Code aims to ensure commercial and non-commercial State bodies meet the highest standards of corporate governance.
The Minister for Public Expenditure and Reform Paschal Donohoe TD, today (Wednesday 17 August 2016) published a revised and updated Code of Practice for the Governance of State Bodies, which has been agreed by government.
This revised and updated document is designed to ensure that both commercial and non-commercial state bodies meet the highest standards of corporate governance.
It provides a framework for the application of best practice and is intended to take account of developments in respect of oversight, reporting requirements and the appointment of board members.
The code is based on the underlying principles of good governance: accountability, transparency, probity and a focus on the sustainable success of the organisation over the longer term.
The updated Code of Practice for the Governance of State Bodies is based on 4 key pillars:
values – good governance supports a culture of behaviour with integrity and ethical values
purpose – each body should be clear about its mandate with clearly defined roles and responsibilities
performance – defined priorities and outcomes to achieve efficient use of resources resulting in the delivery of effective public services
developing capacity – appropriate balance of skills and knowledge within the organisation, to be updated as required.
The updated code is split into a suite of documents comprising the main code, as well as more detailed documents setting out its requirements as follows:
business and financial reporting requirements
audit and risk committee guidance
remuneration and superannuation
board self-assessment evaluation questionnaire
A balance has been struck in the updated code between the need for strong accountability and the requirement to support the appropriate autonomy of the state body under the legal framework and the environment within which it operates.
Publishing the code, the Minister for Public Expenditure and Reform, Paschal Donohoe TD, said:
"The key benefit of the updated Code of Practice for the Governance of State Bodies is that it provides greater clarity regarding the roles and responsibilities of the board of a state body.
“There is a greater emphasis on accountability and transparency, which is underpinned by effective relationships between the minister/parent department and the chairperson of the state body to ensure that the body is effective in achieving its objectives, uses its resources efficiently and operates in a manner which secures the longer-term sustainability of the state body.
"In light of the scale and diversity of roles carried out by state bodies, the code is not a ‘one size fits all’ document, but rather acts as a framework to ensure that both commercial and non-commercial State bodies meet the highest standards of corporate governance commensurate with their significant public roles and responsibilities."
Corporate governance best practice in the wider public and private sectors in Ireland and internationally has evolved since 2009 such as:
A number of reference documents have been updated and published since then such as the Financial Reporting Council’s 'UK Corporate Governance Code' (2016), CIPFA and IFAC’s 'International Framework, Good Governance in the Public Sector' (2014), OECD’s 'Principles of Corporate Governance' (2015).
These developments have been taken account of in the current update of the Code of Practice for the Governance of State Bodies.
The code is intended to be a living document and will evolve with best practice. It is effective from 1 September 2016 and is available on the Government Accounting website