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Governance, Risk and Legal
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Governance of Charities and Not for Profits – Webinar Highlights

At a Chartered Accountants Ireland webinar on 23 March on the governance of charities and not for profits (ROI), David Brady, non-executive director and management consultant, presented on the “charity board maturity model”. Five Levels of Charity Board Maturity*   Level Board characteristics Non-Compliant Negative attitude to governance. Unaware of strategic developments. Short-term funding focus. Receives only basic financial information. Unaware of outdated policies. Does not insist on a risk register. No rotation or succession planning. Antagonistic relationship with staff. Weak AGM process. Compliant Tolerant attitude to governance. Closed to developments other than self-beneficial. Ensures mixed portfolio of income sources. Ensures policies are current. Ensures risk register prepared for compliance. Rotation policy not implemented. Provides superficial staff support. AGM limited to board only. Effective Understands benefits of governance. Revises board and staff structures to exploit opportunities. Focused on seeking funding opportunities to support strategy. Use policy register to refresh and revise policies. Reviews risk register to manage risk and plan contingencies. Ensures appraisals and rotation policy implemented. External members attend AGM and decisions made. Progressive Seeks improvement governance. Keen to benchmark board maturity. Seeks collaboration in new initiatives that reflect market changes. Ensures policies updated in line with business/market changes. Defines risk appetite. Ensures skills gaps aligned with strategy. Ensures strategy informs decisions. Staff and board rotations planned and implemented. Elite Delivers a series of strategic programmes resulting insignificant impact and/or funding. Board and staff have collective problem-solving mind set. Reviews a series of financial and non-financial KPIs. Employs long-term resource planning. Promotes risk management culture. Reviews strategy regularly. Succession planning includes pro-active identification of new chair and board members. Embraces and learns from occasional failure positively. * Source: David Brady, FCA, of DB Consulting. In an insightful presentation in which he persuasively argued that compliance with a governance code should a basic expectation, David provided recommendations for moving a charity or non-profit on to the levels of effective, progressive or elite governance. The keynote presentation was followed a panel discussion featuring Inez Bailey, CEO of the Centre for Effective Services; John Roycroft, non-executive director National Advocacy Service for People with Disabilities and chair of its policy, communications and governance committee; and Aisling Fitzgerald, Director with PwC. Issues discussed in detail included: Is complying with a governance code, or an equivalent set of standards, sufficient to achieve good governance? A non-executive director’s experience of implementing the Charities Governance Code. Insights on how the senior management of a charity or non-profit can effectively manage and meet stakeholder expectations in relation to compliance and performance. Whether a charity is complex or non-complex per the Charities Governance Code. The importance of innovation in a charity or non-profit organisation. The societal contribution of the charity and non-profit sector in Ireland, and considerations for providing support to assist people suffering because of the crisis in Ukraine. The event was opened by Tony Ward, Chair of the Chartered Accountants Ireland Charity and Non-profit Network Group, chaired by Níall Fitzgerald, Head of Ethics and Governance, with a closing address delivered by Terea Campbell, Member of the Council of Chartered Accountants Ireland and Chair of the Institute’s Ethics and Governance Committee. A full recording of this webinar is available to viewed at: Governance of charities and non-profit organisations (ROI). Níall Fitzgerald FCA Head of Corporate Governance & Ethics at Chartered Accountants Ireland

Apr 06, 2022
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Governance, Risk and Legal
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EU proposal for new directors’ duties and rules on corporate sustainability due diligence:

