guidelines for good governance · 2017-03-27 · guidelines for good governance for board members...

Guidelines for Good Governance

for Board Members of Local Action Groups

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Irish LEADER Support Unit Local Action Groups - Good Governance Guidelines

78 - ILSU Governance R8.doc 02/05/2006

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© Irish LEADER Support Unit

First published May 2006

Published by Tipperary Institute, Nenagh Rd., Thurles, Co Tipperary

Web: www.ilsu.ie

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Disclaimer:

ILSU has taken all reasonable care in relation to the accuracy of the information in theseguidelines. The information is intended as a guide only and does not purport to be a legalinterpretation.

ILSU does not make any warranties regarding the accuracy or completeness of the data ofthe site and the data within. Organisations are encouraged to seek professional legal advicewhere a particular issue arises.



Glossary of Terms ...............................................................................4

Introduction...................................................................5What is Governance?...........................................................................6Principles of Governance ....................................................................6Seven Characteristics ..........................................................................7

1 Participation ................................................81.1 Principles ........................................................................81.2 Board Composition ........................................................81.3 Duties and Responsibility of the Board ........................9

2 Control........................................................102.1 Principles ......................................................................102.2 Prudence .......................................................................112.3 Duties and Responsibility of the Board ......................112.3.1 General Control ...........................................................112.3.2 Management .................................................................122.3.3 Risk Management .........................................................122.3.4 Procurement ..................................................................122.3.5 Other Responsibilities..................................................13

3 Transparency and Accountability ..........143.1 Principles ......................................................................143.1.1 Transparency................................................................143.1.2 Accountability...............................................................143.2 Requirements................................................................153.2.1 Freedom of Information...............................................153.2.2 Data Protection Acts....................................................153.3 Duties and Responsibility of the Board ......................16

4 Leadership..................................................174.1 Principles ......................................................................174.2 Establishing Direction..................................................174.3 Duties and Responsibility of the Board ......................18

5 Staff Management.....................................195.1 Principle........................................................................195.2 Good Practice ...............................................................195.3 Duties and Responsibility of the Board ......................20

6 Health and Safety ......................................216.1 Safety, Health and Welfare at Work Act ....................216.1.1 Duties of Employees.....................................................216.1.2 Safety Statement and Officer .......................................216.2 Duties and Responsibility of the Board ......................21

7 Consensus...................................................227.1 Principles ......................................................................227.2 Consensus.....................................................................227.2.1 Towards Achieving Consensus ....................................227.2.2 Failing to Achieve Consensus......................................22

8 Equality and Ethics .................................. 238.1 Equality........................................................................ 238.1.1 Principles ..................................................................... 238.1.2 Proofing ....................................................................... 238.1.3 Duties and Responsibility of the Board ...................... 248.2 Ethical Standards ......................................................... 248.2.1 Principles ..................................................................... 248.2.2 Disclosure of Interests................................................. 248.2.3 Information .................................................................. 258.2.4 Fairness ....................................................................... 258.2.5 Abuse of Power............................................................ 258.2.6 Hospitality.................................................................... 258.2.7 Work and External Environment ................................ 268.2.8 Responsibility............................................................... 26

9 Effectiveness and Efficiency .................... 279.1 Principle ....................................................................... 279.2 Effective Boards .......................................................... 279.3 Investigation ................................................................ 279.4 Board Self-Evaluation................................................. 289.4.1 Principle....................................................................... 289.4.2 Review.......................................................................... 289.5 Board Delegation......................................................... 289.5.1 Principle....................................................................... 289.5.2 Clarity of Roles............................................................ 299.6 Duties and Responsibility of the Board...................... 319.6.1 Legal Requirements..................................................... 31

Appendices .................................................................. 33A1 Memorandum & Articles of Association ................... 34A2 Model Conduct and Confidentiality Bond ................. 41A3 Annual Compliance Checklist .................................... 42A4 Annual Compliance Pack............................................ 43A5 Board Member’s Annual Checklist ............................ 44A6 Company Secretary’s Annual Checklist..................... 45A7 Changes in Particulars of Director/Secretary ............. 46A8 Appointment of Director/Secretary ............................ 47A9 Register of Interest for Board Members..................... 48A10 Implication of CLEA 2001 .......................................... 49A11 Board Evaluation .......................................................... 52A12 Model Procurement Policies ........................................ 57A13 Resource Agencies ....................................................... 60A14 Government Departments and Agencies ..................... 62Selected Bibliography....................................................................... 63

Contents



Glossary of Terms ARD - Annual Return Date – Company Law Enforcement Act 2001.

Board – The Board is the legal structure responsible for the leadership and control ofthe Local Action Group. There should be a formal schedule of matters reserved to theBoard for consideration and decision. This includes Board appointments, approval ofstrategic plans for the organisation, approval of financial statements, the annualbudget, major acquisitions and significant capital expenditure, and review of theorganisations system of internal controls.

Board Members – Company Directors of the Local Action Group.

‘Bottom-up’ – Concepts and actions emerging from those most distant from theaccepted centres of power.

CLEA - Company Law Enforcement Act 2001.

Community - Inhabitants of the geographic area covered by the Local Action Group.

Company – the legal entity.

CRO – Companies Registration Office.

DCR&GA – Department of Community, Rural and Gaeltacht Affairs.

Directors – Board Members of the Local Action Group.

ILSU – Irish LEADER Support Unit, based in Tipperary Institute and providingsupport for all LEADER+ and National Rural Development Programme Local ActionGroups.

LEADER – EU Rural Development Programme – French acronym for: Links betweenActions in Support of the Rural Economy.

Local Action Group - Organisation that locally delivers the LEADER Programmeand/or the National Rural Development Programme, usually constituted as company ora co-operative.

Manager – the Local Action Groups most senior staff member – sometimes designatedChief Executive Officer (CEO) or Co-ordinator.

Mission Statement – An agreed statement setting out the vision of the Company.

NRDP – National Rural Development Programme.

Specificities of the LEADER model of rural development are: bottom-up approach,area-based, local organisation ownership, multi-sectoral and integrated initiatives,decentralised financial management, innovation, and transnational co-operation.

Stakeholders - those who provide funding and resources to the Local Action Group;those who use the services of the Local Action Group; those who support the actionsof the Local Action Group; and those who are employed by, or work with the LocalAction Group.

Subsidiarity – is the principle that states that matters ought to be handled by thesmallest (or, the lowest) competent authority, such as the local community.



IntroductionThese guidelines have been prepared by the Irish LEADER SupportUnit of Tipperary Institute to assist Board Members of LocalAction Groups with some of the concepts and applications of GoodGovernance. The guide is designed to introduce, or reintroduce,Boards to governance standards that should be implemented in thecommunity and voluntary sector.

We hope this guide will be easy to follow, and will assist yourcompany in achieving world-class standards in the practice of ruraldevelopment.

Providing leadership and good practice in the community and voluntary sector is, rightly,becoming of major concern to forward-thinking Local Action Groups. Good governancemust be fundamental to the business of local development, enabling the process to be heldaccountable by its constituent communities, local partners, and national and EU funders.

Local Action Groups are diverse bodies, with varying internal and external needs. Boardscontain representatives of the community and voluntary sector, state agencies, the socialpartners, and local elected representatives. Every Member brings a unique insight into theneeds of the local area, yet may have quite different levels of expertise in serving onBoard structures.

Beyond demonstrating fiscal correctness, Local Action Groups must comply with manypublic sector regulations and standards. Whilst we are private companies, we are inreceipt of significant levels of public finance, and are viewed by many as surrogate stateagencies. The fact that many Local Action Groups have roles and values that extendbeyond the normal remit of such agencies fuels a dilemma, both in terms of financialmanagement, and also in terms of developing a long-term strategy for survival andgrowth.

Finally, the unique properties of the LEADER Programme must not be forgotten, creatingan additional set of operational requirements, with heightened social responsibility. Theseseven properties (sometimes called ‘specificities’) of the LEADER model of ruraldevelopment are: -

Bottom-up approach; Area-based approach; Local organisation ownership; Multi-sectoral and integrated initiatives; Decentralised financial management; Innovation; and Transnationality/ co-operation.



What is Governance?

Governance is…‘the systems and processes concerned withensuring the overall direction, effectiveness, supervision andaccountability of an organisation.’1

Governance specifies the relationships between, and the distribution of, rights andresponsibilities amongst all involved in every Local Action Group, including the: -

Board of Directors;

Local Action Group Manager;

Staff;

Stakeholders;

Programme regulators (Department of Community, Rural and Gaeltacht Affairs, etc.);

Programme participants; and

Community affected by the actions of the organisation.

For every Local Action Group the fundamental concern of good governance includes: -

1. Ensuring that conditions apply whereby the Directors and Management act in theinterests of the company and of its stakeholders, including its staff; and

2. Ensuring the means exist to hold the Manager and Board accountable to thestakeholders and employees for the use of assets.

Principles of GovernanceThe community and voluntary sector has a distinctive form of governance and a set ofvalues that are not determined by the financial bottom line or by an electoral mandate.These values address not just what you do, but how you do it.

Community and voluntary organisations also have a set of distinctive relationships withtheir different stakeholders: those who fund them, use their services, and work in or withthem. Our concern must be to turn development objectives into accountable and effectiveaction without forfeiting what is distinctive about the sector.

Each Local Action Group has a core set of values and principles that frames the vision,work, and development of the organisation. These principles should be recorded in theMission Statement of the Company.

Research shows, however, that few Local Action Groups debate, record or implementtheir understanding of governance values.

1 Good Governance - A Code for the Voluntary and Community Sector; First edition: June 2005



Seven CharacteristicsWithin the development sector good governance can be said to have seven majorcharacteristics. At a minimum these help insure that the potential for corruption isminimised, the views of minorities are taken into account, and that the principles of socialinclusion are adhered to. The seven characteristics of good governance are: -

1. Participation;

2. Control;

3. Transparency and Accountability;

4. Leadership;

5. Consensus Orientation;

6. Equality, Diversity and Ethics; and

7. Effectiveness and Efficiency.

The following sections outline some of the most important features of thesecharacteristics, as they apply to Local Action Groups.



