Amendments Nos. 2 and 3 are related to amendment No. 1 and all may be discussed together.
Companies (Auditing and Accountancy) Bill 2003: Report and Final Stages.
I move amendment No. 1:
In page 8, to delete line 8 and substitute the following:
"(e) The Institute of Directors;”.
I do not want to repeat what was said yesterday. The supervisory authority is heavily weighted in favour of the public service and lightly weighted in favour of the creators of wealth. The Government has shown a desire to listen to consumers in the past. Therefore, the omission of companies which use auditors and executive directors highlights a gap in Government policy. The Government considers consumers in other areas but in this sphere it does not recognise consumers or users.
The review group comprised 18 members, including two Civil Service trade union representations, six public servants, three academics and four representatives of auditors. There was only one representative of business, the creator of enterprise. The recommendations made by the group reflected that imbalance. There is a lack of understanding among governments in general about the needs of business. IBEC provided the only business representative on the interim board of the supervisory authority. My amendments are intended to achieve a better balance on the board.
I second the amendment.
I welcome the amendments made to the Bill. I read the Blacks of yesterday's debates and compliment the parliamentary reporters. Senator Maurice Hayes was a little upset by my reference to fat cat directors but I exclude him because he is a wonderful, unselfish director. I oppose the amendments.
Following the acceptance of the Government's amendment on Committee Stage, nine bodies have been designated for the purposes of section 6(2). Each of the designated bodies, while being a member of the supervising authority, is entitled to nominate one person to be a director of the authority. The present composition reflects recommendation 9.5 of the review group on auditing. The Minister is entitled to prescribe, by regulation, additional designated bodies. He or she is also entitled, by regulation, to remove a designated body. There is flexibility, therefore, to take account of interests which, in the light of experience, should be represented on the authority.
The aspect of the authority's role that is most relevant to the bodies mentioned is the review of compliance of accounts under the Companies Acts. As a result of the amendments made to section 27 on Committee Stage, the authority will be able to invoke the expertise of bodies such as the Institute of Directors or ISME to assist with this task. I will take note of the Senator's views but I am not willing to accept the amendments.
I thank the Minister of State for noting the points I made. There is recognition of the ability and right to co-opt an individual to the board or to dismiss him or her. The reason I tabled these amendments is that I am concerned about the Government's attitude to business, particularly in regard to a regulatory impact assessment, which is lacking in this legislation. The Irish Times carries a headline today regarding the OECD's comments about Ireland. It is only two years since the OECD spoke strongly about Ireland and recommended that a regulatory impact assessment should be conducted. The Government stated it should be carried out and published a White Paper, which provided that all legislation likely to have an impact on competitiveness and making Ireland attractive to business should contain such an assessment. However, it has not been provided for in this legislation.
Senator O'Toole explained on Committee Stage that enough opportunities were provided for people to have an input but conducting a regulatory impact assessment is easy. A civil servant can be asked to ascertain the impact of regulations on various aspects of business. I do not know the reason it has taken a year to act on the White Paper. Other countries lost competitiveness because business was over-regulated and their economies went out of control, which resulted in the IMF or other institutions intervening to tell them how to run them. A number of years ago the European Union told us how we should behave ourselves. I am seeking to achieve a balance on the authority and will not press the amendments. While I appreciate that the Minister of State has noted my comments, I urge him and the Government to include users in future, which in this case include non-executive directors as well as auditors.
The Senator has referred to regulatory impact analysis on a number of occasions. A number of initiatives have been taken as a result of the OECD report on regulation. These involved, inter alia, the establishment of a high level group to co-ordinate the implementation of the regulatory reform agenda. The group will develop regulatory impact analysis guidelines. This work has not been completed and will require Government approval. The recommendations of the review group on auditing and the heads of the Bill were checked by the Department against a Cabinet handbook and quality regulation checklists and found to be compliant.
In addition the IASA Bill is implementing the recommendation of the review group. This group was broadly based and its report was published in 2000. Interested parties were free to comment on its recommendations. Heads of the Bill were published in 2002. It is interesting to note that representations were received from the Law Society this morning – it took some time to get its views. Together with the excellent comments and views expressed here yesterday and again today it will give much food for thought in considering the provisions currently in the Bill.
Amendment, by leave, withdrawn.
Amendments Nos. 2 and 3 not moved.
I move amendment No. 4:
In page 21, to delete lines 35 and 36 and substitute the following:
"(a) appealing the decision of that body relating to that matter that was the subject of the enquiry to the High Court.".
This amendment relates to section 23 of the Bill dealing with intervention in the disciplinary process of prescribed accountancy bodies. I tabled this amendment to ensure due process. The supervisory authority is in a sense all-powerful. It can intervene in the disciplinary procedures of any of the accountancy bodies and can even annul them. It is a major domo with all these powers. It would therefore have the ability to ignore due process, which could be in contravention of the rights of an individual member. Rather than having the power to annul, it should be allowed to investigate and if it concludes that a body's procedures are incorrect or have not been entirely followed, its decision should be open to appeal to the High Court. I am sure the Minister is aware that this is in line with the recommendation of the review group chaired by our colleague, Senator O'Toole.
I second the amendment.
Because of uncertainty, I was reluctant to accept the amendment yesterday and the same applies today. The amendment should refer to section 35 rather than to section 23, as the Senator appears to have done. I am prepared to give further consideration to the points raised. If convinced of them, I will table an appropriate amendment to address the issue in the Dáil. However, I will need to consult the IASA interim board and perhaps the accountancy representative bodies to ascertain their views in the matter.
This may also tie in with my reflection on the Senator's amendments to section 35, which relate to statutory support for the disciplinary procedures of recognised accountancy bodies. I assure the Senator that this will be given active consideration.
I accept the Minister's good intentions in that regard. I accept also that there was some confusion and that it should refer to section 35. I have a further amendment relating to section 35.
Amendment, by leave, withdrawn.
Amendments Nos. 5 and 6 are related and may be discussed together by agreement.
I move amendment No. 5:
In page 26, between lines 1 and 2, to delete ", or may be,"
As I spoke about this yesterday, I need not repeat myself. It basically says that the supervisory authority may give notice to the directors where "it appears to the Supervisory Authority that there is, or may be, a question whether the annual accounts comply with the Companies Acts." Yesterday I used the term "belt and braces" which is what it seems to be. While I have not seen this before, I would have thought it should have said: "if it appears to the Supervisory Authority that there is a question", which gives considerable freedom. It seems to be over the top to say "it appears to the Supervisory Authority that there is, or may be". Why not insert "or perhaps" on top of that along with other words that would be open to the accusation of tautology? It is extreme and almost suggests wanting to make sure it will be able to do anything it wants to do. Although it is unlikely to happen, if a vindictive individual were to delay something just to embarrass somebody, this gives the freedom to do so. I urge the Minister to reconsider.
