Purpose -The purpose of this paper is to analyse the reasons for non-compliance by Polish listed companies with elements of the Polish code of corporate governance Best Practices in Public Companies 2005.Design/methodology/approach -Based on 250 publicly available compliance statements filed in 2005 by companies listed on the Warsaw Stock Exchange (WSE) content analysis is used to classify the explanations provided for non-compliance with those corporate governance principles that attract high levels of non-compliance.Findings -The data analysis reveals that, despite a high level of overall compliance, three out of 50 code principles attract high levels of non-compliance. These principles concern the independence of supervisory board members, the composition of supervisory board committees and the appointment of auditors. The most contentious principle concerns the independence of supervisory board members, due to the presence of many majority-owned companies on the Warsaw Stock Exchange.Practical implications -The paper sheds light on the operation of the ''comply or explain'' approach to corporate governance in Poland and provides suggestions for improving the level and quality of compliance with the revised corporate governance code Best Practices for WSE Listed Companies, applicable from 2008 onwards.Originality/value -The paper provides an empirical investigation of the reasons given by Polish companies for non-compliance with the most controversial corporate governance principles. It highlights a tendency for some companies to report compliance that is conditional, suggesting that reported compliance under-represents the true level of compliance. We suggest that establishing a monitoring committee tasked with evaluating the quality of explanations for non-compliance and reducing ambiguities in the wording of code principles will improve the quality of Polish corporate governance in the long term.

According to perceived wisdom the main aim of a company is to maximize its stock market value. Managers of the company are responsible for achieving that aim, i.e. for maximizing shareholders' wealth. The performance that a company achieves reveals how successful the management is in adapting to changing circumstances. The ability to quickly and properly react to changes in the business environment characterizes the quality of the company's management.Campbell and Underdown (1991, p. 2-3) argue that the success of any business enterprise is determined by the interaction of two major sets of factors -external factors and internal factors. The latter are beyond the control of business managers and include such environmental conditions as shifting preferences, the behaviour of consumers, adverse movements in commodity prices, changes in government policy and cyclical market forces. The internal factors emanate from inside the firm and encapsulate the ability of management to develop and implement planning strategies that fit the business to the environment. The probability of changes in environmental factors and the effects of such changes on future business performance should be taken into account if an enterprise is to survive and prosper.The firm's performance, represented by gross profit (II), depends on the manager's effort (e) and also a chance variable (a), determines after e is chosen (Hart, 1995, p. 105):According to the theory of the relationship between principals (owners) and agents (managers) -principal-agent theory -owners hires managers to run the firm on their behalf.

Purpose -This paper provides an understanding of the importance of socioemotional wealth to family firms in Poland viewed through the lens of the events surrounding the first hostile takeover bid of the post-communist era on the Warsaw Stock Exchange when the clothing company Vistula & Wólczanka (V&W) made an unsolicited, leveraged bid for the family-controlled jewellery company W. Kruk.Design/methodology/approach -The 2008 takeover and its aftermath are described in the context of the corporate governance and legal environment in Poland. The case study events demonstrate the connection between firm behavior and socioemotional wealth theory.Findings -After the acquisition of W. Kruk by V&W, the Kruk family purchased stock in the newly named Vistula Group and gained influence over the supervisory board in concert with a business ally, eventually wresting back control of the company in the style of a Pac-Man 'defence'. The case study illustrates the importance of socioemotional wealth in family firm takeovers.Research limitations/implications -The case-study design has limitations for generalizability. Nevertheless the research highlights the relevance of socioemotional wealth preservation in understanding the market for control of listed family firms in Poland.Practical implications -Understanding the reaction by family firms to takeover bids requires recognition that there is a tradeoff between financial and socioemotional wealth considerations, not just financial gains and losses.Originality/value -The case study demonstrates the importance of socioemotional wealth to family firms and suggests that the balance of power in takeovers on the Polish stock market rests with incumbent management.

Wpływ rentowności przedsiębiorstwa na strukturę kapitału na przykładzie spółek akcyjnych notowanych na Giełdzie Papierów Wartościowych w Warszawie StreszczenieCelem artykułu jest analiza zależności pomiędzy strukturą kapitału przedsiębiorstwa a jego rentownością. Funkcjonujące teorie struktury kapitału wskazują na istnienie takiego związku, nie ma jednak zgodności co do jego kierunku. Według teorii hierarchii źródeł finansowania wysokiej rentowności towarzyszy mniejszy poziom zadłużenia. Zgodnie z teorią sygnalizacji zależność między rentownością podmiotu a jego zadłużeniem jest dodatnia. Niniejszy artykuł stanowi próbę odpowiedzi na pytanie o to, która z wymienionych teorii znajduje potwierdzenie w polskich realiach, jeżeli chodzi o rentowność przedsiębiorstwa. Badanie przeprowadzono na podstawie sprawozdań finansowych 196 spółek notowanych na Giełdzie Papierów Wartościowych w Warszawie. Analizie poddano dwa makrosektory: przemysłu oraz handlu i usług w latach 2005-2010. W badaniach empirycznych wykorzystano miary statystyki opisowej oraz metodę regresji liniowej. Wyka-

This paper argues that hybridization is a process that has been going on for decades in Japan and has contributed to improvement of Japanese corporate governance, and that the regulations regarding the board of directors are a good example of this hybridization process. The paper outlines the main changes within Japanese corporate governance system and identifies their determinants. Three main waves of hybridization of Japanese regulations and corporate governance are identified, along with three functioning structures of Japanese boards, and their strong and weak points. The company with statutory auditors (with Kansayaku Board), the company with Three Committees-nomination, audit, and remuneration-and the company with an Audit and Supervisory Committee are presented as evidence of this hybridization process. The paper addresses the research question: why has hybridization rather than convergence resulted in an improvement of Japanese corporate governance? The method of critical analysis is applied to academic literature sources, legal acts, and corporate governance regulations. The article contributes to a reduction in the research gap in Polish academic literature in the field of Japanese corporate governance, especially with respect to Japanese boards.