1 Participation

1.1 PrinciplesEquality of participation by all is a cornerstone of good governance for LocalAction Groups.

Successful Local Action Groups demonstrate best practice in the following: -

Encouraging community involvement, and recognising local needs; Enabling self-determination; Encouraging power-sharing through true partnership; Recognising equality for all; Being inclusive; Protecting individual voices and viewpoints; and Creating flexible structures that are open, accountable and transparent.

1.2 Board CompositionThere are a number of specific regulatory requirements affecting participation on theBoards of Local Action Groups. These are additional to the requirements of TheCompanies Act.

Regulatory Requirement – DCR&GA Circular no: 15-02: 4th June 2002

‘The composition of Local Action Group Boards must containcommunity/development group representation of at least 25%. All suchmembers must come from community and development groups that areregistered with the County Development Boards.

To ensure equality of opportunity, election as a community or developmentgroup representative must be open and transparent and it is recommendedthat the Community and Voluntary Forum, established as part of theCounty Development Board structures, be used. Any local action groupthat has not held such elections within the last 18 months should do so assoon as possible and in any event within the next 6 months.

The normal rotation2 rules apply to community and development grouprepresentation.’

While the regulation recommends representation to be drawn from thecommunity and voluntary forum, many Local Action Groups have otheradditional structures by which community representatives are nominated totheir board.

2 See Appendix 1 – Model Articles of Association – Paragraph 38 for typical rotation.



1.3 Duties and Responsibility of the BoardIn creating the right environment for participation, the Board must ensure that it has: -

Open and transparent procedures for nomination and representation of its membership;

Unambiguous and fair local elections/nomination procedures;

Effective fora structures to transmit information and decisions to and from the Board;

Effective and regular consultation with all local stakeholders;

Clear mechanisms for capturing and reflecting local stakeholder views in planning anddecision-making processes;

Mechanisms for informing stakeholders of the Board’s future plans;

Democratic processes to appoint suitably qualified individuals;

An understood and easy-to-access internal procedure for dealing with the legitimateconcerns of all stakeholders, staff, volunteers; and

Procedures to report to all stakeholders for performance, impacts and outcomes.



2 ControlThe Board, as the responsible body, has a pivotal role in ensuring that its decisions,processes and procedures are in full compliance with its duties and responsibilities. TheMemorandum and Articles of Association3 provide the operating rules for everyCompany. In the context of these and in order to exercise effective control the Boardmust: -

Understand, maintain and regularly review the organisations' internal checks andbalances, and performance monitoring policies and procedures.

Establish an effective and competent Internal Audit Committee that: -

o Oversees the work of the external auditor

o Assesses the Auditor's report

The Board might consider the establishment of protected reporting procedures that enablesanyone, including staff, to notify it of impending risks or malpractice.

2.1 PrinciplesBoard Members are collectively responsible and accountable for ensuring and monitoringthat the Local Action Group is performing well, is solvent, and is complying with all legaland statutory obligations.

Decisions – Board Decisions can only be made at a properly constituted BoardMeeting, held in accordance with the Memorandum and Articles of Association of theLocal Action Group.

Compliance – Board Members are responsible for ensuring that the Local ActionGroup complies with all legal and statutory requirements, its own Memorandum andArticles of Association and all relevant laws.

Prudence – Board Members must act prudently to protect the assets of theorganisation and to ensure that they are used to deliver the overall objectives of theLocal Action Group, in accordance with its legal obligations.

Managing Risk – Board Members are required to identify and manage obstacles thatmay prevent the organisation from reaching its goals. Board Members are collectivelyresponsible for risk management, including those emerging from financial control andlegal compliance.

The Board should delegate responsibility for the management of the Group, through theChief Executive, to executive management.

The roles of Chairperson and Manager should never be combined, and there must be aclear division of responsibilities between them, which is set out in writing and has beenapproved by the Board.

3 See Appendix 1 for Local Action Group model Memorandum and Articles of Association



The Manager is accountable to the Board for all authority delegated to executivemanagement.

The Board will normally delegate some of its responsibilities to Committees of the Board.

2.2 PrudencePrudence is very important in Irish Company Law, and is worthy of additionalclarification.

Board Members are expected to exercise skill, due diligence and care in the discharge ofall functions. A Director is expected to act with reasonable diligence and to use his/hergeneral knowledge, skill and experience when performing his/her duties.

Board Members are required to act in good faith in the best interests of the company as awhole. The Board must act prudently to protect the assets of the organisation and toensure that they are used to deliver the overall objectives of the Local Action Group.

When Board Members attend a Board meeting the needs and responsibilities of the LocalAction Group is paramount. All personal interests, as well as those of the stakeholder thatyou represent must be put aside.

Board Members must not disclose confidential material that they might obtain in fulfillingtheir role4.

There is an over-riding duty on each Director to ensure that the requirements of theCompanies Acts are met. The Board Members must declare in the Annual Report thatthey have complied with their statutory requirements.

It is highly recommended that Board Members attend Board Meetings regularly; ask forrelevant information, and take an active interest in the affairs of the Local Action Group.

Typically, the Articles of Association of the Local Action Group will determineprocedures to be enacted where Board Members fail to attend Board Meetings on asatisfactory or regular basis.

2.3 Duties and Responsibility of the Board

2.3.1 General Control

In respect of general control issues the Board must ensure that: -

All rules are equitably and fairly applied to all stakeholders;

Copies of rules and guidelines are circulated to all relevant staff and are availablefreely to all stakeholders; and

All stakeholders are well-briefed and aware of the rules governing specificprogrammes and funds.

4 See Appendix 2 for Draft Confidentiality Bond



2.3.2 Management

In respect of general management processes the Board must: -

Make provision for, receive and understand regular reports concerning: -

Internal audits;

Financial exposure;

Cash-flow forecasts;

Overview of contracts; and

Incidents in the workplace.

Actively encourage staff and Board Member training and skilling in all relevant fields,including: -

Company Law as it applies in the community and voluntary sector.

Audit requirements;

Financial understanding;

Legal compliance;

Cash-flow forecasting;

Managing contracts, including project management;

Purchasing and expenditure guidelines; and

Health and Safety Requirements

2.3.3 Risk Management

In respect of risk management issues the Board must: -

Create a system for identification of each major internal risk to the Local ActionGroup – for example; financial resource planning, staff retention, etc.;

Create a system for measuring the risk – for example; the likelihood of loss of theManager;

Devise and implement a system for managing the identified risks – contingencyplanning; and

Continuously monitor the risk environment.

2.3.4 Procurement

Public procurement relates to the contracts awarded for supplies, services, and works bypublic authorities and public undertakings. Local Action Groups awarding these contractsare required to follow certain procedural rules in putting out their contracts to tender.While the rules differ somewhat between those awarded by the private sectors and theutilities, the underlying principles are similar. The procedural rules apply to contractsexceeding set threshold values, but the principles extend to all contract awards.

Some of these include the principle of equal treatment, the principle of non-discrimination,the principle of transparency, and the principle of proportionality.



Suppliers, service providers, and works contractors, therefore, have the right to fair playand equal treatment by the contracting entities. On their side, however, the contractingentities have the right to achieve both value-for-money in selecting the lowest pricedoffers, or alternatively, of the economically most advantageous valid tenders.

Procurement practices5 are subject to audit and scrutiny under the Comptroller andAuditor General (Amendment) Act 1993 and Accounting Officers are publiclyaccountable for expenditure incurred. www.etenders.gov.ie/guides/guides_main.aspx

2.3.5 Other Responsibilities

Local Action Groups are subject to a range of Programme-related rules and regulations inaddition to the normal company compliance regulations.

In cases where the Company is managing LEADER and/or NRDP these regulations arecombined within the DCR&GA Operating Rules. Where the Local Action Group ismanaging other programmes and initiatives in addition, there will normally becorresponding specific rules and regulations that must be adhered to.

Irish Local Action Groups are currently subject to a number of statutory and legislativeacts: -

Freedom of Information Act, 1997 - www.revenue.ie/pdf/foiact_2003.pdf

Official Languages Act, 2003 - www.pobail.ie/en/IrishLanguage/OfficialLanguagesAct2003

Data Protection Acts 1988 and 2003 - www.dataprotection.ie

Safety, Health and Welfare at Work Act 2005- www.hsa.ie

Ethics in Public Office Act 1995-www.irishstatutebook.ie/ZZA22Y1995.html

5 See Appendix 12 for Model Procurement Guidelines



3 Transparency and Accountability

Voluntary action is reliant on public support and goodwill, including individual’swillingness to give up time for issues they are passionate about. Therefore, each LocalAction Group must engage with the local community in ways that will maintain andenhance people’s trust and confidence, and to recognise this is a key aspect of theiraccountability.

3.1 Principles

3.1.1 Transparency

It is generally agreed that greater transparency within the community and voluntary sectoris needed to: -

Maintain public trust and confidence in the actions of voluntary and communityorganisations;

Strengthen relationships with stakeholders, particularly donor’s (of time and money)and others who support an organisations mission or cause;

Generate a greater understanding of what individual organisations are for and howthey achieve this;

Generate a greater understanding of what the sector is for and how it operates,including understanding of the wider social and political roles that voluntary andcommunity organisations undertake; and

Justify the sector’s expanding role in society, and in providing a greater range ofpublic services as a consequence of evident government policies to this effect.

3.1.2 Accountability

Leat's Model of Accountability6 identifies the following actions: -

Being held to account by stakeholders or on their behalf, via sanctions or othermethods of redress which enforce the right to effect change;

Giving an account providing stakeholders with an explanation or information to reportwhat has taken place and the outcomes of that activity; and

Taking account of stakeholder’s needs and views and responding to these byexamining and, if necessary, revising practices or enhancing performance.

Following from acceptance of these principles each Local Action Group must ensure thatrelevant information should be freely available and directly accessible to those who willbe affected by such decisions and their enforcement. It is also clear that information

6 Leat, 1986, Voluntary Organisations and Accountability, NCVO



should be provided in easily understandable forms and media, appropriate for the needs ofthe stakeholders.

3.1.3 Conflict of Interests

A conflict of interest is a situation in which someone in a position of trust, have competingprofessional or personal interests. Such competing interests can make it difficult to fulfillhis or her duties impartially. Even if there is no evidence of improper actions, a conflict ofinterest can create an appearance of impropriety that can undermine confidence in theability of that person to act properly.