I second the amendment.
I undertook to reflect on the amendments tabled by the Senator. In yesterday's discussions various options to address the issue were proposed. I am not sure that simple deletion is the best course of action. Accordingly, I will reflect on the matter and explore the possibility of substituting some other approach to address the Senator's concerns. As I said yesterday, I could not envisage a supervisory authority lightly seeking to invoke this power. However, I will consider substituting other words to clear up any nebulous areas.
In light of the Minister's words, I am happy to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment No. 6 not moved.
I move amendment No. 7:
In page 36, to delete lines 7 to 51 and in page 37 to delete lines 1 and 2.
This is an amendment to section 35, which deals with the statutory backing for the disciplinary arrangements of the prescribed accountancy bodies. I do not intend to repeat the arguments I put in detail yesterday. As the Minister is aware, the accountancy bodies feel strongly about this. They believe it undermines the new principle of supervised self-regulation and will damage existing disciplinary procedures. It will be welcome if the Minister can accept this amendment. If not, I hope he has it under review and intends to take some action.
I second the amendment.
In our consideration of the amendment yesterday, I gave a commitment to the Senator to review my position on his proposal. This will necessitate discussions with the relevant accountancy bodies. Until these are completed, I am reluctant to make a final decision on the Senator's proposal.
I accept the Minister's words and I withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments Nos. 8 and 10 are related and may be discussed together, by agreement.
I move amendment No. 8:
In page 44, to delete lines 4 to 50 and in page 45, to delete lines 1 to 46 and substitute the following:
"(2) Subject to subsection (3) and subsection (14) the board of directors of a public limited company shall establish a committee of directors to be known as the Audit Committee. The responsibilities of audit committees shall be determined by a Code of Practice as operated by listed public companies and approved by the Irish Stock Exchange.
(3) Subject to subsection (14) the board of directors of each unlisted public limited company shall either:
(a) establish an audit committee that meets the requirements of this section.
(b) state in their report under section 158 of the Principal Act that they have not done so and explain the reasons for their decision.”.
I recognise that the Minister has done something to allay some of my concerns here.
This amendment relates to the audit committee. Section 40(3) states:
Subject to subsection (14), the board of directors of each large private company [as the Minister is aware my concern is for the private company] and of each relevant undertaking shall either–
(a) establish an audit committee that meets the requirements of this section, or
(b) state in their report under section 158 of the Principal Act that they have failed to do so and explain the reasons for the failure.
These words are very moderate and there is no problem there and no question of failure. However section 40(11) states:
Where a company or a relevant undertaking that is required under this section to establish an audit committee –
(a) fails to do so,
The word "fails" suddenly turns up again.
It may be that the Minister of State has taken a step I do not understand, but does this apply to a private company? On two occasions yesterday, the Minister of State said it was an option for a private company not to do so. My concern on the last occasion on which we saw the Bill was that a later section referred to a failure to do so and another section referred to an offence. It was stated that failure would represent an offence. Yesterday, however, the Minister of State twice said that a private company had the option not to do so and that the word "failure" has been removed. The word "fail" is still present and I am concerned about that.
I seek reassurance that taking that option is not an offence. I am not sure that this is clear or that the provision is watertight in terms of the eventuality of a statutory body wishing to take steps in this area at some point. The Minister of State has changed things since Second Stage to attempt to relieve my concerns. However, his efforts will not have been sufficient unless I can get this provision questioned. I am seeking clarification in respect of this matter.
Amendment No. 10 makes the same point. I want the Minister of State to put my mind at rest because my main concern on Second Stage was that as far as I could see, a private company had to appoint an audit committee. There was an out in so far as the Bill stated it did not have to do so. It was not mandatory as long as the company explained why it did not do so. However, the Bill later referred to failure to do so and, further on, stated that failure to do so would be an offence. I recognise that steps taken by the Minister of State since then have removed those links, so I do not see them in the same way. However, I seek his reassurance that my rereading of the position is correct. In addition, since I have a difficulty with this provision, some future statutory authority or court might also have a difficulty with it. I, therefore, suggest that clarity be provided.
My understanding of subsection (11) is that "failure to do so" refers to someone who has been excused under the terms of the earlier provision. As Senator Quinn points out, one could take the interpretation he has given. I know that is not intended and reassurance should be given immediately. A phrase such as "a company or relevant undertaking described under this section, unless excused under the other subsection" or words to that effect should be included. The word "failure" is required and Senator Quinn would accept that. Failure, in this context, is where a company is required to do something under a particular section and does not do so. My understanding is that this was intended to apply to those companies that had not sought the opt-out under the earlier Companies Act, which is referred to in previous sections. Reassurances should be given and if it is likely to cause confusion, then some change of words should be in order.
Is Senator O'Toole seconding the amendment?
I second the amendment. I do not agree with it, but I will second it.
I agree with the amendment, so I will second it.
Senator Quinn's points are excellent and come from his vast experience of business. If I was in the Minister of State's position, I would consider those points and adjust the Bill accordingly. The Senator is being very reasonable in pointing out that failure to act under this section may lead to someone being taken to court and found guilty of an offence. That is very extreme and is detrimental to the quality of the Bill. I ask the Minister of State to give serious consideration to this matter and, if possible, to adjust the wording of the Bill, subject to his legal advice, to comply with Senator Quinn's recommendations.
To deal with Senator Quinn's concerns, I make it quite clear that section 40(11) applies to companies coming under the mandatory regime. In order to ensure that is clear we will look at the wording of this subsection.
As indicated yesterday, recommendation 13.1 of the review group on auditing suggests that boards of directors of public limited companies, financial institutions and public interest companies should be required by legislation to establish audit committees, the membership of which should be made up of non-executive directors. The Bill imposes a mandatory obligation on public limited companies to establish audit committees. The requirement only applies to private companies above a balance sheet threshold of €25 million and a turnover exceeding €50 million and it is not mandatory. The board of such a company can decide not to establish an audit committee and only needs to explain why it has so decided.
Amendment No. 10 would remove the sanction on public limited companies which fail to establish an audit committee in compliance with the provisions of the section. I am not prepared to remove this requirement, but we will clarify section 40(11) to make clear that it only applies to companies which come under the mandatory regime.
I thank the Minister of State for his clarification. While reading the Bill last night, I realised that there is a possibility that the position could be misunderstood. I had taken one view but, after reading it, I realised another view could be taken. I appreciate the Minister of State's understanding of my concern and his investigating the matter. It needs some rewording, although I am not sure how that could be achieved.
Amendment, by leave, withdrawn.
I move amendment No. 9:
In page 46, to delete lines 18 to 27 and substitute the following:
"(a) is, or was at any time during the year preceding appointment to the committee, an employee of the company concerned, or
(b) is an executive chairperson of the board of directors.”.
