Gerald Nash (Louth, Labour) | Oireachtas source

The Labour Party is happy to support the Bill. I will not use my full 20 minutes. It took three Sinn Féin members to use 20 minutes. In any case, it is, as Deputy O'Reilly says, largely a technical Bill. That being said, there are elements of this legislation that are critically important in terms of the practical implications of running a business and the streamlining of how businesses operate in this country and how they are regulated.

By and large, the measures should, when enacted, make the operation of businesses and the regulatory regime more efficient. It is important that any measure to make businesses more efficient does not throw the baby out with the bathwater. What I mean is that measures such as those provided for in the Bill ought not to involve any weakening, for example, of the regime on white-collar crime that has been built up over decades. When it comes to this Bill, my assessment is that it has got the balance right. For example, the graduated regime in terms of first instance late filing with the Companies Registration Office is positive. Mistakes or sins of omission, as opposed to sins of commission, can happen in the real world. I accept that in most cases where there may be a clear and genuine issue explaining a later return, there should not be a loss of the audit exemption for an SME. This makes sense and is best described as smart regulation.

I also welcome the additional powers for the Corporate Enforcement Authority to allow it to do the job citizens expect the agency's inspectors to be able to do. As the world becomes more complex, breaches of company law become more difficult to investigate and prove, and the white-collar criminal, or those we suspect of being involved in forms of white-collar crime, can be difficult to pin down. We should have a zero-tolerance approach when it comes to white-collar crime and corruption, which is what it is. Corporate crimes are not victimless crimes. Someone always pays. In the business sector, it is generally the compliant, law-abiding competitors who pay the price. We need a level playing pitch.

In general, Ireland has a good reputation as a fair place to do business and that must remain the case. If we are serious about maintaining that status, we must always keep a watching brief on the evolution of ways in which company law breaches take place, and ensure that the Corporate Enforcement Authority, the Companies Registration Office, those who are responsible for audits, and other statutory bodies are resourced. The law must keep pace with changing patterns of behaviour. The Company Law Review Group has a critical role to play in making sure the law keeps up with evolution in this space. Whether it is the criminal justice system, company law code or the employment rights code - our suite of legislation and regulation – those who do not wish to comply or who may be in breach are always one step ahead of the regulatory regime. We know that the making of laws is difficult. It is a lengthy process for good reason.

I am taken by the reference made by the chief executive officer of the Corporate Enforcement Authority, Ian Drennan, who welcomed the publication of the general scheme. He stated:

Amongst the measures being proposed are the conferral of new powers of investigation on the CEA in the area of information and evidence gathering, including new surveillance powers. The General Scheme also proposes to enhance information sharing across investigative and regulatory agencies.

These measures will, if enacted as proposed, further enhance the CEA's capacity to investigate suspected breaches of company law. The proposals also seek to streamline the court process for dealing with the availability to investigators of evidential material over which claims of legal professional privilege are being asserted.

He went on to say that particularly welcome are the proposals to create two new criminal offences related to interaction with CEA officers. He also said these proposals sent out a very clear signal that obstructing or threatening a CEA officer will not be tolerated and that anyone who does so risks facing a lengthy term of imprisonment. That is as it should be. We would not expect anybody to get away with impunity for threatening, for example, a member of An Garda Síochána or a customs or Revenue inspector. It should be the same when it comes to the Corporate Enforcement Agency.

I note there is provision in the Bill to provide for company AGMs to be held remotely online. We recall the debate in this Chamber at a very different time for our country and the world where we were required to pass legislation to allow company AGMs and the AGMs of credit unions, under the relevant credit union legislation, to take place online. As provided for in this Bill, this will be allowed on a permanent basis. I am taken by the remarks made by Deputy O'Reilly regarding online meetings and all of the consequences of that. I note this has been described in commentary on the Bill as an option. However, this option could be in danger of becoming the norm.

There are some dangers and risks of which we need to be aware. Running a company is a serious business. Directors have onerous responsibilities and obligations to staff, shareholders and their fellow directors. They have serious fiduciary responsibilities that, if not discharged responsibly, can and do have major consequences legally, reputationally, personally and so on. We need to be very mindful of that. If we are serious about real accountability, if this option then becomes the norm and the majority, if not all, company AGMs move online there is a real risk that our wish to ensure that, to the fullest degree possible, there is accountability and transparency and directors are held to a high standard by company members and shareholders, may not always be fully possible in terms of the online arrangements.

I will cite a local example of this. I will not identify the individuals involved or make reference to anything that might cast any aspersions, although we are in the Chamber. I am conscious of our responsibilities. It is a matter of public record in my constituency. In County Louth, we are dealing with a dispute between credit union members and the senior staff and board of a particular credit union entity. The dispute centres on a decision taken by the entity to, without any meaningful consultation, close two of the credit union's physical branches located in rural villages.

Affected members, on my advice and that of others, sought to properly convene a special general meeting in a local GAA club. That meeting took place last night. More than 200 members attended. They set about organising the meeting in a fully compliant way. Those involved are experienced credit union members and sought to have an in-person and important special general meeting in order to discuss the manner in which branch closures were handled by the elected leadership and management of the credit union. Members wanted an explanation, to which they were entitled,

That is something people should be able to take for granted. They should be entitled to have that. It is what any member or shareholder of a company or credit union is entitled to. After the members organised a public special general meeting, what happened next was quite startling. Those to whom the members ought to be directly accountable decided instead to hold an alternative special general meeting online. The implication was that the second meeting was the special general meeting and the senior staff and board would not attend the meeting members had organised.

I have spoken to many affected members about this approach and what occurred last night and over the past couple of days. As one can imagine, it is causing real disquiet in the community among members of the credit union who simply want accountability. Their chosen forum for that accountability was a special general meeting to be held in public. It is not unreasonable to ask for that, but instead an alternative was arranged, namely, an online special general meeting. I will not comment any further because there have been developments in this case today. Deputy Ó Murchú is well aware of the situation and attended the meeting last night. Unfortunately, I could not attend, but I have supported those affected members in recent months in order to have the accountability they require and to which they are entitled.

The conduct of credit union AGMs is a matter for the relevant credit union legislation, but I mention this case to point out the risks involved in company accountability and performance where the option is made available for remote online AGMs and they become the norm. They could be used by the directors of companies to avoid the accountability for which we should be aiming. I accept it is set out as an option in the Bill, but it could soon become the default for companies.

I note in the Bill votes and motions at AGMs held remotely would be by a show of hands. There are obvious problems that can strike us in that regard and I will tread very carefully. I am not convinced that a mass movement to online company AGMs is the wisest of moves. If it is to be enabled by legislation, we need to proceed very carefully and make sure there are sufficient safeguards in place to ensure that, where online AGMs take place, everybody is satisfied the maximum level of accountability can be delivered, there is maximum transparency and the system is not open to abuse.

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