Each member of a Local Action Group is required to complete a Register of Interest Formwhich is submitted the Department of Community, Rural and Gaeltacht Affairs.(Appendix 9)

Members should also ensure that they are acting in the best interest of the company at alltimes. Where a director is a member of another organisation, which may have conflictinginterests, e.g. applying for same funding etc. he or she should formally express the interestand a decision can be made at board level about the appropriate action in each case.

3.2 RequirementsLocal Action Groups are obliged through their contractual arrangements with DCR&GAto provide information about performance, outputs, impacts and spending.

3.2.1 Freedom of Information

All Local Action Groups are subject to the Freedom of Information Act 1997. Thisenables members of the public the right of:

Access to Records;

Access to reasons for Decisions; and

To have misleading Personal Information corrected

According to the Information Commissioner’s Decision ref 020210:‘…there is a strong public interest in members of the public having accessto records which show how a body such as (Local Action Group),authorised to dispose of public funds, performs its functions. Thatinformation used by such bodies to make decisions about a fundingapplication was accurate and fair’.

For a concise guide on the application of the Freedom of Information Act, 1997 seeDepartment of Finance website: http://www.finance.gov.ie/viewdoc.asp?DocID=821

3.2.2 Data Protection Acts

Local Action Groups are obliged to implement the terms of the Data Protection Acts 1988and 2003.



The Data Protection Acts are responsible for safeguarding the privacy rights of individualsin relation to the holding and processing of personal data. The Acts confer rights onindividuals as well as responsibilities on the persons processing personal data.

For detail of the application of the Data Protection Acts 1988 and 2003, see the DataProtection Commissioner’s website: http://www.dataprotection.ie/ViewDoc.asp?DocId=-1&CatID=47&m=l

3.3 Duties and Responsibility of the BoardThe Board must be open and accountable to all stakeholders about its own work. This canbe easily achieved by: -

Having clear policies identifying information that can be made available, and thatwhich must remain confidential to the organisation to protect personal privacy or clientprivacy;

Complying with reasonable outside requests for information about the organisationand its work;

Ensuring that stakeholders have the opportunity to hold the Board to account andknow the mechanisms to enable this to happen; and

Ensuring that the principle of equality is applied, and that information and meetingsare accessible to all stakeholders.



4 LeadershipLeadership is a process by which people are influenced to accomplish an objective in away that is cohesive, coherent and efficient. Leadership makes people want to achievehigh goals.

4.1 PrinciplesEvery Local Action Group must be led and controlled by an effective Board. The BoardMembers must collectively ensure the delivery of the Company objectives, set thestrategic direction, and uphold its values.

The Board has, and must accept, ultimate responsibility for directing the affairs of theLocal Action Group. It must ensure that it is solvent, well-run and is capable of deliveringthe outcomes for which it has been established.

The Board must focus on the devising of policy and establishing the strategic direction ofthe Local Action Group. It should not become involved in the day-to-day management ofthe organisation, since this is the province of the Manager.

Where Board Members do become involved in operational issues they should clearlydistinguish between their operational and strategic roles.

4.2 Establishing DirectionSetting the long-term direction for the organisation is the Board's most important role.Having a strong sense of the organisation's destination focuses the Board. The LocalAction Group’s ‘purpose’ is at the heart of that direction.

All Local Action Groups have multiple purposes. They have to balance the social andcultural aspirations of their stakeholders against individual programme objectives.

The vision of the organisation corresponds to the long-term view of where it sees itself inthe future. Some organisations also set down the values by which they will operate andthe kind of environment they would like to see for the employees. This will often gobeyond the values inherent in the programmes they deliver and may form the pathway toenhanced corporate social responsibility (CSR).

The Manager has responsibility for maintaining a clear division of responsibilitiesbetween the Board and staff team. S/he must provide an effective link between Board andstaff, interpreting the Board policy, creating and implementing strategic decisions by wayof actions.

Members of the Board should not seek to become directly involved in operationaldecisions that have been properly delegated to staff. They must, however, hold staff toaccount through the Manager.



4.3 Duties and Responsibility of the BoardThe Board provides the policy and strategic vision for the organisation. It follows that it isalso in a position to exercise leadership on behalf of all of the stakeholders. This can beachieved through: -

Approving policies, devising strategies and agreeing implementation plans andbudgets to realise the agreed objectives, and monitoring progress in achievement;

Ensuring the solvency, financial strength and good performance of the Local ActionGroup;

Ensuring the Local Action Group complies with all relevant laws, regulations andrequirements of its regulators;

Dealing with all matters relating to the employment of the Manager; and

Setting and maintaining a framework of delegation and internal control.

Some of the terms that apply to the tools of leadership are used interchangeably. It isuseful to be clear as to the exact meaning of each: -

Policy - A guiding principle designed to influence decisions, actions, etc. Typically, apolicy designates a required process or procedure within a local area.

Strategy – A strategy is a long-term plan of action designed to achieve a particularobjective.

Objectives - Statements describing the results to be achieved by a plan of action, andthe manner in which these results will be achieved over a specified period of time.Usually, objectives are linked to one or more programme goals.

Implementation Plans - These are detailed plans that provide sufficient informationto enable a series of actions to resourced and implemented.

Monitoring - Monitoring provides an ongoing verification of progress towardachievement of the objectives and goals.



5 Staff Management

5.1 PrincipleThe Manager is responsible for all staff employed by the Local Action Group.

5.2 Good PracticeThere is a very significant body of legislation covering employment issues. It is highlyrecommended that every Local Action Group publishes and maintains a Staff Manual thatis freely available, and contains all of the Company policies relating to employment.Typically, such a publication might contain the following information: -

Adoptive Leave – requirements and allowances;

Annual Leave – defining the period for calculation, method of applying and anyrestrictions;

Confidentiality – expectations and requirements concerning confidential information;

Contract of Employment – identifying model contracts;

Disciplinary Policy – exact detail of agreed procedures;

Employment Allowances – calculation methods;

Equal Opportunities Policy – exact detail of agreed policy;

Grievance Policy – exact detail of agreed procedures;

Health, Safety and Welfare Policy – exact detail of agreed policy;

Hours of Work – define the working day, overtime, time in lieu arrangements;

Induction – procedures to be adopted;

Job Description – detailing descriptions of responsibilities and staff hierarchicalinformation, including reporting structures;

Maternity Leave – requirements and allowances;

Methods of Payment – defining current system, frequency and method;

Notice of Termination of Employment – process and procedure;

Parental Leave – requirements and allowances;

Pay Policy – incremental grading systems and review structures;

Pension and Life Assurance Plan – details of Company plan;

Personal Files – review procedures;

Place of Work – detail location of employment;

Policy On Internet Use – defining legitimate activity;

Probation – standard conditions of probation, and review methodologies;



Recruitment and Selection Policy – detailing procedures to be adopted;

Redundancy Policy – conditions and requirements;

Retirement – conditions relating to entitlement;

Sexual Harassment Policy – exact detail of agreed procedures;

Sick Leave – requirements and allowances;

Special Leave – requirements and allowances;

Staff Dress Code – defining expectations;

Supervision and Support – Company policy;

Timekeeping – standards and penalties for non-compliance;

Trade Unions – rights of the employee and employer;

Training and Development – policy and application procedures; and

Work-Sharing – current policy and application procedures.

5.3 Duties and Responsibility of the BoardThe Board is responsible for employing the Manager, and ensuring that s/he adheres to thegroup’s official recruitment and human resource (HR) practices.

The Board is responsible for establishing the Company policy in respect of all of theabove in the context of the legislative framework.



6 Health and Safety

6.1 Safety, Health and Welfare at Work ActThe Safety, Health and Welfare at Work Act 2005 consolidates and updates previouslegislation. The Health and Safety Authority offers assistance on the implementation ofaspects and elements of the Safety, Health and Welfare at Work Act on its website:http://www.hsa.ie/publisher/index.jsp?jsessionid=3e30485e8b1e7a3a705e

The aim of the Act is to encourage a responsible attitude on the part of both employers andemployees. A system of on-the-spot fines (not to exceed €1,000) administered byinspectors is detailed in the Regulations.

6.1.1 Duties of Employees

In general employees must: -

Comply with relevant safety and health laws;

Not be under the influence of an intoxicant at the place of work to the extent that thestate he or she is in is likely to endanger his or her own safety, health or welfare atwork or that of any other person;

Not engage in improper conduct or behaviour;

Wear personal protective clothing where necessary;

Cooperate with their employer and look out for one another, and

Not do anything that would place themselves or others at risk.

Where an employee is working in a safety critical situation, he or she, subject toregulations, may be required to undergo a periodic medical assessment of fitness to work.

6.1.2 Safety Statement and Officer

Every employer must have a written Safety Statement, which identifies the risks andhazards in the place of work. Every employer must also identify a suitably qualifiedSafety Officer to be responsible for the implementation of safety policy in the workplace.

6.2 Duties and Responsibility of the BoardSection 80 of the Act makes explicit the responsibilities of Board Members and Managers.Primary responsibility for worker safety and health falls on employers, because it is they,in effect, which creates the risk. Company Board Members and Managers, therefore,carry a significant social responsibility to protect safety and health.



7 Consensus

7.1 PrinciplesGood governance requires mediation of the conflicting interests at play in every LocalAction group, the objective of this being to reach a broad consensus on what is in the bestinterest of the whole community. Good governance must identify how this can beachieved.

Board Members should develop a broad and long-term perspective on what is needed forlocally sustainable development and how to achieve the goals of such development.

In order to achieve this, Board Members should have an understanding of the historical,cultural and social contexts of the local community.

7.2 ConsensusIt is highly desirable that decisions made by the Board are agreed on the basis ofconsensus. As a practical rule of thumb, this would mean that everyone present should bemust be at least 70% comfortable with the decision and fully committed to itsimplementation.

7.2.1 Towards Achieving Consensus

In achieving consensus everyone has an equal say and members are encouraged to expresstheir views. An agreed quorum must be present for a decision to be taken. IndividualBoard Members may consult with their constituents, as appropriate. To this end Boardsshould ensure that there is an appropriate liaison mechanism established between itself andall stakeholders and community groups.