It is hard to recapture the enthusiasm we displayed yesterday in making the case in respect of this amendment.
We could give the Senator a push.
I thank Senator White.
There is a difference involved here and the first situation deals with five years rather than one. There are very valuable people who may have served a company and who may have left and become non-executive directors. They may be exactly the kind of person one wants on an audit committee because they are no longer working for the company and are outside it. Five years is a long period and I am not locked into having one year rather than five. If an executive in the company is on the board and then leaves, ceasing to be an executive, but he or she then becomes a non-executive director, he or she would be so closely aligned to the company it would be difficult to regard them as unbiased or not linked to it. That was why I felt five years was too long and suggested one year.
There is a different case to make in the other instance. It is now regarded as common practice – and admirable – to have a non-executive chairman. He or she acts on behalf of the shareholders and keeps an eye on the executives, particularly the chief executive, of the company. These people are being increasingly brought in to chair companies – particularly larger concerns – and it is they who should be appointed to audit committees. If such a chairperson is an executive, he or she should not be on the audit committee because he or she is part of the circle. However, a non-executive chairman who is brought in purposely to act as a balance against conflicting interests and provide an outside view is precisely the kind of person who should be on the audit committee. They do not have to be on the audit committee – the board may well decide not to have them on it – but that is the kind of person one wants. My amendment suggests that an executive chairman should not be on the audit committee but a non-executive chairman should be permitted to be on it and is worthy of consideration.
I second the amendment. Senator Quinn argued his case cogently and commendably. The point about a non-executive chairman being suited to sit on an audit committee was well made.
I can see from where Senator Quinn is coming. The audit committee must have credibility and it must be independent. If these lines were deleted, one could, technically, invite a retired employee of a company to sit on such a committee. I do not think it would be an independent group. The audit committee needs to be totally independent of the organisation because that is the only way it will work. I do not agree with the amendment and I ask the Minister of State to oppose it. This is an excellent provision and one which will, as far as possible, not be abused. In addition, five years is a short period within which an individual could join such a committee after leaving employment.
It has always been my view that it does not need to be five years. If somebody moves directly from being a senior executive to being a board member, one could not describe him or her as independent. That probably happens quite regularly. A person might move from being a senior executive or perhaps retire from the executive function and become an non-executive director. I accept that such a person could not be seen as independent one year later. Perhaps a reduction of the five year timeframe could be considered so that there could be a type of limbo period. This could be considered because I do not think it would significantly change anything and five years is a long time. I am not being ageist, but if somebody retired from an executive function at 60 years of age and if we were to add five years on to that, he or she would be beginning to call time on things.
Not at all.
I knew it was wrong the moment I said it, but I could not retract it. My young colleague, Senator Quinn, will understand what I meant. Perhaps there could be a softening in regard to the five years.
In regard to the five year period, there seems to have been some confusion among those who drew up the legislation. Perhaps they were thinking of semi-State bodies. If someone was employed by a semi-State body and they became a director, they could have information which could give them power. In a private company, it could be imperative that an ex-employee become a director as soon as possible if the occasion arose. The five year requirement is extreme. There is no reason that a director should not also be chairperson of the audit committee. As stated this morning, companies in the private sector only survive as long as they have sales and can sustain jobs for management and staff. Everything should be done to enable companies to have those with the best expertise as directors. There is confusion in regard to the companies from which people come.
The independence of the audit committee is the fundamental principle we are trying to achieve through this provision. However, I have asked my officials to reconsider the exclusion term of five years. Perhaps it is a bit excessive.
The new section 205B, inserted into the 1990 Act by section 40 of the Bill, states that:
The requirement that all members of the audit committee qualify under subsection (6) does not apply if all of the following conditions are met:
(a) the number of qualified directors on the board of directors of the company or relevant undertaking concerned is otherwise insufficient to enable that company or undertaking to fulfil its duty to establish an audit committee;
(b) any conditions prescribed under section 46(1)(m) of the Act of 2003;
(c) the directors of the company or undertaking concerned state in their report under section 158 of the Principal Act the reasons for not complying with the requirement.
There is, therefore, provision made, outside the normal conditions set out, for individuals to be appointed to audit committees.
I would like the Minister of State to have accepted an amendment in the Seanad. I am somewhat envious of the Lower House getting all the kudos for having amendments accepted. I would have liked the Minister of State to have agreed, even if it was only splitting the difference—
We will have fulfilled the John the Baptist role.
I will attribute the results to the Senator.
I missed the new subsection (7) to which the Minister of State referred, but I will give consideration to it now. I appreciate what the Minister of State has said and I am happy to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment No. 10 not moved.
Amendments Nos. 11 and 13 to 15, inclusive, are related and may be discussed together. Is that agreed? Agreed.
I move amendment No. 11:
In page 52, to delete lines 13 to 19 and substitute the following:
"(a) Irish Companies Acts, and
(b) Irish tax law;”.
We are dealing with section 43 and the infamous compliance statement, which is really paving new ground. Without repeating all the arguments made yesterday, this amendment aims to simplify the obligations being laid down. Compliance statements should be confined to large companies and corporations. We have no business imposing this measure on small, family-owned businesses. I will not be laborious because, given that we discussed them at great length yesterday, the Minister of State is as aware of the arguments as are Members. He will address this matter either today or in the Lower House, but the limit should be set at a much higher level than the audit exemption threshold.
I second the amendment. I have a real difficulty with the compliance statement for a number of reasons. I would like to give the Minister of State what I regard as practical advice. If we want to make it more possible for people to stay within the law, I would like to find a way to overcome this issue. Yesterday, Senator O'Toole spoke about the Securities and Exchange Commission, SEC, in the United States and about the controls it had put in place. As far as I can determine, these were financial controls which did not pertain to matters such as employment, health, the environment and safety. My difficulty is that we are breaking new ground without having considered the matter fully. I know of no other country doing something similar. Senator O'Toole may be able to confirm this.
The Bill states that non-executive directors should sign a statement of compliance, which sounded very reasonable when Senator O'Toole spoke about it yesterday. He spoke about the new section 205E(2), which states:
Subject to subsection (6), the directors of a company shall, as soon as possible after the commencement of this section, prepare or cause to be prepared a directors' compliance statement containing the following information concerning the company:
(a) its policies respecting compliance with its relevant obligations;
(b) its internal financial and other procedures for securing compliance with the relevant obligations;
(c) its arrangements for implementing and reviewing the effectiveness of the policies and procedures referred to in paragraphs (a) and (b).
