Ten most common corporate
governance sins
And how to avoid them
Kevin Prendergast
Head of Advocacy and Assessment, ODCE.
Company law isn’t rocket science
 There are no hidden surprises
 Most matters can be addressed simply
 The worst thing ...
Corporate Governance Sins
1. Don’t keep accounts
 Breach of the law
 Most prosecuted offence for directors
 No idea if ...
Corporate Governance Sins
2. Borrow money from your company
 This is a criminal offence
 Your auditor has to report it
...
Corporate Governance Sins
3. Don’t file your financial statements on time
 Fees and penalties
 Loss of audit exemption f...
Corporate Governance Sins
4. Fight with your fellow directors
 Board meetings may not take place
 AGM’s may not take pla...
Corporate Governance Sins
5. Don’t have meetings
 No opportunity to take strategic look at
the business
 No opportunity ...
Corporate Governance Sins
6. Don’t keep minutes
 Criminal offence
 No official record of decisions
 No proof if legal d...
Corporate Governance Sins
7. Get struck off the register
 Lose limited liability
 Question mark over legality of contrac...
Corporate Governance Sins
8. Don’t deal with financial difficulties
 If put into liquidation, liquidator will
review at l...
Corporate Governance Sins
9. Don’t have a strategy and business
plan
 Business will lack direction
 Management and staff...
Corporate Governance Sins
10. Leave it to the accountant
 The legal obligations rest with directors
 Accountants cannot ...
What can you do?
 Put systems in place to ensure basic
responsibilities are complied with
 Ensure board meetings cover c...
Thank You
Follow ODCE on
10 most common corporate governance sins, and how to avoid them
of 15

10 most common corporate governance sins, and how to avoid them

10 most common corporate governance sins, and how to avoid them
Published on: Mar 3, 2016
Published in: Business      Economy & Finance      
Source: www.slideshare.net


Transcripts - 10 most common corporate governance sins, and how to avoid them

  • 1. Ten most common corporate governance sins And how to avoid them Kevin Prendergast Head of Advocacy and Assessment, ODCE.
  • 2. Company law isn’t rocket science  There are no hidden surprises  Most matters can be addressed simply  The worst thing you can do is ignore an issue
  • 3. Corporate Governance Sins 1. Don’t keep accounts  Breach of the law  Most prosecuted offence for directors  No idea if making a profit or loss as a business  It leads to insolvency, a separate offence  Could lead to personal liability in insolvency
  • 4. Corporate Governance Sins 2. Borrow money from your company  This is a criminal offence  Your auditor has to report it  Easier to prosecute since 2009  Can be resolved without money having to be paid
  • 5. Corporate Governance Sins 3. Don’t file your financial statements on time  Fees and penalties  Loss of audit exemption for two years  Risk of strike-off
  • 6. Corporate Governance Sins 4. Fight with your fellow directors  Board meetings may not take place  AGM’s may not take place  Financial statements may not be signed or filed  Must be resolved in High Court, public and expensive
  • 7. Corporate Governance Sins 5. Don’t have meetings  No opportunity to take strategic look at the business  No opportunity to raise issues  No record of key decisions taken by the company  No minutes!
  • 8. Corporate Governance Sins 6. Don’t keep minutes  Criminal offence  No official record of decisions  No proof if legal disputes between directors  No defence if facing civil proceedings
  • 9. Corporate Governance Sins 7. Get struck off the register  Lose limited liability  Question mark over legality of contracts  May be committing an offence  12 months to get re-registered with CRO  Thereafter wait for a High Court hearing
  • 10. Corporate Governance Sins 8. Don’t deal with financial difficulties  If put into liquidation, liquidator will review at least last 12 months of trading  Directors may face restriction or even disqualification proceedings  Directors may be made personally liable for some or all of the debts
  • 11. Corporate Governance Sins 9. Don’t have a strategy and business plan  Business will lack direction  Management and staff will have no guide to their work  No awareness of or plan for opportunities and threats
  • 12. Corporate Governance Sins 10. Leave it to the accountant  The legal obligations rest with directors  Accountants cannot face company law criminal actions  Your accountant can advise
  • 13. What can you do?  Put systems in place to ensure basic responsibilities are complied with  Ensure board meetings cover corporate governance /compliance matters  Keep informed of new developments
  • 14. Thank You Follow ODCE on

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