One- or Two-tier Board System? A Comparative Analysis of the British and Polish Systems of Corporate Governance
ARTICLE KATARZYNA S A M Ó L * INTRODUCTION of shareholders exceeds twenty-five.5 In the event that the board has not been established, the articles of association6 empower shareholders to, at any time, inspect the books and documents of the company, prepare a balance sheet for their personal use or request that the management board provide explanations.7 The CCPC 2000 does not give such a right to the shareholders of a joint-stock company (JSC). In the UK, companies adhere to the one-tier (`unitary') board model. In practice, this means that a company is governed by a management board alone, which is composed of executive and non-executive directors. The distinction between executive and non-executive directors has no significance in company law (although it may create problems in employment law).8 An executive director of a company typically devotes his or her working time to the company (or a number of companies in a group), often as an employee of the company, and has a significant personal interest in the company as a source of income. A nonexecutive director of a company typically does not devote his or her entire working time to the company and receives a relatively small director's fee. He or she still has unlimited access to the company's files and can participate in the decision-making process on the same basis as the executive members of the board.9 The Codification Commission discussed the possible implementation of the one-tier model of corporate governance in The internal structure of a Polish joint-stock company (the equivalent of a British public limited company (PLC) or a German Aktiengesellschaft (AG))1 is traditionally based on the two-tier (`dual') board system of German origin with two obligatory boards a management board and a supervisory board. The supervisory board supervises the management board and oversees the company's financial statements, it also reports to the shareholders on the activities of...