On 23 February 2022 the European Commission presented its proposal for a Directive on corporate sustainability due diligence. If adopted by the European Parliament and the European Council, the new rules will apply: firstly to all large private companies with over 500 employees and €150 million turnover in the EU; after two years to companies with over 250 employees and €40 million turnover and where at least 50% of this was generated from operations in high-impact sectors such as manufacturing of food and textiles, wholesale of agricultural raw materials and live animals, extraction of minerals and others. The due diligence obligations do not apply to micro companies and SMEs. However, the Directive does provide for supporting measures for those likely to be indirectly affected as part of the supply chains of larger companies, for example a requirement for a larger company to bear the cost of any third-party assurance required from a SME to verify compliance with its code of conduct or measures to prevent adverse human rights or environmental impacts in its supply chain. It is expected that the Directive will apply to approximately 13,000 EU companies and 4,000 third-country companies (non-EU companies operating in the EU). What are the proposed rules? The objective is to require companies to: implement processes that mitigate the risk of adverse human rights and environmental impacts in their value chains; integrate sustainability into their corporate governance and management systems, and frame business decisions in terms of human rights, climate and environmental impact, as well as in terms of the companies’ resilience in the longer term. Companies concerned must have a due diligence policy that is reviewed and updated annually, detailing: the company’s approach to due diligence a code of conduct describing the rules and principles to be followed by the company’s employees and subsidiaries the processes to implement due diligence, including measures to verify compliance with the code of conduct and to extend its application to established business relationships. Companies are required to conduct human rights and environmental due diligence by: putting in place a due diligence policy; integrating due diligence into their policies and management systems; identifying actual and potential adverse impacts; preventing, ceasing or minimising adverse impacts; ending, neutralising and remediating adverse impacts; establishing and maintaining a complaints procedure; monitoring the effectiveness of their due diligence policy and measures; publicly communicating on their due diligence. Business relationships In establishing the extent to which due diligence is to be applied, there is one approach for the company’s own operations and subsidiaries and another for its business relationships. In relation to the latter, a company’s obligations extend only to established business relationships that are, or expected to be, lasting and that do not represent a negligible or ancillary part of the value chain. There are further considerations in the Directive that apply to a company’s direct and indirect business relationships (e.g. suppliers of the company’s direct suppliers), including circumstances in which a business relationship cannot reasonably be brought to an end. Combating climate change through strategy, risk and remuneration Companies will be required to: have a plan that ensures their business model and strategy of are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5°C in line with the Paris Agreement; include emission-reduction objectives in cases where climate change is or should have been identified as a principal risk or a principal impact of the company’s operations; have regard to the fulfilment of the above obligations when setting variable remuneration, if variable remuneration is linked to the contribution of a director to the company’s business strategy and long-term interests and sustainability. New directors’ duties The Directive introduces a duty for directors of EU companies to set up and oversee the implementation of corporate sustainability due diligence processes, including a due diligence policy, and to adapt the company’s strategy to take into account adverse impacts on human rights and the environment arising from their own operations. The Directive also clarifies the general duty of care requirement in relation to these new rules. Directors are required to take into account the consequences of their decisions for sustainability, including, where applicable, human rights, climate change and environmental consequences, in the short, medium and long term. Third party assurance The Directive refers to situations where seeking independent third-party verification is appropriate; for example, verification of compliance with contractual assurances provided by a supplier in relation to meeting human rights and environmental required by the Directive.  Independent third-party verification in this context is to be provided by an auditor that is independent of the company, free from any conflicts of interests, has experience and competence in environmental and human-rights matters and is accountable for the quality and reliability of the audit. Enforcement A national authority will be designated to supervise and impose effective, proportionate, and dissuasive sanctions, including fines and compliance orders. Civil liability will apply to companies, directors (in cases where courts decide to lift the corporate veil) and/or senior executives (where legally accountable). Victims may be entitled to compensation for damages arising from the failure to comply with the obligations of the new rules. The company’s own monitoring measures and compliance functions will play an important role in ensuring effective identification, prevention, minimisation, ending and mitigation of adverse impacts on human rights and the environment. The Directive establishes minimum requirements for monitoring, though companies should also be aware of other measures (e.g. whistleblowing), that can assist in identifying adverse impacts or breaches of the company’s policies and procedures.   Persons who work for companies subject to due diligence obligations under this Directive or who are in contact with such companies in the context of their work-related activities can play a key role in exposing breaches of the rules of this Directive. Directive in the context of the EU Green Deal and Ireland This Directive represents a significant step towards achieving a primary objective of the European Green Deal, for sustainability to be further embedded into the corporate governance frameworks of organisations across the EU. The Directive complements the EU Corporate Sustainability Reporting Directive (CSRD) by adding a corporate duty to perform due diligence. This Directive will underpin the EU Sustainable Finance Disclosure Regulation (SFDR) which requires financial market participants to publish a statement on their due diligence policies with respect to principal adverse impacts of their investment decisions on sustainability on a comply-or-explain basis. The Directive will also complement the EU Taxonomy Regulation, a transparency tool that facilitates decisions on investment and helps tackle greenwashing by providing a categorisation of environmentally sustainable investments in economic activities. The Directive will also complement several other EU Directives and policies aimed at combatting human trafficking and forced labour, establishing deforestation-free supply chains, an action plan on a circular economy, a strategy for financing the transition to a sustainable economy, and more. Sustainability in corporate governance, or ‘sustainable corporate governance’, encompasses encouraging businesses to consider environmental, social, human and economic impact in their business decisions, and to focus on long-term sustainable value creation rather than short-term financial value. The value of good corporate governance to long-term sustainable success is not new to companies familiar with the first principle of The UK Corporate Governance Code. While the Directive will apply to large private companies, we can expect that many businesses in Ireland’s small, open, export-lead, economy will be impacted. Níall Fitzgerald FCA Head of Corporate Governance & Ethics at Chartered Accountants Ireland Note: Click for further information on the Corporate Sustainability Due Diligence Directive.    

