RECENT CORPORATE scandals were a reflection of a “cultural malaise” that has to be changed utterly, the chairman of the Irish Stock Exchange, Pádraic O’Connor, said yesterday.

He said it was his view that society would demand a lead from Government as a critical part of a process of change.

“What was most required from Government was that it lead by example through a genuine effort to ensure that public sector companies adhere to the highest standards of corporate governance.”

This would send out the right message about the behaviour expected from Irish business.

“That is a real competitive issue as well as an ethical one.”

Mr O’Connor was speaking at a conference on corporate governance in Dublin organised by the stock exchange.

Tánaiste and Minister for Enterprise, Trade and Employment Mary Coughlan said there was a temptation nowadays to knock corporate Ireland and the enterprise sector as a consequence of the problems in the banking sector.

“I would like to put on record that it is wrong to blacken, here and abroad, the reputation of all our companies because of serious failures in a particular sector.”

She said Ireland had been ranked in the top six EU member states in terms of information disclosure and explanation.

She said the Government had committed to putting the combined code on corporate governance on a legislative footing for all banks, public companies and state-sponsored bodies.

Discussions were ongoing between her department and the Department of Finance.

She said proactive shareholders should monitor such matters as chief executives succeeding an outgoing chairman and the control of management pay and pensions. She was loathe to see the State get involved.

Labour Party finance spokeswoman Joan Burton said the important matter was the ethical framework within which rules were applied. “Ticking all the boxes” was not enough. She said Ireland would benefit from being more transparent.

Ms Burton added that former British prime minister Tony Blair, without any lawyers, was answering questions put to him by a committee investigating the war in Iraq and on which there were no lawyers.

Such an model of inquiry here would be “revolutionary”.

The chief executive of the Irish Association of Investment Managers, Frank O’Dwyer, said a key issue in good governance was the quality of a company’s board.

Because of the small pool of qualified people here, companies should look to Britain and further afield when seeking directors.

Anne Molyneux, a director of global consulting firm CS International, said the problem of speaking up to a dominant figure on the board was a global one, whether it was in a family-dominated company in India or a Chinese company where the dominant figure was a leading party official.

She said the main issue coming down the road for Ireland was “trust”.

Ireland needed regulation that was implemented and then had to tell the world that this was so, in order to attract investment, Ms Molyneux added.

Philip Pellé, an official with the European Commission, said a difficulty with the governance code was the passivity of investors.

Vincent Sheridan, a director of FBD Holdings, said the principles of corporate governance should be applied to the Government and its policies.

He criticised society’s temptation to get involved in “the blame game”.

Leo Varadkar, Fine Gael’s enterprise spokesman, said a culture of high standards was needed in Ireland. He accepted that the Oireachtas had not done a great job in holding people and State companies to account.