2020 raised unexpected and extraordinary challenges for the directors of Irish companies as Covid-19 related health risks were exacerbated economically by Irish and international restrictions on travel, reduced business activity and increased costs arising from changes to the ways we do business.
While particular sectors continue to face very significant ongoing challenges, as we look ahead to 2021, it is with greater hope coming from the release of anti-Covid vaccines, greater potential financial and economic stability and perhaps even a Brexit deal at the very last possible moment.
Looking back, the Irish corporate governance and company law response to these challenges during 2020 reinforces that hope. As we reported to you during the year (links to related articles below), the Irish Government responded by promoting new company law legislation which on a temporary basis to 31 December 2020 (unless extended) gives Irish companies flexibility to issue notice of and to hold wholly or partial virtual shareholder meetings, subject to reasonable protections; makes it easier for companies to execute documents under seal; and allows changes in decisions to pay dividends. The changes introduced have proven useful and effective and hopefully those relating to convening and holding shareholder and creditor meetings and for the execution of documents will be considered for inclusion in Irish company law on a longer-term basis.
The Companies Registration Office also demonstrated responsive, pragmatic and balanced flexibility with extended filings deadlines and other arrangements to enable Irish companies to continue to operate in a predominantly virtual environment as closely as possible to the way they did before March 2020.
The ODCE played its part too in its clear and measured guidance to directors as to the objective standards recommended for directors to keep in mind in relation to the exercise of their duties and responsibilities as they make business decisions. Many of those standards will be relevant and very helpful to directors in looking at the impact of other risks, such as Brexit, to their companies’ businesses in 2021.
Diversity is a continuing challenge for Irish boards. On 16 December 2020 the Government indicated that, while significant progress has been made in achieving better gender balance for both Irish listed and large Irish private companies, its intention is to consider doing more in 2021 to promote gender diversity. In launching the Third Report of the Review Group on Balance for Better Business, the Government confirmed its intention to consider the introduction of mandatory gender diversity obligations for Irish companies, perhaps starting with ones in which the State has invested.
Gender diversity is one element in a larger international recognition of the value of diversity (of gender but also of ethnicity) for the improvement of corporate governance. Other elements which will be on board agendas for 2021 include the promotion of more sustainable business and of employee wellbeing and including broader stakeholder interests in business decision making.
Despite many challenges, it is clear that strong foundations are in place from 2020 to continue to improve Irish company law, business support and corporate governance.
- Companies (Miscellaneous Provisions) (COVID-19) Act 2020 – Key Changes to Company Law - link
- Helpful ODCE Guidance for Directors and Liquidators during COVID-19 - link
- Corporate Governance and COVID 19 – Practical Implications to Consider - link
Share this article:
About the Author
Ken is Head of the Corporate team and has built a practice in acquisitions, disposals, and capital markets transactions across various industry sectors; joint ventures and corporate re-organisations of publicly quoted and private companies; and advises on corporate governance and general corporate law. He has extensive expertise in the financial services, aviation, gaming, technology, media and sports sectors.