The judgment of the Supreme Court of 22 February 2023 (II CSKP 785/22) confirms that a member of the management board may act as the proxy of limited liability company.

 

The admissibility of appointing a management board member as the company’s proxy under Article 210 § 1 of the Polish Commercial Companies Code (hereinafter: „CCC”) has been, before this judgement, subject of different views in previous judgements and professor’s opinions. Nevertheless, our law firm has consistently supported the position that it is permissible to grant a power of attorney to a board member (see our 2014 article). The opposing view (that a board member cannot serve as the proxy under the cited CCC provision) was expressed by the Supreme Court in its judgment of 28 June 2012 (II PK 290/11), where it was argued that such interpretation would help avoid conflicts of interest between the company and the management board member. The Court stated: “The proxy would not be guided (in such case) primarily by the interests of the company, but rather seek to fulfil the expectations of their associate who is usually another management board member.”

 

However, in its decision of 7 April 2010 (II UZP 5/10), the Supreme Court accepted the possibility of concluding an employment contract with a management board member by a company represented by the other board member. The Court pointed to several arguments in favour of such a position:

 

• The literal wording of Article 210 § 1 CCC, where the legislator did not restrict the group of persons who may act as the company’s attorney-in-fact under this provision, which means that there is no express exclusion of management board members as the proxies;

 

• The proxy has an independent status and constitutes a distinct entity in relation to the company’s governing bodies;

 

• The autonomy of corporate bodies is not limited under Article 210 § 1 CCC, which implies that the Shareholders’ Meeting is granted the discretion to determine, based on the company’s needs, who shall be appointed as the attorney-in-fact.

 

It is encouraging to see that the judiciary allows the Shareholders’ Meeting to independently assess whether granting a power of attorney to a board member creates a conflict of interest between the company and the attorney-in-fact or not. Such a position is undoubtedly practical. In companies with a simple ownership and governance structure, it is often difficult to appoint an attorney-in-fact from outside the Management Board.

Do you have a legal problem related to the matters of your company? We’d be happy to discuss it.

Tel. (+48) 536 34 34 32
sekretariat@blumski.pl

Our law firm is experienced in corporate law and litigation, with experience stemming from, among other things, serving as a manager in companies within the Bank Zachodni WBK S.A. group (currently Santander Bank Polska S.A.) and serving as Chairman of the Supervisory Board of a publicly traded company.

 

This article has its text in Polish.