MANAGEMENT BOARD’S REPORT ON THE ACTIVITIES AS A TOOL OF CORPORATE GOVERNANCE: THE PERSPECTIVE OF CAPITAL PROVIDERS, SUPERVISORY BOARDS, AND OTHER STAKEHOLDERS

• Main Author: Jacek GAD
• Format: Article
• Language: English
• Published: Publishing House of Rzeszow University of Technology 2016-06-01
• Series: Modern Management Review
• Subjects: report on the activities, corporate governance, supervisory board, capital providers.
• Online Access: http://doi.prz.edu.pl/pl/pdf/zim/218
• ISSN: 2300-6366; 2353-0758

This article aims to identify and analyse areas of use of report on the activities as a tool of corporate governance implemented by capital providers, members of supervisory boards, and other stakeholders. The contents presented in this article are based on studies of domestic and foreign literature and an analysis of the annual reports of public companies listed on the Warsaw Stock Exchange. This paper analyses the usage of report on the activities for three categories of users, i.e., capital providers, supervisory boards, and other stakeholders. The report on the activities is to help managers to account for their actions. For capital providers the report on the activities provides information on the use of the invested capital by the management board. In turn, for other stakeholders report on the activities provides information on, e.g., corporate social responsibility. Particularly important seems to be the use of the report on the activities by supervisory boards. Considering that in many companies, supervisory boards are involved in formulation of strategy of the company, the supervision over the report on the activities, which largely contains information which is a derivative of the strategy, takes on a new dimension. The exercise of supervision by supervisory boards over the report on the activities has two main levels. The first consists in checking the correctness of the data disclosed in the report on the activities, and the other in checking the assumptions concerning the future of the company formulated in the report. Considerations in this article concern the two-tier model of supervision applicable, among others, in Poland.