Search Investment value thousand PLN Industry sector Select" Consumer RelatedIndustrial automationBiotechnologyNo preferencesLife sciencesConstructionChemicals & MaterialsConsumer relatedElectronicsEnergyOtherIT: internetIT: SoftwareIT: SemiconductorsIT: HardwareIT: Wireless-MobileIT: ServicesMediaMedical/Health RelatedMedical: PharmaceuticalsMedical: HealthcareMedical: Instruments/DevicesEnvironment ProtectionManufacturingManufacturingIndustrial Products & ServicesConsumer: RetailConsumer Products ManufacturingIndustrial ProductsHeavy IndustryManufacturing (other)AgricultureTelecommunications: CarriersTelecommunications: HardwareTransportationServicesServicesOther ServicesBusiness ServicesFinancial ServicesAll but real estate PPEA gathers private equity/venture capital investors... The mission of PPEA is to... Access exclusively for PPEA Members Corporate governance principles for companies financed by private equity investments I. Preamble The main objective of an investment by a fund is to achieve an appropriate rate of return on capital, by exiting the investment after the expiry of its term. A joint goal of the fund and the entrepreneur is an increase in the company's value, to be achieved, among other ways, through creating additional development opportunities for the company. The fund and the entrepreneur should co-operate to reach the above objectives. An investment agreement, in addition to applicable laws and the company's articles of association, is the basic document defining the rights and obligations of the fund and the entrepreneur, as well as the objective of the investment. The fund and the entrepreneur should act in good faith and in accordance with the rules set out in the investment agreement. The fund and the entrepreneur should not abuse their ownership rights based on the size of their investment in the company. The fund and the entrepreneur should co-operate with a view to increasing the company's value, and divergence of interests should be resolved amicably and without undue delay. II. General Meeting of Shareholders The fund and the entrepreneur should work together with a view to convening and conducting General Meetings of Shareholders in accordance with the provisions of law, the articles of association and the investment agreement. In convening and holding General Meetings of Shareholders, the fund and the entrepreneur should abide by the codes of good practice and established customs. III. Supervisory Board The Supervisory Board is the company's governing body best positioned to ensure appropriate supervision over the company's activities, effective and efficient decisionmaking and the exchange of views between the fund and the entrepreneur, within the limits prescribed by law, the articles of association and the investment agreement. The fund should be represented in the Supervisory Board depending on its equity involvement or otherwise, insofar as may be necessary to protect its stake in the company. The fund and the entrepreneur should work together to select a Supervisory Board, which reflects the arrangements made in the investment agreement. The Supervisory Board should have the power to appoint and recall members of the Management Board. The Supervisory Board should have the power to set the rules and the amounts of remuneration of members of the Management Board, to approve the terms and supervise the performance of management stock option schemes for the Company's key executives. The Supervisory Board should have the power to consent to the Management Board performing material transactions relating to the company's activities, as specified in the investment agreement, and in particular to set and approve the Company's strategy, annual budget and material transactions not included in the budget. The Supervisory Board should have the power to choose the auditors (also where their appointment is not required by law) and approve the amounts of their remuneration and supervise their work. The Supervisory Board should have the power to demand that the Management Board prepare and provide financial statements and monthly, quarterly and annual reports, immediately after the end of the period for which they are to be prepared, as well as to demand that the Management Board provide explanations concerning the company's current affairs. The Supervisory Board should have the power to appoint independent experts or advisors to examine specific issues relating to the management of the company's affairs, and to set the amounts of their fees and supervise their work. The company should ensure that the Supervisory Board has appropriate technical and financial means to properly perform the duties falling within the scope of its powers. IV. Management Board In principle, the fund does not actively participate in the managing the company's current affairs. The fund should be able to participate in making decisions concerning the composition of the Management Board and its changes, on the terms specified in the investment agreement. The Management Board should manage the company's affairs with a view to increasing its value, in accordance with the rules specified in the investment agreement, subject to applicable laws and provisions of the company's articles of association. Members of the Management Board are obliged to act with diligent care and loyalty towards the company. Members of the Management Board and the Supervisory Board, prior to concluding any transactions with connected parties, or any transactions on non-market terms, or on terms involving a conflict of interest for members of the Management Board or the Supervisory Board, or capable of bringing members of the Management Board personal benefits at the expense of the company, should disclose these transactions to the Supervisory Board and obtain its consent. In particular, the consent of the Supervisory Board should be required for the company to perform transactions where the other party is a shareholder or a member of the Management or Supervisory Board, or his or her spouse or a blood or other relative up to the second degree, or another person related to a shareholder in the company, whether in terms of capital or in personal terms. The Management Board should obtain the consent of the Supervisory Board to perform material transactions relating to the company's activities, specified in the investment agreement, where the obligation to obtain such consent is set out in the investment agreement. The Management Board should prepare financial statements and monthly, quarterly and annual reports, and provide them to the Supervisory Board, immediately after the end of the period for which the statement or report should be prepared, as well as to provide explanations concerning material events relating to the company's affairs. V. Fund's Exit from the Investment in the Company Exiting an investment is the main method enabling the fund to achieve the goal for which it has invested in the company. The fund and the entrepreneur should work together on the terms specified in the investment agreement in order for the fund to achieve the appropriate rate of return on capital when exiting the investment, in particular through creating the broadest possible options for the fund to exit the investment. The fund should be vested with the broadest possible rights to dispose of shares held by it in the company, to be exercised on the terms specified in the investment agreement, in particular through conferring upon the fund option rights relating to these shares, as well as "drag along" rights relating to shares owned by the entrepreneur, and the right to list the company. Should the fund exit the investment in the company, the entrepreneur will have the rights defined in the investment agreement, and specifically the priority right to purchase shares in the company which are disposed of by the fund, as well as the right to "tag along" their shares when the fund disposes of its shares. The investment agreement should contain detailed provisions concerning the procedures for exercising the rights of the fund and the entrepreneur when exiting the investment in the company and specify sanctions for non-compliance, in order to ensure the most efficient possible performance of the investment agreement. Members of the Management and Supervisory Boards should work together with the fund in exercising the fund's rights when exiting the investment. An increase in the company's value should remain the primary goal of the Management and Supervisory Boards' also in this period. EVCA Corporate Governance Guidelines      Copyright (c) 2004-2007 PSIK. All rights reserved.