Audit committees in public companies listed on the Warsaw Stock Exchange: compliance with hard law in practice

Abstract

Purpose: The article aims to determine the implementation extent of the regulations around appointment and characteristics of audit committees and regulations concerning disclosure of information about the audit committee in Polish practice. Design/methodology/approach: The author analyzed the informative content of management reports and corporate governance statements. The survey covered all domestic companies listed on the Warsaw Stock Exchange in the years from 2017 to 2021. Findings: The new guidelines resulting from hard law had a significant impact on the corporate governance on the Polish capital market. According to the research results, over the analyzed years, the share of companies listed on the Warsaw Stock Exchange, which appointed an audit committee within the supervisory board, clearly increased. Moreover, the research found that in the period under study, not all companies fulfilled the obligation to disclose information about the audit committee resulting from hard law. In particular, this applies to disclosures on how the members of the audit committee acquired competencies in the area of accounting. Practical implications: The article concerns the operation of the audit committee in public companies listed on the Polish capital market. The study can serve as a reference point for further research on corporate governance. The results of the research may be an indication for those who create legal solutions in the area of corporate governance. Originality/value: This is the first such comprehensive study on the characteristics of the audit committee and disclosures about the audit committee resulting from the introduction of hard law in this area.