Irish company boards can be strengthened - IoD

The IoD made its comments in response to a report on corporate governance in Irish-listed companies published yesterday by Grant Thornton, which found that the number of Dublin-listed companies claiming full compliance with the Combined Code, which is required for a listing on the Irish Stock Exchange, has dropped from 51pc to 36pc.

Grant Thornton’s 2010 Corporate Governance Review, shows that a third of companies fail to disclose if they have reviewed their chairman’s performance, and 28pc do not properly explain how the roles of chairman and chief executive are divided.

The review also said there has been a notable decrease in the number of companies reporting that their board is comprised of a majority of independent non-executive directors, down 10pc to 77pc, and that over a third of firms are not properly disclosing the terms of appointment for their non-executives. 

Appropriately qualified and trained directors essential
According to the IoD, Dublin-listed companies can strengthen their boards by selecting directors on the basis of relevant skills and experience.

“We need to ensure that the best and most appropriately qualified and expert people are appointed to the boards of Irish-listed companies,” said Maura Quinn (pictured), Chief Executive of the Institute of Directors in Ireland.

“Irish-listed companies can strengthen their boards by ensuring that a transparent recruitment, selection and appointment process is in place and that director appointments are made on the basis of skill, suitability and experience.

“Emphasis must be placed on the training of board members in their specific roles as directors. Board members assume a key role in corporate governance and compliance with the combined code. They set the company’s values and standards and ensure that its obligations to shareholders and to the wider community are met.

“By appointing directors who are appropriately qualified and trained for their role, Irish-listed companies can build and strengthen their boardrooms,” Quinn added.