A new Code of Practice, the SWIFT 3000: 2010 Code of Practice for Corporate Governance Assessment in Ireland, has been developed and published by the Institute of Directors in Ireland (IOD) and the National Standards Authority of Ireland (NSAI).
The stated objective of the Code of Practice is to “facilitate external assessment of a company’s Corporate Governance performance, and to enable companies of varying sizes to benchmark their performance against these requirements”. Additionally, the Code of Practice aims to provide a standard framework of assessment of compliance in Ireland with various codes, namely, the Combined Code, the OECD Principles of Corporate Governance and the Code of Practice for the Governance of State Bodies.
The Corporate Governance assessment itself will focus on three core areas: i) Board composition; ii) Board processes and iii) Board responsibilities. The Code of Practice contains questionnaire templates for the Company Secretary and for board members as well as details on required assessor qualifications and a template Corporate Governance final report.
The assessment process has four phases, namely planning and preparation, initial review, interview and follow-up and reporting and follow-up.
The first phase is expected to involve the preparation of a plan by the assessor which should address issues such as the scope and objectives of the assessment, confidentiality and the timescale of the process. The initial review phase is expected to involve a review of the board documentation and records of the company followed by a review of the completed Assessment Questionnaires. The interview phase will involve individual interviews with a representative sample of the board and senior executives of the company. The final phase will involve the preparation of a summary of main findings which should be presented to the board for consideration.
Following the process, the company will receive a Corporate Governance rating based on a scale of 0 to 5 (5 indicating that the company has fully implemented each of the main principles of the Combined Code or Code of Best Practice for State Sponsored Bodies). A company will require a rating greater than 3 to achieve compliance with SWiFT 3000.
This Code of Practice is voluntary and it remains to be seen whether there will an appetite among Irish company directors to participate as a result.