7.2.2 Failing to Achieve Consensus

In the event that a consensus cannot be achieved within the Board concerning a particularissue, there should be clearly identified procedures involving pre-agreed processes throughwhich a binding decision can be made. Ultimately, this may involve the implementationof a secret ballot process adjudicated by independent appointees of the Board.



8 Equality and Ethics

8.1 Equality

8.1.1 Principles

The Board should ensure that it upholds and applies the principles of equality anddiversity, and that it is fair and open to all sections of the community in all of its activities.

The Board should ensure that its organisation upholds and promotes equal opportunitiesand diversity in all areas of work.

Local Action Groups must demonstrate leadership in recognising the needs of all insociety. This can be achieved through the implementation of ‘proofing’ processes.

8.1.2 Proofing

Proofing is the means by which it is ensured that all policies and practices adopted by theLocal Action Group have equally beneficial effects across society. The process shouldalso establish unforeseen negative impacts arising from the development of policies.

Policy proofing provides the mechanism by which policies are assessed at design andreview stages for their impact on areas of concern.

Poverty proofing forms part of the National Anti-Poverty Strategy and is currently beingoperated by Government Departments.

Equality proofing can be undertaken within the framework of the Nine Grounds ofDiscrimination identified under the Employment Equality Acts 1998 and 2004. These canform the basis for a proofing process appropriate in a community setting: -

Gender7; Marital status; Family status; Sexual orientation; Religion; Age; Disability; Race; and Traveller Community.

The introduction of rural proofing as a mechanism for ensuring that policies areexamined for their impact on rural communities will, over time, represent a criticalelement of commitment to the development of rural areas.

7 Gender Proofing Handbook – Donegal, Galway, Offaly, Roscommon, Sligo and Westmeath County DevelopmentBoards - 2002



8.1.3 Duties and Responsibility of the Board

The Board should set strategies for, and receive regular reports on, the progress of work toachieve equality and diversity. This must be measured against clear targets wherepracticable. Reports should be used to help develop the Local Action Group’s overallstrategic direction.

Where the Board is developing specific work areas, it must ensure that it is incorporatingthe principles of equality and diversity when: -

Carrying out needs assessments and community consultations;

Allocating resources to various measures and/or target groups;

Considering membership of the Board and sub-committees;

Undertaking staff recruitment, training and conditions of service; and

Communicating with stakeholders and the public.

8.2 Ethical Standards

8.2.1 Principles

Impartiality and Independence – When taking decisions Board Members must alwaysact in the interest of the Company. The Board should be impartial and independent andabstain from any preferential treatment on any grounds whatsoever.

Loyalty - The Board Members must demonstrate responsibility towards the Board’s aimsand objectives, and be committed to its activities.

Integrity - The Board must have a commitment to act ethically and honestly: -

To ensure that the accounts/reports accurately reflect true business performance andare not misleading, or designed to be misleading;

So as not to use the Company’s resources, time, or decisions for personal gain, or forthe benefit of persons/organisations unconnected with the body or its activities; and

Disclosing all outside employment/business interests in conflict or in potential conflictwith the business of the body.

8.2.2 Disclosure of Interests

In compliance with the Ethics in Public Office Act (1995) each Board Member will, on anannual basis, furnish a statement of interest to the Secretary of the Company.

This statement should include details relating to his/her employment and all other businessinterests including shareholdings, professional relationships etc., which could involve aconflict of interest or could materially influence the member in relation to the performanceof his/her functions as a member of the Board.

Disclosure of any family interest, or conflicting interest of any other person or bodyconnected with the Board Member, who could materially influence the performance ofhis/her functions, should also be provided.



8.2.3 Information

The Board will conduct its activities in a confidential and objective manner;

The Board will support the Manager and employees of the Company in providingaccess to general information relating to the body’s activities in a way that is open andthat enhances its accountability to the general public;

The Board is not permitted to disclose any confidential information obtained whileperforming, or as a result of performing, any activities on behalf of the Company. Theabove requirements do not apply to information already in the public domain or in thepossession of the Board Member prior to undertaking the activities;

The Board Members will comply with relevant statutory provisions (e.g. DataProtection Act, Freedom of Information Act); and

Former Board Members must continue to treat information received while acting inthat capacity as confidential.

8.2.4 Fairness

Local Action Groups must be committed to fairness in all business dealings and will: -

Value and treat all clients, and stakeholders equally;

Comply with employment equality8 and equal status9 legislation;

Ensure that the principle of equality of treatment is respected. The Board shall inparticular avoid any unjustified discrimination based on gender, marital status, familystatus, sexual orientation, religion, age, disability, race or membership of the travellingcommunity.

Be an equal opportunities employer and require that staff appointments are made basedupon demonstrably objective criteria.

Adhere to best practice in employment and recruitment procedures.

8.2.5 Abuse of Power

Board Members’ powers shall be exercised solely for the purposes for which they havebeen conferred. Board Members shall, in particular, avoid using those powers for purposeswhich have no basis in law, or which are not motivated by any public interest.

8.2.6 Hospitality

Board Members must avoid the giving or receiving of corporate gifts, hospitality,preferential treatment or benefits which might affect, or appear to affect, the ability of thedonor or the recipient to make independent judgement on business transactions;

8 The Equality Authority - http://www.equality.ie/9 The Equality Authority - http://193.178.1.9/index.asp?locID=106&docID=226



8.2.7 Work and External Environment

The Board will place the highest priority on promoting and preserving the health andsafety of its employees. It will ensure that public concerns are taken into considerationand will endeavour to minimise any detrimental impact of the operations on theenvironment.

8.2.8 Responsibility

The Chairperson of the Board should ensure circulation of a set of guidelines ongovernance to all Board Members for their retention. The Board Members mustacknowledge in writing receipt and understanding of the guidelines on governance.



9 Effectiveness and Efficiency

9.1 PrincipleThe Board should have clear responsibilities and functions, and must organise itself todischarge them effectively.

9.2 Effective BoardsThe Board must meet regularly, retain full and effective control over the Local ActionGroup, and monitor the Manager and performance of the Company.

Within the terms of its Memorandum and Articles of Association, the Board should ensurethat it has enough Members to provide the skills and experience needed without becomingso large that decision-making becomes unwieldy.

The Chairperson of the Board should ensure that all Board Members can contribute atmeetings, and that any individual does not dominate proceedings.

The Board must ensure that all company procedures are followed.

9.3 InvestigationAs a matter of good practice, and before joining the Board of a Local Action Group, thepotential Board Member should carry out a ‘due diligence’ investigation on the state of thecompany’s affairs. Questions to be asked in this situation include: -

What is the Company's current financial position and what is its track record for thepast three years?

What funding, if any, does the company receive from the state or other sources?

If the company is not performing well, do I have the time, desire and capability tomake a positive impact?

Who are the current Board Members? What is their background and how long havethey served on the Board?

What is the size and structure of the Board? Are there any Committees? Who is theManager and what type of relationship does s/he have with the Board?

Is there any litigation present or pending against the Company?

What insurance cover is available to Board Members?

Is the internal regulation of the Company of an acceptable standard?



9.4 Board Self-Evaluation

9.4.1 Principle

The Board should periodically review both its own, and the Company’s overalleffectiveness, and take any necessary steps to ensure that they both continue to work well,or improve.

9.4.2 Review

Taking time periodically to review how effectively the Board is achieving its key tasks canbe very worthwhile. Such a review can be led by an outside consultant, or managedinternally through a structured discussion.

Board evaluations are an opportunity to check that it is on-track, and to see if there areopportunities for change that could give better results.

As part of evaluating their own performance, Boards may consider: -

The state of relationships with funders, beneficiaries and other stakeholders;

How well the strategic plan is linked to the work within the organisation;

How well the key indicators and reporting processes have helped the Board in itsmonitoring role;

Whether all legal requirements have been met;

Staff satisfaction;

Board discussions: are they well informed and well run? Are they about the mostimportant things?

Committees: are they working as they should, and do they have the right relationshipwith the rest of the Board?

Whether Board Members feel their skills are used and their contribution is valued;

How the Chairperson’s role might be enhanced?

The quality of the relationship between the Board and the Manager.

Appendix 11 shows a sample evaluation format.

9.5 Board Delegation

9.5.1 Principle

The Board must set out the functions of Committees, Sub-Committees, Officers, theManager, and other staff and agents of the Local Action Group in unambiguous language,and should monitor their performance.

Clarity of Roles – The Board should define the roles and responsibilities of theChairperson and all other Officers in writing.



Effective Delegation – The Board should ensure that Staff, Volunteers and Officers havesufficient delegated authority to discharge their duties effectively. All delegated authorityshould have clear limits relating to budgetary and other matters.

Structure – Ideally, Boards should be very clear about the hierarchical structures that theCompany will employ. A possible structure being: -

Board

Committee

Sub-Committee

Working Group

Terms of Reference – The Board must set clear terms of reference for Committees, Sub-Committees, and Working Groups etc. These must detail the decision of the BoardMeeting at which the Committees, Sub-Committees, Working Groups came into being,the limits of the task for which the body has been established; its chairperson andmembership; its reporting instruction; and the date on which the work of the body will beconcluded or formally reviewed.

Monitoring - All delegated authority must be subject to regular monitoring by the Board.

9.5.2 Clarity of Roles

Role of the Chairperson

The Board should define in writing the role and responsibilities of the Chairperson. Therole of the Chairperson in a typical Local Action Groups includes, at a minimum: -

Leading and representing the Board to the Manager and staff;

Setting the agenda for meetings and facilitating the effective contribution of BoardMembers, and in particular any non-executive Members. The Chairperson also workswith the Company Secretary to ensure that: -

o There is efficient conduct of business at meetings;

o That business is efficiently and accountably conducted between Board meetings;

o The appraisal and remuneration of the organisation’s Manager is conducted inaccordance with agreed standards;

o The employment of the Manager complies with employment legislation; and

o The appraisal of Board and Board Members performance is conducted in aregular and efficient manner.



Role of the Secretary

Every registered company must have a Company Secretary, who may be a Director or asenior executive within the company. The Company Secretary has legislative functionsand many specific responsibilities according to Irish Company Law, these include: -

Board Meetings Preparing agendas;Attending and recording minutes of meetings – minutes should in themain simply reflect decisions taken;Maintaining the minute book/record;Recording particulars of Board Members' interests disclosed atmeetings;Ensuring that the correct procedures are followed.

