Seán Sherlock (Cork East, Labour)
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Question 52: To ask the Minister for Enterprise, Trade and Innovation his views on the report, Mapping the Golden Circle, published by the research body TASC, which showed that Ireland's corporate world was dominated by a small number of interconnected business people which the report said posed a serious threat to corporate governance; the action he will take to ensure that corporate power does not remain concentrated in the hands of a small number of individuals; and if he will make a statement on the matter. [24358/10]

Batt O'Keeffe (Cork North West, Fianna Fail)
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I note the findings of this report.

As regards listed companies (those on the main market of the Irish Stock Exchange), these are subject to the provisions of the Combined Code which applies on a "comply or explain" basis. The code has recently been reviewed and revised in light of the financial crisis. The revised code recommends that all directors of such companies should be subject to annual re-election by shareholders. This would give shareholders a regular opportunity to take account of the number of directorships held by an individual director and whether or not he/she is in a position to give sufficient time to the company to discharge his/her responsibilities effectively, in deciding whether they should be re-elected.

In addition the Irish Stock Exchange (ISE) and the Irish Association of Investment Managers (IAIM), who represent institutional investors here, jointly commissioned an independent and detailed review of the level of compliance by Irish listed companies with the Code in Quarter 4 2009. The review showed that while listed companies are meeting disclosure obligations, further steps could be taken by boards to enhance the quality/meaningfulness/usefulness of disclosures contained in annual reports. The ISE and IAIM published a report in the matter in March 2010, which contains a number of recommendations for consideration by the Boards of listed companies. The recommendations for enhanced disclosure include board balance and board refreshment.

The ISE will be consulting shortly on the revised code and the recommendations of their own report with a view to having both applying to Irish listed companies by the end of 2010 for their 2011 financial year.

In relation to financial institutions and insurance companies, which are the responsibility of my colleague the Minister for Finance and the Financial Regulator, the Regulator recently published a consultation paper setting out proposals for a corporate governance regime for these sectors. One of the proposals in this paper is that the number of directorships of credit institutions and insurance companies held by a director should be limited to three.

In addition, the consultation paper proposes certain restrictions on the number of directorships a director of a financial institution or insurance company may hold overall. I understand this consultation paper is open for comments from interested parties up until 30 June 2010.

On 3rd June, the European Commission published a discussion paper relating to corporate governance in financial institutions. This paper is suggesting that board members of financial institutions be restricted to three overall. No doubt the Minister for Finance and the Financial Regulator will consider the discussion paper and respond in due course taking account of the results of their own consultation paper.