Proposed Corporate Governance Code Issued - Irish Funds Industry
Over the course of the last year, the Central Bank of Ireland (the "Central Bank") has sought to publish corporate governance guidelines across a range of sectors of the Irish financial services industry. Included in this initiative has been the move by the Central Bank to call for a set of guidelines specifically for the funds industry in Ireland.
The responsibility for developing these guidelines was placed on the industry itself and taken on by a representative steering group from within the Irish Funds Industry Association (the "IFIA"). The Central Bank has remained centrally involved throughout the process.
A draft set of guidelines has now been formulated and published for industry consultation. This represents an industry proposal that has the support of the Central Bank. This draft Corporate Governance Code (the "Code") can be accessed by clicking here.
Some of the main points addressed in the Code are as follows:
- It is voluntary, best practice guide. However, any non-adherence by an investment fund/management company is to be explained in the annual report and may cause the investment fund/management company to come under the close scrutiny of the Central Bank.
- The proposal does not include a hard limit on the number of fund directorships an individual can hold; rather it requires that each director has sufficient time to devote to the role.
- There is a rebuttable presumption that no more than eight non-fund directorships may be held.
- The requirement for two Irish resident directors remains.
- Some new requirements are proposed, including: a minimum of three directors per board; each board to be represented by at least one independent director; each board to appoint a chairman.
- Investment funds and management companies shall have a transitional period of 12 months from 1 September 2011 to adopt the Code.
It is anticipated that an agreed version of the Code will be available at the end of July 2011, and be adopted by the industry by 1 September 2011. For further information, please contact Barry McGrath or Stephen Carty.