General Meetings Preparing agendas and ensuring notices are sent out in a timelyfashion;Maintaining the minute book;Ensuring that the correct procedures are followed.

Memorandum andArticles of Association

Ensuring that the company complies with its Memorandum andArticles of Association;Drafting and incorporating amendments in accordance with thecorrect procedures.

General Compliance Monitoring and ensuring compliance with relevant legal requirementseither directly or indirectly by ensuring that the appropriatearrangements are in place.

Statutory Registers Maintaining the following statutory registers: - Register of Members; Register of Board Members and Secretaries; Register of Board Members' and Secretaries' interests in

debentures; Register of substantial interest; Register of debenture holders (if applicable).

Maintaining andfurnishing copies of thefollowing documents:

Charges created by the company;Memorandum and Articles of Association;Board Members' interests in contracts with the Company.

Committees Acting as secretary to Board committees, e.g. Audit Committee, HRCommittee etc.Maintaining minutes of committee meetings.

Company Seal Ensuring the safe custody of and proper use of the company seal

Statutory Returns Filing information with the Registrar of Companies in a timelyfashion including: Annual returns (extremely important); Report and Accounts; Notices of appointment, removal and resignation of officers and

changes to their particulars; Change of registered office; Location of registers; Special Resolutions and some Ordinary Resolutions; Charges and satisfactions thereof

/continued



/continued

Reports and Accounts Co-ordinating the publication and distribution of the company'sannual report and accounts including, where appropriate, interimstatements in consultation with the company's advisers and, inparticular, preparing the Directors' report.

Registered Office Establishing and administering the registered office includingthe receipt, co-ordination and distribution of officialcorrespondence received at the registered office;Providing facilities for the public inspection of companydocuments.

Non-Executive BoardMembers

Acting as a channel of communication and information for non-executive Board Members.

Retention of documents Ensuring compliance with all statutory and other retentionperiods for documents.

As well as these core duties mentioned above, many Company Secretaries will also beinvolved with specialists and advisors in other areas such as legal, accounting, financepersonnel and employee benefits.

The Board Members have a responsibility to see that the funds of the company areprudently and properly managed. They will be responsible for any negligence or breachthereof. The Secretary, as an Officer of the Company, will be liable if (s)he facilitates thenegligence or knowingly assists in the breach of trust.

The Office of the Director of Corporate Enforcement has published guidance notes on therole and duties of a Company Secretary. These are available on www.odce.ie

9.6 Duties and Responsibility of the BoardMembers of the Board should understand their duties and responsibilities, and should havea statement defining them. The statement should at a minimum include: -

The term of appointment;

The time commitment of the role;

The necessity to declare any potential conflicts of interest;

The duty of confidentiality;

Whether the Board will evaluate the Board Members’ progress;

Whether training will be provided to members;

Provision for Board Members to seek independent professional advice; and

Details of any sub-committees to which the individual is expected to be appointed.

9.6.1 Legal Requirements

Members of all Boards have thirteen legal duties. These duties are set out below: -

Act in good faith in the best interests of the Company as a whole;

Exercise skill, due diligence and care in the discharge of the functions;



Act honestly;

To be responsible for their personal performance;

To declare conflicts of interests;

To comply with the Companies Acts 1963 – 2005;

To keep corporate books;

To prepare annual reports and accounts;

To hold general meetings;

To have an annual audit performed;

To ensure annual returns are filed in the Companies Office;

To furnish information; and

To act in a prescribed manner in respect of insolvency situations.



Appendices

Guidelines for Good Governance

for Board Members of Local Action Groups



A1 Memorandum & Articles of AssociationCompany Limited By Guarantee And Not Having A Share Capital

Model Memorandum And Articles Of Association1. The name of the Company is ________________________ Company Limited.

2. The main object for which the Company is established is to improve the quality of life of the people andgroups resident in the Community by providing a Forum for discussing and planning development activities,by supporting groups in the Community to implement projects and by monitoring progress.

3. The following objects set out hereafter are exclusively subsidiary and ancillary to the main object set outabove and these objects are to be used only for the attainment of that main object and any income generatedtherefrom is to be applied to the main object only.

a) To implement an agreed medium term multi-sectoral plan for the Community.

b) To facilitate networking between groups within the Community and with groups of similar interestoutside the Community and with various statutory bodies.

c) To encourage inclusiveness and the active participation of all the members in the development of theBally Community.

d) To support members, in particular those that promote the welfare of the marginalized in society, inrealising their respective goals.

e) To foster an active local sense of pride and ownership for the community, its natural heritage andculture.

f) To educate and inform members of their rights and responsibilities inline with these objects for thecommon good and sustainable development of the local Community.

g) To strengthen the capacity of existing groups and to promote the establishment of new groups toaddress identified needs or opportunities by assisting with the development and encouragement oflocal leadership and training.

h) To do all such things as from time to time are necessary, incidental or conclusive to the attainment ofthe above main object and to make such decision and to do such acts as are necessary to effectivelymanage the relevant activities in the Community.

4. The following are the powers of the Company:

a) to hold public Meetings, conferences, discussions, to produce publications, conduct surveys andstudies, hold events, engage in any business, project or undertaking that may be deemed desirable ornecessary and that is consistent with the activities of the member groups.

b) to furnish and provide the Company's property with such furniture, implements, machinery andconveniences as the Company may think desirable.

c) To solicit, receive and hold donations, subscriptions, gifts, bequests and to raise funds and to helpraise funds for any charitable purpose consistent with the above main object.

d) to carry on any business that may seem to the Company capable of being conveniently carried on inconnection with the above main object or calculated directly or indirectly to enhance the value of orrender profitable any other Companies, property, rights or interests.

5. To accumulate capital for any purposes of the Company and to appropriate any of the Company's assets tospecific purposes consistent with the above main object.

6. To enter into Partnership or into any arrangement for sharing profits, interests, co-operating, joint venture,reciprocal concession or otherwise with any person or Company carrying on or engaged in or about to carry onor engage in any business or transaction which this Company is authorised to carry on or engage in or anybusiness or transaction capable of being conducted so as to directly or indirectly benefit this Company.

7. Following the power of the Company: -

(1) (a) To furnish and provide the Company's property with such furniture, implements, machinery andconveniences as the Company may think desirable.

(b) To provide gardens, greenhouses and grounds for recreation and amusement.

(c) To raise funds and help raise funds for any charitable purpose.

(d) To provide places and facilities for curricular and extra curricular activities for pupils of the Schoolsof the Area.

(e) To carry on any business that may seem to the Company capable of being conveniently carried on inconnection with the above main object or calculated directly or indirectly to enhance the value of orrender profitable any of the Company's property, rights or interests.



(2) To make, draw, accept, endorse, issue, discount and otherwise deal with promissory notes; bills of exchange,cheques, letters of credit, circular notes and other mercantile instruments.

(3) To acquire by purchase, exchange, lease, fee farm grant or otherwise, either for an estate in fee simple or forany less estate or interest, whether immediately or reversionary, and whether vested or contingent; any lands,tenements or hereditaments of any tenure, whether subject or not to any charges or encumbrances and to holdand farm and work or manage or to sell, let, alienate, mortgage, lease or charge land, house property, shops,flats, maisonettes, reversions, interest annuities, life policies and any other property real or personal, movableor immovable, either absolutely or conditionally and whether subject to or not to any mortgage, charge, groundrent or other rents or encumbrances and to pay for any lands, tenements, hereditaments or assets acquired bythe company in cash or debentures or obligations of the Company, whether fully paid or otherwise, in anyother manner.

(4) To guarantee, support, or secure, whether by personal covenant or by mortgaging or charging all or any part ofthe undertaking, property and assets (present and future) of the Company, or all such methods, theperformance of the obligations of and the repayment or payment of the principle amounts and interest of anyperson, firm or company or the dividends or interest of any securities, including (without prejudice to thegenerality of the foregoing) any company which is the company's holding company or a subsidiary orassociated company.

(5) To carry on any other business which may seem to the Company capable of being conveniently carried on inconnection with the above main object.

(6) To purchase or otherwise acquire and carry on the whole or any part of the business, property, goodwill andassets of any company carrying on or proposing to carry on any business which the Company is authorised tocarry on or which can be conveniently carried on in connection with the same, or may seem calculated directlyor indirectly to benefit the Company, or possessed of property suitable for the purposes of the Company, andas part of the consideration for any of the acts or things aforesaid or property acquired to undertake all or anyof the liabilities of such company or to acquire an interest therein, amalgamate with or enter into anyarrangement for sharing profits, or for co-operation, or for limiting competition or for the mutual assistancewith any such company and to give, issue or accept cash or any shares, debentures or securities that may beagreed upon and to hold and retain or sell, mortgage and deal with any shares, debentures or securities soreceived.

(7) To promote any company for the purpose of acquiring all or any of the property or liabilities of the Companyor of undertaking any business or operations which may appear likely to assist or benefit the company or toenhance the value of or render more profitable any property, assets or business of the Company or for anyother purpose which may seem directly or indirectly calculated to benefit the Company.

(8) To accumulate capital for any of the purposes of the Company, and to appropriate any of the Company's assetsto specific purposes, either conditionally or unconditionally.

We, the several persons whose names and address are subscribed wish to be formed into a Company in pursuance of thisMemorandum of Association.

Names, Addresses and Descriptions Of Subscribers:

Dated this day of

Witness to the above Signatures: -



COMPANY LIMITED BY GUARANTEE AND NOT HAVING A SHARECAPITAL

ARTICLES OF ASSOCIATION OF ______________________ COMPANY LIMITED

The regulations contained in Table C of the Companies Acts, 1963 to 1990 shall apply to the Company save in so far asthey are excluded or verified hereby.

1. In these Articles: -

"the Act" means the Companies Act, 1963.

"Committee" means the Management Committee of the Company, that is the directors of the Companybeing the members for the time being of the Management Committee hereby constituted.

"Company" means the Bally Development Company Limited.

"Member" means a member of the Company.

"Subgroup" means any group specified in the Schedule hereto which is a member of the Company andhas paid its annual subscription.

