Directors of listed companies face annual elections in new reform
Published 31/05/2010 | 05:00
DIRECTORS across Irish and UK-listed companies face annual elections and regulator performance reviews as part of an overhaul of a key corporate governance code.
The UK Corporate Governance Code -- formerly known as the Combined Code -- sets out standards of governance for companies whose shares are listed on the stock market.
Most large Irish companies have a UK listing and the Irish market previously followed the original code introduced in 1992.
The Irish Stock Exchange (ISE) said on Friday it would engage in consultations with the market on the implementation of a revised code for companies in this country.
Under a "comply or explain" policy, companies are required either to follow the code or explain how else they are acting to promote good governance.
"This [new UK] code, which updates the Combined Code, makes an important contribution to the debate on setting appropriate corporate governance standards for Irish listed companies in the future," the exchange said.
The new guidelines also contain measures to encourage greater representation of women in boardrooms.
The proposal that all company directors face annual election by shareholders would replace the current guidance of a three-year rolling system.
The Irish consultation will also consider findings of a recent report chaired by Professor Niamh Brennan of UCD.
Mike Duignan, head of market supervision at the Irish bourse, said: "The ISE's consultation will consider how best to incorporate the code into the existing Listing Rules and explore how this might be expanded to include the recommendations set out in the report."
The UK Financial Reporting Council said it was changing the code to "explicitly" ensure gender was taken into account by hiring committees.