Foreign investment will follow higher standards, says stock exchange boss

THE head of the Irish Stock Exchange (ISE) has warned that future international investment in Irish publicly-quoted companies depends on better corporate governance standards and global standards and expectations.

Addressing the ISE conference on corporate governance at Dublin’s Four Seasons Hotel yesterday, the exchange’s chief executive Deirdre Somers said: “Companies must consider whether their historical practices, although accepted in the past, will meet market expectations in the future.”

Investors must “demand better standards and require better disclosure and then differentiate and penalise those companies that don’t provide them”.

ISE chairman Padraic O’Connor added that responsibility for the upkeep of Ireland’s corporate governance reputation shouldn’t solely rest on the shoulders of the 29 companies listed on the ISEQ, but also semi-state companies and privately- owned firms.

When asked specifically about the corporate governance issues at Anglo Irish Bank, prior to its nationalisation at the beginning of 2009, Ms Somers said the ISE had been limited in its powers, due to the scope of the body’s regulatory role.

Meanwhile, in opening the conference Tánaiste Mary Coughlan said the investigation into the banking crisis must be robust. “Stabilising and recapitalising the banks is required to restart commercial lending and is a precursor to fundamental regulatory reform, including in the vital area of corporate governance,” she added.

Separately, chartered accountancy firm Grant Thornton (Ireland) has published its 2009 Corporate Governance Review. It highlighted instances of independent directors holding multi-board positions; the same director holding both chief executive and chairman roles and lack of transparency regarding financial experts on audit committees as its chief concerns.