Thursday, March 25, 2010. Pictured at the launch today of a new Code of Practice for Corporate Governance Assessment, left to right: Ann Riordan, Chairman, NSAI and President of the Institute of Directors, Mr. Billy Kelleher, T.D., Minister for Trade and Commerce, and John Smyth, Chair of Code committee.
Ireland leads EU in Advancing Corporate Governance agenda
The National Standards Authority of Ireland (NSAI) and the Institute of Directors in Ireland (IoD) are tackling some of the challenges that Irish organisations face regarding corporate governance with the launch today of a new Code of Practice for Corporate Governance Assessment for Irish companies and State bodies. The new code provides a best practice standard for an independent evaluation of an organisation’s compliance with existing corporate governance codes such as the OECD principles, the Combined Code on Corporate Governance and the Code of Practice for the Governance of State Bodies.
The code, SWiFT 3000: 2010 Code of Practice for Corporate Governance Assessment in Ireland, is the first of its kind in the EU and the first to award certification to companies which meet the required standard. Evidence based evaluation of an organisation’s corporate governance practices will be carried out by independent assessors who have met comprehensive qualification and experience criteria. Companies which meet the specifications of the Code will be awarded the SWiFT 3000 Certification by independent accredited certification bodies.
Mr. Billy Kelleher, T.D., Minister for Trade and Commerce, stated, “Good corporate governance is a key factor in sustaining economic growth and development. Corporate governance failures in some of Ireland’s prominent private sector and state sector companies has resulted in a loss of reputation for Ireland and a loss of support from many international stakeholders. Organisations that undertake the independent assessment will send clear signals to their shareholders, stakeholders and to the international community that they are operating to the best standards in corporate governance. With the introduction of this new voluntary code, Ireland is not only advancing the corporate governance agenda, but is in fact leading it.”
The Corporate Governance assessment will focus on three core areas: i) Board composition; ii) Board processes and iii) Fulfilment of board responsibilities, as well as looking at other aspects of governance procedures including Chairman-CEO separation. The assessor will have access to all relevant internal documentation and will evaluate an organisation by using processes that will include:
- Completion by boards of a questionnaire based on the principles enshrined in these codes.
- Interviews with company directors, Chairpersons, CEO and other directors as deemed appropriate.
- Reviewing a company’s compliance with relevant corporate governance codes.
Speaking at the launch, Ann Riordan, Chairman, NSAI and President of the Institute of Directors in Ireland, said, “The Code was developed as a direct response to the pertinent issues of corporate governance which Ireland has experienced over the last 18 months. I strongly encourage company directors, company secretaries, board members, senior management and business owners to look to the Code as a vital tool that will help their organisation operate to the highest standards of Corporate Governance. One of the most important aspects of the new code is the assessors cannot have an existing relationship with the organisation they will be evaluating for 24 months on either side of the assessment. This is a crucial step in re-establishing stakeholder confidence and rebuilding Ireland’s reputation as a country to do business with.”
The development of the Code, which commenced in October 2009, is the output from new NSAI’s priority development process (SWiFT). More than a dozen key professional bodies engaged in the promotion of best corporate governance practice participated in its development, including NSAI, IoD, the public and private sectors, the Financial Regulator, Office of the Director of Corporate Enforcement, Corporate Governance Association of Ireland (CGAI), Irish Small and Medium Enterprises Association (ISME), Institute of Chartered Secretaries and Administrators (ICSA), Institute of Public Administration (IPA), Standards in Public Office Commission and corporate governance experts from academia. The code will be reviewed on a regular basis to reflect changes in regulation, legislation and corporate governance codes.
John Smyth, chair of the committee that developed the new code, said, “The code will result in an inevitable improvement in corporate governance performance in Irish companies. This is an opportunity for companies of all sizes to benchmark their corporate governance performance against the specifications of this Code of Practice. The first organisations are expected to be assessed by September 2010. It is likely that those companies with strong corporate governance practices in place will be the first to participate in this process. Growing companies could target a transition period to place themselves in a position to be confident of success in an external assessment of their corporate governance.”
Maurice Buckley, CEO, NSAI, said, “Until now, there was no definitive standard by which an organisation could assess their corporate governance procedures. The Code will provide a robust framework of assessment of compliance with relevant corporate governance codes and enhance the basic principles of good corporate governance for Irish organisations: transparency, accountability, fairness, responsibility and disclosure. Any organisation with the SWiFT 3000 Certification in Corporate Governance is acting in the best interests of the company and its shareholders.“ Back to Top