Mary Coughlan (Donegal South West, Fianna Fail)

I assume the Deputy is referring to comments made by my colleague, the Minister for Finance, concerning the establishment of a new central banking commission, possible inappropriate cross-directorships and circumstances where the appointment of a chief executive as chairman may not be in accordance with best corporate governance practice.

The House will be aware that the Taoiseach recently announced that a new central banking commission will be established, which will incorporate the responsibilities of the Central Bank and the supervision and regulatory functions of the Financial Regulator. This will build on best international practice and it is intended that the banking commission will have the necessary powers to ensure the financial health, stability and supervision of the financial sector.

In the area of company law, which falls within my responsibility, the Deputy will be aware that the companies consolidation and reform Bill, which is currently being drafted by the Office of the Parliamentary Counsel, sets out the corporate governance duties of directors, company secretaries and auditors on a general basis for companies across all sectors. The Bill will implement the recommendations of the Company Law Review Group in that the fiduciary duties owed by directors to the company will be stated in the new companies' code.

At present, company law does not prohibit cross-directorships, whereby a person is a director of more than one company at the same time. Any consideration of a change in this position for the general cohort of companies operating in Ireland would need to take account of the contribution that non-executive directors make by imparting their mix of expertise and the cross-fertilisation of ideas from other areas of the business community.

On the issue of a chief executive becoming chairman of a company, at present there is no prohibition in the Companies Acts that would prevent that taking place in the case of companies generally. However, this issue is dealt with on a "comply or explain" basis in the combined code of corporate governance that applies to companies whose securities are listed and traded on the Stock Exchange.

The Government and I are committed to ensuring that our corporate governance regime for the financial sector and the corporate sector generally accord with best international practice. I will be working closely with the Minister for Finance to take account of the lessons which emerge from current inquiries arising from recent developments and we will address, as appropriate, any concerns in this area.

Additional information not given on the floor of the House.

Separately, the Deputy will be aware that, yesterday, I announced that the Government has approved my proposals to make immediate amendments to the Companies Acts to ensure that the annual accounts of companies that are licensed banks will disclose loans made to named directors, rather than the aggregate of such loans as applies at present. The amendments will also ensure that the maximum amount of each director's liability during the year is published, rather than just the outstanding balance at the end of the financial year.

The Deputy will also be aware that I asked the Director of Corporate Enforcement if, arising from his current investigations, there were any legislative amendments that he considered of immediate importance for the carrying out of his work. The amending Bill will, as a result, also include provisions requested by the Director of Corporate Enforcement: clarifying the right of access of his office to certain records of a company under investigation and to certain related third party records; reducing the evidential requirement on the Director of Corporate Enforcement so that he will not have to prove a director was wilfully in breach of the loans to directors provisions of company law; strengthening the provisions dealing with search warrants; and providing a mechanism for the courts to determine whether legal professional privilege attaches to some seized material. I hope to bring the Bill before the House at the earliest opportunity.

Finally, I can also confirm to the Deputy that I have granted the Director of Corporate Enforcement's request last week for additional staffing and that I have instructed my Department to put these resources in place as a matter of urgency. This will facilitate the carrying out of ongoing investigations and allow his office to continue to perform its other functions to the highest standard.

See this speech in context