'Robust enforcement of rules' can mend battered reputation
IRELAND'S reputation has been damaged and the country must let the rest of the world know that it will have best-practice regulation with robust enforcement, a leading international consultant has said.
Anne Molyneaux, director of CS International, told an Irish Stock Exchange (ISE) meeting on corporate governance that reputation was an issue even for the US after the global crash.
"People do not trust US companies anymore. But the US is acting to deal with this, with new rules and implementation of those rules," she said.
Tanaiste Mary Coughlan told the conference it was necessary to distinguish between the banking sector and the rest of corporate Ireland.
"It is wrong to blacken, here and abroad, the reputation of all our companies because of serious failures in a particular sector," she said.
There was no such thing as a "light touch" regulatory regime for Irish companies, but we should "think long and hard" before extending the power of the State into the affairs of private sector enterprise where it has no prior property rights, Ms Coughlan said.
ISE chairman Padraic O'Connor said the Exchange's reputation has been damaged when some companies deviated from the principles of the code on corporate governance.
"However, responsibility for corporate governance issues is not solely down to publicly listed firms and the Government must lead by example in ensuring that public sector companies practiced the highest standards," he said.
ISE chief executive Deirdre Somers said it could not have done much more with regard to Anglo Irish Bank because of its limited regulatory role.
However, the dual role of chairman and chief executive was a breach of the code, and Ireland must learn the lessons of recent corporate governance failures.
Prof Niamh Brennan of the Centre for Corporate Governance at UCD, said standards at public bodies and companies should be higher than those of listed companies, because taxpayers cannot sell their "shares".
Fine Gael enterprise spokesman Leo Varadkar TD told the conference the reputational damage to Ireland does not have to be lasting.
"It is up to us to put our house in order, to do it quickly and to show the world that Ireland is second to none when it comes to governance, ethics and open government," Mr Varadkar said.
Labour spokesperson Joan Burton TD said she had the impression that the financial regulators sometimes did not feel powerful enough to question the chief executives of mighty banks about what they were doing.