Irish Corporate Governance (Gender Balance) Bill 2021

This bill is currently before Dáil Éireann (second stage).

Application of the proposed legislation

If enacted the legislation will apply to ‘Corporate Bodies’, being:

• Private Companies Limited by Shares;
• Designated Activity Companies (DACs);
• Public Limited Companies (PLCs)
• Companies Limited by Guarantee (‘CLGs);
• Unlimited Companies;
• All companies with charitable status;
• All collective asset-management vehicles;
• All Undertakings for Collective Investment in Transferable Securities (UCITS); and
• All state-sponsored bodies of Ireland and their prominent subsidiaries, including all statutory corporations.

As drafted in the Bill the legislation will not apply to unincorporated associations, partnerships, LLPs, single director companies, a micro company or a corporate body that has an annual turnover of less than €750,000 OR has fewer than 20 employees, or both.

The bill does provide for the possibility of further ministerial regulations to expand the definition of Corporate Bodies.

Mandatory nature of the proposals/time periods for compliance:

The proposed legislation will provide for gender quotas at boardroom level and requires boards of Corporate Bodies to comprise a minimum of 33% of each gender within a year of the date of commencement of the legislation, and a minimum of 40% of each gender within three years of the date of commencement of the legislation.

Declaration and Certificate of Compliance

As drafted the bill provides that the Chairman of the board/governing council will be required to make a statutory declaration in the relevant Annual Return to state whether or not that the Corporate Body complies with the gender balance requirement – where it is not in compliance the declaration must state the reasons why.

The Corporate Body may on request to the Registrar (CRO), Minister (Enterprise & Trade), Governor (Central Bank) or Regulator (Charities Regulator), subject to the relevant authority being satisfied of compliance, receive a Certificate of Compliance that the Corporate Body has complied with the gender balance requirements.

The gender balance quota is mandatory and where any of the above-mentioned authorities is not satisfied as to compliance then it may make application (or indeed an application may be made by a member or director of the Corporate Body itself) to the High Court pursuant to section 797 of the Companies Act 2014 for an order directing compliance. 

The decision as to whether to make such an application is discretionary. Comments made by Minister Higgins TD (who introduced the Bill) suggest that legislation will be operated on a comply-or-explain basis i.e., Corporate Bodies that do not meet the quotas will have the opportunity to explain the non-compliance before any action is taken to compel compliance. It is not expected that a list of reasons shall be included in the legislation, but it is envisaged that exceptions may be made where the body can prove a ‘genuine effort’ was made to reach the gender balance quota.

For further information in relation to this matter, please contact Bríd McCoy (Partner), or your usual AMOSS contact