Directors believe firms ‘run better’

An overwhelming majority of Irish directors believe the way firms are run has improved in recent years.

More than 80% of the 260 directors surveyed by the Institute of Directors in Ireland (IoD) feel the standard of corporate governance among firms has improved recently, while seven out of 10 believe those running companies have learned from governance failings of the past.

Governance of the financial-services sector, which has previously been criticised in light of the economic downturn, is deemed to be “good to very good” by more than half of those surveyed (55%), pointing to confidence among directors that newly-introduced regulation is having the desired effect on the industry.

IoD chief executive Maura Quinn said that while improvements have been made, real diversity and transparency has yet to be achieved.

“We can take a number of positives from this survey in terms of improvements in corporate governance standards, however, lessons continue to be learnt in the wake of governance failings and there is still some way to go in terms of achieving real diversity and transparency on boards. While training and regulation are important factors in continuing to improve governance standards in this country, so too is transparency in the appointment process and a willingness and recognition to ensure that boards are appropriately skilled and representative of stakeholder interests,” said Ms Quinn.

It seems who, rather than what, you know is still the main determinant of whether a person is likely to assume a directorial position, with the vast majority of those surveyed considering it to be central to the prevailing culture.

Despite some improvements in the composition of boards — in areas such as gender balance and the range of experiences directors bring to the table — they are still largely seen as male-dominated and lacking in diversity. Many women are also more sceptical that change is occurring in relation to gender equality, with 70% claiming only marginal improvements have been made.

However, almost 60% believe directors are better qualified than they were a few years ago.

Encouragingly, nearly all of those surveyed (97%) are optimistic about the outlook for the Irish economy heading into next year, while 70% of directors claim their organisation is set to take on new staff in the next 12 months.