Kathleen Lynch (Cork North Central, Labour)
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Question 63: To ask the Minister for Enterprise, Trade and Innovation when he expects to publish the legislation promised referred to in an interview (details supplied) to clamp down on crony capitalism to restrict cross directorships and to prevent one person fulfilling the dual role of the chair and chief executive of any company; and if he will make a statement on the matter. [24346/10]

Batt O'Keeffe (Cork North West, Fianna Fail)
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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 this regard, the Deputy may be aware that the Central Bank and the Financial Regulator have launched a consultation paper recently on corporate governance standards for financial institutions and credit undertakings. The matters referred to by the Deputy are among the issues being addressed in the consultation paper. For example, one of the proposals in the consultation paper suggests to limit the number of directorships of credit institutions and insurance companies held by a director to three. The consultation paper also proposes certain restrictions on the number of directorships a director of a financial institution or insurance company may hold overall. The Financial Regulator has invited interested parties to comment by 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.

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.

Currently, 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.