Ciarán Cannon (Progressive Democrats)

I welcome the Tánaiste back to the House and hope we can continue in the same spirit of co-operation that was the hallmark of our previous debate. This amendment is about striking a balance between awarding the Director of Corporate Enforcement the powers he needs to carry out his duties and not frightening off anyone from getting involved either in entrepreneurial effort or becoming a company director. This amendment seeks to strike that balance. In section 8, subsections (11) and (12), the pendulum has swung too much in favour of the Director of Corporate Enforcement. It provides that directors of companies who fail to comply with the disclosure requirements provided for in section 41 shall be guilty of a criminal offence. Subsection (12) provides a defence for subsection (11). It appears the usual burden of proof has been switched and that it is for the company director, the accused, to persuade a court he or she took all reasonable steps — that is the phrase used — to secure compliance once the facts of defective disclosure and the fact of him or her being a director are established. What would this mean in practice for a company director? A company director may not have the time or resources to check whether all the accounts in this respect are accurate. The director must ensure the company employs financial personnel to carry out these functions and, furthermore, that the auditors are properly informed regarding all relevant matters.

In the recent past, we have discussed decreasing the financial and administrative burdens we place upon companies, especially small, fledgling, indigenous companies. Obliging directors to engage in this sort of activity would not lead us in that direction. I do not believe a company director can be expected to carry out detective or sleuthing work in his or her own company to ensure every single potential conflict-of-interest transaction is disclosed. I would have thought that is a most unfair burden to place on a company director. In general, criminal law should penalise actual wrongdoing, rather than providing for guilt by association, as is most certainly the case in these two sections. The burden of all reasonable steps would appear to require a level of performance from directors that is substantially higher than simply being non-negligent. This burden leaves every director exposed to criminal sanction unless this very high — and I have to say, not very easily defined — standard is met. Apart from criminalising conduct which may not be errant or wrong in any conventional sense, it will provoke substantial board resolutions detailing the process followed. More often than not, it may pay lip service to disclosure so as to provide for a defence without having any real effect in rooting out corporate wrong-doing, which is the Bill's ambition. The focus should be on a director who has failed to disclose the conflict-of-interest transaction, and only that director, with a clearly defined offence and an appropriate penalty.

In respect of a number of amendments that we have already tabled, the Tánaiste has undertaken to re-examine certain elements of the Bill and revert to us on Report Stage. I ask that this should also be done with regard to these two subsections.