The Majority Shareholder and the Independent Supervisory Board Member: Adversaries, Allies, or Partners?
Wojciech Krzymowski | Investment and Strategic Adviser - Corporate Governance - ESG/CSRD
EMBA, the Polish Academy of Sciences' Institute of Economic Sciences (INE PAN) - Postgraduate Commercial Company Law, University of Warsaw Faculty of Law and Administration (UW WPiA, June 2026).
A majority shareholder appoints an independent member of the supervisory board. He then expects that member to act in his interest. The law says otherwise: an independent board member acts in the interest of the company - not of whoever appointed him. This tension is not a Polish anomaly of 2026. It is a dispute that economics and law have been conducting for nearly a century - and one rarely spoken of plainly.
Why Does a Majority Shareholder Need an Independent Board Member at All?
Before we answer the question of conflicting interests, let us pose an earlier and more basic one: why does a majority shareholder need an independent supervisory board member in the first place? He could, after all, staff the entire board with loyal representatives and exercise oversight without any friction whatsoever. In many companies, that is precisely what happens - within the limits formally set by law.
To understand why this question matters at all, we must go back to 1932. Adolf Berle and Gardiner Means described, in “The Modern Corporation and Private Property”, a mechanism now known simply as the separation of ownership from control: the more dispersed the shareholding, the less real power the formal owners hold over those who run the company operationally. In Polish State Treasury companies this mechanism works in reverse - shareholding is not dispersed but concentrated in a single pair of hands. Yet the structural problem Berle and Means diagnosed does not disappear. It relocates. Instead of tension between manager and dispersed shareholders, we get tension between the controlling shareholder and the rest of the system: the company, the minority, the market. An independent board member is the answer to exactly the same, century-old problem - only in a different configuration.
The answer to why a majority shareholder needs this is layered. First: formal requirements. The Best Practice for GPW Listed Companies and EU directives on audit committees require a set number of independent members. In public companies, the audit committee must consist in the majority of independent members, including a chair who meets independence criteria. The absence of independent members is a regulatory and reputational risk.
Second: capital credibility. Institutional investors - pension funds, mutual funds, foreign institutions - assess the quality of corporate governance before making investment decisions. A lack of genuinely independent board members lowers the governance rating and raises the cost of capital. That is arithmetic, not ideology.
Third - and here we reach the heart of the matter - a majority shareholder needs an independent board member as protection against his own management board. This is a paradox that escapes many commentators. Management acts in its own interest — not necessarily identical even to that of the dominant shareholder. An independent board member with genuine competence and real decisional independence is, for the majority shareholder, the most effective instrument of control over management that money cannot buy outright.
“A majority shareholder needs an independent board member not despite himself - but precisely for himself. The problem arises when he fails to understand this.”
- W. Krzymowski
Whose Interest Does an Independent Board Member Protect? The Legal Answer - and the Answer to Friedman
The Commercial Companies Code is unambiguous on this point, though rarely cited directly in this context. Article 382 § 1 CCC provides that the supervisory board exercises continuous oversight of the company's activities in every area of its operations. Article 483 § 1 CCC provides for the liability in damages of supervisory board members towards the company for loss caused by an act or omission contrary to the law or the company's articles of association.
It is worth naming directly what Polish law is arguing against here - though usually unconsciously. On 13 September 1970, Milton Friedman published in The New York Times Magazine an essay that became the foundation of shareholder-primacy doctrine: the sole social responsibility of business is to increase its profits, within the rules of the game. That sentence shaped a generation of boards and executives worldwide - and the instinct of more than one majority shareholder who assumes that the board member he appointed exists simply to maximise his return on investment.
Polish law says otherwise. The recipient and beneficiary of the oversight exercised by the supervisory board is the company, not the majority shareholder. This is not an academic nicety, nor an import of European stakeholder sensibility set against American profit doctrine. It is a fundamental distinction that defines the boundaries of every board member's conduct - including one appointed by the controlling shareholder. The company's interest may coincide with that of the majority shareholder. But it may diverge - and it is precisely in those moments of divergence that the true value of the independent board member is revealed, along with the true limit of Friedman's doctrine.
