17.The_Combined_Code_on_Corporate_Governance.pdf

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Principles of
Good
Governance
Mainly used by companies quoted on
the UK stock exchange, but many Irish
companies, both private and public,
elect to adhere to these rules.
The aim
: to provide a set of principles
that ensure the company directors
take responsibility for their actions
and provide sufficient disclosure at
regular intervals on the financial
status of their company.
Listed companies are expected to
comply with the Code, although they are
not legally mandated to do so.
If a company wishes to depart from any of
the provisions of the Code, they must give an
explanation in their annual report as to why
they are not complying with the code
(‘
comply or explain
’ principle).
Code of
Best
Practice
Every company should be
headed by an effective board
Clear division of responsibilities between running
of the board and the executive responsibility for
the running of the company’s business.
No one individual should have
unfettered powers of decision.
The chairman is responsible for
leadership of the board.
Non-executive directors should
constructively challenge and help
develop proposals on strategy.
The board and its committees should have the skills,
experience and independence and knowledge to
enable them to discharge their duties effectively.
Leadership
There should be a formal, transparent procedure for the
appointment of new directors to the board.
Receive induction
All directors should
Effectiveness
Regularly update and refresh
their skills and knowledge
Be able to allocate sufficient time
to the company to discharge their
responsibilities effectively
The UK Corporate
Governance Code and Irish
Stock Exchange Annex
(known as
‘The Combined
Code on Corporate
Governance’
)
The board should use the AGM to
communicate with investors and to
encourage their participation.
Dialogue with shareholders, based on
mutual understanding.
Responsibility of the board to ensure
the dialogue is satisfactory.
Principles
The board should
Be supplied with relevant
information in a timely manner
Undertake an annual evaluation
of its own performance
All directors should be
submitted for re-election
at regular intervals
A board should be presented with an understandable
assessment of the company’s position
Accountability
The board is responsible for maintaining sound
risk management and internal control systems
The board should establish arrangements for maintaining
an appropriate relationship with the company’s auditor
Levels of remuneration should be sufficient to attract,
retain and motivate directors of an appropriate quality to
run the company successfully, but the company should
avoid paying more than necessary.
Relations with
Shareholders
Remuneration
There should be a formal and transparent procedure for
developing policy on executive remuneration.
No director should be involved in
deciding his own remuneration.
A significant part of the remuneration should be
linked to the company’s performance.

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