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Corporate Governance

  • 28-12-2008 8:32pm
    #1
    Bryan Griffin
    Closed Accounts Posts: 13 ✭


    Hey - does anybody know if the Combined Code on corporate governance is applicable to privately owned family companies and if not what are the corporate governance issues that do apply to such companies. Any help at all would be greatly appreciated.


Comments

  • #2
    BuffyBot
    Registered Users, Registered Users 2 Posts: 24,924 ✭✭✭✭BuffyBot


    Moved to Entrepreneurial & Business Management, which is probably a lot more suited :)


  • #3
    Bryan Griffin
    Closed Accounts Posts: 13 ✭Bryan Griffin


    Thanks a million for this - hopefully I'll get some replies!


  • #4
    krugerrand
    Registered Users, Registered Users 2 Posts: 67 ✭✭krugerrand


    Bryan Griffin wrote: »
    Hey - does anybody know if the Combined Code on corporate governance is applicable to privately owned family companies and if not what are the corporate governance issues that do apply to such companies. Any help at all would be greatly appreciated.

    Bryan: Are you speaking about a private company limited by shares ? A good starting point for you is the website of the Office of the Director of Corporate Enforcement www.odce.ie


  • #5
    antoinolachtnai
    Registered Users, Registered Users 2 Posts: 9,817 ✭✭✭antoinolachtnai


    The corporate governance rules are really about publicly quoted public companies and arise from a number of major controversies in the 80's and early 90's. The enforcement of these, to the extent they are enforced, lies with the stock exchanges and the institutional investors.

    That said, there is a great deal of 'good practice' in the rules which may be applicable to a privately held enterprise.

    Howeve,r in general, the directors can make decisions amongst themselves about the running of the company as they see fit. There are some restrictions on this but really, not that many.

    In terms of what directors can and cannot do, you are really delving into the area of company law. It is worth buying a book about company law - see http://www.ucc.ie/law/irishlaw/subjects/company.shtml

    Quite a lot has been written about family governance in the last five or ten years. There was even a conference about it a few years ago, organized by one of the firms. But just from the top of google, have a look at

    http://www.google.ie/search?q=family+business+governance&sourceid=navclient-ff&ie=UTF-8&rlz=1B3GGGL_enIE219IE219

    If there is a conflict or disagreement within your family business, the reality is that it will have to be resolved through talking and negotiation. It is unlikely that there will be a legal resolution, or if there is, it will be at the expense of the whole family.

    Two high-profile cases to ruminate on (although the businesses involved were not particularly large):

    http://www.independent.ie/national-news/judge-tells-feuding-pub-family-to-get-sense-164057.html

    http://www.independent.ie/national-news/restaurant-serves-a-recipe-for-trouble-in-family-legal-row-97396.html

    And this story, regarding a grocery concern you may have heard of.

    http://findarticles.com/p/articles/mi_qn4156/is_/ai_n13954496

    If you are having family issues like this in a substantial business, do not delay, get some external advice in. Good advice will not solve all problems and it will at best, save a disagreement from turning into a family grudge. In the worst case, it can still help break up or restructure the business in a way that is acceptable to most of the family and minimises the damage to the business.


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