Julia Dolna | In Principle

In recent years, ESG has been mainly about “E”—environmental aspects, which were most often subject to regulation. Now there is increasing emphasis on social (S) and corporate governance (G). A noteworthy measure in governance is the EU’s Gender Balance Directive, which came into force at the end of 2022. The directive is intended to ensure more balanced representation of women and men among directors of listed companies.

In November 2022, the leaves were falling from the trees to the rhythm of ESG. First, the European Parliament and then the Council of the European Union approved the draft Corporate Sustainability Reporting Directive. Then the European Financial Reporting Advisory Group submitted the first set of draft European Sustainability Reporting Standards to the European Commission.

The proposed Corporate Sustainability Reporting Directive is now on the EU legislative agenda. It would amend the existing reporting rules established by the Non-Financial Reporting Directive, which are a weakness of the current system. Ultimately, the new directive is intended to contribute to a fully sustainable European market.

Two major proposals for ESG directives—the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD)—are currently working their way through EU institutions. Soon, more and more companies will have to take environmental, social and governance issues into consideration in the course of their day-to-day operations if they wish to stay in business and remain competitive. It is high time for companies to develop and implement an ESG strategy.

For many companies in Poland, the 30th of June is the date set for holding their ordinary (annual) shareholders’ meeting. One of the points on the agenda should be adoption of a resolution on division of profit (or coverage of loss). The profit shown in the annual financial statement may be earmarked, among other things, to payment of a dividend to the shareholders. It seems like an opportune moment to examine the recent amendment of the regulations governing dividends in limited-liability companies.

The condition of the Polish M&A market depends on many factors, such as the economic and political situation in the country and the legal and tax environment for businesses. But another significant element impacting the size and structure of investments in Poland is the legal restrictions on conducting transactions. They affect both share deals and asset deals.

Three repealed acts, 189 amended acts, and five new acts, one containing recitals, form the Constitution for Business—the comprehensive legislative package regulating business activity in Poland.

On 30 April 2018 new laws take effect bringing to an end the long dispute over the types of businesses allowed to appoint commercial proxies. Ultimately, businesses that are natural persons will be able to appoint commercial proxies.

The issue of determining when the appointment of a member of the supervisory board of a joint-stock company ends in connection with the expiration of the term of office has been the subject of doubts and disputes for some time. It was particularly problematic to determine when the appointment ends when the term of office does not coincide with the financial year. The Supreme Court of Poland recently addressed this issue.

The Act Amending the Business Freedom Act and Certain Other Acts entered into force on 19 May 2016. The changes mainly affect Poland’s small business register—the Central Register and Information on Economic Activity (CEIDG).