Nobody could object to paragraphs (a), (b) and (c), which are very reasonable, and everybody should accept that the policies referred to should exist but the sting in the tail comes in subsection (4)(a) which states that the directors shall include in the report a statement acknowledging that they “are responsible for securing the company's compliance with its relevant obligations”. I am concerned about this. It will scare any non-executive director who has been invited to join a company. The small print suggests that he or she has to make sure that the company's policies respect compliance, that internal financial and other procedures for securing compliance with its relevant obligations exist with the arrangements for implementing such policies. This is acceptable and what everybody would say he or she should do but the acknowledgement that he or she is individually responsible puts him or her under an obligation that he or she would find very difficult to accept. The high cost of putting his or her mind at rest must be considered. How would a non-executive director in this position handle the matter? He or she would state that the legislation refers to many areas and that it involves an unrealistic new workload and extra responsibilities for a company's directors.
Traditionally and in law, directors are responsible for the accuracy of financial accounts and company tax provisions. The Bill proposes to enlarge this statutory responsibility to every form of law affecting a company materially in respect of its financial statements. In Ireland, this includes laws in respect of employment, health and safety, environment, competition, pensions, consumer protection, insurance and intellectual property. Nobody could say he or she would take the chief executive's word that his or her company was complying with these regulations. I would not do so if I was a non-executive director. Before signing off, I would request help from somebody who knows something about employment law. As Senators know, much expertise is required in these areas. I would also wish experts on health and safety, the environment, competition and pensions to issue the company with a clean bill of health. This is my problem with the issue of compliance.
One will not get good directors if this legislation is passed. Some will opt for positions because of the prestige but these are not the sort of board members one desires. One desires a board member whose heart is in the right place, who is responsible and willing to say he or she will look after the interests of the company and make it a success and who will ensure there are internal controls in place to ensure the company will not overstep the mark and do something wrong. When a director reads the small print, he or she will see that he or she is responsible for securing the company's compliance.
I know different terms are used in later sections of the Bill. The new section 205E(5)(a)(i) states the directors shall specify if they are of the opinion, based on the procedures referred to under subsection (4) of the same section, that they used all reasonable endeavours to secure the company's compliance with its relevant obligations in the financial year to which the annual report or notes relate. This sounds reasonable and nobody could object to it but the sting in the tail comes in the new section 205E(5)(a)(ii) which states the directors shall specify if they are of the opinion that “the company has complied with its relevant obligations in that financial year”. How could anybody sign this? If a non-executive director, not working in a particular company, asked the chief executive for a guarantee before signing a statement of compliance, and the chief executive said he or she could offer such a guarantee, the non-executive director would say that this was not good enough. This is because the chief executive is not an expert in the areas of health, the environment, competition or pensions. The non-executive director would not be willing to take the chief executive's word unless consultants and experts had been employed to give the company a clean bill of health in all the relevant areas.
I run a company and know the number of things that can go wrong. I am an executive and know that it would be a case of non-compliance if somebody in one of my supermarkets put the wrong kind of plastic bag into a recycling container. Yesterday Senator O'Toole referred to the failure to install a fire door. That is a case of non-compliance in the field of safety. I could list examples pertaining to all the relevant areas of law. There are very strict laws regarding people under 18 years working more than a certain number of hours each day. I would love to be able to say this never happens but the most one can do as an executive is put controls in place to prevent it. It is unreasonable to ask a non-executive director who joins a company in order to advise, steer and ensure it complies with the law to prepare a statement such as that proposed in the legislation.
I have significant difficulties with the two aforementioned proposals which contradict each other. I would like the Minister of State to put my mind at rest. Directors are put under an obligation such that non-executive directors would insist on protecting themselves by hiring an expert consultant in each of the relevant areas of law. Non-executive directors would say they could not accept the chief executive's word. They would ask their wives to excuse them because they had signed, on the basis of the chief executive's word, a statement that could lead to their being jailed or having to lose their houses. Before losing their houses, their wives would suggest they hire experts on each of the areas of law.
I do not know how we will solve this problem. We have gone over the top and established a standard which, to the best of my knowledge, nobody has attempted to establish anywhere else. Auditors and non-executive directors usually take responsibility in financial areas but it is unreasonable to place such an onus on directors, not just in terms of their having policies but also in terms of their having to comply with them.
I am not accusing Senator Quinn of exaggeration in general but he may have exaggerated some of the responsibilities being placed on directors. The new section 205E(5)(a)(i) requires directors to specify that they have used all reasonable endeavours to secure the company's compliance with its relevant obligations in the financial year to which the annual report or notes relate.
I cannot understand the reason the non-executive directors of the AIB – Lochlann Quinn and others – did not resign when they lost $670 million. How many schools could we build and how many hospitals could we fund adequately if we had that sum of money? Unashamedly, they did not resign or comply with the regulations. Other directors have acted in a similar matter. There is a golden circle in this city, of which I never was or never will be a member—
Names should not be mentioned—
We have something called parliamentary privilege and have been elected to be responsible—
I am ruling that names should not be mentioned. The Senator can use the words "the directors" but it is not fair to mention names.
It is my view that one should use parliamentary procedure but not abuse it.
You may use parliamentary procedure any time.
Thank you for the correction, a Chathaoirligh. I meant to say parliamentary privilege. I believe I am in order in speaking on this matter because this section deals with directors.
Is this in line with Senator Leyden's name and shame policy?
We will hear Senator Leyden without interruption.
Thank you for your help, a Chathaoirligh.
I might compile a list of directors who appear on the boards of all the big companies. I may even ask the public to send me names. Directors flew to New York for meetings of the governors of the Bank of Ireland and went to locations such as Monaco for celebrations. However, they did not take their responsibilities seriously and this Bill will make sure they do so. Let them be well aware of that.
Senator Maurice Hayes is a most distinguished non-executive member of the board of Independent News and Media. I would exclude a man of his calibre from my list. I do not say all directors are not compliant. There are some wonderful, qualified, unselfish non-executive directors of companies who take their jobs very seriously indeed. I apologise to Senator Maurice Hayes, the man who brought the Sam Maguire Cup back to County Down and who knew my relative, Mr. Alf Murray, a former president of the GAA, if he took any offence at what I said yesterday about non-executive directors. People of the calibre of Senator Hayes, who is doing an excellent job, are excluded from what I was speaking about yesterday.
I am a customer of AIB and I was nominated to the Seanad by the Irish Bankers' Federation. Employees of that bank have been laid off. Customers and staff of the bank are paying for the inactivity of the non-executive directors of AIB. If some of them have to go to jail for not complying with the law, so be it. As far as I can see, it is all gain and no pain for non-executive directors. Companies go into liquidation and employees lose their jobs because of the ineffectiveness of their boards of directors, yet they never apologise. I have never heard a non-executive director apologise for his or her inactivity which allowed a company to go to the wall.
