An interesting situation in our practice is the time when the legal adviser is the person who is most likely to uphold the interest of the company. It is the time when a shareholder or his or her representative who is rarely, marginally or (according to the Companies Act) not at all involved in the affairs of the company, is to represent the company in a contract with a member of the management board (primarily an employment or management contract). This is the point at which the owner, often a multinational corporation or one that is a partner in a number of companies, may not quite feel how best to get along with his or her chairman so as not to discourage him or her on the one hand and not to exaggerate his or her expectations on the other, and at which, exceptionally, the chairman thinks more about his or her own interests than those of the company. The legal adviser, who is familiar with the company, steps in and, by suggesting balanced contractual solutions, acts most in the interest of the company in this triangle.

So what is the interest of the company?

If we look for a definition of the notion of the company’s interest, we will be unable to find it in any normative act, because despite the term being used in a number of articles, including the Commercial Companies Code, the legislator has not decided to explain it legally. It has not done so despite the fact that this notion is sometimes crucial for the proper functioning of the company’s activity.

The above term is proposed in the doctrine to be understood as a corporate action carried out by the company’s bodies, the purpose of which is to satisfy certain needs and to achieve a certain desired state of affairs. “Needs” and “desired state of affairs” must be adapted to the specific institution in each case. This is because they are vague concepts and their correct interpretation depends to a large extent on the specific factual situation.

According to the stakeholder value concept, the interest of the company should be understood as the mixture of the interests not only of the shareholders, but also of all stakeholders involved in the company. Stakeholders make a group not strictly defined. This concept encompasses a wide range of people who have a specific legal or factual relationship with the company (employees, co-operators, service providers, board members, etc.). On the other hand, there is the shareholder value model, where the purpose of the company’s board of directors is to create value for shareholders rather than to protect the interests of other stakeholders.

Golden mean for both theories may be the idea of enlightened shareholder value, widely recognised in the Polish literature, which originates from the separate legal system of Anglo-Saxon common law. It assumes long-term profit generation through stable and sustainable growth by corporations, but with reasonable consideration of the interests of all stakeholders.

It seems reasonable to assume that the interest of the company is a certain abstract construction, which is admittedly a result of the will of its partners, but which is interpreted taking into account the purpose of the company arising from the corporate documents: first and foremost the articles of association of the company, and possibly the purposes formally defined by the partners in other contracts, agreements or strategies. The decoding of the company’s interest must be based on an objectivising concept that guarantees a uniform interpretation of it for each shareholder, regardless of what the particular interests of the other shareholders are at any given time.

Personally, I am of the opinion that the interest of the company should be equated with this aforementioned enlightened shareholder value, which emphasises the long-term interest of the shareholders. ‘Ordinary’ shareholder interest may in fact be short-term, geared, for example, to maximise dividends in the coming years or to enter into agreements that are more favourable to shareholders than to the company. Similarly, the stakeholders’ interest may often not be aligned with the long-term interest of the company, and only building the company’s value in the long term is beneficial to the company – which is aligned with the long-term interest of precisely the shareholders.

The balanced voice of a legal advisor who stands aside, assesses the CEO entering into an agreement with the company with a cooler eye, is familiar with the company’s operations on a day-to-day basis but is not an employee of the company, is close to the company and not thousands of kilometres away (like sometimes the main shareholder), and who therefore sees certain nuances not only from the texts of the financial statements and who is not interested in participating in the upcoming dividend may in some cases be the only voice that acts in the interest of the company knowing how to structure the agreement between the board member and the company best for the company.