The ISE is to require Irish listed companies to comply or explain against the provisions of the UK Corporate Governance Code. Additional corporate governance provisions arising from the recommendations contained in the report on Compliance with the Combined Code on Corporate Governance by Irish listed companies (“the ISE/IAIM Commissioned Report”)1 will come into force later this year. These requirements are outlined in the feedback statement on proposed changes to the ISE Listing Rules relating to corporate governance published today.
Irish listed companies have been required to comply or explain against the Combined Code for some years. In May 2010, the Financial Reporting Council (FRC) replaced the Combined Code with the UK Corporate Governance Code2. The FRC’s Code is widely regarded as best practice internationally and a benchmark for corporate governance standards. The ISE’s Listing Rules will maintain their existing parity with the standards applying in the UK, by requiring Irish listed companies to comply or explain with the provisions of the UK Corporate Governance Code, with effect from 30th September 2010.
In addition, the ISE is to implement the recommendations arising from the ISE/IAIM Commissioned Report by including new provisions in the ISE Listing Rules. Consultation on the exact nature of these provisions is ongoing, but these provisions will apply to Irish listed companies with financial year’s commencing on or after 1st January 2011.
Commenting on the revised Listing Rules, Mike Duignan, Head of Market Supervision at the ISE, said “maintaining parity with the UK Corporate Governance Code, an important benchmark for the international investment community, means that Irish listed companies remain subject to the most highly regarded international code on corporate governance. The provision of additional requirements for Irish listed companies, arising from adoption of recommendations set out in the ISE/IAIM Commissioned Report, will enable Irish listed companies to further enhance their corporate governance disclosures, assisting them in their ongoing interaction with shareholders and the market.”
1The ISE/IAIM Commissioned Report, released in March 2010, was commissioned by the ISE and the Irish Association of Investment Managers (IAIM) and chaired by Professor Niamh Brennan.
2The UK Corporate Governance Code, formerly known as the Combined Code, sets out standards of governance for listed companies. Companies are required either to follow the Code or explain how else they are acting to promote good governance.
