Corporate Governance and Administration Conference

Jury’s Hotel, Ballsbridge

30 March 2004

Ensuring Compliance within your Company

Paul Appleby

Director of Corporate Enforcement

Introduction

• Where are we? The ODCE in 2004

• Where are we going?ComplianceDetecting suspected offencesInvestigation and enforcementInsolvency matters

• Working with the ODCE

The ODCE in 2004 (1)

• Specific remit is Company Law, not other laws or codes of corporate governance

• We have two main objectives:encouraging adherence to company lawbringing to account those who disregard it

The ODCE in 2004 (2)

• Satisfactory start to our work

• Range of ODCE publications available

• Increases in reported non-compliance

• Successes with our enforcement work

• Encouraged by recent TNS/MRBI research

The ODCE in 2004 (3)

Company Directors (300 sample)• 97% feel compliance is very/fairly important• 66% consider compliance to be very/fairly easy• 54% acknowledged some familiarity with the ODCE• 34% rate ODCE as very/fairly effective (18% say no) • 30% have seen ODCE Information Books and 83% of

those were complimentary about their value

The ODCE in 2004 (4)

Accountants and Liquidators (130 sample)• 95% say that compliance has increased in last 5 years• 98% acknowledged some familiarity with the ODCE• 66% rate ODCE as very/fairly effective (31% say no) • 86% have seen the ODCE’s Information Books and

91% of those were complimentary about their value

The ODCE in 2004 (5)

Current Challenges • Guidance arising from the Companies Act 2003 • Large volume of reported offences/misconduct• Quantity/range of enforcement activity• Number of liquidator reports/other insolvencies• Capacity-building within the Office

Compliance (1)

2003 Act Guidance required on –

• Directors’ compliance statement

• Audit committees

• Auditor reporting

• Audit exemption

• ODCE Information Books

Compliance (2)

• Continue ‘outreach’ programme of seminars

• Keep our website up-to-date

• Review ODCE communications strategies

• Contribute to company law developments

• Participate in international research

Detection of Offences (1)

• Develop information-sharing arrangements with IAASA, IFSRA, ISE, Revenue, etc.

• Advance the 400 cases on hands at end-2003• Evaluate close to 1,000 new auditor reports, public

complaints and matters in the public domain• Progress the current company investigations and

undertake some new investigations where relevant

Detection of Offences (2)

• Focus public complaints on company law issues• Improve the consistency of auditor reporting• Enhance information flows between ODCE and

auditors and ODCE and other regulators • Consider initiatives in discrete areas like

management companies

Investigation/Enforcement (1)

• Advance to decision stage some ‘big cases’• Progress the directors’ transactions cases• Prioritise investigation cases of particular merit

• Select best evidence-gathering instruments Receipt of Relevant Documentation Voluntary witness statementsArrest/detention

Investigation/Enforcement (2)

• Initiate 50 prosecution proceedings

• Conclude 35 prosecution proceedings

• Secure 100 convictions

• Widen the prosecuted offences to 12 types

• Undertake 10 restriction/disqualification cases

Insolvency Matters (1)

• Ensure compliance by liquidators with their reporting obligations

• Evaluate close to 1,000 new liquidator reports

• Monitor liquidators’ restriction proceedings

• Maintain Public Notice Procedure

Insolvency Matters (2)

• Investigate evasion of accountability process

• Examine other insolvent company casesInsolvent liquidation cases with no liquidatorUnliquidated insolvent companiesDissolved companies after strike-offCompanies post-receivership

Insolvency Matters (3)

• Monitor restricted/disqualified directors

• Prevent undischarged bankrupts acting

• Examine possible misconduct by liquidators/receivers

Working with the ODCE (1)

• The ODCE is not an end in itself• It is a means by which those infringing the law

will be investigated and brought to account• Our motivation is to improve the environment for

enterprise• We’re in the risk reduction and quality assurance

business to benefit creditors/other stakeholders

Working with the ODCE (2)

• We welcome information relating to offences• We encourage cooperation from related parties• We try to reduce the ‘fear factor’ vis-a-vis clients• We minimise our use of serious legal powers• You should seek professional advice if in doubt• Much of our work is intrusive by nature, but it is

such in the public interest

Working with the ODCE (3)

www. odce .ie About the ODCE ODCE Services ODCE Publications/Statements Legislation Court Decisions

Thank You

Questions?