"Secretary" means any person appointed to perform the duties of the Secretary of the Company:

"the Seal" means the Common Seal of the Company:

"the office" means the registered office for the time being of the Company.

Expressions referring to writing shall, unless the contrary intention appears, be constructed as includedreferences to printing, lithography, photography and any other modes of representing or reproducing words ina visible form.

Unless the contrary intention appears, words or expressions contained in these Articles shall bear the samemeaning as in the Act, or any statutory modification thereof in force at the date at which these Articles becomebiding on the Company.

Words importing the singular number shall include the plural number and vice versa and unless (the contrary)intention appears words importing the female gender only shall include the male and neutral gender andreference to person shall include both corporate and unincorporated associations.

Members

2. The number of members with which the Company proposes to be registered is 7 but the Committee may fromtime to time register an increase of members.

3. The subscribers to the Memorandum of Association and such other persons or groups as the Committee shalladmit to membership shall be members of the Company in accordance with Article 7

4. The rights and liabilities attaching to any Members of the Company may be varied from time to time by aSpecial Resolution of the Company.

General Meetings

5. The annual subscription, if any payable by the members shall be determined from time to time by theCommittee and shall be payable on acceptance into membership for the calendar year in which acceptancestakes place and thereafter shall payable on the first day of January in each year.

6. An application for membership by the groups specified in the Schedule hereto cannot be rejected by theCommittee. The Committee shall have the right for good and sufficient reason to terminate themembership of any member provided that the member concerned shall a right to be heard before a finaldecision is made. An ordinary resolution of the Company in general Meeting shall be required to amendthe groups as outlined in the Schedule hereto.

7. Membership of the Company is open to the initial subscribers, and the groups as listed in the Schedule hereto.

8. The Committee may, whenever they think fit, convene an Extraordinary General Meeting and ExtraordinaryGeneral Meetings shall also be convened on such requisition or in default may be convened by suchrequisitionists as provided by Section 132 of the Act. If at any time there are not within the State sufficientmembers of the Committee capable of acting to form a quorum any member of the Committee or any twomembers of the Company may convene an Extraordinary General Meeting in the same manner as nearly aspossible as that in which meetings may be convened by the Committee.

9. All general meetings of the Company shall be held in the State.

10. (1) Subject to Paragraph (2), the Company shall in each year hold a general meeting as its AnnualGeneral Meeting in addition to any other meetings in that year and shall specify the meetings as such in thenotices calling it: and not more than 15 months shall elapse between the date of one Annual General Meetingof the Company and that of the next.

(2) So long as the Company holds its first Annual general Meeting within 18 months of itsincorporation, it need not hold it in the year of its incorporation or in the following year. Subject to Article 5,the Annual General Meeting shall be held at such time and at such place in the State as the Committee shallappoint.



11. All general meetings other than Annual General Meetings shall be called Extraordinary General Meetings.

Notice Of General Meetings

12. subject to Sections 133 and 141 of the Act an Annual General Meeting and a Meeting called for by passing ofa special resolution shall be called by 21 days notice in writing at the least and a meeting of the Company(other than an Annual General Meeting or a meeting for the passing of a special resolution) shall be called by14 days notice in writing at the least. The notice shall be exclusive of the day on which it is served or deemedto be served and of the day for which it is given and shall specify the place, the day and the hour of meetingand in the case of special business and general nature of that business, and shall be given in manner hereinaftermentioned to such persons as are under the Articles of the Company entitled to receive notices from theCompany.

13. The accidental omission to give notice of a meeting to or the non-receipt of notices of a meeting by any personentitled to receive notice shall not invalidate the proceedings at that meeting.

Proceedings At General Meeting

14. All business shall be deemed special that is transacted at an Extraordinary General Meeting, an also all that istransacted at an Annual General Meeting, with the exception of consideration of the accounts, balance sheetsand the reports of the Committee and Auditors, the election of members of the Committee, the Chairperson,Vice Chairperson, Secretary, Assistant Secretary, Honorary Treasurer and Assistant Honorary Treasurer inplace of those retiring, the re-appointment of the retiring Auditors, and the fixing of the remuneration of theAuditors.

15. No business shall be transacted at any general meeting unless a quorum of members is present at the timewhen the meeting proceeds to business, save as herein otherwise provided two fifths of the members asnominees of the groups specified in the Schedule hereto shall be a quorum.

16. If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, ifconvened upon the requisition of members, shall be dissolved: in any other case it shall stand adjourned to thesame day in the next week at the same time and place, or to such other day and at such other time and place asthe Committee may determine, and if at the adjourned meeting a quorum is not present within half an hourfrom the time appointed for the meeting, the members present shall be a quorum.

17. The Chairperson, if any, of the Committee shall preside as Chairperson at every general meeting of theCompany, or if there is no such Chairperson, or if he is not present within 15 minutes after the time appointedfor the holding of the meeting or is unwilling to act, the Committee present shall elect one of their number tobe Chairperson of the meeting.

18. If at any meeting no Member of Committee is willing to act as Chairperson and if no Member of Committee ispresent within 15 minutes after the time appointed for holding the meeting the members present shall chooseone of their number to be Chairperson of the Meeting.

19. The Chairperson may with the consent of any meeting at which a quorum is present (and shall, if so directedby the meeting) adjourn the meeting from time to time and from place to place, but no business shall betransacted at any adjourned meeting other than the business left unfinished at the meeting at which theadjournment took place. When a meeting is adjourned for 30 days or more, notice of the adjourned meetingshall be given as in the case of an original meeting. Save as aforesaid, it shall not be necessary to give anynotice of an adjourned meeting or of the business to be transacted at an adjourned meeting.

20. At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless apoll is (before or on the declaration of the result of the show of hands) demanded: -

a) by the Chairperson or

b) by at least three members present in person or

c) by any member or members present in person and representing not less than one-tenth of the totalvoting rights of all members having the right to vote at the meeting.

Unless a poll is so demanded, a declaration by the Chairperson that a resolution has on a show of hands, beencarried or carried unanimously or by a particular majority or lost, and an entry to that effect in the bookcontaining the minutes of proceedings of the company shall be conclusive evidence of the fact without proofof the number or proportion of votes recorded in favour of or against such resolution. The demand for a pollmay be withdrawn.

21. Except as provided in Article 20 if a poll is duly demanded it shall be taken in such a manner as theChairperson directs and the result of the poll shall be deemed to be the resolution of the meeting at which thepoll was demanded.

22. Where there is an equality of votes, whether on a show of hands or on a poll, the Chairperson of the meeting atwhich the show of hands takes place or at which the poll is demanded, shall be entitled to a second or castingvote.

23. A poll demanded on the election of a Chairperson, or on a question of adjournment shall be taken forthwith. Apoll demanded on any other question shall be taken at such time as the Chairperson of the meeting directs, andany business other than that upon which a poll has been demanded may be proceeded with pending the takingof the poll.

24. Subject to Section 141 of the Act, a resolution in writing signed by all the members for the time being entitledto attend and vote on such resolution at a General Meeting (or being bodies corporate by their duly authorised



representatives) shall be as valid and effective for all purposes as if the resolution had been passed at a GeneralMeeting of the Company duly convened and held, and if described as a special resolution shall be deemed tobe a special to be a special resolution within the meaning of the Act.

25. Every member shall have one vote.

26. No member shall be entitled to vote at any general meeting unless all subscription monies immediatelypayable by him to the Company have been paid.

27. No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting atwhich the voter objected to is given or tendered, and every vote not disallowed at such meeting shall be validfor all purposes. Any such objection made in due time shall be referred to the Chairperson of the meetingwhose decision shall be final and conclusive.

28. Votes shall be given by the duly authorised Representative of the Member Groups being in attendance at ageneral meeting.

Groups Acting By Representatives At Meetings

29. Any Group which is a member of the Company may by a resolution of its Committee or other GovernmentBody authorise such persons as it thinks fit to act as its representative at Meeting of the Company, and theperson so authorised shall be entitled to exercise the same powers on behalf of the Group which he representsas that Group could exercise if it were an individual member of the Company.

Management Company

30. The maximum number of committee members shall be determined by the Company in a GeneralMeeting but unless and until so fixed, there shall be no maximum number. The minimum number ofCommittee Members shall be seven and shall include the Chairperson, Vice Chairperson, Secretary,Assistant Secretary, Honorary Treasurer and Assistant Honorary Treasurer. The names of the firstcommittee members, the Chairperson, Vice Chairperson, Secretary, Assistant Secretary, HonoraryTreasurer and Assistant Honorary Treasurer shall be determined in writing by the Subscribers of theMemorandum or majority of them.

31. Each group as outlined in the Schedule hereto shall be entitled to nominate a nominee for membership of theCommittee. Such application cannot be rejected by the Committee. However, such an application can berefused or rejected by an ordinary resolution of the Company in General Meeting for stated reasons. Themember group may then nominate another nominee for membership subjected to the rules herein.

Borrowing Powers

32. The Committee may exercise all the powers of the Company to borrow money and to mortgage or charge itsundertaking and property or any part thereof, and to issue debentures, debenture stock and other securities,whether outright or as security for any debt, liability or obligation of the Company or of any third party.

Powers And Duties Of Committee

33. The business of the Company shall be managed by the Committee, who may pay all expenses incurred inpromoting and registering the Company, and exercise all such powers of the Company as are not by the Act orArticles required to be exercised by the Company in general meeting subject nevertheless to the provision ofthe Act and these Articles and to such directions, being not inconsistent with the aforesaid provisions, as maybe given by the Company in general meeting but no direction given by the Company in general meeting shallinvalidate any prior act of the Committee which would have been valid if that direction had not been given.

34. All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments, and all receipts formoneys paid to the Company, shall be signed, drawn, accepted, endorsed or otherwise executed, as the casemay be, by such person or persons and in such manner as the Committee shall form time to time by resolutiondetermine.

35. The Committee shall cause minutes to be made in books provided for the purpose: -

a) of all appointments of officers made by the Committee.

b) Of the names of the Members of the Committee present at each meeting of the Committee and of anyCommittee of Members of the Committee.

c) Of all resolutions and proceedings at all meeting of the Company and the Committee and ofCommittees of Committee Members.

