MINISTER FOR Finance Brian Lenihan plans to ban cross-directorships and chief executives becoming chairmen of their companies under new legislation designed to crack down on “crony capitalism” in Ireland.
Mr Lenihan told the Financial Timesyesterday that he would propose the measures to Cabinet next week.
“There is a problem in all small countries with too many incestuous relationships,” he told the newspaper.
The Minister also said the proposed new central banking commission would have the power to impose restrictions on lending and that he would advertise for a bank regulator in the near future.
Mr Lenihan yesterday con- cluded his three-day trip to London with a lunchtime meeting with British chancellor Alistair Darling.
Mr Lenihan told The Irish Timesthat he and Mr Darling had "a very good discussion about the difficult financial circumstances Britain and Ireland face" and agreed the continuing need for both governments to work together in face of the global downturn.
Mr Lenihan and Mr Darling also reviewed the preparations for the forthcoming G20 summit in London.
The Minister said he had been “concerned about some downbeat forecasts” following last weekend’s meeting of G20 finance ministers, and stressed his agreement with the chancellor that “the international banking system must be reformed and restored”.
Mr Lenihan was upbeat about his St Patrick’s Day trip to London and welcomed the opportunity to counter some recent “negative publicity” about the economic situation in Ireland.
One particular problem Mr Lenihan “sensed” was criticism of the Irish performance by some ultra-Eurosceptics who seemed to think the current Irish experience was a reason why the UK should not join the euro zone.
While accepting that that was entirely a matter for British internal debate, Mr Lenihan insisted those making such a link were “wrong” and stressed that the British and Irish systems were inextricably linked.
In an interview with Bloomberg television yesterday, Mr Lenihan repeated his confidence that the recession was strengthening public opinion pointing to a Yes vote in the second referendum on the Lisbon Treaty.
Mr Lenihan said voters would embrace the EU and reject a go-it-alone policy after the collapse of Iceland’s economy.
“A lot of political pundits say the choice next time for Ireland will be Rome or Reykjavik,” Mr Lenihan said. “Most people will vote for Rome.”
Mr Lenihan also reiterated his assertion that the supporting presence of the European Central Bank (ECB) meant that the Irish banking system would not default on its debts.
Both cross-directorships and the practice of a chief executive becoming chairman of the same company are frowned upon under a voluntary code of practice for public companies.
The Minister’s signal that he intends to incorporate elements of the Combined Code on Corporate Governance into law follows a series of scandals relating to Anglo Irish Bank.
Former Anglo Irish Bank chairman Seán Fitzpatrick, who was forced to resign after it was revealed he concealed loans of up to €122 million by temporarily transferring them off the bank’s books, had previously been chief executive of the bank.
Mr Fitzpatrick also sat on the boards of two companies, Smurfit Kappa and Greencore, at the same time that Smurfit Kappa chief executive Gary McGann and Greencore chairman Ned Sullivan sat on the board of Anglo Irish Bank.