When Interests Diverge — Three Scenarios and Two Distinct Agency Problems
A distinction long established in corporate governance literature, though rarely named in Poland, is useful here: the Type I and Type II agency problem - a typology popularised by Ronald Gilson and Jeffrey Gordon (Columbia Law School / Stanford Law School), in “Controlling Controlling Shareholders” (University of Pennsylvania Law Review, 2003), distinguishing the classic conflict between management and dispersed shareholders (Type I) from the conflict between a controlling shareholder and the remaining shareholders (Type II). Lucian Bebchuk of Harvard Law School built his most celebrated work on Type I - in “Pay Without Performance” (2004, with Jesse Fried) he described the mechanism by which the management of American companies with dispersed shareholdings set their own pay without meaningful owner oversight. But the same Bebchuk, with Kobi Kastiel, addressed Type II directly - in “The Untenable Case for Perpetual Dual-Class Stock” (Virginia Law Review, 2017), they showed how controlling shareholders become entrenched over time at the expense of other owners, even once that structure ceases to be efficient — precisely the problem that concerns Polish State Treasury companies.
More precisely: this is a conflict not between management and owners, but between the controlling shareholder and the rest of the system - the minority, the company, the market. This distinction is no academic curiosity. It changes the answer to the question of what, exactly, an independent board member is meant to protect against. In the Berle-Means company, one protects shareholders against management. In the Polish State-owned company, one protects the company - and the minority - against the majority shareholder, when his interest diverges from that of the entity he formally controls.
The first scenario: related-party transactions. A majority shareholder may have an interest in the company entering into a transaction with an entity he owns or co-owns. Price, terms, payment timing - every one of these elements can be shaped to benefit the related party at the company's expense. The independent board member on the audit committee is, in this scenario, the sole link with both the legal standing and the duty to notice it.
The second scenario: the shareholder's short-term interest versus the company's long-term value. A dominant shareholder may favour a high dividend payout in a year when the company should be investing in infrastructure or the energy transition. The independent board member exists precisely to articulate that longer horizon within the decision-making process.
The third scenario: the owner's political interest versus the company's market rationality. In State Treasury companies this scenario is especially frequent — and it is the purest, textbook example of the Type II agency problem. The Ministry of State Assets, as representative of the majority shareholder, may favour decisions driven by energy-policy objectives, regional commitments or the electoral calendar - not always to the benefit of the wider body of shareholders, bondholders, or the company's long-term valuation on the Warsaw Stock Exchange.
“An independent board member does not exist to rubber-stamp the majority shareholder's decisions. He exists to ask the questions that shareholder will not put to himself.”
— W. Krzymowski
How to Be Independent Amid Certain Dependencies - A Practical Model
I write this from the position of someone knowingly standing for the role of independent board member in conditions where full independence across every dimension - including the economic - is difficult to achieve. There is no hypocrisy in that, provided the dependencies are named openly and managed consciously.
Formal independence is a necessary and non-negotiable condition. No capital ties to the controlling shareholder, no employment relationship with management, no material commercial relationships with the company. This is the line whose crossing disqualifies - legally and ethically.
Decisional independence is the domain of practice. It is built through: consistently recording one's own positions in meeting minutes; a willingness to register dissenting opinions where the company's interest requires a different assessment; the active exercise of the right to demand information and documents from management; and - hardest of all - resigning the mandate where the conditions of holding it make genuine oversight impossible.
That last criterion is the ultimate test. A board member who was never prepared to resign in the face of harm to the company's interests was independent in form only. Paradoxically, it is the readiness to resign - not its exercise - that is the strongest guarantee such a situation rarely arises.
The Company's Interest as an Anchor — Mayer Against Friedman in Practice
The company's interest is a concept as readily abused as independence itself. Each party - management, majority shareholder, minority - interprets it in its own way. Colin Mayer of Oxford's Saïd Business School devoted two books to this very question - “Firm Commitment” (2012) and “Prosperity” (2019) - arriving at a conclusion directly opposed to Friedman's: the purpose of the corporation is not to maximise shareholder profit but to solve the problems of people and planet profitably, with profit as the consequence of that purpose, not the purpose itself. This is not ESG sentimentalism. It is a reversal of cause and effect with hard decisional consequences.
