Irish regulator pledges to get tough on corporate governance

Ireland's new financial regulator Matthew Elderfield has warned banks and insurers that their operations will be placed under closer scrutiny over the coming years.

Speaking at the annual lunch of the Irish Insurance Federation, the Central Bank of Ireland's head of financial regulation said several "spectacular failures of corporate governance" had recently taken place in the country.

Mr Elderfield suggested that he is determined to improve Ireland's standing in the global business community by strengthening the governance standards of its major companies.

In particular, he promised to "knock on the head the lingering perception that corporate governance is sometimes compromised by concentrated personal business relationships".

The regulator recently unveiled plans to cap the number of directorships Irish board members are permitted to hold at three and prevent chief executives being appointed as chairmen.

His proposals, which could force many firms to alter their executive recruitment strategies, were described by chief executive of the Institute of Directors in Ireland Maura Quinn last month as "a positive step in reform of the finance sector".