Vol. 510 No. 2
8 Mr. M. Higgins asked the Tánaiste and Minister for Enterprise, Trade and Employment if, further to Parliamentary Question No. 72 of 22 June 1999, she has met the Irish Stock Exchange to discuss progress on the issue of the detailed disclosure of the remuneration of directors of public companies; the plans, if any, she has to introduce legislation to deal with the matter; and if she will make a statement on the matter. [21994/99]
At their request, I met the president and chief executive of the Irish Stock Exchange on 1 November 1999 arising from the exchange's consultations with investors, listed public companies and other relevant bodies in relation to the disclosure of directors' pay and remuneration in such companies. The exchange proposed to me that individual disclosure be made for two persons, namely for each chief executive and for the highest paid director, excluding the chief executive, while the pay and remuneration of the remaining directors would be disclosed in aggregate form only. I was advised that full disclosure of directors' remuneration could damage the marketing of the exchange if Irish requirements were too far ahead of its competitors.
It would be true to say that the exchange's views and mine remain divergent. I indicated to its representatives that full disclosure for each named director is a desirable development. It is in the best interests of all the members of a company that the annual reports of Irish registered and listed companies show the remuneration packages paid to individual directors. As previously indicated, I would prefer to see the exchange's rules on disclosure being revised voluntarily rather than being dealt with through legislation. The exchange's representatives undertook to have the matter discussed again at a forthcoming meeting of the board of the exchange and they will be in touch with me after that meeting.
Does the Tánaiste accept that she has been talking the talk on this matter for a long time now? When will she decide that the hedging by the stock exchange will not change? She must either require disclosure or not.
The first time I commented on this issue was on 4 March 1999 when I launched the suggested code of practice for the Irish Association of Investment Managers. They recommended that we take on board the confined code on corporate governance which applies in Northern Ireland and the United Kingdom. Having considered their views, I agreed with them. Since then, I have held two discussions with representatives of the stock exchange. I would prefer if the rules on disclosure were obeyed voluntarily, as happens in many other countries. Self-regulation, if it works, is preferable and I am anxious to bring the stock exchange along that route.
My position has hardened somewhat in light of all the inquiries and I have made that clear to the stock exchange. Disclosure would not adversely affect the exchange, given that it applies in the UK and Northern Ireland. In any event, companies on flotation must give details of individual remuneration packages so I do not believe disclosure would have any adverse effect on flotations. Notwithstanding that, we are a small country and, taking everything into account, all of the shareholders of a public company should be entitled to the fullest possible information on benefit-in-kind, remuneration packages and so on. The only Bill in this area is the Companies (Amendment) (No. 2) Bill which was debated in the House yesterday. Legislation will be forthcoming in company law, particularly in regard to the establishment of the new enforcement office.
Surely, this matter would be very simply dealt with by way of legislation. A simple amendment to the Companies (Amendment) (No. 2) Bill would have accommodated this point. I presume the Tánaiste agrees that the stock exchange will not voluntarily change its view on this matter. The suggestion that requiring this type of disclosure in 1999 would have an adverse impact on the exchange is nonsensical.
I am not certain that the exchange will not change its views. On Monday, its representatives had substantially changed their views since the previous meeting I held with them in June or July. They suggested that the packages of the chief executive and the highest paid director would be disclosed and that was a move in the right direction. Some members of public companies have told me privately that they would like to see the rules on disclosure changed. If the changes do not occur voluntarily, we must seek Government approval to introduce legislation which will allow them to be made legally. That will happen if it is deemed necessary.
