Managers’ Right to Information

Managers’ Liability In Poland – Part II

Maciej Gawroński and Piotr Biernatowski | GP Partners

[This article has been first published in Polish in Rzeczpospolita Daily on 26 January 2025]

In our previous article Prosecuting Managers of State-Owned Companies – Quo Vadis?, published in Rzeczpospolita Daily on 27 December 2024, we discussed the issue of holding managers working in the State Treasury accountable by their successors. Naturally, recent events prompted us to return to the topic. They not only provide new information and reflections but also bring back memories of earlier “seasons” of this series, broadcast in  the political election years e.g. 2016, 2005, and earlier.

As we have already written, but it’s worth repeating – state assets are to be subject to special protection as a common good of all nation. Managers are to manage in line with this idea. They also have the right to be judged exclusively on merit. This is not only in their interest, but in the interest of the State Treasury. The risk of facing accountability on a scale and on principles unknown in the private sector is something any sensible manager factors in – and as a result, some simply resign.

In the first article, we started from the end – what accountability looks like in practice from the manager’s perspective in each of these “seasons,” regardless of who is currently directing.

Now we return to the beginning – how certain principles of cooperation between the manager and the company should be structured, starting with the right to information.

This text discusses the right to information.

Information Asymmetry. A manager most often learns about a negative assessment of their actions and potential claims – but, just like Josef K. in Kafka’s The Trial, rarely with enough clarity to respond legally and process psychologically. The materials forming the basis of claims are typically created under the new management (e.g., audit reports), so the manager has no knowledge of their content.

Sometimes, the manager’s only source of information is signals from employees of the company they once managed. Ultimately, when the company decides to bring a claim, the first step doesn’t entail providing specific information. In civil proceedings, the manager receives a payment demand with an amount and a general description that gives little away. In criminal cases, the manager will likely find out from the press that a notification has been filed regarding their conduct. Why from the press? Because settling scores isn’t about keeping things secret. Moreover, the information underlying the allegations is considered trade secrets, and once the manager leaves office, they generally no longer have access to it.

Management Contracts. Confidentiality clauses and agreements aimed at protecting company secrets are standard in management contracts and broader business practice. Similarly, the law – particularly the Polish Act on Combating Unfair Competition – focuses on protecting trade secrets. This is also true of the model service agreement under the Principles of Corporate Governance of Companies with State Treasury Shareholding, which serves as a starting point for all SSP manager contracts.

Right to Defend. To balance information asymmetry, management contracts should include provisions ensuring the manager’s ability to defend themselves against successor allegations. These provisions might state that the manager has the right to defend themselves and that the company is obligated to present the manager with specific allegations (with detailed justification and time for response). More accurately, we should say “provisions enabling discussion on the validity of managerial actions,” since, in theory, it should be about understanding whether a given decision was justified—not about pressing charges. The standard State Controlled Enterprise contract lacks even a clause requiring settlement discussions before claims are made, though such provisions are common elsewhere. Of course, settlement talks can be a fiction if one party acts in bad faith, but the other party at least gains a platform to demand arguments and information.

From a purely legal standpoint, a company seeking damages should disclose the full scope of the actions it claims caused harm so the manager can assess the validity of the claims.

Right to Documents. Another key mechanism for addressing information asymmetry is the right to documents.

To ensure that the right to information is not purely theoretical at the very moment it is most needed, a management contract should grant the manager the right to collect and retain certain information and documents in advance. Such “advance information” could include, for example, a list of documents signed by the manager, specifying the date, title, reference number, and location of each document in the company’s archives or repositories; the identity of the employee requesting the relevant decision; and a list of opinions and analyses submitted to the management board prior to the decision, along with their authors. Naturally, such a list would also be protected as a trade secret and would constitute highly sensitive material.

It would be worth considering a delay in providing this list to the manager, since its release would naturally carry risks. To further balance the interests and risks of both the manager and the company, more detailed provisions could be applied—for example, that the list is to be provided only upon the “externalization of objections,” but subject to a contractual penalty in the manager’s favour, such as EUR 25,000 for each commenced month of delay. In addition to a penalty for non-disclosure, the contract could also provide for a penalty in the event the list is incomplete.

The temporal scope of the list should cover both the period relevant to the allegations and the period relevant to the defence. Only documents concerning the scope of the manager’s actions to which the company raises objections would be subject to disclosure. In this context, a penalty for incompleteness would be even more crucial.

Based on such a document list, the manager could request (first from the company, and later in appropriate proceedings) an order requiring the company to provide documents relevant to the case.

Flaws in the list or a failure to provide it could be assigned specific evidentiary consequences in the management contract—ones that would not constrain the court’s freedom in assessing the case, but could encourage a finding in the manager’s favour. The effectiveness of such provisions in civil proceedings would, of course, depend on the judge’s discretion, although one could even consider invoking the evidentiary agreement construct from the Polish Code of Civil Procedure.

This kind of list would not include all email correspondence—physically, that’s just not feasible. Still, provisions on such a document list would modestly improve the manager’s odds.

One could even consider placing such a list in escrow. But practically, it’s best to explicitly state that the manager may compile and retain such a list for up to ten calendar years after the cooperation ends—or longer, if claims or allegations are incubating.

Such a document list could at least give decision-makers (prosecutors, judges) an idea of the manager’s burden and indicate whether the manager consulted opinions and analyses when making decisions. That matters when assessing the standard of care and whether it was met with respect to the disputed events. We’ll return to this idea in a future piece on managerial diligence.

