Directors' Compliance Statement

Directors' Compliance Statement: The Government has today published its proposals for amending the present Directors' Compliance Statement (DCS) provision. The accompanying statement of Mr Michael Ahern, T.D., the Minister for Commerce and Trade, is available via the following link: http://www.entemp.ie/press/2005/20051201b.htm

The Government has been guided in its decision by the Company Law Review Group (CLRG) which finalised and submitted its Report to Minister Ahern last July. A copy of the Report is available via the following link: http://www.entemp.ie/commerce/companylawreview/clrgreport.htm

When implemented in amending companies legislation, the DCS will:

Apply to:

  • public limited companies (whether listed or not) and
  • private companies limited by shares with both a balance sheet total of over €12.5 million and a turnover of over €25 million in the financial year in question;

Require directors to address the company’s obligations under:

  • tax law and 
  • company law, where the failure to comply is an indictable offence under the Companies Acts;
  • be published in the annual directors’ report to shareholders;

Contain the following main elements: 

  • an acknowledgement that the directors are responsible for securing the company’s compliance with its relevant obligations;
  • confirmation that the company has in place a compliance policy statement that is, in the opinion of the directors, appropriate for the company, and if not, specify why; 
  • confirmation that the company has in place appropriate arrangements or structures that are, in the opinion of the directors, designed to secure material compliance with its relevant obligations, and if not, specify why;
  • confirmation that the company’s arrangements or structures have been reviewed during the financial year and if not, specify why.

The proposed DCS provision will no longer require auditors to opine if the DCS is fair and reasonable. Overall, the provision represents in aggregate a reduction in its scope and effect compared with the original DCS.

The ODCE will develop in due course revised guidance on the DCS provision once the Government publishes the associated amending Companies Bill. Like our previous work in the DCS area, we will consult with interested parties and invite public comments before we finalise the Guidance and formally publish it.