Corporate Governance and Capital Groups in Poland

Zusammenfassung

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The process of systematic change in Poland has brought about major changes in corporate governance. The enforcement of new laws has created a culture of compliance that has shaped capital groups and the management ethos of the groups, spurring them to improve. It is argued that the Polish versions of capital groups are markedly different from their western counterparts as they reflect unique historical patterns and socio-economic environments. The purpose of this paper is to discuss governance structures within capital groups from their transformation, insitutualization contingencies. Describing current forms of capital groups, the focus is on governance issues illustrated by two capital groups. Building on the Weimer/Pape (1999) framework, a taxonomy is proposed which contrasts governance in Poland with other economic systems. The paper concludes with preliminary theses about trends and current challenges for governing capital groups.

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Auszug

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Corporate Governance and Capital Groups in Poland

Introduction

Extensive and complex governance systems have evolved over centuries in "western" types of market economies. In Poland, one of the primary challenges faced by corporate governance stems from the breakdown of the old and the enforcement of the new socio-economic system. Market-focused laws, policies, administrative practices and controls, supporting institutions and managerial cultures were in their infancies in the beginning of 1990 (Wawrzyniak et al. 1998; 2002). The lack of experience and absence of model behavioral patterns to follow were impediments to building an efficient base for the growth of firms. Other impediments included weak judicial systems, underdeveloped institutions and financial sector, scarce human resources, and complex ownership structures. The business environment lacked the institutional and professional infrastructures needed for a competitive marketplace. Also, institutional investors overrelied on debt financing and were not yet strong enough to demand fairness, efficiency and transparency of actions. Such conditions created an environment of ups and downs with steady gains in corporate governance. The process, however, was extremely fragile and struggling for survival.

Over the last ten years, privatization programs have transformed the economic landscape in Poland by transferring government-controlled assets into private hands. The process of de-nationalization of the state assets started in the 1990s and a variety of developments in the grass-rooted companies helped to overcome environmental jolts (Aggestam 2002) and then provided enthusiastic endorsement of the steps to economic recovery. The challenges of the environmental jolts also offered opportunities for the state and the private sector to change behaviour and existing rules of the game. In the most turbulent environment in the recent history, the marketization of the companies presented unique challenges to the restructuring of the firms and their managing rapidly changing politics, technology and markets. These firms faced the need to realign radically their competitive assets with rapidly changing market conditions with full cognition of the ongoing turbulent evolution of their environments. The economic argument in favour of reforming the economy was to improve the allocative efficiency and competitiveness of the industries and operating firms in order to promote economic growth of these companies. The privatization of state-owned enterprises was the key element of the transformation, enabling the founding process and creation of "capital groups" operating on the basis of defined ownership rights. "Capital groups" are a Polish version of business groups that are legally independent, joined together by...

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