IRISH companies are falling behind in the race to stay up to date with changes to corporate governance regulations according to a new report.
The 2011 Corporate Governance Review of Irish-listed companies' compliance with the Combined Code, which has been compiled by Grant Thornton, shows that only 26pc of companies are fully compliant with the code, down from 36pc a year ago.
The Combined Code takes the UK Corporate Governance Code and combines it with supplementary requirements for listed companies added by the Irish Stock Exchange (ISE). The ISE brought the code into effect this financial year.
Complying with the code, or disclosing and explaining non-compliance, is a condition of listing with the ISE.
Grant Thornton said the low compliance rate was due to companies taking a stricter interpretation of the rules and disclosing more information on which provisions they have not complied with. In the UK, 51pc of FTSE 350 companies claimed full compliance.
Among the report's findings, a third of companies failed to disclose if they reviewed the chairman's performance, and of the companies that did appraise performance, only four explained how the appraisal was done. Meanwhile, 43pc of companies explicitly disclosed that their audit committee contained at least one member with both "recent" and "relevant" financial expertise, as required by the code.
Cian Blackwell, Partner in Grant Thornton, said: "Compliance with the existing code remains relatively low, and the new codes place much stricter obligations on companies, so there is significant work to be done by companies to put their house in order."