News

GPW Publishes Best Practice for GPW Listed Companies 2021

PRESS RELEASE

• The Exchange Supervisory Board has approved a new code of corporate governance for GPW listed companies
• The Best Practice for GPW Listed Companies 2021 comes into force on 1 July 2021

The Exchange Supervisory Board has passed a resolution on 29 March 2021 approving the Best Practice for GPW Listed Companies 2021, a new version of the code of corporate governance for companies listed on the GPW Main Market, originally adopted in 2002.

“The document drafted by the Exchange in partnership with the GPW Corporate Governance Committee reflects the current trends and European regulations of corporate governance. The transparent structure of the new document, its short form and clear language should support a better understanding of the subject matter of the Best Practice and consequently attract stronger interest of issuers and shareholders,” said Jakub Modrzejewski, Deputy Chairman of the Exchange Supervisory Board and Chairman of the Regulation and Corporate Governance Committee.

The Best Practice 2021 has been prepared by experts representing different groups of capital market participants who are members of the GPW Corporate Governance Consultation Committee. The draft document was published for public consultation with the participation of representatives of issuers and investors, capital market institutions and associations.

“The goal of the Best Practice 2021 is to improve the quality and transparency of the Polish capital market. It is particularly relevant and useful that the Best Practice has been drafted by market participants. The Exchange is a custodian of the code of best practice; however, thanks to the dedication of the GPW Corporate Governance Committee and broad public consultations, the Best Practice has been prepared by the market for the market. We hope that Polish capital market participants will actively support the Best Practice and engage in the monitoring of compliance by listed companies,” said Piotr Borowski, Member of the GPW Management Board.

Compared with the version of the Best Practice in effect since 2016, the structure of the document has been modified. The previous mix of recommendations and principles has been eliminated. Each section now opens with general principles which define the goals to be pursued by companies in relevant areas, as well as specific principles subject to mandatory reporting. The principles of proportionality and adequacy continue to play an important role in the interpretation of the Best Practice: issuers and shareholders should assess the application of individual principles from that perspective.

To address market expectations, the new Best Practice covers ESG factors, including climate, sustainability, diversity on boards of companies, and equal pay. There are new principles concerning profit distributions, issues of shares with the exclusion of subscription rights, and share buy-outs. To facilitate the understanding of those concise principles, the Corporate Governance Committee has issued guidelines which mainly address the questions and comments raised by users of the Best Practice. The guidelines will be published before the Best Practice 2021 comes into force.

Some of the Best Practice 2021 principles are addressed to supervisory boards and their members, general meetings, as well as shareholders. Consequently, all corporate bodies should take measures in order to ensure that the principles are applied to the best possible extent by all concerned parties. Where the application of a principle requires new internal regulations, amendments to existing corporate documents or specific decisions of competent bodies, such initiatives should be taken as soon as possible.

After the Best Practice 2021 come into force, the Exchange will monitor issuers’ compliance with corporate governance regulations, in particular by reviewing the quality of explanations published by companies in accordance with the comply-or-explain approach. However, the engagement of all directly concerned parties, including investors, analysts and experts, will be directly relevant to the impact of those measures.

“New solutions supporting improved visualisation of companies’ corporate governance disclosures should encourage scrutiny of the quality of corporate governance in listed companies. By enabling investors and analysts to review disclosures in a range of different configurations and variants and to compare compliance with specific principles in different companies, we expect to boost interest in corporate governance factors and bolster shareholders’ engagement. The Exchange will provide a new visualisation tool on its website as soon as the new Best Practice comes into force,” said Agnieszka Gontarek, Director of GPW’s Listing Department and Chairwoman of the GPW Corporate Governance Committee.

The new principles come into force on 1 July 2021. Companies will be required to publish compliance disclosures for the first time no later than 31 July 2021.

To address issuers’ expectations, GPW will in the coming months offer educational initiatives introducing the new Best Practice. The calendar of events dedicated to the Best Practice for GPW Listed Companies 2021 and the full version of the “Best Practice of GPW Listed Companies 2021” will soon be published at GPW Main Market – Best practice.

Companies and all other parties interested in compliance with the Best Practice may ask questions and provide observations by email at .

***

The Warsaw Stock Exchange Group (GPW Group) operates trading platforms for shares, Treasury and corporate bonds, derivatives, electricity and gas, and provides indices and benchmarks including WIBOR and WIBID. The index agent FTSE Russell classifies the Polish capital market as a Developed Market since 2018. The markets operated by the GPW Group are the biggest in Central and Eastern Europe. For more information, visit www.gpw.pl