Announced issue of Irish Corporate Governance Code 2024, effective Jan. 1, 2025.
Follows May 2024 IRE EXC consulted Irish corporate governance code, see #210764.
Background
Historically, Irish companies followed UK Corporate Governance Code (UK code) which is synonymous with best international practice, but given orientation of trading, post-trade in Irish securities towards Europe, Brexit and recent UK listing and corporate governance review, now was seen as the time for Ireland to have its own Irish Code.
Irish code's starting point was to use UK code model as a base, adapt it for the Irish market where appropriate; introduction of an Irish Code begins ongoing process to ensure governance practices in Ireland stay robust, relevant, attuned to local market.
UK Code is the Irish code's foundation, but IRE EXC is setting ground for divergence if needed; a local code allows for greater flexibility to adapt and evolve as the corporate, legal, economic climate changes, so governance standards remain relevant, effective.
Code Overview
Inaugural Irish Corporate Governance Code establishes robust benchmark for good governance in Irish corporate sector, to balance transparency and accountability with business practicalities; good governance helps firms navigate modern business.
Code sets out a series of principles and more detailed provisions aimed at establishing a high standard of corporate governance focused on long-term sustainable success.
Where a company has not complied with the code’s provisions, the firm is required to report meaningfully on the nature, extent and reasons for non-compliance.
Explanations should reflect environment within which company operates and provide a rationale for divergence; an alternative to complying with a provision may be justified in particular circumstances based on factors including firm size, complexity, etc.
Code states that explanations should set out the background, provide a clear rationale for the action the company is taking, and explain the impact that the action has had.
Where a company does not comply with a code provision but actively intends to do so in future, it should in its explanation provide indication of how and when it will comply.
Code's provisions will apply to Irish incorporated companies with an equity listing on Euronext Dublin for financial years commencing on or after Jan. 1, 2025.
