I want to begin by congratulating Deputy Kelleher on his appointment as spokesperson for business, enterprise and innovation and I look forward to working with him. I do not have a monopoly on good ideas and I am happy to work closely with Deputy Kelleher, as I do with my other colleagues, in doing everything we can to create and sustain jobs and to support enterprise.
I am satisfied that the Companies Act 2014 is robust. It is an important element in ensuring Ireland's regulatory environment is maintained to the highest standard. All companies, regardless of size, are required to comply with the extensive provisions of the Companies Act 2014.
Moreover, company directors are obliged under common law to exercise fiduciary duties, which include the obligation to act with care, skill and diligence. Alongside company law, companies must comply with a broad range of legal requirements on the treatment of employees and creditors, disclosure to Revenue and the protection of the environment etc. Taken together, these regulations make up a wide-ranging legal framework for the conduct of business.
The Companies Act 2014 introduced some changes that are relevant to the governance of all companies, both listed and not. In particular, one of the key innovations of the Act is that directors' common law fiduciary duties are codified together with the diverse statutory duties and assembled into one place. This makes the law more accessible and comprehensive for directors.
The Act also introduced a new directors' compliance statement at section 225. This places an onus on directors of affected companies to make a statement confirming that a company has policies in place to ensure it complies with "relevant obligations" and that they have conducted a review of the appropriateness of these policies or structures during the financial year. The "relevant obligations" mean the company’s obligations under tax law; and company law obligations, the breach of which would be a serious offence as defined. Section 225 applies to all public limited companies and large private companies, that is, private companies where the balance sheet for the year exceeds €12.5 million and the turnover for the year exceeds €25 million.
The Companies Act 2014 provides for remedies for breach of directors’ fiduciary duties. In general, the company may sue for damages, seek an indemnity for losses or seek an account of profits. In addition, there are circumstances provided for in the Act where a director can be made personally liable for the debts of the company. Examples include reckless trading; fraudulent trading; failure to keep adequate accounting records; and acting in breach of a restriction or disqualification order.
The Government is committed to ensuring that the Companies Act 2014 continues to deliver a robust yet competitive corporate regulatory framework for business in Ireland. Consequently, the provisions of the Act are under continuous review.