As previously reported, the Financial Reporting Council (FRC) published the UK Corporate Governance Code (the 2010 Code) in May 2010 which replaced the Combined Code on Corporate Governance (the 2008 Code). The Listing Rules apply the 2010 Code to companies listed on the Main Securities Market of the Irish Stock Exchange in respect of accounting periods beginning on or after 30 September 2010.

The Listing Rules require companies to state in their annual report that they have complied with the provisions of the relevant code throughout the prior accounting period. For companies with a 31 December 2010 year end, the 2008 Code is the applicable code against which they must disclose in 2010 annual reports. Such companies will be required to explain how they have applied the principles of the 2010 Code for the first time in the annual report for the period ended 31 December 2011.

However, companies should remember that they are required to comply with the continuing obligation provisions of the 2010 Code in accounting periods beginning on or after 30 September 2010.  Therefore, companies with a 31 December financial year end are required to comply with the provisions of the 2010 Code with effect from 1 January 2011.

Companies should be mindful of new continuing obligation provisions of the 2010 Code such as the annual re-election of directors. In order to report full compliance with the 2010 Code in 2011 annual reports, companies should put the full board forward for re-election at AGMs held during 2011. The 2010 Code does envisage a transitional period for companies to implement the annual re-election of directors. However, where a company intends to avail of the transitional period in 2011, the FRC will expect the company to outline in its 2010 annual report whether it intends to comply with the annual re-election requirement in 2012.

Contributed by Susanne McMenamin, David Fitzgibbon.