Tánaiste Mary Harney today (Thursday 4th March 1999) congratulated the Irish Association of Investment Managers on the publication of its revised guidelines on corporate governance and incentivisation schemes for directors and employees of quoted companies.

"The guidelines break new ground and are to be welcomed. It is vital that we have the highest standards of corporate governance. Standards should not only be set by law but should be demanded and enforced by industry groups such as the Association," the Tánaiste said in the course of her speech at an event to mark the launch of the guidelines in the Shelbourne hotel.

The Tánaiste went on to say that the increased globalisation of capital markets and the need to ensure the optimum attractiveness in Irish stocks in a euro environment has led to an environment where greater accountability and transparency are not only to be welcomed but are fundamental to the survival of funds management.

"Events in the past have resulted in Tribunals of Inquiries together with the unprecedented number of company law investigations that I have initiated. These have heightened our awareness that appropriate standards of corporate governance are not always being maintained. I am determined that through the use of my investigative powers, a more active prosecution regime by my Department and a strengthening of company law that the highest standards of corporate governance are implemented," the Tánaiste emphasised.

Tánaiste Mary Harney welcomed the Association's recommendation that there be full disclosure of directors' remuneration.

While the Rules of the London Stock Exchange rules demand full disclosure of remuneration of each named director, the Irish Stock Exchange only requires disclosure of directors' remuneration on an aggregate basis. "I am of the view," the Tánaiste outlined, "that the remuneration of individual directors should be disclosed in respect of quoted companies. I believe that this is in the best interests of all members of a company. This is in an area that I will be considering in detail in the context of company law reform. No doubt there will be many in favour of the status quo. Let me say that the remuneration of members of the Government, the directors of Ireland Inc., are open to public scrutiny. This is as it should be. Listed companies should be amenable to the fullest accountability themselves by their shareholders."

On another aspect of corporate governance, the Tánaiste said that she had been surprised and disappointed to learn that a number of listed plcs in this State have failed to file timely returns with the Companies Registration Office (CRO).

The CRO commenced an extensive strike-off regime in September, 1998 resulting in companies in default of their obligation to file returns being selected at random for the initiation of the statutory strike-off procedures. Some 500 companies deficient in filing returns for two or more years are being formally notified by the CRO each working day of their default. This process will continue until all companies who are out of date with their returns for two or more years have been processed. It is estimated that this will take until mid-1999.

Those companies which fail to meet their statutory requirement following notification are subsequently struck-off the register and dissolved. "It is my intention to reduce the current generous two year "period of grace" to one year in the Companies Bill which will shortly be published," the Tánaiste stated.

In welcoming the IAIM's promotion of wider share ownership, the Tánaiste said that it was Government policy "to encourage and facilitate employee share ownership schemes as far as possible. Programmes such as these tend to underpin the commitment employees have to the development of their enterprise and encourage more co-operative management/employee relationships."