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The Grant Thornton Review of Corporate Governance for companies listed on the Irish Stock Exchange is a useful, albeit narrow, contribution to the ongoing debate on Corporate Governance on public markets.
There would appear to be a disconnect between the detailed findings of the Report and the accompanying commentary. The detailed findings of the Report identify that there is strong compliance with the key components of the Combined Code, whereas the commentary suggests that there is significant divergence away from generally accepted standards. This is regrettable.
A number of points should be borne in mind in discussing these matters:- The Combined Code on Corporate Governance which applies to companies on the Irish market is the same code as that which applies to companies listed on the London Stock Exchange and is regarded as best practice in Europe. The other major markets of Europe have no such Corporate Governance code. The findings of Grant Thornton in the UK were not dissimilar to that found in the Irish market.
- The objective of the Code is to promote good corporate governance. The Code specifically states that good governance can be achieved by means other than those outlined in the Code. The point of the listing requirements is to provide investors with all of the information necessary to judge whether they can be happy with the standards being applied in any given company.
- Rules and codes can never be a substitute for good corporate culture and individual director integrity.
- The debate on corporate governance standards and the rules which may apply to them is already underway at a European level and the Exchange is participating in that debate. It is clear that participation in a public market increases the requirement for transparency.
