Written answers

Tuesday, 9 March 2010

Department of Enterprise, Trade and Employment

Proposed Legislation

8:00 pm

Photo of Ruairi QuinnRuairi Quinn (Dublin South East, Labour)
Link to this: Individually | In context

Question 88: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the position regarding the work of the company law review group; the timeframe for the publication of legislation following the reports of this group; and if she will make a statement on the matter. [11378/10]

Photo of Mary CoughlanMary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context

In accordance with Section 70(1) of the Company Law Enforcement Act 2001, the Company Law Review Group's (CLRG) Work Programme is assigned by the Minister for Enterprise, Trade & Employment every two years. I expect to receive the Report of the Group on its 2008-2009 Work Programme before the end of March. Following consideration by the Government, the Report will be laid before both Houses of the Oireachtas.

While there is no obligation on my part to legislate in respect of any recommendation from the CLRG, the main focus of the Group's work to date has been in relation to the General Scheme of the Companies Consolidation and Reform Bill which was published in July 2007. The Government subsequently approved the drafting of a Bill along the lines of the General Scheme. The proposed Bill will consolidate the existing Companies Acts, dating from 1963 to 2009, as well as other regulations and common law provisions relating to the incorporation and operation of companies, into a single Act comprising more than 1,300 sections. Given its size and complexity it is envisaged that the Bill will not be published until October 2010 at the earliest.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
Link to this: Individually | In context

Question 89: To ask the Tánaiste and Minister for Enterprise, Trade and Employment when she expects to publish the legislation (details supplied) to clamp down on crony capitalism, to restrict cross-directorships and to prevent one person fulfilling the dual role of chair and chief executive of any company; and if she will make a statement on the matter. [11380/10]

Photo of Mary CoughlanMary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context

The remarks attributed to the Minister for Finance in the interview in question would, no doubt, have been made with the banking sector in particular in mind. Policy responsibility for the banking sector is a matter for my colleague the Minister for Finance. In the area of company law that falls within my responsibility, the Office of the Parliamentary Counsel is currently drafting the Company Law Consolidation and Reform Bill. It sets out the corporate duties of directors, company secretaries and auditors on a general basis 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. The general position is that a person may not be a director of more than 25 companies subject to certain specific exceptions. Directorships of public limited companies (plcs) are not included in the limit of 25. 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.

The Companies Acts do not prevent a person fulfilling the dual role of chair and chief executive of a company. This would in my opinion be unworkable for smaller companies. However, the Combined Code of Corporate Governance which applies to companies whose securities are listed and traded on the Irish Stock Exchange does provide that the roles of chairman and chief executive should not be exercised by the same individual. The "comply or explain" principle, which is now enshrined in law under Statutory Instrument 450 of 2009, requires companies to meet the best practice guidelines or explain publicly why not. The Government and I are committed to ensuring that our corporate governance regime for the corporate sector generally, accords with best international practice. We will take account of the lessons which emerge from current enquiries and reviews arising from recent developments and we will address, as appropriate, any concerns in this area including by way of legislation if necessary.

Comments

No comments

Log in or join to post a public comment.