A significant majority of directors say standards of corporate governance have improved in recent years and directors have learned from governance failings.
Over four in five (81%) of directors believe that standards of corporate governance in Ireland have improved in recent years, while seven in 10 (71%) say that directors and boards have learned from governance failings of the past, according to new research issued by the Institute of Directors in Ireland (IoD).
The financial services sector in Ireland is deemed to have good to very good standards of corporate governance by over half (55%) of the directors surveyed, where considerable regulation has been introduced in recent years to address past failings.
The research with IoD members also found that virtually all directors surveyed (97%) are positive about the outlook for the Irish economy in 2015, while 69% of directors claim their organisation plans to hire new employees next year.
Asked to describe the typical composition of boards in Ireland, three in five (61%) directors claim that Ireland’s boardrooms lack sufficient diversity and over half (56%) label boards as being ‘male-dominated’.
However, change is slowly afoot. There is a sense among those surveyed that the profile and composition of boards in Ireland has changed in the wake of the economic downturn, with 58% of those claiming that directors are now better qualified for the role, 54% saying that there are more new faces around the boardroom table and 47% of the view that there is a greater number of directors from a wider variety of backgrounds and disciplines serving on boards in Ireland.
Progress in terms of gender diversity is also being made, albeit slowly, with over one quarter (29%) of directors surveyed agreeing that gender diversity on boards has improved in recent years and 48% of the view that it has marginally improved.
Women are slightly less optimistic, however, with the largest proportion (69%) claiming that gender diversity on boards has only marginally improved.
A ‘who you know’ culture remains a factor in how people are appointed to boards, according to 70% of directors surveyed, while a further 19% say this is mainly the case for certain boards, citing the State sector, in particular.
Commenting, Maura Quinn, IoD chief executive, said: “We can take a number of positives from this survey in terms of improvements in corporate governance standards, however, lessons continue to be learnt in the wake of governance failings and there is still some way to go in terms of achieving real diversity and transparency on boards.
“While training and regulation are important factors in continuing to improve governance standards in this country, so too is transparency in the appointment process and a willingness and recognition to ensure that boards are appropriately skilled and representative of stakeholder interests.”