Mahon Report Brings New Focus On Corporate Governance

Author:Mr Paul Egan
Profession:Mason Hayes & Curran

Those involved in business are already well aware of the importance of satisfactory governance structures and procedures as a protection from criminal law penalties, civil law actions and reputational damage. Governance procedures to forestall bribery and corrupt practices are likely to become a renewed area of focus in the light of the changes to the law advocated by the Mahon Tribunal in its final Report, published on 22 March 2012.

In the following Article, published in yesterday's Irish Times, Mason Hayes & Curran's Corporate Chairman, Paul Egan, outlines the background and likely direction of new law in this area, which will affect businesses generally, and not just those with a historic interaction with politicians.

Mahon looks to remove the 'ostrich' defence

Chapter 18 of the Mahon Report states the Tribunal's recommendations arising from its findings in the Report's first 2,515 pages and in its previous reports. Unsurprisingly, they are focused on law and procedure to do with planning, political finance, lobbying, bribery, corruption in office, money laundering and asset confiscation.

The first thing to say is that implementation of these recommendations will not result in any prosecution or convictions; horses have bolted and this is an opportunity to close the stable door for the future. Whereas many of the recommendations have a political and public-office focus, the key changes advocated by Mahon that will affect businesses are its proposals on bribery by intermediaries, defective corporate governance and on whistleblowing.

Mahon recommends: outlawing the making of payments to a third party where the payer knows or is reckless as to whether that third party uses that payment as a bribe to further the payers interests; outlawing a lack of supervision or control on the part of a commercial entity that facilitates the commission of bribery to the benefit of that entity by one of its employees or other business associates; whistleblower protection not only for employees but also for independent contractors.

Why, you might ask, is it necessary for such recommendations to be made? Like the whining schoolboy in As You Like It, Ireland has crept like a snail unwillingly to compliance with the OECD and other conventions on bribery and corruption. It was only an overdue 2010 Act that finally plugged an obvious gap in our law relating to bribery overseas.

So Irish anti-corruption law is at last compliant with our international...

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