Introduction
The management board (zarząd) constitutes the central executive organ of the Polish family foundation (fundacja rodzinna), bearing primary responsibility for both day-to-day operations and the long-term realization of the founder’s vision. Unlike supervisory bodies or the assembly of beneficiaries, the management board assumes direct accountability for asset stewardship and the discharge of obligations owed to beneficiaries. This article examines the board’s institutional position, scope of authority, and operational parameters under the Family Foundation Act (Ustawa o fundacji rodzinnej), with particular attention to the distinctive features that differentiate this governance structure from analogous corporate forms.
I. The Institutional Position of the Management Board
A. The Organ Theory and Its Application
The family foundation, like other legal persons under Polish law, operates through its organs in accordance with Article 38 of the Civil Code (Kodeks cywilny). This fundamental principle—known as the organ theory (teoria organu)—establishes that acts undertaken by board members within the scope of their competence produce legal effects directly for the foundation itself, rather than for the individual members in their personal capacities. The practical ramifications of this construct are considerable: good or bad faith on the part of a board member, knowledge of particular circumstances, or culpable conduct are all imputed directly to the family foundation as a legal entity.
A noteworthy doctrinal question arises concerning the founder’s relationship to the foundation. Notwithstanding the formal separation between the founder and the entity established thereby, the prevailing view holds that the founder’s good or bad faith will generally be attributed to the family foundation—at least during the period in which the founder retains meaningful influence over its operations. The position of beneficiaries who do not participate in the assembly of beneficiaries presents a different analytical framework; their state of knowledge or culpability will ordinarily bear no relevance to the assessment of foundation conduct.
B. The Presumption of Board Competence
Article 54 of the Family Foundation Act enumerates specific board responsibilities, yet this catalogue should not be construed as exhaustive. The presumption of board competence (domniemanie kompetencji zarządu) remains operative, pursuant to which all matters not expressly reserved to other organs fall within the board’s purview. Any statutory transfer of board-assigned duties to the supervisory board would contravene mandatory law, rendering such provisions ineffective ab initio.
This principle carries substantial practical significance. In cases of uncertainty regarding which organ possesses decision-making authority over a particular matter, competence presumptively vests in the management board. Correspondingly, this allocation imposes upon the board responsibility for the proper discharge of an extensive array of obligations.
II. The Dualism of Board Functions: Internal Management and External Representation
The activities of the management board bifurcate into two distinct yet intimately connected spheres: the conduct of internal affairs (prowadzenie spraw) and external representation (reprezentacja).
A. Internal Management
Internal management encompasses the totality of foundation governance: economic planning, strategic formulation, asset administration, and organizational and personnel decisions. These activities are predominantly factual in character—advisory and decisional—though they may also assume the form of board resolutions. Critically, internal management in the family foundation context operates on a collegial basis, necessitating collaboration among members of multi-person boards when adopting material determinations.
B. External Representation
Representation denotes acting on behalf of the foundation vis-à-vis third parties. This function comprehends both the making and receipt of declarations of will (representation stricto sensu) and all other forms of external communication: the submission of applications, explanations, positions, and declarations of knowledge before administrative authorities, courts, and contractual counterparties. Unlike internal management, representation may be exercised individually or by a designated number of board members acting jointly, depending upon the rules established in the statute (statut).
C. Practical Implications of the Distinction
This dichotomy assumes practical importance in evaluating the propriety of board conduct. Third parties dealing with the foundation may verify whether a person purporting to act on its behalf holds board membership and whether such person acts in conformity with representation rules disclosed in the register. What remains beyond external verification, however, is whether a given representational act was preceded by proper internal deliberation within the board.
III. Board Autonomy in Relation to Beneficiaries
A distinctive structural characteristic of the family foundation is the comparatively robust position of the management board relative to beneficiaries. In capital companies, shareholders who have contributed capital retain substantial influence over the board through powers of removal, compensation adjustment, and amendment of constituent documents. In the family foundation context, these mechanisms operate with diminished force.
Beneficiaries, by design, do not provide additional capital to the foundation—quite the contrary, they anticipate receipt of benefits therefrom. Their influence over statutory amendments may be circumscribed by the founder’s original determinations. Board member appointment, absent contrary statutory provision, belongs to the founder during his or her lifetime, thereafter to the supervisory board, and only in the absence of such body to the assembly of beneficiaries. This architectural choice reflects a deeper policy rationale: it safeguards the founder’s intent against pressure from beneficiaries who might naturally seek to maximize distributions in their favor, potentially contrary to the founder’s long-term strategic vision.
