A representative from the Irish Stock Exchange (ISE) recently addressed a conference about an independent review, commissioned by the ISE, of disclosures in companies’ annual reports for 2010 as compared with 2011 (the first full financial year that companies had to apply the Irish Corporate Governance Annex).
The review assessed:
- The level of compliance with the Irish Annex
- Whether the Irish Annex was making any impact on the type of disclosures made in annual reports
The review found that there was a high level of compliance with the Irish Corporate Governance Annex with 65% of companies claiming full compliance and 35% claiming partial compliance. Generally there was also an overall improvement in disclosures as to how companies were achieving best practice in corporate governance. Specific improvements were observed in areas such as:
- Board evaluation
- Risk oversight
Whilst noting these specific improvements, the ISE concluded that there is further room for improvement particularly in the following areas:
Board composition: Reporting in this area could be improved by providing a rationale for the size and structure of the board, information on the skills and expertise of board members and information on the processes around individual board appointments.
Audit Committee: Disclosures in this area could be improved by reporting on the work undertaken by the committee throughout the year.