Taoiseach delays new compliance laws pending review

The Taoiseach has agreed to delay the introduction of controversial new obligations on directors pending a review by an expert group on company law.

The obligations, which form part of the Companies Act 2003, require directors to furnish statements of compliance showing they have systems in place to prevent major company law breaches.

Ibec has complained that the statements of compliance could impose considerable extra burdens and costs on business. The group has also said the statements are not required in most countries. The Taoiseach said the matter would now be studied by the Company Law Review Group.

He said he hoped this group would have its work completed by July. He was speaking during the inaugural lecture of the Institute of Certified Public Accountants (CPA).

The announcement by the Taoiseach was welcomed last night by the CPA and by the Institute of Chartered Accountants in Ireland (ICAI).

"These measures have been controversial since their announcement," the ICAI said in a statement. "They impose a regulatory burden on firms in excess of that which applies in other countries and are already being cited abroad as a reason not to do business in Ireland."

Mr Ahern said that, despite the decision to refer the matter to the Company Law Review Group, he was not going to allow standards to be diluted. "Our determination to ensure the highest standards of governance in business remains firm. We cannot go back, we cannot be faced again with the type of practices which gave rise to the PAC Dirt enquiry and which led to this legislation," the Taoiseach said.

He said there appeared to be considerable confusion about what directors were being asked to do. "They are certifying that they have a system in place in their firms to underpin compliance and detect non-compliance, rather than guaranteeing absolute compliance with all areas of all laws," he said.

Declan Keane, head of business advisory services at KPMG, welcomed the decision by the Taoiseach to obtain views from the Company Law Review Group. He said the Government needed to ensure Ireland's compliance provisions were aligned with "the international marketplace".

Mr Keane commented: "We strongly support steps to ensure that the reputation of Irish business for sound practice and good governance is second to none."