I am glad this measure is included in the Bill. Non-executive directors seem to be queuing up for appointments. Some of them are on ten boards, they go from boardroom to boardroom, sign in, get their expenses and are not really worried whether or not a company is complying with rules or regulations. One hears at the tribunal hearings of directors who had little concern about the activities of their companies. The measure may be strong and may put a serious onus on non-executive directors. However, I believe it will cause them to think twice before becoming non-executive directors and they will take their jobs very seriously indeed. I want to see this section left in the Bill.
While I hold no brief for the directors of the AIB, I wish to distance myself from the comments made by Senator Leyden about them. The case of the AIB is an interesting example. Senator Leyden is incorrect in saying the directors of AIB would go to jail or would be held criminally responsible if the same thing were to happen under this legislation. When the board of directors became aware of what had happened in the bank they immediately made a public statement and took responsibility. Mr. Michael Buckley tendered his resignation to the board and it was refused. As far as I know, Mr. Lochlann Quinn did so also. The directors handled the matter in the way responsible directors should and in the way we are trying to ensure such matters will be handled under this legislation.
They ignored the auditor's warning. Senator O'Toole's memory is selective.
They took responsibility, as a matter of principle, but their board decided that it was incorrect to hold them responsible because they had done as much as they were required to do and that there had been a systems breakdown.
One cannot hold directors responsible for the nefarious activities of someone in a backroom somewhere. If that were the case I would support Senator Quinn. If we ever reach a situation where right thinking honest people are punished for decisions which are undermined by people who have criminal minds we will be doing an absolute disservice. That would be unfair and wrong and there would be no support for it. That is not what is intended here.
Companies are required to be compliant with regard to Irish Companies Acts, Irish tax law, the Competition Act and with regard to environmental and other issues. We could have written one line in the Bill requiring directors to certify that their company is compliant with every law. That was the demand of many groups, including environmentalists. However, it was felt that that would have been an unfair way of doing things and that we should specify the areas in which the company should be compliant. I could give a million examples of non-compliance. A person running a transport company might use unmarked diesel or a person running a liquor company might use liquor on which excise duty had not been paid. Senator Quinn referred to the misuse of plastic bags or an error in inequality legislation. Such situations are covered by the insertion of the words, "may materially affect". If the action did not materially affect the financial statement it would not be a concern under this section.
We work on the basis of a chain of command. Senator Quinn cited the example of a director who does not trust the chief executive. If there is not trust and confidence between senior management of a company and its board of directors the company is in serious trouble. We cannot arrange legislation to cope with that sort of situation. If I were a director and did not trust my chief executive I would do as Senator Quinn suggests and get an expert in. I would have the expert check everything the chief executive is doing. If I did not trust him to look after one aspect of his responsibilities I would not trust him to look after the others and I certainly would not have him in charge of the running of the company. I accept that Senator Quinn merely used this example as an illustration but it is one that does not give a fair reflection of the issue we are discussing. If we do not have trust and confidence in the people we are dealing with then we have a problem.
A board of directors must have trust and confidence in the people running the company on their behalf to do so in compliance with the law. The board of directors may be wrong and the person running the company may be a confidence man, like John Rusnak, who is cheating the company. In such a situation one cannot hold the directors responsible.
We are saying in this legislation that the directors must put the structures in place. Senator Quinn pointed out the way in which that would be done by ensuring the processes were in place, that the arrangements for implementing them were effective, and so on. The example given during Second Stage was precisely that – that the board would get a report on a quarterly basis, for example, as part of a regular agenda, as to how compliance was dealt with.
The only issue is the fear about this, which I understand. People could suddenly find themselves snowed under by all sorts of extraneous legislation which would not normally be germane to the work of the company. If it is not normally germane or central to the work of the company, it should not materially affect the balance sheet. On the other hand, if someone is running an operation which remains profitable because it is, for example, dumping illegal waste, or operating in any criminal way, then these issues become hugely important.
Many groups made very strong representations on this issue. They wanted it to be absolutely clear that the law of the land is determined on these issues. It has been said for example that the question of competition law is not understood by many directors, that they do not realise it is a criminal offence in many cases to break those laws. If a board of directors is given a report each month to the effect that four filling station owners are meeting monthly to decide on the price of a litre of fuel, to make sure each is charging the same price for it, then that is conspiracy. It is a breach of the competition law and a criminal offence. It would be utterly wrong to pass legislation that would allow people to sign up to compliance while ignoring such a situation. The point is to link all these aspects in order to create fair competition rather than to put undue pressure on people trying to work and create wealth in a very competitive environment. That is the objective, and it is well met.
Last night I raised an issue touched on by Senator Quinn today. It relates to section 43(5)(a)(ii), which says that the directors shall specify that they are of the opinion that “the company has complied with its relevant obligations in the financial year”. That is the issue that bothered Senator Quinn, the question of there being something absolutist in the statement. What he said was fair, in the context of what I have just argued, that in asking directors to give their opinion, they cannot be absolutely certain that someone in the company is not being non-compliant. It might be helpful to insert words such as “as far as they can reasonably attest”. That may not be the precise form of words needed. We should be simply asking for people's best judgment on the basis of the information that has come to them in the course of their work. We should not ask them to employ consultants, for example, to reassure them.
I have listened to the comments of the Senators regarding section 43(4)(a). The problem is that there is a myriad of company sizes. We are talking of small, medium and mega-sized companies, the latter spoken of by Senator Leyden. These are companies with billion-euro revenues. Regarding small and medium-sized companies and high-risk new technology companies, section 43(4)(a) is a monster.
There is no reference to 43(4)(a).
I refer to section 43(4)(a) –“acknowledging that the directors are responsible for securing the company's compliance with its relevant obligations”–
Acting Chairman
None of the amendments under discussion is relevant to this subsection.
I am referring to section 43(4)(a). I was in the House last night and I have been here all day. I know what I am talking about.
Acting Chairman
The Senator will accept that the Chair too will rule.
I want to talk about this. It is very serious.
Acting Chairman
It is not relevant to the amendments.
It is exactly relevant. It is section 43 which deals with compliance. It is the item about which I have spoken, and I am grateful for not having been interrupted when I spoke on it at some length. It is exactly that point we are debating in the House today.
Acting Chairman
The Chair will continue to make the point that there are four amendments under discussion, and this is not part of any of them. We will allow the Senator a certain latitude.
The problem with this section is that there is a myriad of different-sized companies. They might have revenues of €3 million, €4 million, €50 million or €100 million. I said in the House last night that there should be a cut-off point in regard to directors' obligations, perhaps starting with a firm with revenues of €100 million. Is that point clear? The section is a monster for small and medium-sized companies and for those with revenues under a certain figure.
The philosophy behind it is correct in that directors must know that everything is in order. Senator Leyden is correct. I know from my own experience that there is a golden circle in this city. It is made up of the same people who sit on the boards of large companies in this country. Did Senator Quinn hear what I said?