What the independent board member needs, however, is a working, operational definition - not philosophy, but something applicable to a specific vote. I propose four criteria. First: the company's long-term value - a decision that maximises quarterly profit at the expense of the long-term value of assets or market position does not serve the company's interest. Second: equal treatment of all shareholders - a decision that confers a disproportionate benefit on the controlling shareholder at the expense of minority shareholders breaches the company's interest. Third: operational and financial capacity - a decision that weakens the company's liquidity or solvency does not serve its interest, even where the majority shareholder wishes it. Fourth: legal compliance and reputation - a decision exposing the company to legal liability, regulatory sanction, or reputational loss never serves its interest.
Where any of these criteria is breached, the independent board member has not merely the right but the duty to act. Not necessarily through a loud veto. Often through asking a question, demanding an analysis, requesting information, and recording one's position in the minutes.
“The company's interest is an anchor, not a compass. It does not point the way — it marks the boundary that must not be crossed.”
- W. Krzymowski
The Independent Board Member in State Treasury Companies - the Specifics of the Polish Context
In Poland's State Treasury energy companies - PKN Orlen, PGE, Tauron, KGHM - the tension between the majority shareholder's interest and the company's interest has a particular character. The State Treasury as owner has not only a capital interest but also a political and social one. These are not always aligned interests.
This is the contemporary, Polish rendering of the same question Berle and Means posed a century ago about America's industrial giants: who truly controls the company, and in whose interest? There, the answer was dispersed shareholding and the informal power of managers. Here, the answer is concentrated state ownership and the temptation to equate the owner-state's interest with the company's interest without remainder. The history of Poland's State Treasury companies is full of decisions taken in the name of ownership interests that, with hindsight, proved destructive to company value and damaging to minority shareholders. Asset acquisitions at non-market prices, investments driven by regional objectives, sub-optimal dividend policy - these are not marginal phenomena. They are a systemic pattern.
An independent board member in a State-owned company stands at the crossing of two forms of loyalty. On one side: loyalty to the entity that appointed him. On the other: loyalty to the law and to the company's interest, entrusted to him for oversight. Where these two loyalties coincide, there is no problem. Where they diverge, the board member has no choice. The law is clear: it stands with the company. This is not an idealistic postulate imported from Oxford or Cambridge along with a reading of Mayer. It is a legal requirement arising directly from Articles 382 and 483 of the Commercial Companies Code. A board member who wrongly believes his duty is to protect the interests of the controlling shareholder not only acts unlawfully - he exposes himself to personal civil and criminal liability where that loyalty causes the company harm.
Adversaries, Allies, or Partners - the Answer
Let us return to the question in the title. What are the majority shareholder and the independent board member to one another?
They are not adversaries - or should not be. Confrontation for its own sake, demonstrative opposition, the chronic questioning of majority decisions without substantive justification - that is not independence. It is dysfunction, which paralyses the board's work and serves no one.
Nor are they allies - or should not be. A board member who always votes with the majority shareholder does not perform an oversight function. He performs a notarial one. He affixes a seal of credibility to decisions taken without him -precisely what Berle and Means already warned against, in describing a supervisory board reduced to a façade before the real power controlling the company.
They are partners - if both sides understand their roles. A majority shareholder who knowingly appoints an independent board member knows he is appointing someone who asks questions. Who does not always applaud. Who records reservations in the minutes. And who, precisely through that, protects the company's value - for him too. This is neither pure Friedman nor pure Mayer. It is the answer Polish law gave long ago, only rarely spoken aloud: partnership within the bounds set by the company's interest is the only formula of corporate governance that, over the long horizon, protects every participant in the system - the company, its shareholders, the capital market, and society.
“The best independent board member is the one the majority shareholder respects - even when he disagrees with him.”
- W. Krzymowski
Wojciech Krzymowski - investment and strategic adviser, founder of Krzymowski Communications. Author of the “real independence” model for supervisory boards. EMBA (the Polish Academy of Sciences' Institute of Economic Sciences — INE PAN; dissertation: The Impact of the CSRD Directive on the Quality of ESG Reporting in the Oil and Gas Sector), postgraduate studies in commercial company law at the University of Warsaw Faculty of Law and Administration (UW WPiA, defence June 2026; dissertation: Corporate Governance in Public Companies - the Role of Independent Supervisory Board Members in Protecting the Interests of the Company and its Shareholders). Standing for independent supervisory board mandates - across private, listed, and State Treasury companies alike.
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