Corporate Governance and Administration Conference Jury’s Hotel, Ballsbridge 25 March 2003

“Ensuring Compliance in Your Company” Paul Appleby Director of Corporate Enforcement

Outline of Presentation  Role of the ODCE  Interaction with Agencies/Professional Bodies  Directors’ Duties to ensure Compliance  ODCE’s Investigative/Enforcement Role  What to do if approached by ODCE

Role of the ODCE  Encouraging Compliance  Uncovering Company Law Breaches  Prosecuting Detected Breaches  Sanctioning Improper Conduct in Insolvent Companies  Delivering Quality Services

Interaction with Agencies/Bodies (1) Compliance  Development of Guidance for Company Directors, Auditors, Liquidators, etc.  Promotion of Compliance Message  Legislative Change/Implementation

Interaction with Agencies/Bodies (2) Investigation/Enforcement  Persons subject to a Reporting Obligation  Information-Sharing Arrangements  CRO, Courts, DPP’s Office, etc.

Directors’ Duties (1)  The Company – a Separate Legal Person  General Duties of Directors  Act in the Company’s (not Personal) Interest  Act with Due Care, Skill and Diligence  Defined Legal Obligations/Constraints  Disclosure Requirements

Directors’ Duties (2) Company Documents to be kept, updated and made available  Register of Members  Register of Directors and Secretary  Register of Directors’/Secretary’s interests  Register of debenture holders  Directors’ Service Contracts  Minute Books

Directors’ Duties (3) Basic Operational Obligations  Keeping proper books of account  Holding the annual general meeting (AGM)  Circulating to members before every AGM a signed copy of the balance sheet, profit and loss account, director's and auditor's report  Holding an extraordinary general meeting when circumstances require

Directors’ Duties (4) General Filing Obligations  Change in constitution of company  Change in registered office  Change of directors/secretary  Increase in Nominal/Issued Capital  Annual return  Mortgages and charges

Directors’ Duties (5) Burden of Proof  : Burden with the Prosecutor to prove “knowing and wilful default”  Now: Burden with the Defendant to prove that he took “all reasonable steps to prevent” default

Investigative/Enforcement Role (1) Main Triggers for Investigation  Auditor Reports of Indictable Offences  Liquidator Reports on Insolvent Companies  Public Complaints  Matters in the Public Domain

Investigative/Enforcement Role (2) Process of Investigation  Filtering  Assessment  Collection of Evidence  Decision-Making

Investigative/Enforcement Role (3) Decision Options  Voluntary Compliance  Insufficient Evidence  Civil Remedy  Restriction/Disqualification  Summary Prosecution  Prosecution on Indictment

What to do if contacted by ODCE Don’t Panic!  May be no element of culpability Co-operate!  Entitled to seek certain registers, etc.  Seek professional advice in case of doubt  May require search warrant in other cases

Sources of Information www. odce.ie  About the ODCE  ODCE Services  ODCE Publications/Statements  Legislation  Court Decisions