Ireland needs new corporate culture

 

Addressing the Irish Stock Exchange Conference in Dublin, Fine Gael Enterprise Spokesman Leo Varadkar TD called for a new corporate culture to restore Ireland’s battered reputation overseas. Deputy Varadkar addressed the conference on the issue of corporate governance as an invited panellist.

 

“The reputational damage that has been done to Ireland by the activities of our banks, Government and State agencies has done real damage to Ireland’s reputation overseas. This damage comes at a cost. It is harder and more expensive for the Government to borrow money from the international capital markets. It is more difficult for Irish companies to secure credit from the banks, capital from investors and export credit insurance. And it is harder for Irish companies to sell their goods and services overseas.

 

“This reputational damage, however, does not have to be lasting damage. We are not alone. Other countries have endured reputational damage too. But it is up to us to put our house in order, to do it quickly and to show the world that Ireland is second to none when it comes to corporate governance, ethics and open Government.

 

“Yes, we need new laws. We need to restrict the practice whereby CEOs can graduate from management to become Chairman of the Board as occurred at FÁS and Anglo Irish Bank.

“We need to introduce a ‘conflicts of interest regime’ which prevents an overlap of directors between the boards of financial institutions and State/semi-State companies as occurred between Anglo Irish and Dublin Docklands Development Authority.

“We need legislation to protect whistleblowers and legislation to regulate and register lobbyists. Fine Gael is committed to doing all these things within our first term in government.

“But more, much more than a change of laws, we also need a change in culture and standards in this country. And that cannot just apply to listed to companies on this stock exchange. It must apply to all companies, limited and unlimited, private and public. It must apply to all boardrooms, to the semi-States, to the public sector, to the Government and also to aspects of civil society that inhabit the public sphere, including the media and non-governmental organisations.

“Yes we need stronger laws. But more than that we need a new culture in Ireland. A culture of compliance, ethics and enforcement. One in which misconduct is reported, detected and punished. And one in which whistleblowers are not just protected, but promoted as well. One in which compliance with the law and the spirit of the law is the normal way of thinking.

“This change in culture must start at the top. In the political system. For too long, we have been prepared to tolerate the clientelistic politics of the stroke, the ‘cute hoor’, the wink and the nod. The post-colonial country which was suspicious of authority. A country in which the 11th commandment was not getting caught.

“We will apply that change at State Agency level too. State agencies must be made fully accountable to the Dáil, and not just to Ministers and corporate governance principals must apply.

“Ireland’s reputational crisis is real and damaging but it need not be permanent. We can restore our reputation quite quickly. But no amount of rules, ticked boxes or laws can do that. At the end of the day, it is down to people, their behaviour and their attitudes. That’s what we need to change.”