According to the amendments to the Commercial Companies Code, that entered into force on October 13 2022, Supervisory Boards will among others: have the right to approve some of the company’s transactions by the company; be obligatory provided with some information; have the right to hire the advisor.
Supervisory Board is a body appointed to perform permanent supervision over the company’s operations. Its appointment is obligatory in joint-stock companies (spółka akcyjna) and voluntary in other types of capital companies (spółka z ograniczoną odpowiedzialną; prosta spółka akcyjna). In my opinion appointment of Supervisory Board in most of limited liability companies (spółka z ograniczoną odpowiedzialną) would lead to unnecessary overbureaucratization with no advantages added. However, for example, in companies where the shareholder who has bigger than insignificant share in the share capital does not participate in the management of the company, it is worth considering introducing this body.
The keynote of changes in the competences of the supervisory board was to increase the effectiveness of supervision over business activities by internal supervisory authorities and to activate supervisory boards that play actually too little role in many companies. The changes aimed to introduce balance between the Supervisory Board and the Management Board, with emphasis on the effectiveness of obtaining information by supervisory institutions.
In the amended art. 219 § 4 of the Commercial Companies Code, the scope of persons from whom the Supervisory Board may request information was extended. In the past, only the Management Board and employees were indicated. Currently, apart from them, also the ones who are employed under a specific task contract (umowa o dzieło) or a mandate contract (umowa zlecenie) are obliged to provide information to Supervisory Board as well. The deadline in which the obliged person should submit information was clarified – now it is two weeks, unless a longer period is indicated in the request.
The advisor to the Supervisory Board is a third party with whom the Supervisory Board enters into a legal relationship in order to audit, at the company’s expense, a specific matter relating to the company’s operations or its assets and to prepare specific analyzes and opinions. The possibility of appointing an advisor is voluntary.
New rights of Supervisory Board are followed by new duties. In accordance to art. 219 § 3 3) of the Commercial Companies Code Supervisory Board is obliged to draft the written report on the activities in the previous financial year. As indicated in the justification of the amending act, such report will be a source of information about the work of Supervisory Board and one of the bases for assessing this work, thus it will perform a function similar to that of the Management Board’s report.
Additionally, it is worth to mention two other important changes at the end. The first is the fact that in art. 3841, regarding spółka akcyjna, introduced a rule according to which transaction with a parent company, a subsidiary or an associated company, that value exceeds 10% of the company’s assets, should be accompanied by the Supervisory Board approval. The above standard is not mandatory – it can be regulated differently in the company’s statute.
Secondly, the issue of the expiration of the cadency of a member of the body of capital company has been regulated. It has recently been the subject of court judgments. The issue of designation of the moment of the expiration of the mandate due to the expiration of the term of office used to be problematic. Due to the introduced regulation, there will be no doubt that the cadency of a member of the management board appointed during financial year (i.e. on June 1st, 2021) for a two-year term in a company whose financial year is the same as the calendar year, will expire on the date of the shareholders meeting approving the financial statements for the financial year 2023 (for second full financial year).
We described only a part of the changes concerning Supervisory Board. It is worth to get acquainted with all the other last amendments of Commercial Companies Code.