Feb 25, 2022
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Governance, Risk and Legal
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Companies are embracing the spirit of the Wates Principles

The Financial Reporting Council has issued the first in-depth assessment of the quality of reporting from private companies who have chosen to follow the Wates Principles. The report, which was conducted with the University of Essex, shows that the Wates Principles are the most widely adopted corporate governance code used by large private companies.   The research shows that companies are grasping the spirit of the Wates Principles in their governance reporting. They are using the principles as a tool for self-reflection and improvement, and seeing the yearly governance reporting as an opportunity, not a burden. This research also includes examples of good reporting and acknowledges that it is too early to draw too many conclusions as most companies were in their first cycle of reporting. The financial sector was the biggest adopter of the Wates Principles.

Feb 23, 2022
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Governance, Risk and Legal
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Embedding and monitoring sustainability in strategy: A discussion with John Moloney, Chair, DCC Plc.

In our fifth Governance Webcast for 2022, John Moloney discusses with Barry Dempsey, Chief Executive Chartered Accountants Ireland, the role of the board and board subcommittees in embedding sustainability in the organisations strategy and monitoring its progress. John and Barry discuss a range of matters including: What sustainability means to many and who is responsible for it in a company Insights on how boards of listed and private companies deliberate and achieves consensus on what sustainability improvement initiatives to prioritise. The responsibilities of directors and ensuring access to relevant sustainability expertise The questions non-executive directors should be asking in relation to sustainability related risks faced by the company. The discussion was recorded at the Chartered Accountants Ireland Governance Conference in 2021, Boards and Sustainability. Its reproduction is very timely as the momentum of companies to address sustainability increases. The interview is available to view on the Chartered Accountants Ireland YouTube channel: Governance Webcast Series – Interview with John Moloney on Boards, Sustainability and Strategy. John Moloney is Non-executive Chair of DCC plc and Chair of their Governance and Sustainability Committee and a Member of their Remuneration Committee. John is also a Non-Executive Director of Smurfit Kappa plc and Chair of ABP Food Group. John has extensive top management and board level experience, having held the position of Group Managing Director of Glanbia plc until November 2013. John was previously a Non-Executive Director of Greencore Group plc. John holds an MBA from the National University of Ireland, Galway (NUIG).

Feb 18, 2022
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Governance, Risk and Legal
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New whistleblowing and speaking-up requirements: A discussion with Gráinne Madden, Principal GMJ Associates

In our fourth Governance Webcast for 2022, Gráinne Madden discusses with Níall Fitzgerald key developments in whistleblowing and speaking-up requirements in Ireland and the UK, their implications for governance policies and procedures, and the related responsibilities of directors and senior management. Gráinne Madden discusses a range of matters including: An overview of the EU Whistleblowing Directive due to be transposed into Irish Law The UK Government’s review of whistleblowing legislation Designing effective whistleblowing and speaking-up policies and procedures Considerations for directors and senior management on receipt of a potential protected disclosure Whistleblowing and speaking-up policy considerations for SMEs The discussion with Gráinne Madden is available to view on the Chartered Accountants Ireland YouTube channel: Governance Webcast Series – Interview with Gráinne Madden on whistleblowing and speaking-up requirements. Gráinne Madden is principal in GMJ Associates, an advisory firm specialising in corporate governance, whistleblowing and speaking-up, culture and corporate social responsibility (CSR). Gráinne lectures for third level masters’ programmes and is also a training facilitator for Transparency International Ireland’s Integrity at Work Initiative, which supports organisations in developing cultures of openness and accountability.    

