GRANT THORNTON managing director Paul Raleigh admits to being “puzzled” by the Irish Stock Exchange (ISE) response to his company’s Iseq Corporate Governance Review, a publication that made the seemingly uncontroversial point that Irish corporate credibility is a touch wobbly.

“Camaraderie over competence,” was Raleigh’s catchy way of summing up the boardroom fandango performed by many multitasking company directors.

However, it was the headline on the press release – “Almost half of Irish companies are not fully compliant with the corporate governance code” – that is thought to have ruffled the sensitivities of some institutional interests, who felt it implied that 50 per cent of the boards of Irish plcs were corporate criminals.

Signing up to the code in question, the Combined Code on Corporate Governance, may be a condition of listing on the ISE, but of course that doesn’t necessarily mean that sticking an unthumbed copy in the recycling bin is breaking any laws.

Lamenting what it says was a regrettable “disconnect” between the detailed findings of the report and Raleigh’s commentary, the ISE put out a statement declaring that “a number of points should be borne in mind when discussing these matters”.

The first point was broadly that the code is the same one that applies to London Stock Exchange companies and that Irish plcs are no worse than UK ones.

Given that UK-quoted companies such as JJB Sports and Carphone Warehouse have been engulfed in share misuse scandals all of their own, it is perhaps not the most flattering of defences – although, unlike our homegrown scandals, these hidden transactions did not have the direct effect of misleading shareholders about the financial health of a company.

The ISE’s second point was that “the code specifically states that good governance can be achieved by means other than those outlined in the code”.

(The nature of these means was not elaborated upon in the statement, but presumably includes by osmosis.)

Its third point, apparently aimed at Grant Thornton’s unpopular call for the code’s key provisions to be incorporated into legislation, was that “rules and codes can never be a substitute for good corporate culture and individual director integrity”.

If rules and codes, though, are not a substitute for “good corporate culture and individual director integrity”, then what is?