Acting Chairman
The Senator will please address her remarks through the Chair.
There is a golden circle. Senator Leyden was talking of high-profile companies. It appears to the public that the directors of these companies are not taking responsibility for certain failures. Without naming names, Nick Leeson of Barings Bank–
(Interruptions).
I do not mind saying his name but I do not want to mention the companies in this country which should have been studying the mistakes that Nick Leeson made. If they had been watching his escapade in Barings Bank, there would not have been the problem with Mr. Rusnak. There is no question about that. That was typical of what was done in the United States.
Well said.
There is a problem with the same law applying to companies of different sizes. It would be very difficult for a company like mine, employing perhaps 50 people, or a high-risk new technology company, to attract directors. We do not have the staff to deal with all these regulations. To deal with paperwork and regulations is a nightmare. When my business was initially established, and FÁS wanted my staff to go on courses to learn all the different management functions, we did not have the time.
A company will not survive or be a good company if it does not comply with all the regulations. I am not excusing companies which do not comply, but it is wrong to put in place excessive regulations regarding directors, who are desperately needed. My company has a new director, a young man aged about 40. We are privileged to have him. To sustain and to grow a company, one needs experienced people, who come at a high price.
I am speaking up for small and medium-sized companies, a point I clarify each time I speak. Senator Leyden is correct. There is a golden circle. I have always said that in our country only the poor are in prison.
That is correct.
The public wants to see people being held responsible for—
Fraud?
The public wants to see people who have been guilty of misdemeanours in high-profile situations paying the price and going to prison. When, 50 years from now, people look back at our generation, they will see us as barbarians because we only put the poor in prison. Those who can afford expensive legal aid – excuse me, Acting Chairman.
Acting Chairman
I have not said a word.
The Acting Chairman—
Acting Chairman
Excuse me, but the Senator is giving a Second Stage speech. She will adhere to the amendments and will conclude.
I can say what I want to say.
Acting Chairman
I beg the Senator's pardon, but she cannot do so.
The Acting Chairman will have to get used to it. I have been thrown off. I am not going to say again what I said.
Acting Chairman
I did not make any remark whatsoever.
I did not say that the Acting Chairman made a remark.
Acting Chairman
I ask the Senator to withdraw that.
Excuse me, I did not say that the Acting Chairman made any remark. Does he want me to obtain the Blacks to prove it? Do I have to do so for the fourth time because someone has misinterpreted what I said? I did not say that the Acting Chairman made any remark.
Acting Chairman
Will the Senator withdraw—
I do not want to argue with the Acting Chairman.
Acting Chairman
I beg the Senator's pardon, but she will not argue with me.
I find this disturbing. I sat here through the entire debate yesterday evening—
Acting Chairman
The House stands adjourned for five minutes.
Excuse me, I have been present for yesterday's and today's debates and I find what is going on very disturbing.
Sitting suspended at 2.15 p.m. and resumed at 2.20 p.m.
Acting Chairman
Before we continue, I wish to state, for the information of Members, that it is a long-standing tradition of both Houses, that persons outside the House who are not in a position to reply should not be attacked or referred to in a personal way and that persons who are not able to defend themselves should not be referred to in such a manner as they can be identified. The Chair will, at all times, do nothing more than implement the rules of the House. There is nothing personal in that and Members must be conscious of those rulings and try to abide by them. The Chair is the sole judge of fact. On that basis, we will resume our deliberations.
On a point of order, that is also my understanding of the rules of the House. I am concerned that, during the past 30 minutes, Members have made remarks about the largest public listed company in this State at a turbulent time in the international markets. The House should dissociate itself from any views that the directors of that company – in whom I have the fullest confidence – should be held responsible further than what has previously been the case.
The type of remarks to which I refer can be potentially dangerous for a company, but I accept that this was not the intention from the other side of the House. These types of remarks could be misreported in a financial commentary and could cause problems for the companies involved. The directors in those cases should not in any way be tainted by comments we have made here in the course of argument about other issues. The chief executive and the chair of AIB have acted to the best of their abilities in discharging their duties and responsibilities.
Acting Chairman—
Acting Chairman
Unless it is a point of order, Senator Leyden cannot reply.
On a point of order, as was the case when I was a Member of the Dáil, I respect the rules of the House. Any comments I made were uttered on the basis of debating the Bill. My comments related to a historical fact, namely, the massive losses of a particular company – which was warned by its auditors that problems would arise – and I make no apologies for them.
Acting Chairman
Before we proceed, we are dealing with amendments Nos. 11 and 13 to 15, inclusive. Will Members please confine themselves to the amendments at hand and not make Second Stage speeches? Senator White was in possession.
I want to explain why I was taken aback earlier. I was following up Senator Quinn's point under the previous occupant of the Chair, so I thought it was all right for me to speak on section 43(4)(a). I did not mean anything derogatory in my remarks. I have known the Acting Chairman since childhood, when we both learnt piano side by side with the nuns in Newbridge.
We learn something new every day.
I was taken aback that I was not allowed to talk about what I know from my business experience. We sat here until 9.30 p.m.—
Acting Chairman
May we proceed? What the Senator thinks of me has nothing to do with the opinion of the Chair. We have to draw a distinction between the two.
The Senator is being genuine in her comments.
I am a straight person and I am not in the House to engage in palaver or to please people. I was just giving my honest opinion in a helpful way. I did not mean to criticise the Acting Chairman, but I was taken aback that Senator Quinn, when the Chair was occupied by someone else, was allowed to comment on that issue. I was following that through from last night. I did not say that the Acting Chairman said anything.
Amendment No. 11 would effectively remove paragraph (c) of the definition “relevant obligations” in the new section 205E(1), which is being inserted into the principal Act by section 43 of the Bill. We had a long debate on the merits of this proposal on Committee Stage. I explained that this decision implements the recommendation 14.1 of the report of the review group on auditing and it reflects what directors of companies are obliged to do when preparing accounts. I remind the House that the provision only refers to matters that are material or which may materially affect a company's financial statements.
I will ask my officials to examine the wording in the new subsection 5(2), particularly in respect of directors giving their opinion, using their reasonable judgment, etc. This matter will be reviewed before the Bill is presented to the Dáil.
Due to the way that the exemption from the requirement to prepare a director's compliance statement is worded, as being available to a private company that is eligible for exemption from the requirement to have its accounts audited, a particular focus has been brought to bear on the thresholds applicable to such companies. In particular, the turnover threshold of €317,000 has been focused on.
The effect of amendment No. 13 would be to change the basis of the exemption to the thresholds that apply in the Companies (Amendment) Act 1986 for companies to be treated as small companies for the purposes of filing obligations with the Companies Registration Office. In essence, a private limited company with a turnover not exceeding €3.8 million would be exempt from the compliance statement.
