The Gazette 1974

supervision over the executives in a public company, such as a Supervisory Board, is desirable. The balance of power would be altered much less if it was made clear that the powers of direction and dismissal which would be exercised on behalf of the shareholders, could also be exercized by them. It is important that share- holders powers to protect themselves should not he weakened. Private companies' accounts The EEC proposals would cause a major change in Ireland by requiring private companies' accounts to be made public. At present it was impossible for an employee, a creditor or a potential creditor to find out a private company's financial position if the company wanted to conceal it. It is therefore im- possible to find out if 99 per cent of the com- panies in the country are creditworthy or not. The publication of these accounts would have many im- portant effects. Shareholders would be able to compare *or profitability of their own company with that of other companies, for the first time, and to complain if it was low. They could also see whether the directors of their companies were getting more or less remunera- tion than those of other companies. Overall this should tend to increase efficiency and reduce excessive remun- eration in Irish companies. It would also be likely to cause a spate of take-overs, as the financial attractions of private companies would become widely known. It would also give employees some at least of the infor- mation they need to gauge the prospects of successful wage claims. Some companies might change their character rather than publish their accounts, but when- private companies in Britain had been required to publish their account none of the ill-effects that had been anticipated actually occurred. Rationalising company law When the EEC measures are adopted into Irish law, it would be important that the new principles should be dovetailed neatly into the existing Irish rules. If this was not done, there was a danger of Irish law becoming a patchwork of unrelated rules and remedies, complicated, difficult to understand, and full of anom- alies. The adoption of the EEC measures should be used as a chance to rationalise Irish law, instead of making it more complicated. This work of rationalisa- tion would require public discussion. The EEC measures themselves would leave a good deal of detail to be filled in by national law, and would leave alternative courses of action open to national parliaments; all of this should be worked out in advance. The EEC measures should improve Irish company law, but only if they were properly implemented and fully discussed and understood. Uniformity not imposed It was sometimes said, mostly by people who seemed to be against all change, that the EEC measures were standardisation for its own sake. This is not so. The EEC measures were drawn up with much trouble before Ireland and the U.K. joined. Everyone is reluc- tant to alter them more than is necessary. But it is recognised that they involve bigger change for Ireland and Britain than for the other countries, and that the proposals may therefore need modification. It is also understood that the huge number of companies in Britain (more quoted companies than in the whole of 273

Irish law, by agreement between employers and workers, or by the Courts, before worker represen- tation would work satisfactorily. Would the repre- sentatives be untrained or specially trained workers, or would they be lawyers or accountants appointed by the workers? How far would workers' representatives have the right to have their own professional advisers examine the books of their companies for them? How far would they be free to report to their fellow em- ployees or trade union officials? Should worker repre- sentation in management be introduced without joint works councils, or only after councils had worked for a while? Works councils are a much less novel idea than worker representation on the board. How far would workers' representatives have a right to insist on particular matters being discussed by the Super- visory Board? If these questions were answered before the legislation to implement the EEC plan was intro- duced, worker representation would be well on the way to making a big contribution to labour relations; if they were not, the legislation would be hard to frame and difficult to work. Workers protected in mergers Another EEC proposal requires directors of a com- pany planning a merger to give the employees a "de- tailed report" on the effects of the merger on them, and the way they are to be treated. The employees would have a right to be consulted about this, and to give their views to the shareholders, who decide on the merger. If the merger is contrary to the employees' interests, there must be negotiation with management, and if agreement is not reached, there should be media- tion by a public authority (such as the Labour Court). This would all be new in Irish law, because it recognizes explicitly the legal rights and interests of employees in the company's affairs. At present Irish company law allows the interests of workers to be taken into account only insofar as it is in the interests of the company and the shareholders to do so. If adopted the EEC proposal would have to be extended to the kinds of mergers and take-overs usual here. This would be a strong stimulus for reforms giving safeguards to workers in circumstances other than mergers, and for safeguards for employees of private companies, indus- trial and provident societies, and partnerships.. The biggest influence for reform of Irish company law is now the EEC. Shareholders rights Under EEC proposals Supervisory Boards of directors are designed to look after the interests of shareholders better than they are likely to themselves. The idea originated in Germany where shareholders rarely take an active interest in their companies' affairs. German law is democratic about workers (worker representa- tion has existed there for many years) and paternalistic about shareholders: Irish law is democratic about shareholders and paternalistic about workers. At present Irish shareholders have the right to dismiss directors and, usually, the right to give directors instructions. It is not clear how far these rights were compatible with the EEC proposals, which would give these powers to the directors on the Supervisory Board. In Ireland ajl the directors would be on first-name terms; it is not clear whether a director who deserved dismissal would be more likely to get it from a Supervisory Board or from the shareholders. Clearly anything that increases