Implementation of best practice code:
practical implications from the Warsaw
Stock Exchange
Maria Aluchna
Abstract
Purpose – The purpose of this paper is to present the best practice initiative in Poland, presenting
codes formulated in 2002 and 2005 and focusing on the recent document known asBest Practice of
WSE Listed Companies. Moreover, the paper aims to present practical aspects of implementation of
new code between January and April 2008.
Design/methodology/approach – The paper identifies the guidelines recommended in three versions
of the Warsaw Stock Exchange code of best practice. Additionally it discusses companies’ doubts and
questions addressed to the Warsaw Stock Exchange, analyzes technical challenges referring to new
system of reporting on companies compliance as well as raises some concerns regarding the content of
the new code.
Findings – The paper shows that the codes of best practice attempted to address the most problematic
issues of transitional Polish corporate governance. The recommendations content was adopted during
the last eight years as the response to the changes in market environment and governance challenges.
However, the new code addresses mostly the strategic plans of the Warsaw Stock Exchange rather than
the corporate needs and its implementation and communication with listed companies leaves a lot of
room for improvement.
Practical implications – The analysis addresses the needs for coherence between the crucial
moments of development of corporate governance and the code of best practice. Moreover, it points out
potential shortcomings in the process of the code implementation.
Originality/value – The paper is based on the documents prepared by the Warsaw Stock Exchange,
companies remarks as well as author’s experience of working at the Stock Exchange during the first
three months of 2008 code implementation.
Keywords Corporate governance, Best practice, Stock exchanges, Poland
Paper type Research paper
1. Introduction
Corporate governance is an important element of the economic system in each country or
region and its importance for economic development and competitiveness, particularly
under conditions of globalization and internationalization, cannot be overestimated.
Therefore corporate governance belongs to the center of international concern and debate,
conducted both by academics and practitioners. Its current importance for economic
development is rooted in the companies’ demand for capital required for growth and global
expansion, active, mobile and flexible investors seeking for the highest rate of return on all
stock markets, pension system developing under condition of ageing population as well as
countries which aim at increasing their competitiveness and pro-investor environment
(Becht and Ro
¨
ell, 1999).
Corporate governance is described by many definitions originating from various
perspectives, which include economic, social, systemic, legal or cultural approaches.
However, regardless of the definition corporate governance is understood as a set of
mechanisms that build efficient structures providing for monitoring, control and motivation.
DOI 10.1108/17471110910940050 VOL. 5 NO. 1 2009, pp. 123-140, Q Emerald Group Publishing Limited, ISSN 1747-1117
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SOCIAL RESPONSIBILITY JOURNAL
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PAGE 123
Maria Aluchna is Assistant
Professor, Department of
Management Theory,
Warsaw School of
Economics, Warsaw,
Poland.