Feb 04, 2022
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Governance, Risk and Legal
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Emerging trends in corporate governance in Ireland and Northern Ireland: A discussion with Teresa Campbell, Keith Morrow and Barrie O’Connell

In this third interview in our new governance webcast series, Níall Fitzgerald discusses key corporate governance issues affecting organisations in Ireland and Northern Ireland with some members of the Chartered Accountants Ireland Ethics and Governance Committee, who share their perspectives as non-executive directors, audit and governance advisors.   The panel discuss a range of issues including: What is on the horizon for corporate governance regulatory reform How directors and business-owners are addressing sustainability Large private and listed companies and the evolving role of the audit committee Challenges and practical considerations for SMEs and family businesses Governance challenges for charities, non-profits, and sporting organisations The effect of Covid-19 on governance. The discussion with Teresa Campbell, Keith Morrow and Barrie O’Connell is available to view on the Chartered Accountants Ireland YouTube channel: Governance Webcast Series – Interview with members of the Chartered Accountants Ireland Ethics and Governance Committee.   Teresa Campbell FCA is a Director with PKF-FPM Accountants, a non-executive director, member of the Council of Chartered Accountants Ireland, and Chair of the Chartered Accountants Ireland Ethics and Governance Committee. Keith Morrow FCA is Legal Entity Rationalisation lead at NortonLifeLock, a non-executive director and member of the Chartered Accountants Ireland Ethics and Governance Committee. Barrie O’Connell FCA is a Partner, Head of Audit Markets and member of the Audit Executive Team at KPMG Ireland. He is a non-executive director, member of the Council of Chartered Accountants Ireland Council, and member of the Chartered Accountants Ireland Ethics and Governance Committee.  

Jan 21, 2022
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Governance, Risk and Legal
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Holding companies and directors to account – A conversation with Ian Drennan, Director of Corporate Enforcement, ODCE

In this second interview in our new governance webcast series, Ian Drennan discusses with Níall Fitzgerald, key corporate governance issues affecting compliance with company law, the role of corporate enforcement and key developments in this area and the implications for company directors. Ian Drennan discusses a range of issues including: how the Office of the Director Corporate Enforcement (soon to become the Corporate Enforcement Authority), performs its role in collaboration with other regulators and law enforcement agencies, such as the Charities Regulator, the Central Bank of Ireland and An Garda Síochána; the main sources of information for the ODCE and the common types of offences that it investigates; the role of statutory auditors in reporting indictable offences under the Companies Act 2014; individual and collective responsibility of directors, including the accountability of directors for offences committed by a company; corporate governance reform and what this means for the future of corporate enforcement in Ireland; and the unique role accountants in business and practice play in ensuring good governance. The interview with Ian Drennan is available to view on the Chartered Accountants Ireland YouTube channel: Governance Webcast Series – Interview with Ian Drennan. Ian Drennan FCCA is the Director of Corporate Enforcement at the Office of the Director of Corporate Enforcement in Ireland.  

Jan 14, 2022
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Governance, Risk and Legal
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Board effectiveness: a conversation with Dr Margaret Cullen

In the first interview from our new governance webcast series, Dr Margaret Cullen and Níall Fitzgerald discuss board effectiveness, some of the issues currently impacting Irish and UK boards and how those issues can affect behaviours, and key concerns boards have in relation to their responsibilities at the beginning of 2022. Dr Cullen discusses a range of topics in this webcast, including: three competencies that are critical to board effectiveness; what senior management can do to self-manage behaviours and ensure their contributions facilitate effective decision-making; individual and collective accountability and the importance of good decision-making processes; and the governance issues that are having the greatest impact on SMEs, large private and listed companies. The interview with Dr Margaret Cullen is available to view on our YouTube channel. Dr Margaret Cullen is an experienced non-executive director, lecturer, and researcher. She is founder and principal of Think Governance Limited, a corporate governance consulting firm.

