Compliance plans back on agenda after debate

CONTROVERSIAL PROPOSALS to force company directors to make compliance statements with their annual returns and results are back on the table following a recent Oireachtas debate.

Earlier in the decade, the Government shelved plans to introduce new laws requiring company directors to make stringent statements with company returns showing that they had complied with a range of legislation and regulations.

After widespread protests that the measure would result in a hefty extra regulatory burden, the Government referred the issue to the Company Law Review Group (CLRG), which came up with a more moderate suggestion, which is now due to be included in a proposed company consolidation Bill.

However, Independent Senator Joe O’Toole recently tabled an amendment to companies legislation currently going through the Oireachtas which was similar to the original compliance statement proposals.

After a debate, Tánaiste and Minister for Enterprise, Trade and Employment Mary Coughlan said she would refer the issue back to the CLRG and to the State’s corporate law enforcer, Paul Appleby.

At the weekend, Sinéad Kelly, a partner with commercial solicitors’ firm AL Goodbody, said that the issue is back on the agenda after the Seanad debate.

“This is an interesting development,” she said. “In 2009, we are in a very different place to 2005, it’s a very different climate. The outcome would depend on whether the CLRG decides that the issue needs to be dealt with again in light of that.”

She pointed out that it could be seen as a way of improving business practices now, instead of waiting a number of years for the CLRG’s revised proposals to become law when the Oireachtas passes the consolidated companies legislation. Either way, she added, the issue is now back in the spotlight.

Ms Kelly pointed out that the original proposal, which was to be section 45 of the Companies (Auditing and Accounting) Act 2003, was very unpopular, and ultimately was not commenced on the grounds that the costs involved would leave Irish businesses at a competitive disadvantage.