Corporate Governance: Polish Lessons from the Global Financial Crisis

The current economic crisis, resulting from the credit crunch has had a major impact on the global economy and companies. Both national governments and companies were forced to react in order to avoid significant financial problems. So far the Polish economy has proved to have successfully overcome the crisis experiencing an economic slowdown with a GDP growth of 1.7 % at the end of 2009; however several problems in reagard to corporate governance have surfaced. This chapter discusses the characteristics of the Polish corporate governance system and its shortcomings. The central question refers to the activities undertaken by listed companies and regulators, in particular the direction of corporate governance development. The chapter analyses three corporate governance problems of Polish listed companies which were identified as being due to the global financial crisis. These problems include risk management, majority shareholders practices and liquidity problems. The analysis reveals the dynamics of corporate governance development from the perspective of an economy in transition. The Polish governance system has experienced significant improvement over the last 10 years supported by the EU law harmonisation process and market pressure to comply with the best practice code. However, the control standards remain lower as compared to Western Europe and the US, which proved to be significantly visible during the period of the world financial crisis.