Obligation to Specify Allegations. The rights to information and defence should include an obligation to specify claims and present documents in support. It is common to receive payment demands for large sums with the justification that they are simply “owed” (a style we called “biblical” on page 51 of our bestselling Little Book on Drafting Pleadings—to be renamed “revealed” in the second edition). Such demands show, at best, carelessness—and may themselves be legally questionable. They don’t allow any verification of the claims. After all, anyone could demand money from us, claiming to have “carefully analysed” the matter and concluded we owe them a million Euro. This might even be construed as an attempted fraud under Article 286 § 1 of the Polish Penal Code.

Do These Rights Exist? If not included in a contract, do the rights to information and documents, and the obligation to specify allegations, still exist? In our view, yes—they can be derived from general principles of the Polish law of contracts. A manager absolutely has the right to know the specific grounds for objections directed at them, even before legal proceedings begin.

We see the legal basis for the right to information in:

  • the principles of social coexistence (Article 5 of the Polish Civil Code),
  • the creditor’s duty to cooperate in performing debtor’s obligations (Article 354 § 2 of the Polish Civil Code),
  • principles of personal rights protection,
  • Article 15 (as well as in Articles 5, 6, 13, and 14) of the EU General Data Protection Regulation (GDPR).

Moreover, when suing a manager, a company must show that it attempted to resolve the dispute out of court (Article 187 § 1(3) of the Polish Code of Civil Procedure)—which is impossible if the manager doesn’t know what the dispute concerns.

In fact, the standard management contract template for State Controlled Companies (SCCs) contains a clause stating that if an event affecting the achievement of managerial objectives occurs after the agreement has ended, the company is obliged to assist the manager and provide any requested data needed for the final report. This provision is meant to support the manager’s rights—just like the other provisions we discussed. Whether a manager receives their variable component of remuneration depends on achieving these objectives. So the precedent exists.

Securing Information. This is a tricky but important topic. Management contracts and corporate policies (on evidence handling, cybersecurity, data retention, offboarding, etc.) should clearly and consistently (LOL) define how to handle the contents of the manager’s email account. Ideally, the contract would specify how long and where the email archive is kept, and how the manager and their advisors can access it. Such data is created in at least two locations—on the email server/cloud and locally on the manager’s laptop—and the contents may differ.

You can, of course, request such preservation through legal means—but that raises its own challenges, chief among them being the decision to go down that road.

What if the manager has squirreled away company documents? Technically, that’s a breach of confidentiality clauses. Interestingly, simply possessing company documents after leaving is not inherently illegal—provided the manager originally had authorized access (which is generally the case for board members). But admitting to possession may still trigger NDA liability. The manager (and witnesses) can of course retain knowledge of the documents’ contents. Introducing such documents into legal proceedings later, however, requires careful manoeuvring.

Prohibition on Offsets. While we’re at it, here’s a short but important recommendation for SCC managers’ contracts: the manager should insist on a clause barring offsets of contractual payments with company claims. Why? So the company can’t invent claims to justify withholding payments to the manager (e.g., offsetting alleged damages against non-compete pay, severance, or bonuses). Of course, the company has the right to sue for mismanagement, but such cases are often far more complex and drawn-out than claims for contractual entitlements. That delay becomes an excuse (or pretext) for withholding payments.

New SCC Manager’s Contract Template. In general, we believe a new SCC management contract template should be developed—one that incorporates the above recommendations and those we will outline in future pieces. If no one else steps forward, we’ll likely propose something ourselves. But we won’t promise a timeline.

That’s All for Today. In upcoming instalments, we’ll return to the old joke about the three envelopes when discussing the opening audit. We also plan to discuss D&O (acquisition, contents, “liquidation”); the role of sycophantic advisors (only useful in good times); the legal department director’s role; shielding ministers from signing vs. the practice of stacking documents for the CEO’s signature (linked to the question of subordinates deflecting responsibility onto superiors); documenting the decision-making process; evaluating managerial diligence; communication tactics; and counterclaims. Enough material for a whole year of writing.

Maciej Gawroński and Piotr Biernatowski

The authors are partners at GP Partners Gawroński, Biernatowski sp.k., authors of the bestselling The Little Book on Drafting Pleadings. How to Communicate and Argue in Writing.

GP Partners Gawroński, Biernatowski sp.k., headquartered in Warsaw, is a Polish business law firm specialising in technology, dispute resolution, corporate law, mergers and acquisitions, financial sector regulation, and public procurement.

The firm’s lawyers are the authors of two No 1 legal bestsellers: Jak pisać pisma procesowe i prowadzić komunikację w sporze, czyli książeczka o pisaniu pism (Poland’s best-selling legal title from Wolters Kluwer in 2022), published in English as The Little Book on Drafting Pleadings. How to Communicate and Argue in Writing; and RODO. Przewodnik ze wzorami, the most popular Wolters Kluwer Poland title in 2018 and 2019, published in English as Guide to the GDPR.

GP Partners’ lawyers have been recognised by international rankings in categories such as: Data Protection, Dispute Resolution, Fintech, Franchise, Intellectual Property, IT, Media, Patent Disputes in Life Sciences, Public Procurement, Technology, Telecommunications, Trademark and Copyright Disputes, as well as Client Satisfaction.

The full list of GP Partners’ practice areas is available at: https://gppartners.pl/practiceareas.