Directors put on notice on pay

No-one could accuse the Minister for Enterprise, Trade and Employment, Mary Harney, of mincing her words when it comes to standards of corporate governance. Introducing new guidelines from the Irish Association of Investment Managers, she said the Irish Stock Exchange and public companies could voluntarily accede to the requirements it suggested . . . or face the prospect of her introducing legislation to force them to do so.

The measures, which would require detailed disclosure of remuneration rather than the current system of aggregation, have been strongly resisted in the past by both the exchange and the Institute of Directors. While, privately, some directors appear to accept the change is inevitable, both organisations are a long way from accepting the idea publicly.

There may well be reasons why directors would be reluctant to accept the changes proposed but I can't imagine much serious consideration being given by the Minister to one put forward by Mr Tom Healy, chief executive of the exchange. He said detailed disclosure of what directors were paid could act as a disincentive to companies thinking of going public and damage the overall development of the market.

Now what could that mean. After all, no-one, least of all shareholders, would begrudge their hard-working directors earning a decent crust for their labours. What might damage the overall development of the market is a perception among those same shareholders that the directors of companies in which they invest have something to hide in terms of what they are paid.