ms. Holly Gregory, who presented the American view of corporate governance. The corporate governance regulations introduced in the USA, in particular the Sarbanex-Oaxley Act of 2002, rely on the one hand on the strong capital market system, and the approach to corporate management based on the shareholder value creation. On the other hand, they are the product of increased pressures from different groups to introduce restrictive corporate governance regulations, which mounted as a result of the financial scandals of the last years. Ms. Gregory emphasized that the regulations introduced in the USA would influence the systems of other countries, among others those of the European countries.
Ms. Lutgart Van Den Berghe presented a different opinion on the issue. She reported the results of research which question the rationale behind applying the American principles of corporate governance on the European ground. According to Ms. Van Den Berghe, inapplicability of these regulations stems from the fact that in Europe one or two major shareholders frequently control the company, even if it is listed on the stock exchange. Moreover, managers of European corporations do not enjoy the power comparable to this of their American counterparts. Finally, it is vital to respect the interest of corporate stakeholders other than those holding company shares. Ms. Van Den Berghe also argued that due to the vast differences among the systems of European countries, it would be impossible to create a pan-European corporate governance code. It is however vital to possess a top-quality corporate governance system.
Professor Grzegorz Domański referred to the situation in Poland, and noted that the document prepared by the Corporate Governance Code Committee chaired by him is not a bill of law, but merely a kind of antidote to bad practices. Poland and other European countries need corporate governance legislation, but its construction should not put corporations at a competitive disadvantage, but rather be in their best interest.
