Leadership

Ireland must learn from corporate governance failures - ISE chief

29.01.2010
Ireland must learn the lessons of recent corporate governance failures in Ireland and Irish-listed companies must meet evolving international market expectations if they are to attract international investment, the Chief Executive of the Irish Stock Exchange, Deirdre Somers has said.

Somers (pictured) made her comments at a special conference on corporate governance hosted by the Irish Stock Exchange in Dublin today.

“Companies must consider whether their historical practices, although accepted in the past, will meet market expectations in the future,” she said.

Somers also said that investors had a particular responsibility in respect of publicly quoted companies. She said they must “demand better standards and require better disclosure and then differentiate and penalise those companies that do not provide them.”

ISE companies not solely responsible
Also speaking at the conference was the Chairman of the Irish Stock Exchange, Padraic O’Connor, who said that while most Irish-listed companies complied closely with the Combined Code – a key guide for corporate governance issues for public companies – problems had arisen where some companies deviated from the principles of the code.

He cited in particular instances when the Chairman of a company was also Chief Executive or a former Chief Executive as an example.

O’Connor also warned against devolving responsibility for corporate governance issues solely to publicly listed companies: “Responsibly for Ireland’s international corporate governance reputation is not the sole responsibility of the 29 companies listed on the Irish Stock Exchange.

“The hundreds of thousands of privately owned companies and the numerous semi-state companies are equally responsible for ensuring our national reputation for probity and good corporate governance – and indeed many of the damaging revelations of recent years have arisen out of those sectors rather than amongst listed companies,” he added.

Government must ‘lead by example’
According to O’Connor, while the Combined Code was a key influence on corporate governance practices in listed companies, it was not a substitute for ethical behaviour, company law or sectoral regulation.

He also called on the Government to “lead by example” by ensuring that public-sector companies adhered to the highest standards of corporate governance.