Jan 06, 2022
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Audit
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European consultation on strengthening of the quality of corporate reporting and its enforcement

Updated 28 February 2022 to include the response from chartered Accountants Ireland.  Corporate reporting by listed companies is the bedrock of capital markets as it gives investors the essential information they need to make sound investment decisions such as information about the financial situation of companies. Moreover, it enables stakeholders to hold companies accountable on, for instance, sustainability issues. The quality and reliability of public reporting by listed companies rely on three main mutually reinforcing pillars: (i) corporate governance in these companies; (ii) statutory audit; and (iii) supervision and enforcement by public authorities. Several recent failures of companies in Europe (e.g. Wirecard, Carillion) suggest that the three pillars that underpin the quality and reliability of corporate reporting by listed companies have not fully played their intended role. European Commission has initiated a broad review on the three core pillars of corporate reporting for large companies. This review will directly feed into an impact assessment that the Commission will prepare in 2022 with a view to: assessing problems with the quality of corporate reporting; and comparing possible options to remedy these problems. Five-part consultation The consultation is divided into five parts seeking views about the overall impact of the existing EU framework for the three pillars of high-quality and reliable corporate reporting: corporate governance, statutory audit and supervision. It also seeks views about the interaction between the three pillars: The first part seeks views about the overall impact of the EU framework on the three pillars of high quality and reliable corporate reporting - corporate governance, statutory audit and supervision. It also seeks views about the interaction between the three pillars. The second part of the questionnaire focuses on the corporate governance pillar, as far as relevant for corporate reporting. It aims to get your feedback in particular on the functioning of company boards, audit committees and your views on how to improve their functioning. The third part focuses on the statutory audit pillar. The first questions in this part aim at getting views on the effectiveness, efficiency and coherence of the EU audit framework. It focuses in particular on the changes brought by the 2014 audit reform. Subsequently, the questions aim to seek views on how to improve the functioning of statutory audit. The fourth part asks questions about the supervision of PIE statutory auditors and audit firms. Finally, the consultation will ask questions about the supervision of corporate reporting and how to improve it This consultation, which runs until 4 February 2022, will directly feed into an impact assessment that the Commission will prepare in 2022 with a view to possibly amend and strengthen the current EU rules. What the Institute is doing A working party from the Institute's committees will be reviewing the consultation, debating the issues and submitting a consultation.  We welcome comments from members interested in the project. Please send any comments to us via email. UPDATE: You can read the Institute's response here.  The three pillars of corporate reporting Corporate governance The consultation questionnaire seeks feedback on the effectiveness, efficiency and coherence of key features of the EU corporate governance framework relevant to corporate reporting. These include board responsibilities for reporting; internal control, fraud prevention obligation to establish an audit committee. Statutory audit The bulk of the consultation document is centred on audit, in particular the impact of the changes brought about by the 2014 EU audit reform package, focused on public interest entities (PIEs). The Commission’s last market monitoring report issued earlier this year had already revealed a number of deficiencies with audit quality (based also on inspection reports) and divergent use of the country options allowed under EU audit rules. General questions are raised on independence, firm rotation, the content of the audit and audit reporting, the provision of non-audit services, transparency rules and the internal governance of firms. Specific questions also ask for feedback on whether joint audits for PIEs should be incentivised or mandated; whether caps on auditor liability should be increased or removed; and whether a passporting system should be established to ease the cross-border provision of audit services.  Supervision Reflecting a number of concerns with the supervision of corporate reporting – the third pillar of the consultation document – feedback is also sought on deficiencies in the EU’s supervisory framework. These address the roles and responsibilities of national authorities, the exchange of information between authorities, the need for greater enforcement powers, as well as the role of the European Securities and Markets Authority.   Background High quality and reliable corporate reporting are of key importance for healthy financial markets, business investment and economic growth. The EU corporate reporting framework should ensure that companies publish the right quantity and quality of relevant information allowing investors and other interested stakeholders to assess the company’s performance and governance and to take decisions based on it. High quality reporting is also indispensable for cross-border investments and the development of the capital markets union. In the context of this consultation, corporate reporting comprises the financial statements of companies, their management report that includes the non-financial and corporate governance statements, and sustainability information pursuant to the proposed Corporate Sustainability Reporting Directive. The consultation takes into account the outcomes of the 2018 consultation on the EU framework for public reporting by companies and the 2021 Fitness Check on the EU framework for public reporting by companies. This current consultation focuses on companies listed on EU regulated markets that is a subset of the companies subject to public reporting requirements under EU law. Find out more Commission consultation page and questionnaire ESMA letter to Ms Mairead McGuinness Commissioner in charge of Financial services, financial stability, and Capital Markets Union following Wirecard: Microsoft Word - ESMA32-51-818 Letter to EC on next steps following Wirecard (europa.eu) The European Commission’s second audit market monitoring report which takes stock of changes to the European audit market several years after the implementation of the 2014 audit reform package.

