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First Irish corporate-governance code set out

Euronext Dublin, which runs the Irish stock exchange, has published its first corporate-governance code for Irish companies.

Lawyers at McCann FitzGerald have described the move as “a welcome development in the evolution of the Irish equity capital-markets landscape”.

They point out that, while Euronext Dublin has recognised the UK Corporate Governance Code as being synonymous with international best practice, it was felt that now was an opportune time for Ireland to have its own code.

Flexibility

The Irish code will apply to Irish companies listed on the regulated market of Euronext Dublin for accounting years beginning on or after 1 January 2025.

Dual-listed companies will, however, have the choice to adopt the Irish code or the British code.

In a note on the firm’s website, the McCann FitzGerald lawyers say that the code is designed to allow for greater flexibility to adapt and evolve as the corporate, legal, and economic climate changes.

They note that, while the British document forms the basis of its Irish equivalent, there are some differences.

Independence of directors

While the Irish code provides a list of circumstances that could affect a director’s independence, McCann FitzGerald (MF) says that one of these circumstances – employment by the company – is “subtly different” from the British code, which has a five-year lookback period. The Irish code’s lookback period is three years.

The Irish code also outlines how a company should respond if 25% of shareholders vote against a proposal recommended by the board. 
This compared with the threshold of 20% in Britain.

The MF lawyers also highlight the Irish code’s requirement that a board should routinely review the company’s policy on the means for the workforce to raise concerns in confidence and, if they wish, anonymously.

Diversity

They add that the Irish code specifically mandates the maintenance of a policy on diversity and inclusion.

Under the Irish version, at least one member of the audit committee should have “competence in accounting or auditing”, rather than “recent and relevant financial experience” under the British code. 

McCann FitzGerald says that this is consistent with the wording of section 167(6) of Ireland’s Companies Act 2014.

The firm’s lawyers conclude that the continuing (and expected future) divergence between British and EU equity capital-markets regimes provides “a strong impetus” for a code tailored to the Irish market that has the flexibility to diverge further from its British equivalent.