The inclusion of the Green Party in the Irish coalition government has seen some interesting new features included in the new “Programme for Government” which was agreed this week after a series of last minute negotiations.
In addition to new protections for mink through the abolition of fur farming and the development of Irish pub food trails, Irish shareholders can expect to see their own protections strengthened. As part of its policy committment to reform the banking sector, the government has said it will put the principles of the UK’s Combined Code on a legislative footing for all Irish banks, public companies and state-sponsored bodies.
Specifically mentioned are the following key areas of governance:
- Board composition and independence
- Segregation of CEO and Chair
- Clear definition of executive and non-executive responsibilities.
- Audit committee composition, independence, role and function
- Responsibilities and composition of board committees.
- Segregation of committee chairs
- Risk management
- Selection of non-executive directors
- Sanctions for non-compliance
A key demand of the Green Party in the Programme was also a commitment to reform corporate political donations. In a parallel with the Walker Review, the Irish government has said that it will enter into consultation with the Financial Regulator to develop a new statutory framework for the governance of major financial institutions.
It is worth noting that companies listed on the Irish Stock Exchange are already subject to the Code as it is part of the Exchange’s listing requirements. However, as the Irish Times noted “the code operates on a “comply or explain” basis and some of the explanations have been perfunctory. Presumably, they will not get away with this in the future.” There appears to be no mention of introducing a “say on pay” for Irish companies; the Combined Code dropped a requirement for a remuneration report resolution when it was introduced into legislation as part of company law.
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Last Updated: 13 October 2009