Irish companies need to develop the right culture if corporate governance is to work in any organisation, according to a major new survey.
One of the main features of the collapse of the Irish financial sector in 2008 was the complete lack of appropriate corporate governance standards and risk management practices.
However, a new survey commissioned by PwC, Arthur Cox and the Irish Stock Exchange found that nine out of 10 respondents found that culture was the most important factor in creating an environment that promoted sound corporate governance practices.
The survey was released to coincide with a conference in Dublin today, which was organised by the Department of Jobs, Enterprise and Innovation as part of the Irish EU Presidency.
Eighty-seven per cent of respondents said that companies had to change their attitude to risk management. Instead of seeing it as obligation, it should be seen as having tangible business benefits. Moreover, companies need to shift from excessive risk avoidance to well controlled expansion of products and markets.
Over half the people surveyed said that mandatory quotas were not the best way of achieving diversity in the boardroom. There was a sizeable majority who believed that the adoption of a proper corporate governance framework throughout the EU would stimulate competitiveness and growth. Opinion is evenly divided, however, on whether corporate governance legislation should be introduced.
There was a large majority in favour of much greater disclosure of company specific information rather than “boilerplate” corporate governance reporting. There should be much greater transparency on director remuneration with shareholders having more of a say.
Speaking at the survey launch, Minister for Jobs, Enterprise and Innovation Richard Bruton said: “It is vital that we learn from past regulatory failings, so that at the EU and national levels we have a robust and fit for practice corporate governance regime.”
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