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Abstract
Corporate governance codes of best practice provide sets of internationally recognized recommendations guiding the practice of shareholders, the board, the firm's internal organization and its relations with various stakeholders and institutions. Recent years have seen the development of best practice codes addressing corporate governance failures and shortcomings identified in the course of corporate scandals and the consequences of the financial crisis. New recommendations call for stronger transparency standards, empowerment of shareholders, efficient board work, stronger board independence and responsibility of executive compensation, and involvement of females in governance and management. The codes of corporate governance are the tools for transmitting standards and norms to the large population of listed companies. This issue is particularly important for transition and emerging markets which are characterized by weak institutional order and ineffective legal system. The adoption of corporate governance codes may reinforce the process of institutional transition, improve companies' standards and practice as well as enhance social and economic development.
The chapter presents the evolution path of corporate governance code at the Warsaw Stock Exchange, tracing the milestones of the best practice guidelines within Poland's transition. We identify the dynamics of the best practice code and main drives for the development of its content. Also, we address the question of compliance with the best practice. Using the sample of 100 listed firms over the years 2008-2014 we analyze the dynamics of corporate governance conformity at the Warsaw Stock Exchange.
Keywords: corporate governance code, corporate governance compliance, Warsaw Stock Exchange
Introduction
Corporate governance codes of best practice provide sets of internationally recognized recommendations guiding the practice of shareholders, the board, firm internal organization (audit, risk management, motivation and incentive schemes) and its relations with various stakeholders and institutions (OECD, 2004, 2015; Lipman, 2007). These recommendations are viewed as the selfregulation of listed companies in response to management and supervision inefficiencies. The formulation and adoption of corporate governance guidelines are usually inspired and supported by active institutional investors, who characterized by significant mobility and substantial funds search for the investment opportunities of the highest return at the level of acceptable risk (Mallin, 2004; Tricker, 2012). The company's declaration of compliance with the best practice serves as a mechanism enhancing image and reputation, assuring for more efficient governance...