Will state-owned companies face an earthquake after the government reshuffle?

Our CEO Barometer, which measures changes in the management of the largest state-controlled companies over the past 12 months, fell to 28.4 points in July. This is the lowest level since the beginning of 2024, when the October 15 Coalition, after winning the parliamentary elections, was just beginning the major change of management in companies with State Treasury shareholding.

The barometer, which summarizes CEO changes at 44 key companies, reached a record high (96 points) in November of last year, when the coalition was finalizing the purging of PiS appointees from the supervisory and management boards of these companies. Will it rise again now that the MAP chairman has been replaced?

The post-election reshuffle of state-owned companies' leadership, initiated by Borys Budka—who headed the MAP until he moved to Brussels after last year's European Parliament elections—was completed last year, with few exceptions. It was swift and efficient , despite the May change of MAP chairman. Jakub Jaworowski, a nonpartisan but long-time member of the Civic Coalition (KO), took over. He emphasized the importance of corporate governance from his first days in office, also declaring his desire for state-owned companies to become role models of good corporate governance practices.

Perhaps that's why the change of MAP head didn't cause as much of an upheaval in companies with a State Treasury shareholding as a similar change during the first PiS government, when Dawid Jackiewicz was dismissed in September 2016. However, the fact that the personnel turnover wasn't yet as advanced in May 2024 was also significant.

As a result, although after a year of the October 15th Coalition's rule, virtually all large state-controlled companies had new CEOs, our barometer failed to match the PiS-era records. Back then, at the end of 2016, when the MAP leadership change was followed by another round of top management turnover, its level exceeded 105 points.

While management board changes have also occurred at several large companies under the current coalition, their number has been smaller. Furthermore, these changes could be partially attributed to the management evaluation process conducted at the end of 2024 at companies with State Treasury shareholdings. It was the poor performance evaluation of Krzysztof Trofiniak, CEO of Polska Grupa Zbrojeniowa (Polish Armaments Group), that allegedly led the manager, criticized by the Ministry of National Defense, to resign in early April after only a year at the helm of PGZ. This prompted a change in the CEO position at Grupa Azoty, who was replaced in May by Adam Leszkiewicz, a proven manager associated with the KO. After more than a year (again) at the helm of the nitrogen company, Leszkiewicz—as expected—won the competition to become the new CEO of PGZ. Consequently, Grupa Azoty had to find a new CEO, Andrzej Skolmowski.

Adam Leszkiewicz, former president of Grupa Azoty, has been managing the Polish Armaments Group since May. Press materials (2)

Photo: press materials

Totalizator Sportowy (Totalizator Sportowy) previously underwent a similar overhaul to PGZ. Edward Krzemień, dismissed in the fall of 2024 (due to the invasion of political activists as regional directors at TS), was replaced in January by an experienced manager, Beata Stelmach.

One of the most high-profile changes was the unexpected replacement of the head of PZU, who in January, at the request of a MAP representative, lost Artur Olech, who was well-regarded by the market (he had held the position since April 2024). Andrzej Klesyk, who headed PZU in 2007-15, was once again at the helm of the largest Polish insurer.

Andrzej Klesyk has been managing PZU since February this year, which was approved by the Polish Financial Supervision Authority in July.

Photo: press materials

Will the July government reshuffle, which also included the Minister of State Assets, now trigger a new wave of turnover in the management boards of large companies with State Treasury shareholding (and, consequently, changes in subsidiaries)? Although Wojciech Balczun, a non-partisan expert with extensive experience in managing state-owned companies, has been appointed to head MAP, he will find it difficult to cope with pressure from politicians.

Bartłomiej Jabrzyk, an analyst at the Civic Development Forum (FOR), expresses no such concerns. According to him, although Jakub Jaworowski left behind a Code of Good Corporate Governance Practices, which outlines standards for managing state-owned companies, this document is not a universally binding legal act. It is merely a collection of best practices that the new minister can amend at will in the future.

As a result, even the best corporate governance practices and the most experienced managers hired through transparent competitions do not guarantee protection for companies from the destructive influence of politicians. They risk losing their positions when a change occurs at the helm of the ministry, according to a FOR analyst.

As Andrzej Maciejewski, partner at executive search firm Spencer Stuart, notes, although Minister Jaworowski has undertaken a number of actions that have had a positive impact on strengthening corporate governance in state-owned companies, he lacked the time to complete and fully implement his plans. "I hope that the change in the position of Minister of MAP will not slow down the initiatives undertaken, and I am certain that the new minister's business experience can be a significant asset in his contacts with management and supervisory boards," says Andrzej Maciejewski, adding that the new head of MAP will face no shortage of challenges, including political pressure.

Bartłomiej Jabrzyk points out that the mere specter of job loss negatively impacts managerial independence. The threat is not only indirect influence – through board appointments – but also direct influence. Such as, for example, a politician's suggestion to a company's management board members that they take actions consistent with the current government's policies. These actions may not necessarily be in the best interests of the company itself, meaning the interests of its shareholders, who often include more than just the State Treasury, emphasizes the FOR analyst, citing examples such as Orlen's pre-election fuel price cuts and the unclear spending of foundations financed by companies with State Treasury shareholdings.

The FOR expert consistently points out that true independence of these companies' management from political influence can only come about after their actual privatization. This is especially true given the state's exceptionally high share of the Polish economy compared to other European Union countries.

His opinion is also shared by an Executive Search expert who requested anonymity and does not hide his disappointment with the implementation of pre-election promises to "depoliticize" State Treasury companies.

According to him, although it appears that MAP has indeed taken some action, there appears to be a lack of political will to implement changes. And, above all, an answer to the question of whether the state should be a shareholder in large companies at all and what kind of strategy it intends to pursue through its shareholding.