Abstract

The article deals with one of the key corporate governance mechanisms, which is the audit committee. In 2009 the legislators obliged public companies to appoint audit committees if the boards of trustees have more than five members. According to the more recent regulations. introduced in 2017, the obligation to set up an audit committee depends on the size of the company. It seems therefore that the regulation introduced in 2009 proved to be ineffective and it was necessary to modify it.

The main purpose of this article is to analyze the reaction of listed companies to the obligation to appoint an audit committee in the boards of trustees, and to identify the characteristics of listed companies accompanying their specific responses to that obligation. The article was developed using the literature study, analysis of annual reports and logistic regression.

Public companies listed on the Warsaw Stock Exchange (WSE) responded in various ways to the aforementioned obligation. In our research we found negative impact of managerial ownership on the appointment of an audit committee, with the tendency to become positive when the state ownership was greater. Moreover, greater diversity in the board of trustees affected significantly and positively the appointment of audit committees. The last group of factors influencing this appointment were characteristics of the companies such as: company size, leverage, financial performance and sector the company belongs to. Among these characteristics, the size of the company seems to be particularly important.

References

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