Disqualification Of Committees

36. The office of a member of the Committee shall be vacated if the member of the Committee: -

a) holds any office or place of profit under the Company or:

b) is adjudged bankrupt in the State or in Northern Ireland or in Great Britain or makes any arrangementor composition with his creditors generally: or

c) becomes prohibited from being a Director by reason of any order made under Section 184 of the Act or

d) becomes of unsound mind or

e) resigns his office by notice in writing to the Company; or

f) is convicted of an indictable offence unless the Directors otherwise determine; or

g) is directly or indirectly interested in any Contract with the Company and fails to declare the nature ofhis interest in manner required by Section 194 of the Act; or



h) has held such office for a period of 3 consecutive years or

i) is absent for three consecutive committee meetings without furnishing suitable explanation to theCommittee for such absence.

Any Officer who has held such office for a period of three consecutive years may after an absence of 12months seek re-nomination to the Committee.

37. A Committee Member shall not vote in respect of any contract in which he or she is interested or any matterarising thereout and if he or she does not so vote, his or her vote will not be counted."

38. At the first General Meeting of the Company, all the members of the committee shall retire from office exceptthose holding the positions of Vice Chairperson, Assistant Secretary and Assistant Honorary Treasurer,who will automatically be appointed to the positions of Chairperson, Secretary, and HonoraryTreasurer respectively. At the Annual General Meeting in every subsequent year, one third of the membersof the Committee for the time being, or if their number is not three or a multiple of three, then the numbernearest one third, shall retire from office, not being those holding the positions of Vice Chairperson,Assistant Secretary and Assistant Honorary Treasurer who will automatically assume the positions ofChairperson, Secretary and Honorary Treasurer until the next Annual General Meeting. The committeemembers to retire in every year shall be those who have been longest in office, but as between persons whobecame Committee Members on the same day, those to retire shall unless they otherwise agree amongstthemselves be determined by lot.

39. The Committee shall have the power at any time, and from time to time to co-opt any person to be a memberof the Committee to enhance the skills of the Committee. The Committee may not comprise of morethan four such co-opted members at any time. Any member of the Committee appointed as a nominee of aGroup specified in the Schedule hereto who ceases to be a member of the Committee shall be replaced by anominee of the aforementioned group member. Any Committee Member appointed in accordance with thisarticle shall hold office only until the next Annual General Meeting and shall then be eligible for re-appointment.

40. The Company may from time to time by ordinary resolution increase or reduce the number of members of theCommittee, may determine in what rotation the increased number is to go out of office and may make anyamendment to the groups listed in the Schedule hereto.

41. The Company may by ordinary resolution of which extended notice has been given in accordance with Section142 of the Act, remove any member of the Committee before the expiration of his or her term of office,notwithstanding anything in these Articles and in any agreement between the Company and such member. TheCompany may by ordinary resolution appoint another person in place of the individual Committee Memberremoved under this Article. In the event of a nominee of a member group as specified in the Schedule heretobeing so removed, that member group shall be entitled to nominate another person to act.

Proceedings Of Committee

42. The Committee may meet together for the dispatch of business, adjourn and otherwise regulate their meetingsas they think fit, provided that the Committee shall meet at least six times in each calendar year. Questionsarising at any meeting shall be decided by a majority of votes. Where there is an equality of votes, theChairperson shall have a second or casting vote. A member of the Committee may, and the Secretary on therequisition of a member of the Committee shall, at any time summons a Meeting of the Committee. If theCommittee so resolve it shall not be necessary to give notice of a Meeting of the Committee to any member ofthe Committee who being resident in the State is for the time being absent from the State.

43. The quorum necessary for the transaction of the business of the Committee may be fixed by the Committeeand unless so fixed shall be one half of the membership of the Committee, subject to a minimum of four.

44. The continuing members of the Committee may act notwithstanding any vacancy in their number but, if and solong as their number is reduced below the number fixed by or pursuant to the Articles of the Company as thenecessary quorum of members of the Committee, the continuing members or member of the Committee mayact for the purpose of increasing the number of members of the Committee to that number or of summoning ageneral meeting of the Company, but for no other purpose.

45. If any Meeting the Chairperson is not present within 5 minutes after the time appointed for holding the same,the Committee members present may choose one of their number to be Chairperson of the Meeting.

46. The Committee may delegate any of their powers to sub-committees consisting of such member or members ofthe Committee as they think fit, any sub-group so delegated or formed shall, in exercise of the powers sodelegated, conform to any regulations that may be imposed on it by the Committee.

47. The Sub-Group may elect a Chairperson of its meetings: if no such Chairperson is elected, or if at any meetingthe Chairperson is not present within 5 minutes after the time appointed for holding the same, the memberspresent may choose on of their number to be Chairperson of the Meeting.

48. A Sub-Group may meet and adjourn as it thinks proper. Questions arising at any meetings shall be determinedby a majority of votes of the members present, and when there is an equality of votes, the Chairperson shallhave a second or casting vote.

49. All acts done by any meeting of the Committee or of a committee of members of the Committee or by anyperson acting as a member of the Committee shall, notwithstanding that it is afterwards discovered that therewas some defect in the appointment of any such member of the Committee or person acting as aforesaid, or



that they or any of them were disqualified, be as valid as if every such person had been duly appointed and wasqualified to be a member of the Committee.

50. A resolution in writing, signed by all of the members of the Committee for the time being entitled to receivenotice of a meeting of the Committee, shall be valid as if it had been passed at a meeting of the Committeeduly convened and held.

Secretary

51. The Secretary shall be appointed by the Members at the Annual General Meeting to act as Assistant Secretaryfor a period of 12 months and as Secretary for the subsequent twelve month period and upon such otherconditions as the members may think fit, and any Secretary so appointed may be removed by them.

52. A provision of the Act or these Articles requiring or authorising a thing to be done by or to a Member of theCommittee and the Secretary shall not be satisfied by its being done by or to the same person acting both as aMember of the Committee and as, or in place of, the Secretary.

The Seal

53. The Seal shall only be used by authority of the Committee or of a sub-group of the Company duly authorisedby the Committee on their behalf, and every instrument to which the seal shall be affixed shall be signed by amember of the Committee and shall be countersigned by the Secretary or be a second member of theCommittee or by some other person appointed by the Committee for that purpose.

Accounts

54. The Committee shall cause proper books of accounts to be kept relating to: -

a) all sums of money received and expended by the Company and the matters in respect of which thereceipt and expenditure takes place:

b) all sales and purchases of goods by the Company: and

c) the assets and liabilities of the Company.

Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary togive a true and fair view of the state of the Company's affairs and to explain its transactions.

55. The books of account shall be kept at the office or, subject to Section 147 of the Act, at such other place as theCommittee thinks fit, and shall at all reasonable times be open to the inspection of the Committee.

56. The Committee shall from time to time determine whether and to what extent and at what times and places andunder what conditions or regulations the accounts and books of the Company or any of them shall be openedto inspection of members not being members of the Committee, and no member (not being a member of theCommittee) shall have any right of inspecting any account or book or document except as conferred by statuteor authorised by the Committee or by the Company in General Meeting.

57. Every Committee member, agent, auditor, secretary and other officer for the time being of the Company shallbe indemnified out of the assets of the Company against any liability incurred by him in defending anyproceedings whether civil or criminal in relation to his acts while acting in such office in which judgment isgiven in his favour or in which he is acquitted or in which relief is granted to him by the Court.

Additions, Alterations And Amendments

58. No addition, alteration, or amendment shall be made to or in the provisions of these Articles for the time beingin force unless the same shall have been previously approved in writing by the Revenue Commissioners.

Winding Up

59. The provisions of Clause 5 of the Memorandum of Association of the Company relating to the winding up ordissolution of the Company shall have the effect and be observed as if the same were repeated in full in theseArticles.

Schedule

a) Name to be inserted

b) Name to be inserted

c) Name to be inserted

d) Name to be inserted

Prospective First Members

a) Name to be inserted

b) Name to be inserted

c) Name to be inserted

d) Name to be inserted

Names, Addresses And Descriptions Of Subscribers



A2 Model Conduct and Confidentiality Bond

Conduct and Confidentiality Bond

I, insert Director’s name, as a Board Member of insert Company name Local Action

Group hereby agree that I will adhere to the rules of the Company as agreed at the General

Meeting of the Company held on insert dd/mm/yy.

It is incumbent on each Board Member to ensure that all matters discussed at Board

meetings are kept confidential.

Where a project promoter makes representations to a Board Member, all enquires should

be directed to a staff member.

Where Board Members are not fully up-to-date on the rules and regulations regarding the

funding, misleading information may given out, consequently misunderstandings may

arise between the project promoter and the Local Action Group.

Board Members must not communicate Board decisions on grant assistance to project

promoters.

Signed____________________

Dated_____________________



A3 Annual Compliance ChecklistBoard of Directors Principal Duties

(For completion at the last meeting prior to the Annual General Meeting)

Statutory Duties Yes No

1. Proper Books of Accounts are being maintained

2. Annual Accounts for the year ended 20____have been prepared and signedoff

3. Audit of the Annual Accounts for the year ended 20_____ has beencompleted

4. Minute Book contains proper minutes of all meetings held

5. All Statutory Registers maintained and up-to-date

6. General Meeting(s) of the Company held (AGM and EGMs), as required

7. Annual Return (Form B1) filed with the Companies Registration Office

8. All Form B10s filed with the Companies Registration Office

9. All necessary documents filed with the Companies Registration Office(excluding B1 and B10)

10. All Board Members have completed a register of interest as per form A8

11. All Board Members’ and Secretary’s Individual Annual ComplianceChecklists are completed and retained

12. An up to date list of Indictable offences has been obtained, reviewed anddiscussed and no indictable offences have been committed

13. The Company is Solvent (i.e. it can meet its debts as they fall due)

(** Where any of the above answers are no, then remedial action is required)

Signed On Behalf Of The Board:

_______________________ ______________________

Director Company Secretary

_______________ _______________

Date Date



A4 Annual Compliance Pack

Sample DocumentsItem √ if complete

1 Annual Checklist – Board of Directors Principal Duties

2 Individual Director’s Annual Checklist

3 Company Secretary’s Annual Checklist

4 Change of Particulars of Director/Secretary – Information for Form B10

5 Appointment of Director/Secretary – Information for Form B10



A5 Board Member’s Annual ChecklistName:________________________________

Representing:______________________________

Item Yes No

1. Have you supplied the Company Secretary with any changes in yourParticulars that must be furnished to the Registrar of Companies?

