An interesting change to corporate governance and company law in Ireland has been put forward in the form of the Irish Corporate Governance (Gender Balance) Bill 2021 (the “Bill”). The Bill proposes measures to increase the number of female board members over a three year period from its enactment into Irish law.
If enacted, within one year, the Bill will require at least 33% of board members of Irish companies to be female, rising to 40% by the end of its third year in existence. The Bill also puts forward some exemptions to this requirement, including;
The Bill also aims to place annual reporting obligations on each Irish company as to their board’s gender balance, which is proposed to operate on a comply or explain basis. As it currently stands the principle of ‘comply or explain’ means no penalties for non-compliance, so long as an adequate justification is established. The proposed annual Gender Balance report will be required to be filed by all relevant companies with the Companies Registration Office. While operating on a flexible comply or explain model of governance, the Bill also intends to make provision for High Court applications where the explanation for non-compliance is unjustified.
The Bill will most likely lead to further debate around the benefit of gender quotas and it remains to be seen how effective it will be, especially in a country where many companies are family-owned and managed.
Sinead Floody, Chartered Secretary
Dublin 7, Ireland