Oireachtas Joint and Select Committees
Tuesday, 26 February 2019
Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach
Law Reform Commission Report on Regulatory Powers and Corporate Offences: Engagement
Mr. Raymond Byrne:
The short answer is "Yes", if I can give a very short answer. The other aspect of this is that the commission's proposal would also be something that would clarify, as Mr. O'Malley has said, the potential for somebody at a very senior level to say that he or she did not know what was going on further down - the so-called defence that if something goes wrong, deputy heads must roll. In this particular instance, the proposal the commission makes is that at all different levels of responsibility, there is a requirement that there be communication up and down. The Central Bank's senior management proposal, for example, would identify particular roles and responsibilities. The commission's proposal, which is related to so-called derivative liability or parasitic liability, provides that, regardless of whether one has an identified role and regardless of whether the Central Bank would impose a particular line of duty, if it can be shown that someone in a senior policy-making function in the organisation - whether he or she is called the chief executive officer, senior financial officer or corporate financial officer - has failed in his or her duties, he or she can be held personally accountable, as well as the corporate entity. The two of them are complementary. The commission's proposal on derivative liability would ensure that in a particular instance where everybody except the chief executive officer has taken a particular role and responsibility, the CEO of the organisation would still be held accountable under the derivative liability proposals of the commission, even if for some reason he or she had persuaded everybody else to take on particular roles and the CEO had not taken on a particular role. That responsibility of derivative liability would still apply in those circumstances.