Risk management tools are a key element in executing investments, both in the Closed-End Investment Funds (FIZ) model and in the direct investment model, including investments compliant with Sharia Law. In Poland, various tools are available to effectively minimize risk associated with engaging capital in investment projects.

Risk management tools within Closed-End Investment Funds

• Investors’ Council – Fund participants can take part in the Investors’ Council, allowing them to monitor the implementation of the investment objective and investment policy. The Council enables the review of the Fund’s books and documents and the right to request explanations from the Investment Fund Company (TFI).
• Investors’ Assembly – a body authorized to make resolutions, e.g., regarding the issuance of investment certificates. Participation in the Assembly gives investors control over the capital accumulation process, which can help prevent dilution of profits.
• Control over the entity managing the Fund’s assets – allows for decision-making regarding the selection of investment projects, enabling the rejection of excessively risky projects and the selection of those that meet the acceptable investment criteria.
• Supervision by the Polish Financial Supervision Authority (KNF) – TFIs are supervised by KNF, which increases transparency and ensures compliance with legal regulations, thereby reducing investment risk.

Risk management tools in Sharia-compliant investments

• Commercial Companies Code regulations – allow shareholders of limited liability companies to exercise direct control over the Management Board’s decisions. If necessary, investors can adopt a resolution to change the Management Board members.
• Possibility of delegating representatives to the Management Board – investors can appoint their representatives to the Management Board of a special-purpose company, ensuring direct control over decisions made at all stages of project implementation.
• Supervisory Board in joint-stock companies – provides control over the Management Board’s activities. The Supervisory Board must approve certain decisions, reducing the risk of unfavorable actions.
• Auditing financial statements by independent auditors – joint-stock companies are required to submit their annual financial statements for review by an independent auditor, allowing investors to conduct an independent verification of financial results.
• Legal regulations concerning zero-coupon bonds – The Bond Act ensures bondholders have priority in claims settlement in the event of financial difficulties faced by the issuer, significantly reducing investor risk.

Each of the described risk management tools enables investors to exercise effective control over capital and minimize risks associated with executing investment projects. The choice of the appropriate tool depends on the investment model and the degree of investor involvement in project management.