Corporate Governance by Phyllis Willoughby
- Statute (Acts of the Oireachtas and other Legislation)
- Common Law
- These are critical to good corporate governance.
S.223 Co. Act 2014
“I acknowledge that, as a director, I have legal duties and obligations imposed by the Companies Act, other statutes and at common law”.
S.228 Co. Act 2014
- Act in good faith in what the director considers to be the interest of the company.
- Act honestly and responsibly in relation to the conduct of the affairs of the company.
- Act in accordance with the company’s constitution and exercise his or her powers only for the purposes allowed by law.
- Not benefit from or use the company’s property, information or opportunities for his or her own or any else’s benefit unless the company’s constitution permits it or a resolution is passed in a general meeting.
- Not agree to restrict the director’s power to exercise an independent judgment unless this is expressly permitted by the company’s constitution.
- Avoid any conflict between the director’s duties to the company and the director’s other interests unless the director is released from his or her duty to the company in relation to the matter concerned.
- Exercise the care, skill and diligence which would be reasonably expected of a person in the same position with similar knowledge and experience as a director. A director may be held liable for any loss resulting in their negligent behavior.
S.232 Co. Act 2014
S.281 Co. Act 2014
It is a criminal offence for any director of the company to fail to take all reasonable steps to ensure compliance with this requirement.
S.290-295 Co. Act 2014
The annual financial statements are prepared from the information contained in the company’s accounting records and other relevant information.
The directors must not approve the financial statements of a company unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position as at the financial year end.
S.238 Co. Act 2014
A company (“relevant company”) shall not enter into an arrangement under which a director of the relevant company or of its holding company, or a person connected with such a director, acquires or is to acquire, one or more non-cash assets of the requisite value from the relevant company, or the relevant company acquires or is to acquire, one or more non-cash assets of the requisite value from such a director or a person so connected, unless the arrangement is first approved:
- By a resolution of the relevant company in general meeting, and
- If the director or connected person is a director of its holding company or a person connected which such a director, by a resolution of the holding company in a general meeting.
- Company directors’ principal duties and obligations of particular relevance in this context.
- The considerable risks associated with accepting such appointments; and
- Some of the basic steps that any member of the public should take before deciding to accept an unsolicited offer to become a company director.
The main role of many Audit Committee Chairs is related to risk and compliance. In addition, they must ensure that ESG matters are effectively reported on, rather than deciding on what to implement and how.
ESG success is dependent upon executive management’s interest levels and the company’s access to ESG resources. However if shareholders have an interest in ESG, it tends to influence the business’ attitude towards the framework and gives greater importance to company’s efforts.
- Environmental activities are wide ranging depending on operating markets and company size. Many organisations are trying to reduce their carbon emissions, workplace plastic use and ecourage staff to cycle or walk to work.
- To date the recommendations by the task force on Climate Related Disclosures (TCFD) have proven most popular for implementation.
- A small number of negative reactions around continual changes to reporting standards. Concerns from a few ACCs around the time needed and costs required for smaller businesses to comply with the recommendations.
- The ACCs agreed that the expansion of social activities is driven in part by societal shifts, in turn making investors more interested in companies’ social policies and activities and motivating companies to place a greater focus on their social activities and reporting
- ACCs felt that they had a firm understanding of governance activities, issues and risks, as these activities and measures are well established.


When companies report on sustainability matters the annual report will consider environmental, social, and governance factors. This information must be clearly identifiable within the management/directors’ report within a dedicated section and said this management report must be produced in a European Single Electronic Format.
There will be additional education and training requirements for auditors to qualify to carry out sustainability assurance including transitional provisions.
Member states have until July 2024 to transpose the CSRD, with requirements being phased in between 2024 and 2028. The phasing in of the new rules in line with the Directive (2022/2464) is applicable to the following entities:
- 2024 large public interest entities already in scope of non-financial reporting (> 500 employees)
- 2025 large companies and large public interest entities (> 250 employees)
- 2026 listed SMEs with further opt outs possible.
- 2028 subsidiaries and branches of certain non-EU companies.
There are considerable risks associated with accepting directorship appointments, therefore it is essential to apply adequate due diligence measures. For success, the board of directors should meet regularly, retain control over the business whilst ensuring ongoing risk management
