Abstract:

Corporate governance based mainly on strict rules set by statutory and sub-statutory instruments has proved insufficient in cases of undetected fraud and abuse, described in the literature for many years, leading to numerous bankruptcies. In the face of financial crimes often resulting in the loss of the life's work of the defrauded shareholders, it became necessary to introduce additional mechanisms to minimise the risk of embezzlement. Hence the importance of new organisational mechanisms that have been introduced and refined over the years to increase the effectiveness of supervision. One example is sets of recommendations – good practices (soft law), the application of which is supposed to improve the functioning of the company, increase its credibility and improve its assessment in the eyes of current or potential investors. Companies listed on the Warsaw Stock Exchange apply the recommendations adopted in the document entitled Good Practices for WSE Listed Companies 2021 (hereinafter referred to as the: GPLC 2021). In the context of improving the effectiveness of supervision, it is particularly interesting to note the attitude of companies to the rules specified in the GPLC 2021 document regarding internal systems and functions that allow for ongoing control and mitigation of business risks.