As previously explained, amendment No. 14 appears to be designed to change the balance sheet total for eligibility for audit exemption. However, that is already the current threshold in section (32)(3)(a)(iii) of the Companies (Amendment) (No. 2) Act 1999, so this would not result in any change.
The implications of amendment No. 15 would be to raise the turnover threshold for the audit exemption from its present level of €317,000 to €3.8 million. It would have the knock-on effect that, if the new 205E(6)(a) had remained in the Bill, as initiated, exemption from the compliance statement would be available to all companies that met this higher threshold. In other words, the effect of amendment No. 13 would be the same as that of amendment No. 15 as regards the compliance statement. However, it would also have substantially increased the turnover threshold for eligibility for audit exemption. This would represent a quantum leap and it could have the effect of taking more than 80% of private companies out of the obligation to have their accounts audited. A change of that magnitude would be need to be carefully considered. I intend to do that before the Bill is presented to the Dáil.
I am sure the Senators will understand that, in the circumstances, I cannot accept the amendments proposed.
I am grateful to the Minister of State for his remarks, particularly regarding the need for compliance statements. When he and his officials have had an opportunity to consider the matter further, I look forward to his informing us that the level of the threshold for the compliance statement will be increased and that all small and medium-sized businesses will be removed from its scope.
I accept the Minister of State's reply in respect of amendments Nos. 14 and 15. However, my sole concern is that we would not put ourselves at any competitive disadvantage. I wanted what will be available here to be in line with that which is available in other EU member states. During the debate, great emphasis was placed on the position in Northern Ireland and Britain, which are our nearest neighbours. We are aware that the authorities in these jurisdictions are considering raising the threshold to £4.8 million. Apart from costs considerations, my sole concern is that, because competitiveness is so important, we would not put ourselves offside in terms of trade by increasing costs, losing jobs, etc., and thereby damaging the economy.
Amendment, by leave, withdrawn.
I move amendment No. 12:
In page 54, line 25 after "year" to insert "or if not such cases of non compliance have been reported to the relevant statutory authority".
This amendment also relates to compliance statements. In regard to executive and non-executive directors about whom we have been speaking, non-executive directors do not run a company. They ensure management runs it correctly and if they cannot trust the chief executive, they bring in someone else to do the job. I do not want to repeat all the points made.
I urge the Minister of State to give serious consideration to this amendment, which I second. This is probably my last opportunity to speak on it because I realise now that my name is not down as a proposer. I have a real concern that there is an anti-business attitude to legislation brought before the House and that this is another example. I voiced this concern when I talked about the fact that the regulatory impact assessment did not come through and when I referred to the setting up of a review group and then an interim board on which business people were not adequately represented. That is the case, not just in this Bill but in other legislation also. The amendment seeks to insert the words "or if not such cases of non compliance have been reported to the relevant statutory authority" in the Bill. It is a good example of the proposals brought forward by Senator Coghlan.
The legal environment here is becoming more and more hostile to business as is evidenced by a number of Bills enacted in recent years. The Competition Act 1996 gives the State police powers to carry out "dawn raids on directors' homes and offices on suspicion.". The Company Law Enforcement Act 2001 obliges auditors to report to the Director of Corporate Enforcement if he or she thinks there may have been an offence committed. The Criminal Justice Act 2001 obliges auditors to report to the Garda that an employee "may have committed an offence". The Companies (Auditing and Accounting) Bill is just another example. I am concerned about all this legislation because it appears there is a lack of understanding of those who set up businesses, provide jobs and create the wealth of this nation.
I found the language used today from the other side of the House to be intemperate, inaccurate and unacceptable, and the Acting Chairman was right to criticise anyone who named a person. Fraud will happen and has happened but to assume that with all the processes put in being place it will never occur is wrong. It does. If one has put in place all the steps necessary to prevent it and somebody else has managed to establish fraud, one has done one's best.
I understand in the case of the AIB that both people mentioned offered their resignation and were turned down. We should be very careful in this House. If the biggest company in Ireland is criticised in the manner and tone in which it was criticised here today, that is unacceptable. I agree with the Acting Chairman that we must protect those not here to defend themselves from comments such as were made.
This legislation is flawed. We have moved in the wrong direction in regard to some aspects of it, particularly with regard to compliance, and should not pass it today without making that protest. We listened to the Minister of State who has taken a number of points into account but in terms of compliance, we are moving in the wrong direction and sending out an anti-business and, therefore, anti-Irish economy message. We should rethink this measure which I am disappointed we are passing through the House with such alacrity.
When I made my comments, which were not meant to offend Senator Quinn, I did not realise there was a family relationship involved. I would not wish to offend the Senator in any sense because we go back a long way to the time when I was Minister of State with responsibility for trade and marketing. His company has been exemplary in what it has done for Irish industry and producers. His was the first company to introduce the concept of traceability. I did not use the name in any way to insult the Senator; it was not intentional. In fact, I did not even make the connection until now. I want to make that clear.
It has nothing to do with individuals.
I accept that but is it not extraordinary that everybody here is so understanding of what happened with the directors concerned? They offered their resignations which were turned down by the same people who had appointed them. Let us live in the real world. They should have admitted they did not have their eye on the ball and resigned.
That is a separate debate.
I am not part of the Establishment. Senator Quinn would be part of the wealthy Establishment. I am just an ordinary Senator from a rural constituency—
Acting Chairman
But a long-standing one who knows the rules better than most.
—who represents the ordinary people – councillors and public representatives who work unselfishly for others. I do not have any vested interests or directorships in companies. I am not a director of any company. I am not a shareholder in any big company other than small ones like Irish Permanent plc, in which I held a few shares at one time.
Those of us in this House represent the people and if a company suffers fraud to the tune of $670 million, which was stolen from the AIB and nobody—
Acting Chairman
We are back to the same problem. We are not dealing with the amendment.
I am making a point about executive directors and their responsibilities. I make it by way of supporting the Minister of State in the inclusion of this provision in the Bill. Why are directors prepared to take high fees and not take responsibility or liability? That is extraordinary. All the staff of the AIB have had to work harder to pay for the fraud that occurred in the United States. Senator White was right to mention Nick Leeson—
The Bill is not about the AIB.
Acting Chairman
We have just gone through that matter.
It is all right for everybody else to do it. Senator Quinn—
Acting Chairman
To be fair to him, Senator Quinn spoke to the amendment.
I am speaking to it. It is all right for everybody else to have a go at me but I cannot have a go back at anybody. I will not be silenced.
Acting Chairman
I think the Senator has made his case.
