LPP SA became the first listed company in Poland to amend its articles of association on September 23, 2022, to protect itself from the dangerous amendment to the Commercial Companies Code, which comes into force on October 13, 2022. The amendment to LPP SA’s Articles of Association was passed by an overwhelming majority of more than 90% of votes. LPP has implemented our legal concept of “running ahead” from the new amendments to the CCC.
The coming into force of the amendment to the Companies Act has a disruptive impact on the business processes of the company’s management and supervision of how it is managed. The amendment leads to: (i) separating the interests of the company from its shareholders; (ii) pushing capital groups into the gray area; (iii) making the supervisory board the alter ego of management.
From the side of business and management processes, the amendment marks the deactivation of the business judgement rule, according to which, under the law, (i) the board of directors has the right to err, as long as it does so carefully, and (ii) accepts the obvious that making business decisions is naturally associated with taking risks.
The amendment represents a kind of “new” opening for the prosecutor’s office to apply Article 296 of the Criminal Code (acting to the company’s detriment) to members of company bodies.
The shareholders of LPP SA recognized that the interests of the company are an outgrowth of their interests, honest professionals are appointed to the supervisory board and management board, and modern management is not about forcing obedience.
LPP was advised by Michał Romanowski, Aleksander Orzeł and Weronika Stefaniuk.