On February 9, 2022, the amendment to the Code of Commercial Companies was passed by the Sejm and it will enter into force on October 13, 2022. At the beginning, we would like to clarify what this means for members of the management boards of companies.
Act of February 9, 2022 amending the Act – Code of Commercial Companies and certain acts – Journal of Laws No. 2022 item 807 introduces many new regulations containing the extension of the performance of the function of a management board member. In the points below, we will present you the most important of them.
- The legislator limited the scope of persons who could be a member of the management board due to being sentenced by final judgments, due to the expansion of the range of crimes excluding the possibility of performing the above-mentioned functions, e.g. in the event that a person has been convicted by a final judgment for publishing false data or simply for not providing documents or concealing data resulting from these documents. We can also talk here about legally valid judgments for enabling unlawful voting, or the unlawful exercise of minority rights and the unlawful use of documents. On the other hand, the provisions of the Criminal Code that apply, such as a conviction with a final judgment concerning the acceptance of financial or personal benefits, or their promise, bribery, handling cases in exchange for financial benefits, or abuse of powers by an officer, etc .;
- Members of the management board of a subsidiary, i.e. one which is an enterprise controlled by another enterprise or by one which holds more than 50% of shares, are not liable for damage caused by the execution of a binding instruction;
- The method of calculating the term of office has been specified in the form of full financial years, i.e. those that are counted in the form of full calendar years or periods of exactly 12 consecutive full calendar months;
- In the event of a conflict of interests of the company, the management board member is obliged to be loyal to the company and the code expressly prohibits the disclosure of the company’s secrets to the management board member after the expiry of the mandate. The same wording of the provision was applied to members of the supervisory board and the audit committee, which increases the integrity and honesty of persons performing these functions.
- Members of the management board are obliged to submit documents, reports or explanations to the supervisory board. Pursuant to the regulations, the management board may not restrict the access of members of the board to any documents that the board requires.
- Documents related to the reports are to be issued to the shareholder not later than within 2 business days from the date of submitting the request. They can also be made available in electronic form and with the use of electronic means of communication. This is to improve the flow of important documents, as the deadline for submitting documents is tightened. It is worth noting, however, that this is a new provision in the Code of Commercial Companies and Partnerships, previously only regulated by the Accounting Act.
- Changing the scope of responsibility of the members of the management board of the company, in which we are talking about the use of information, analyzes and opinions, should be used in the justification, as a kind of confirmation of a careful assessment.
Soon we will provide you with further information on the amendment to the Code of Commercial Companies.