Brian Lenihan Jnr (Dublin West, Fianna Fail)

As regards economic priorities, there has been extensive discussion in the House of all aspects of the economic position. In my interviews with the media over the St Patrick's Day period I did not say anything that I have not said before. As Deputies will know, Ireland has been the subject of much unfavourable comment in some foreign media and my concern was to counteract that by presenting a more balanced view of the Irish economy.

Regarding corporate governance, I explained my belief that the Government should tackle the issue of cross-directorships in financial institutions. By that I mean that situations where there appears to be a reciprocal distribution of directorships between companies, albeit not on a formalised basis, should be appropriately restricted and controlled to ensure that good corporate governance is not prejudiced. I also indicated a concern about the ability of financial institutions to select, as chairpersons, individuals who have had extensive executive responsibilities within the same institution. Again, this could lead to weaker governance and should be controlled.

I will be discussing the development of these ideas and how best they can be translated into practice with my Cabinet colleagues shortly. The Government will also, of course, be considering how these issues may be relevant beyond the financial services sector. These are important issues and require careful study.

In the meantime the Government has considered provisions to deal with certain specific things that have come to light, including new requirements in relation to loans to directors and connected persons. However I believe it is also be necessary to consider the issue of corporate governance from a wider perspective.

I would favour a review to be carried out by the Company Law Review Group which would consider the revision of the existing combined code on corporate governance. Deputies might wish to note that the UK recently announced an independent review of bank corporate governance including the balance of skills, experience and independence required on boards, the effectiveness of board practices and the role of institutional shareholders in engaging effectively with companies and monitoring of boards.

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