Who cannot serve on the supervisory boards of municipal companies?

Table of contents:

  1. Who is covered by the prohibition?
  2. When does the prohibition not apply?
  3. How many companies can one serve on simultaneously?
  4. What qualifications should a candidate for a supervisory board member of a municipal company possess?

The title of the article is addressed by the Act on Limitation of Economic Activity by Persons Holding Public Functions (hereinafter referred to as the “anti-corruption law”), which imposes significant restrictions on local government officials related to their involvement in economic activity, including serving on the management and supervisory bodies of commercial companies.

Who is covered by the prohibition?

The anti-corruption law applies to employees and officials of local governments such as:

  • Mayors (burgomasters, city presidents), deputy mayors (burgomasters, city presidents), members of county boards, members of voivodeship boards,
  • Treasurers and secretaries of local government units at all levels,
  • Heads of organizational units of municipalities, counties, and voivodeships, managing persons and members of managing bodies of municipal, county, and voivodeship legal persons,
  • Persons issuing administrative decisions on behalf of the mayor (burgomaster, city president), county governor, and voivode.

The individuals listed above, during their tenure or while holding office, cannot be members of the management boards, supervisory boards, or audit committees of commercial companies.

When does the prohibition not apply?

This prohibition does not apply to persons holding the aforementioned positions if they have been nominated for such positions in:

  • A commercial company by: the State Treasury, other state legal persons, companies in which the State Treasury’s stake exceeds 50% of the share capital or 50% of the number of shares, local government units, their associations, or other legal persons of local government units (Article 6(1) of the anti-corruption law).

Jaka jest istota podziału przez wyodrębnienie

How many companies can one serve on simultaneously?

These individuals cannot be nominated for more than two commercial companies with the participation of entities nominating these individuals.

However, an “exception to the exception” is introduced by the Act on Remuneration of Persons Managing Certain Legal Entities, which stipulates that one person can only be a member of the supervisory board of one of the following types of companies:

  1. Single-member commercial companies established by the State Treasury or local government units,
  2. Commercial companies in which the State Treasury’s stake exceeds 50% of the share capital or 50% of the number of shares,
  3. Commercial companies in which the stake of local government units exceeds 50% of the share capital or 50% of the number of shares,
  4. Commercial companies in which the stake of companies referred to in points 4-6 exceeds 50% of the share capital or 50% of the number of shares.

The anti-corruption law does not require a local government official nominated to the supervisory board to exclusively apply to a company in which the local government unit in which they serve holds shares (shares). In other words, the nominated person does not have to be subject to the entity submitting the application, for example, a deputy head of a district may be a member of the supervisory board of a municipal company, and a mayor a member of the supervisory board of a State Treasury company.

Can a councilor serve on the supervisory board of a municipal company?

Councilors are not subject to the prohibitions specified in the anti-corruption law (unless they are members of the county or voivodeship board).

Councilors of municipalities cannot be members of management, supervisory, control, or audit committees or agents of commercial companies with the participation of municipal legal persons or entrepreneurs in which such persons participate. Identical regulations apply to county and voivodeship councilors.

A municipal councilor cannot be a member of the supervisory board of a company, regardless of the share held by municipal legal persons or entrepreneurs in which such persons participate. It does not have to be a majority stake; a minimum stake is sufficient.

It also does not matter whom the councilor represents in such a board; they cannot sit on it as a representative of the municipality (municipal legal person) or another public or private shareholder, even if the councilor themselves holds up to 10% of the shares or stocks in such a company, or even as a representative of the workforce.