Policy Paper on De-Politicisation of Corporate Governance in Poland’s Large State-Controlled Companies (Sept 2019)
30 years after the Round Table of 1989 that ushered in the first democratically elected government in Poland post-WW2 and paved the way for liberalisation and privatisation, the Polish state continues to be a very significant actor on the corporate scene in Poland. Just 54 of the largest state-controlled enterprises account for approx. 1/6th of the economy, and their performance relative to market benchmarks has been disappointing.
As is well known, with every political cycle/change of government, there has tended to be a comprehensive shifting of senior management in these government-controlled companies, often affecting continuity and effectiveness, while negatively affecting the long-term implementation and execution of strategic plans. Another election looms on October 13, 2019, offering a new administration-to-be an opportunity to diverge from this trend, and to put Poland’s state-controlled companies on a different path of governance and performance.
Surveys also show that Polish voters are diffident of politicians’ motivations, cynical about politics, disinterested to vote, and dismissive of the good intentions of Poland’s political class in working for the betterment of society and the economy. The Polish people’s trust in politicians and electoral participation is among the lowest among the big 6 European economies by PPP GDP (DE, FR, UK, ITA, ESP, PL), which is the peer group against which Poland aspires to be measured.
This policy paper thus posits two hypotheses, for discussion:
There is a significant political gain to efficiency, growth and dynamism of the state-controlled Polish large corporate sector to-be-gained by a future administration, setting out a governance programme of a depoliticized, merit-and-competence-based senior management appointment and review system. Such a programme and policy, if well structured, staffed, resourced and smartly communicated in appropriate form and at the appropriate time, could be a major electoral asset for Poland’s next government. It may win back voters’ trust and confidence, their votes, and it makes for good economic policy.
Poland’s state-controlled large corporates, if well managed by professionally appointed managers as a result of a merit-based and politically independent governance process, could play a significant role in catalyzing Poland’s continued growth outperformance relative to the EU27, and thus aid the development and growth of GDP per capital in Poland.
The draft policy paper for discussion is attached below in in both Polish and English versions:
EN - Corporate Governance of Large State-Controlled Corporates in Poland
PL - Corporate Governance of Large State-Controlled Corporates in Poland
