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Dáil Éireann díospóireacht -
Wednesday, 29 Jun 1994

Vol. 444 No. 6

Written Answers. - Directorship Regulations.

John Browne

Ceist:

30 Mr. Browne (Carlow-Kilkenny) asked the Minister for Enterprise and Employment his views on whether the obligations imposed by law or directives is reducing the willingness of people to take up directorships, particularly in a non-executive capacity; and if he will make a statement on the matter.

I propose to deal with this question in the context of the Companies Acts, 1963 to 1990, and the EU company law directives which apply to directors of companies.

One of the essential objectives of company law is to ensure that company affairs are conducted in an honest and responsible manner. The obligations imposed on directors are designed to achieve this end. Company law does not distinguish between those who act as executive and non-executive directors.

In general, the legislation provides that whatever penalties may be imposed on directors who fail to comply with their obligations, whether it be a fine, or imprisonment, or personal liability for the debts of their company, or restriction or disqualification from acting as a director, can only be imposed by the court, which has to take account of the particular circumstances of each case and, where provided, the specific defences that may be availed of.
I am satisfied that, by and large, the obligations imposed on directors are no more than is desirable, having regard to the objective that I have just mentioned and the safeguards which also exist to protect those accused of breaches who have acted honestly and responsibly.
Finally, I should add that I have set up a company law review group to examine specific aspects of company law including issues relevant to the areas referred to by the Deputy. The review group's work has begun and it is scheduled to report back to me before the end of the year.
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