The Warsaw Network
Robert Gwiazdowski: Hail the nepotism!


Have we got nepotism in the state-owned companies? Yes, we have. We have, we had and we will have. Because that is a reason of having state-owned companies! If they were to be managed in accordance with rules of economy, they wouldn’t have to be state-owned.

But the state claims, through all politicians who have ruled, that it need to influence those companies, because this is indispensable for some state safety. But if something is important for the state, then “the state” needs managers who will introduce the vision of this safety. And the vision alters each time politicians representing our country change. New chairmen are chosen. And the chairmen hire new managers. It doesn’t even have to be a shift of the government. It’s enough if a Minister of National Treasure changes.

And, if state is a shareholder (even tough it doesn’t have to), it should act like a one. A dominant shareholder may appoint whoever he wants to the company’s bodies. Basing on varied reasons. Capability mixes with trust. And they don’t have to both apply to everyone. One person may be competent, another only trusted (which may actually be more important). It’s easier to find the competent ones than the trusted ones. If a shareholder wishes, he may use one of his companies to support his other company. Actually this is something that the state forbids – state as a source of regulations – by means of tax regulations concerning transfer fees or tax avoidance. So why should state as a shareholder act differently? 

N. B. Former PiS government, in 2006 introduced a regulation to one of the “strategic” state-owned company’s statute stating that a shareholder – the State’s Treasure – represented by the relevant minister may grant his written consent for the company to participate in “investments which could permanently or temporarily hinder economic effectivenesses of the Company, but are necessary for ensuring energy security of Poland.” Opposition, PO at that time, contested the regulation. After gaining the power they didn’t abrogate it, though. During 8 years of ruling.

Therefore: Hail the nepotism! As long as it doesn’t exist in state companies. Is it possible to have state companies without nepotism? It isn’t, since nepotism may exist in private ones. The only way of limiting it is by lowering the number of state companies. Let the state own only key infrastructure, and ensure equal access for all of the private competence. There will be less nepotism – it would be better for the state and for the competition.

Robert Gwiazdowski 

The Author is a professor in Lazarski University, and an attorney-at-law