Control-Enhancing Mechanisms in State-Owned Companies – Analysis of Companies Listed on the Warsaw Stock Exchange

Abstract

Purpose In countries with a developed economy, including Poland, the state seeks to retain control of enterprises (companies) operating in so-called strategic sectors, such as fuel and energy, chemical industry, transport, and telecommunications infrastructure. Proper control of these entities not only determines the effective implementation of economic policy, but it is also important to ensure the economic sovereignty of the state and public security. The purpose of this study is to identify and analyze control-enhancing mechanisms in SOEs listed on the Warsaw Stock Exchange (WSE), taking into account the division between majority and minority state ownership. Methodology Analysis of documentation. Findings Based on the analysis of statutes and shareholder structures of the investigated entities, it is established that for companies with minority state ownership, the state uses control-enhancing mechanisms to gain effective control of the company. Similar mechanisms are also applied in companies with majority state ownership, where these mechanisms contribute to achieving full control of the company. The most commonly used mechanism is a dominant shareholder status and limitation of voting rights for shareholders other than the state. Originality Apart from state-owned companies, this analysis also included companies indirectly controlled by the state.