Seán Sherlock (Cork East, Labour) | Oireachtas source

This section contains the form of directors' compliance statement as recommended by the company law review group. Having analysed the provisions contained in the 2003 Act, the group determined that such extra duties, as set out in the Act, would do little to increase compliance. In fact, it would actually result in an increase in red tape at significant cost to businesses. The set-up cost to a business was estimated at €90,000 with the ongoing annual costs at €40,000. A streamlined version of the directors' compliance statement proposed by the group removed the requirement that the statement included a declaration that the company has complied with all other enactments that could affect its financial performance. This was found to be the most burdensome aspect of the statement, as well as the least relevant as companies are already legally obliged to comply with all Acts. Their inclusion in the statement does not add any substantive duties.

A majority of the group, including members representing the Financial Regulator and other public bodies, agreed to a more balanced version of the statement.

There is a strong EU impetus towards less unnecessary regulation to make EU businesses more competitive. This amendment would create unjustifiable and disproportionate costs on Irish businesses without adding value in terms of protection and would disadvantage Ireland competitively as it would go beyond other countries and perhaps beyond the regime north of the Border. The directors' compliance statement as it stands has broad support from industry and regulators alike. For these reasons, it is intended to preserve the directors' compliance statement, DCS, as it currently stands within the Bill. On that basis, we do not propose to accept the amendment.

See this speech in context