Nov 24, 2021
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Governance, Risk and Legal
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Corporate Governance (Gender Balance) Bill 2021

The Irish Corporate Governance (Gender Balance) Bill 2021 was presented to Dáil Éireann during the week. Proposals in the Bill include a mandatory 33 per cent of a company’s board must be female after the first year of enactment, rising to 40 per cent after three years. The targets reflect the ambitions of many groups seeking to improve gender diversity on boards, including Balance for Better Business who have set targets of 33 per cent for boards of listed companies and 30 per cent for boards of large private companies by end of 2023. The Bill, due to be debated in the Dáil, proposes to apply the requirements to corporate bodies including: limited and unlimited companies, charities, funds (including UCITS), and all state sponsored bodies and their subsidiaries. Exemptions from the requirements will apply to: unincorporated associations, partnerships, limited liability partnerships, single director companies, micro company, or, other corporate body that has an annual turnover of less than €750,000 or that employs fewer than 20 employees, or both. The Bill proposes a statutory declaration to be made by the chairperson of the governing body, e.g., board, in the Annual Return or annual financial statements that the the gender balance requirements have been complied with. If they are unable to comply then they will be required to disclose the reasons why. Níall Fitzgerald FCA Head of Corporate Governance & Ethics at Chartered Accountants Ireland

Oct 08, 2021
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Governance, Risk and Legal
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New guide highlights 10 considerations for directors involved in ownership and management of residential estates