The management board thus functions as guardian of the founder’s will. It operates in the interest of the family foundation as understood through the prism of founder-defined objectives, rather than in service of beneficiaries’ immediate expectations. This independence may be further reinforced through statutory limitations on board member removal or through specification of particular qualifications required of board candidates.
IV. Realization of Foundation Purposes
A. Statutory and Particular Objectives
The primary obligation of the management board is the realization of foundation purposes—both the statutory purpose (accumulation of assets, their management, and performance of benefits to beneficiaries) and particular purposes specified in the statute by the founder. These particular purposes may be diverse in nature, though they should not be mutually exclusive, as such conflict would impede the board’s proper discharge of its duties.
In practice, purpose realization requires the board to undertake all permissible acts within the boundaries established by statute and the constituent instrument. Board members bear liability for culpable breach of the duty to act in conformity with these governing instruments, constituting a significant disciplinary mechanism.
B. Financial Liquidity and Solvency
The duty to ensure financial liquidity and solvency, though expressly enumerated among board responsibilities, derives fundamentally from general principles of liability for legal person management. Without maintenance of capacity to satisfy obligations, realization of any foundation purpose becomes impossible.
The relationship between solvency obligations to external creditors and benefit performance to beneficiaries assumes particular significance in this context. The statute resolves this potential conflict unambiguously: creditors who are not beneficiaries enjoy priority of satisfaction. Where solvency is threatened, the board may—and in certain circumstances must—suspend benefit performance to beneficiaries. This protective mechanism prevents situations in which current benefit distributions would precipitate foundation insolvency and consequent prejudice to creditors.
Prudent asset management constitutes the primary instrument for ensuring financial liquidity. The board should endeavor to augment foundation assets, or at minimum to preserve them, rather than to diminish or exhaust them.
V. Beneficiary Administration
Board duties relating to beneficiaries comprise three interconnected elements: maintenance of the beneficiary register, notification of entitlements, and benefit performance.
A. The Beneficiary Register
The beneficiary register (lista beneficjentów) translates general statutory formulations—which by their nature cannot enumerate in detail all future beneficiaries of a multi-generational foundation—into a roster of specifically identified persons. The board creates, maintains, and updates this register in accordance with principles established by statute and the constituent instrument. The register should include only those persons who possess beneficiary status under the statute, together with data enabling their identification.
B. Notification Obligations
The duty to inform beneficiaries of their entitlements serves a guarantor function. A beneficiary may be unaware that conditions precedent to benefit entitlement have been satisfied—for example, attainment of a specified age, completion of studies, or entry into marriage. The notification obligation falls upon the board immediately upon the arising of benefit entitlement. Information must be conveyed in a manner enabling the beneficiary to acquaint himself or herself with its contents, and from the foundation’s perspective, in a manner permitting demonstration of compliance. For minor or incapacitated beneficiaries, the board must notify the legal representative.
C. Benefit Performance
Benefit performance requires not merely the transfer of funds or property to the beneficiary, but also preparation of appropriate legal and factual conditions. Where benefits are rendered to a minor, the board must ensure proper notification of the legal guardian or person exercising management over transferred assets.
VI. Formal Requirements for Foundation Declarations
In discharging duties relating to beneficiaries, the registry court, or contractual counterparties, the board must observe formal requirements governing foundation declarations. Each such declaration must contain the foundation’s name, registered office and address, registration number in the family foundation register, and tax identification number (NIP).
VII. Personal Data Protection
The board bears an obligation to conduct periodic review of beneficiary personal data no less frequently than once per calendar year. The purpose of such review is to determine whether continued retention of particular data remains necessary for protection of beneficiary rights or interests, or for discharge of statutory obligations. Data whose retention has become superfluous must be deleted without delay.
Examples of data subject to deletion include: a beneficiary’s former residence address following update, contact information that has become obsolete, or data concerning the legal guardian of a minor beneficiary following attainment of majority. This obligation must be discharged with due regard for general principles of personal data processing under the GDPR.
VIII. Nomenclature and Board Structure
The management board of a family foundation should bear precisely that designation—alternative appellations that might mislead market participants, such as “board of directors” or “executive committee,” are impermissible. The family found
