Mary White (Fianna Fail) | Oireachtas source

Fianna Fáil is generally supportive of this Bill, which is the outcome of tremendous work over the years by various Ministers and civil servants in the Department of Jobs, Enterprise and Innovation. Ireland was a different country when the first Companies Bill was introduced more than 50 years ago. We are far more complex now than we were in the 1960s. We never heard of the word "entrepreneurship" in the 1960s but now it is an everyday term. Greater transparency is needed to make it easier for companies to grow while knowing their precise legal position.

I shall make two points based on my personal experience. In regard to Part 10 of the Bill, which deals with receivership, it is disturbing and disheartening for a company to enter receivership. It is a personal blow to those who put so much effort into their businesses. Examinership is a far better way to proceed than receivership. When a case goes before the courts, it is too easy for judges to make a decision on receivership. Generally speaking, they have no understanding of the complexity involved in doing business or the owners' passion for holding on to their companies and helping them to return to sustainability. Approximately 1,000 jobs in small firms were saved through the examinership process in 2012, which is an increase of 67% over 2011. Anything that can assist in saving jobs is to be welcomed.

Part 5 of the Bill deals with another issue close to my heart, namely, the duties of directors and other officers. Part 5 codifies, for the first time in Irish law, all the duties of directors and other officers of a company. Heretofore, these duties were to be found in common law and various statutory provisions but they are now set out in their entirety for the sake of clarity and it is expected this innovation in common law will promote compliance. Part 5 also introduces a director's compliance statement into law, as recommended by the Company Law Review Group and approved by the Government in November 2005. This provision, which will apply to the majority of public limited companies and small and medium enterprises, places an obligation on directors to thoroughly engage with their companies and to understand the rules of corporate governance. It is about time this was put in place. Directors will be obliged to make annual statements which acknowledge their responsibilities for securing their companies' compliance with the relevant obligations and confirming that certain actions have been taken or, where they have not been taken, explaining the reasons for not taking them. Failure to prepare a director's compliance statement will constitute an offence under the Bill. This provision has not yet hit the public radar and only those who are on the inside track are aware that directors' responsibilities have changed. We have to get it into the public arena because directors will have to wake up and face their responsibilities or they will be in serious legal difficulties.

While we support the Bill in principle, the bottom line is that it has to be implemented. Anything that makes us more competitive, develops existing businesses and creates new opportunities for our little country is to be lauded. I thank the Minister of State, Deputy Sherlock, for taking the Bill.