A new guide published today by Chartered Accountants Ireland and The Housing Agency identifies ten considerations for directors of the bodies that manage the shared spaces and services of multi-unit developments such as apartments and housing estates. Increasing numbers of people in Ireland live in apartments and houses that are part of multi-unit developments. Between 2002 and 2016 the number of apartments in Ireland rose by 85%, and in 2019 planning permissions in Ireland for apartments exceeded those for houses for the first time. This high level of growth is expected to continue for some time to come.  Residents of multi-unit developments rely on common areas, or shared amenities and services. Under Irish law, an owners’ management company (OMC) is required to legally own the common areas and be responsible for their upkeep on behalf of its members, who may be owner-occupiers or landlords.  Launched at a webinar today, ‘Owners’ Management Companies – A Concise Guide for Directors’ identifies good practice in ten key areas which the directors of OMCs should follow: Directors’ duties Board effectiveness Performance versus conformance The company constitution and register of members Finances, cash, and debtors Company accounts and statutory audit The role of the company secretary Outsourcing Annual general meetings Dispute resolution John O’ Connor, Chief Executive Officer, The Housing Agency, said: “Most OMCs are not-for-profit, or mutual trading companies, and most directors of OMCs are volunteers. However, the responsibilities and duties they have are enshrined in company law.  “Directors of OMCs are required to apply good corporate governance and sound financial management. This guide will give new and existing directors advice in complying with legal requirements, as well as achieving the objectives of their OMC. When organised and operated in a sustainable way, OMCs benefit all residents in the community.” Níall Fitzgerald, Head of Ethics and Governance at Chartered Accountants Ireland, added: “An OMC director must act in the best interests of the company while having regard to the interests of all their stakeholders. At times it can be complex work; OMC directors are often required to deal with service providers, and professional advisors such as accountants, auditors, and solicitors. They can also interact with residents’ associations and regulators or government bodies. “Chartered Accountants Ireland is delighted to  collaborate with The Housing Agency in providing guidance to OMC directors in their important role. As well as the ten considerations we outline, the guide also suggests further sources of information and advice. It emphasises the importance of seeking expert advice where complex legal, financial, and construction or property issues arise.” OMCs do not act for commercial gain, but are custodians of the physical, built environment in which people live. Given the significant proportion of time people spend in their living environment, more so during the Covid-19 pandemic, high standards in shared amenities and services are key to sustainable communities. These are more attainable with good governance and effective management of OMCs. As well as benefitting new and existing OMC directors, this guide will be of interest to other stakeholders in managed estates, such as housing bodies and local authorities, landlords, homeowners, professionals including auditors, accountants, management agents, and others providing services to OMCs.  ‘Owners’ Management Companies – A Concise Guide for Directors’ can be read on housingagency.ie/publications or charteredaccountants.ie/governance. ENDS About The Housing Agency The Housing Agency is a government body working with the Department of Housing, Local Government and Heritage, Local Authorities and Approved Housing Bodies (AHBs) in the delivery of housing and housing services. The Agency also implements the Pyrite Remediation Scheme and is the interim regulator of the AHB sector. Our Mission is to promote the supply of housing to meet current and future needs and demand by being a centre of expert knowledge on housing, supporting housing policy development and implementing effective housing programmes in collaboration with key stakeholders. About Chartered Accountants Ireland  Chartered Accountants Ireland is Ireland’s leading professional accountancy body, representing 29,500 influential members around the world and educating 7,000 students. The Institute aims to create opportunities for members and students, and ethical, sustainable prosperity for society. An all-island body, Chartered Accountants Ireland was established by Royal Charter in 1888 and now has members in more than 90 countries. It is a founding member of Chartered Accountants Worldwide, the international network of over one million chartered accountants. It also plays key roles in the Global Accounting Alliance, Accountancy Europe and the International Federation of Accountants.

May 19, 2021
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Governance, Risk and Legal
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New governance guide for directors of owners’ management companies

Owners’ Management Companies: A Concise Guide for Directors, published by Chartered Accountants Ireland and The Housing Agency, identifies 10 considerations for directors of the organisations that manage the shared spaces and services of multi-unit developments such as apartment buildings and housing estates. Increasing numbers of people in Ireland live in apartments and houses that are part of multi-unit developments, relying on common areas, or shared amenities and services. Under Irish law, an owners’ management company (OMC) is required to legally own the common areas and be responsible for their upkeep on behalf of its members, who may be owner-occupiers or landlords. Between 2002 and 2016 the number of apartments in Ireland rose by 85%.  In 2019, planning permissions in Ireland for apartments exceeded those for houses for the first time. This high level of growth is expected to continue for some time to come. OMCs do not act for commercial gain, but are custodians of the physical, built environment in which people live. Most directors of OMCs are volunteers. However, they have clear responsibilities and fiduciary duties and they are responsible for compliance with various legislation and regulation, including company law (if incorporated) and the Multi-Unit Development Act 2011. An OMC director must act in the best interests of the company while having regard to the interests of all its stakeholders. At times, it can be complex work; OMC directors are often required to deal with service providers, and professional advisors such as accountants, auditors, and solicitors. They can also interact with resident associations, regulators and government agencies. Published in May 2021, Owners’ Management Companies: A Concise Guide for Directors identifies good governance practice in 10 key areas for the directors of OMCs: 1.            Directors’ duties 2.            Board effectiveness 3.            Performance versus conformance 4.            The company constitution and register of members 5.            Finances, cash and debtors 6.            Company accounts and statutory audit 7.            The role of the company secretary 8.            Outsourcing 9.            Annual general meetings 10.          Dispute resolution A copy of Owners’ Management Companies: A Concise Guide for Directors is available to download from the Chartered Accountants Ireland Governance Resource Centre. You can watch the webinar launch of the Owners’ Management Companies: A Concise Guide for Directors by clicking here. Niall Fitzgerald Head of Corporate Governance & Ethics at Chartered Accountants Ireland   

May 19, 2021
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