I will make it again because this is a kind of cover-up. We cannot talk about the AIB, even though $670 million was stolen from it, for which we are paying. Can I not say that in this House? There should have been a public inquiry into the activities of the AIB which, incidentally, was rescued by this House at the time it amalgamated with the Insurance Corporation of Ireland. It was saved from annihilation, not for the first time. As far as I remember, it was a Fine Gael Government led by Garret FitzGerald which recalled the Dáil to enact the necessary legislation. Are we forgetting that the board of directors of this great company did not resign then? They bought the Insurance Corporation of Ireland, a white elephant—
Acting Chairman
That is a debate for another time.
It is a very interesting one. I want to clarify the position. If people in the AIB are offended, they can contact me and if they want to close my account, I will close it, although I have stayed loyal to it since I first started working in the 1960s. I will remain loyal because I respect the employees and local managers who work unselfishly for the company and are under terrible pressure since the fraud—
I am sure they respect the Senator's confidence in them.
I am grateful for that and wish them every success in the future but hope they never get into similar trouble again. Once is enough.
Acting Chairman
I appeal to the Senator to conclude.
To clarify the position, there are excellent non-executive directors of companies who deserve our recognition and credit but there are others who just receive the rewards and do not take the responsibility. I ask the Minister of State not to change the amendment because it is appropriate and timely. If directors are not doing their jobs properly, they should be held liable.
Senator White made a good point about small companies and deserves credit for what she has achieved. The good advice she gave to the Minster of State should be adhered to as far as small companies are concerned.
While I am in favour of compliance statements, I will not specify a figure as to what the threshold should be. My bottom line is that the directors of large companies must stand over such statements. I am conscious that the House sends out signals to the people. This provision would send out a positive message. The only reasons we are here are the provisions of the Constitution and the vote of the people. It is our constitutional duty to protect their interests. It would send out a positive signal if the Government was to legislate to ensure directors of large companies stand over a statement to the effect that everything in their companies was being done above board.
As I explained to Senator Coghlan yesterday, the drafting of the provision in question was based on legal advice and done in such a way as to avoid such issues as self-incrimination or as otherwise contravening the requirements of the European Convention on Human Rights. The effect of the amendment would be to require directors to report to the regulatory authorities, a more onerous obligation than is currently the case. I do not propose to accept the amendment.
Amendment put and declared lost.
Acting Chairman
Amendment No. 13 has already been discussed with amendment No. 11. The line reference in the amendment should read "lines 35 to 40", not "lines 35 to 39". Is the amendment being pressed?
We have made our point on compliance and thresholds. In view of the Minister of State's remarks and the fact that the matter is under review, we anticipate further amendments.
Amendments Nos. 13 to 15, inclusive, not moved.
Bill reported without amendment and received for final consideration.
Question proposed: "That the Bill do now pass."
I express my sincere thanks to the Minister of State for his patience and forbearance in listening to Senators for a long period. This is excellent legislation. I thank the Leader, who has presented to the House a large volume of legislation for consideration, and the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney, who has taken an innovative, forward looking approach. I thank the senior officials of the Department for working so hard to produce the amended Bill so quickly last night in order to present it to the House this morning, which required an enormous amount of work. Their contribution should be recognised and I wish them every success.
I thank the parliamentary reporters for their excellent work. I read the Blacks of yesterday's debates this morning. They do an excellent job which should also be recognised. I also thank the sound recordists who have shown great patience and forbearance in the face of substantial dialogue. I wish the legislation well and thank the Minister of State for his wonderful work on the Bill. I wish him well with it in the Dáil.
I wish to be associated with Senator Leyden's expression of gratitude to all concerned. I thank, in particular, the Minister of State for his thoughtfulness and his senior officials who have spent many hours labouring on the Bill. The Minister of State has a special interest and expertise in this area.
Our deliberations have been fruitful. We look forward to many additional amendments which the Minister of State indicated would flow from our deliberations. As the result of our John the Baptist work, please God, good will flow. I wish the Minister of State and his officials well with the Bill in the other House and look forward to its safe return to this House, suitably amended, at which stage we will comment on its contents.
I congratulate the Minister of State on his success in passing the legislation through the House and thank his officials for their work on this difficult and intricate Bill. I am impressed that the amended Bill was brought before the House this morning as this required considerable hard work. Senator Henry received a telephone call at 11 p.m. last night asking if she would second my amendments – I could not be contacted – and was happy to do so.
I, too, wish to thank the parliamentary reporters. I received a telephone call from Indonesia recently from a person who had read on the Internet a contribution I had made in the House the previous night. I was astonished that this information was already on the website. We do not often have an opportunity to comment on this matter.
As Senator Leyden stated, the Leader has brought a considerable number of Bills before the House and we have had many good debates, including this one. The Minister of State has responded to our contributions, although not necessarily to the extent we would have liked in some cases. Perhaps he went too far in others. Some of the amendments the Government tabled arose from Second Stage debates and conversations with Senators in which they had voiced their concerns. This offers us a reminder that while the amendments may not have been tabled by Members of the House, the House can play an effective role.
My criticism is that much more should have been done here instead of leaving it to the Lower House to correct matters. Nevertheless, the legislation will return to the Seanad if amendments are made in the Dáil. I am disappointed that two aspects of the Bill, the provisions on compliance and non-executive directors, which are not specifically auditing issues, were included. It would be preferable if they were addressed in other legislation. Let us ensure the Bill works well. I congratulate all those involved with it.
I thank Senators for their contributions on all Stages. The debates on 16 April, yesterday and today have been useful. I was struck by the number of Senators who had contributed and the quality of the interventions and views as well as their grasp of this technical and complicated legislation. I appreciate the input Senators have made thus far. I have listened attentively to their contributions and the Government tabled several amendments in response to suggestions made in the House on Second Stage.
I noted their contributions on Committee Stage and Report Stage and the Government hopes to table amendments in the other House for consideration, after which I will return to this House to give Senators an opportunity to express their views. Their contributions have already helped shape and improve the legislation, which, when enacted, will bear the imprint of the wisdom and insight of the House. I thank my officials for the work they have done to date and the officials of the House for preparing everything for this debate at such short notice, having concluded Committee Stage at 9.30 p.m. last night.
I wish to comment briefly on the episode of fraud at the bank referred to earlier. This intricate case, carried out in the United States, bears out the importance of the role of directors. I share Senator O'Toole's view that directors are not responsible for such intricate frauds, provided all reasonable endeavours to secure the company's compliance are made and the relevant obligations, structures and controls are in place. If such reasonable endeavours have been made, it would be wrong for us to send out the message that directors must fall on their swords in the event that a fraud is expertly carried out. The AIB is following other financial institutions which have been connected with the individual concerned. I hope it will succeed in getting some of the money back.
I thank everybody involved in the debate and look forward to returning in due course to bring the Bill to a final and successful conclusion.
Question put and agreed to.
Acting Chairman
When is it proposed to sit again?
At 2.30 p.m. on Tuesday, 10 June.