Ireland: corporate governance reform - Labour Party proposals

One of Ireland's opposition parties, the Labour Party, has published far reaching proposals for the reform of corporate governance including replacing the current 'comply or explain' approach with a binding governance code. A bill - the Corporate Governance (Code of Practice) Bill - will be laid before the Dáil later this year and, according to the policy document "Never Again", it will:

• Provide for the drawing up of a binding code of practice for corporate governance
  
• End the practice of cross-directorships
• Limit the number of boards on which a non-executive director may sit
• Prohibit the positions of chairman and chief executive of a company being held by the same person
• Prohibit a former chief executive from being elected chairman
• Prohibit non-executive directors from serving on a board for more than seven consecutive years
• Require companies to establish independent auditing committees, comprised of members with relevant expertise
• Require the chairman and chief executive to assume direct responsibility for ensuring good corporate governance and transparency in corporate reporting
• Require non-executive directors to demonstrate the time and skills necessary to contribute effectively to the board
• Regulate the appointment of non-executive directors who are connected to the company’s bank or auditors

Note: Irish listed companies are required, under rule 6.8.3 of the Irish Stock Exchange Listing Rules, to state the extent of their compliance with the UK's Combined Code on Corporate Governance.