10th February 2023 |
The Company Law Review Group (CLRG) is conducting a survey on the effectiveness and usability of the Directors’ Compliance Statement as provided for under section 225 of the Companies Act 2014.
The CLRG is a statutory expert body charged with advising the Minister for Enterprise, Trade and Employment on the review and development of company law in Ireland. The minister recently approved a two-year work programme for 2022-2024.
Item 2 of this programme concerns the Directors’ Compliance Statement (DCS): Review the obligations outlined in relation to the directors’ compliance statement in the Companies Act 2014, and, if appropriate, make recommendations as to how these might be enhanced in the interest of good corporate governance.
The Directors’ Compliance Statement was first introduced by section 45 of the Companies (Auditing and Accounting) Act 2003, following the 1998 McDowell Working Group on Company Law Compliance and Enforcement which identified a “culture of non-compliance” in Irish company law, and also the Review Group on Auditing’s 2000 DIRT report which recommended the introduction of the directors’ compliance statement owing to its finding that non-compliance by Irish companies was more widespread than had been thought.
This section was never commenced however, due to opposition from the business community many of which believed the requirement would create an excessive burden for companies.
At the request of the minister, the CLRG reviewed the matter and proposed a revised text to be included in legislation. This was adopted and is the current section 225 of the Companies Act 2014.
Object of survey
Now that the DCS has been operational for several years, the CLRG are again reviewing it to determine a) its effectiveness in achieving compliance and b) its usability. The CLRG is conducting a survey of affected companies to identify, inter alia:
- if the DCS is achieving its objective in promoting awareness of directors’ responsibility for complying with relevant obligations
- if the DCS is contributing towards a company’s compliance structures
- the benefits and drawbacks of the DCS in its current form
- the process involved in preparing the DCS
The review will assist the CLRG with any recommendations for amendments to section 225 to the minister.
Stakeholder views are vital to understanding the value and drawbacks of the DCS in its current form. The CLRG are seeking feedback from:
a) directors of affected companies
b) practitioners (auditors, financial directors, solicitors, and so on) who are involved in the preparation of the annual DCS
Take the survey
The survey should take no more than 8 minutes to complete. The closing date is 28 February 2023.
Any queries can be directed to the CLRG Secretariat at email@example.com or 087 1493114.