The Supervisory Board of the Warsaw Stock Exchange has adopted the new 2021 Code of Best Practice for WSE Listed Companies.

This code will take force on 1 July 2021. The entire document can be retrieved from the following link: https://www.gpw.pl/pub/GPW/pdf/DPSN_2021.pdf

The code is more compact and concise than the previous version. Issues that are presently regulated by law have been deleted from the code. The unclear split into principles and recommendations has been replaced with a split into general principles (or objectives to which a company should aspire but which are not compulsory) and compulsory detailed requirements subject to disclosure. 

The new Best Practices include popular ESG-related issues (Environmental, Social and Corporate Governance) pertaining to environment and sustainable development, social and employee-related affairs (including equal pay and gender equality). A requirement has been introduced for public companies to publish information concerning the tenets of their ESG strategy on their website. 

The Best Practices specify a deadline for submitting candidates to become supervisory board members - submissions should be made at least 3 days before the shareholder meeting. They also contemplate the principle that the supervisory board should pronounce an opinion on the draft versions of resolutions submitted by the management board on the shareholder meeting’s agenda. They also specifically state that the supervisory board chairman should not combine this function with directing the work of the audit committee operating within the supervisory board. 

The principles regarding management option programs have also changed. The right to receive options should hinge upon the beneficiaries fulfilling predetermined, financial and non-financial targets over a period of at least 3 years (2 years have sufficed until now).  

Even though the new 2021 Best Practices do not mark a diametrical about-face with respect to the principles in force till now, they do contemplate changes that may compel companies to implement additional internal regulations or customize the ones already in force. 

After the 2021 Best Practices take force, companies will have to publish a report on the application of the various principles (not just information about refraining from their application, which has been the case till now). The deadline for the publication of the first report elapses on 31 July 2021. It is advisable to start preparing this report with sufficient lead time. 

Guidelines drafted in the form of Q&A may serve as a supplement to the Best Practices and as needed they have to be updated by WSE’s Corporate Governance Committee. These guidelines are supposed to help in grasping and applying specific principles. According to prior statements, the first round of Guidelines is expected to be published by 1 June 2021. 

Find more in the PRO HR May 2021.