2. Are you satisfied that you continue to be legally eligible to act as CompanyDirector?

3. Have you exercised your powers in good faith and in the interests of theCompany as a whole?

4. Have you disclosed any profit, or benefit, direct or indirect, which has beenderived from your position as Board Member?

5. Have you disclosed any interest that you have in any contract with theCompany?

6. Have you carried out your functions with due care, skill and diligence?

Signature:______________________________

Date: _____________________________



A6 Company Secretary’s Annual Checklist

Name:___________________

Item Yes No

1. Have you notified all changes in your Particulars to the Registrar ofCompanies?

2. Are you satisfied that you continue to be legally eligible to act as CompanySecretary?

3. Have you carried out your functions with due care, skill and diligence

Signature:______________________________

Date: _____________________________



A7 Changes in Particulars of Director/Secretary

Information for CRO Form B10

Surname: ________________________________________________

Forename: ________________________________________________

Former Surname (if applicable):

________________________________________________

Former Forename (if applicable):

________________________________________________

Business Occupation: ________________________________________________

P.P.S. Number: ________________________________________________

Date of Birth: _______Day __________________ Month __________Year

Home Address: ________________________________________________

________________________________________________

________________________________________________

Nationality: ________________________________________________

Other Company Directorships:

Company Name Company Registered Number

Signature:_______________________________________

Date: __________________________



A8 Appointment of Director/Secretary

Information for CRO Form B10

Surname:

Forename:

Former Surname (if applicable):

Former Forename (if applicable):

Business Occupation:

P.P.S. Number

Date of Birth: _______Day __________________ Month __________Year

Home Address:

Nationality:

Other Company Directorships:

Company Name: Company Office Number:

I herby consent to acting as Director/Secretary and confirm that I am satisfied that I am

legally eligible to act as Director/Secretary

Signature _______________________________________

Date:_______________________

** B10 will also have to be signed by the Director/Secretary



A9 Register of Interest for Board Members

All information will be treated in strict confidence and will not be revealed to any

individuals, except those expressly authorised by the Company and/or the relevant

Government Departments. Any further information should be supplied on an additional

page.

Name:

Address:

Tel No.:

Please name any companies of which you are aDirector

Please state any clubs/societies of which you area Member

Please state any other businessInterests/including shares, equity andproperty ownership



A10 Implication of CLEA 2001

Every company is required by law to file an Annual Return with the Companies

Registration Office (CRO) each year.

The Annual Return form (Form B1) is a summary extract from the statutory register of

members and Directors, setting out details of share structure and the Directors.

The challenge for companies now is that they file accounts with the form B1 directly to

the CRO within 10 months of the year end. (9 months + 28 days grace period).

The Company Law Enforcement Act 2001 introduced the Annual Return Date (ARD),

which establishes the date by which the annual return needs to be submitted to the CRO.

The ARD will facilitate the enforcement process in that prosecutions for breach of the

obligation to submit the statutory annual return will be grounded upon a company’s failure

to adhere to its filing date.

Every company will have a period of 28 days grace after its ARD date to file and register

its annual return with the CRO.

The Register of Companies has already allocated a statutory ARD to all of its existing

companies.

The recent strict enforcement of this nine-month rule sends a clear message to companies

and its Directors. It is imperative that accounts must be prepared, sent for audit and signed

off by Board Members within nine months of the year end. Company Directors are

ultimately responsible to ensure that the company maintains proper books and records.

Failure to adhere to this very basic requirement will expose the company and its Board

Members personally to a whole new range of sanctions, and enforcement measures never

experienced before.

Company Board Members’ Exposure

1. €1,200.00 Late Filing Fee

Section 63 of the Act was commenced into law on the 26th October 2001. A late

filing penalty of €100 becomes due in respect of an annual return on the day after

the expiry of the filing deadline, which deadline is 28 days after the effective date

of the return, with a daily penalty amount of €3 accruing thereafter, up to a

maximum penalty of €1,200 per return. This penalty is in addition to the standard



filing fee of €40 per return. Revenue has confirmed that late filing penalties are

not tax deductible.

2. On the Spot Fines €500

Section 63 of the Act introduced the concept of on the spot fines for a number of

offences, particularly relating to the failure to file statutory annual returns. In

addition to the late filing fee, the on the spot fee of €500 can also be levied by the

CRO by serving a notice on the company, however this is a discretionary penalty.

3. Personal Prosecution of Board Members

This is perhaps the most severe sanction that will be utilised by the CRO to ensure

that close to 100% of companies file their returns on time. Section 100 of the

Company Law Enforcement Act (CLEA) 2001 provides that the provision of

section 383 in relation to the meaning of officer in default be amended so that an

officer, which term includes a director or secretary, who is prosecuted for

permitting a default, refusal or contravention of the CLEA where the officer has a

duty to prevent such a breach, should bare the onus of disproving fault on his or

her part. This is a very important change in the enforcement strategy of the CRO

whereby, in future, individual company Board Members and company secretary

will be targeted for prosecution personally rather than the company. District court

fines have been increased to a maximum of €1,900 per director per offence. It is

virtually impossible to escape a substantial penalty if the outstanding returns are

not filed on time. A Company director who is prosecuted in respect of three

offences over a five-year period is placed in a very vulnerable position in that the

Registrar of Companies is entitled to bring an application before the High Court

seeking a disqualification order against this director.

4. The Company Prosecution

It is entirely at the discretion of the Registrar of Companies whether he will

commence enforcement proceedings either against the company or each individual

director. Obviously, the consequences are far more costly and serious if the

proceedings are taken against the Board Members personally.



5. The Office of Director of Corporate Enforcement

The CLEA 2001 established the Office of Director of Corporate Enforcement

(ODCE). This office is engaged in ensuring that Companies and Board Members

comply with the provisions of the CA 2001.

6. Auditors Duties

The Auditor has a duty to report suspect offences to the ODCE. Section 74

requires that the Auditor reports to the Director of Corporate Enforcement any

suspected indictable offence under the Company’s Act enacted by the company or

its officers. Failure to comply with the ARD is an indictable offence.

7. Directors of Companies Previously Struck-Off

There are currently in or around 10,000 Directors of companies that were

previously struck off the register and have now been restored to the register by way

of the Form H1 application or an order of the High Court. These Directors are at

very high risk of a personal prosecution if they do not ensure that each and every

company, of which they hold a Directorship, is fully compliant with the

Companies Acts. These Directors, along with other Directors who have a history

of failing to file returns on time, will be the first persons to be selected for

prosecution in the District Court.

8. Director’s Disqualification

Over the last four years nearly 100,000 companies were dissolved from the

register. It was the main enforcement weapon of the Registrar of Companies.

However, he has virtually ceased to strike companies off the register since

February 2001, selecting now to issue proceedings against the Directors or the

company. Section 42 of the CLEA 2001 now provides that Directors struck-off in

future for non-filing of their returns will be subject to a restriction or

disqualification application in the High Court. Disqualification is a total ban on a

person acting as a Director or taking part in the promotion, formation or

management of any company.



A11 Board Evaluation

Sample Questions for Board Evaluation

Participation Yes No

Does the Board have open and transparent procedures for nominations andrepresentations?

Are the local elections/nomination procedures are open and transparent?

Explain procedures

Does it meet all DCR&GA requirements?

Do women constitute at least 40% of the Board membership?

What mechanism do local communities/stakeholder have to feed information, opinions into the company?

Does the Board have an effective forum to “feedback” information to thestakeholders?

Explain mechanism

Are all local partners and stakeholders consulted regularly?

Are their views taken into consideration in the Company’s decision making?

How are stakeholders informed and consulted on the Local Action Group’s plans and proposeddevelopments?

Is there an internal procedure for dealing with feedback and complaints from allstakeholders, staff, volunteers?

/continued



/continued

Control Yes No

Are the Memorandum and Articles of Association of the Company still appropriate?

Is the Company complying with its Memorandum and Articles of Association?

Has the Company met all the legal requirements of its regulators, funders andrelevant legislation?

Has the company submitted annual returns, reports and accounts as required bylaw?

Is the Board complying with statutory obligations under the following Acts?

Freedom of Information Act, 1997

Official Languages Act, 2003

Data Protection Acts 1988 and 2003

Comptroller and Auditor General (Amendment) Act 1993

Safety, Health and Welfare at Work Act 2005

Ethics in Public Office Act 1995

Are the operational rules of the company being equitably and fairly applied to allstakeholders?

Are copies of rules and guidelines circulated and available freely?

Are all the Board Members well briefed and aware of the rules governing individualProgrammes and funds?

Has the Board Identified all major risks e.g. resources, retaining qualified staff?

Measuring identified risk in terms of potential magnitude, e.g. likelihood of loss ofManager

Does the Board control the way the risk is managed e.g. what measures are put inplace to minimise the damage, for example, future planning

Is the Board continuously monitoring the risk environment?

Does the Board maintain and regularly review the Local Action Group’s system ofinternal controls, performance reporting, policies and procedures?

Does the Board ensure that there is a system in place for the regular review of theeffectiveness of internal controls?

Does the Local Action Group have an Audit Committee?

Does the Board have processes for staff to notify the Board of risk (whistleblowing)?

/continued



/continued

Transparency and Accountability Yes No

Is the Board clear about what information can be made available and what mustremain confidential to protect personal privacy or client privacy?

Does the Board comply with reasonable outside requests for information about theorganisation and its work?

Is the company open about the Local Action Group’s work and its strategicreviews?

Do local stakeholders have the opportunity to hold the Board to account and knowthe mechanisms to enable this to happen?

Does the Board ensure that the principles of equality are applied, and thatinformation and meetings are accessible to the community?

Explain Mechanism

Leadership Yes No

Does the Board ensure compliance with and adherence to the Company’s valuesand principles and ensures that the company does not extend beyond the remit of itsMemorandum and Articles of Association?

Does the Board set or approve policies, plans and budgets to achieve objectives?

Does the Board have a mechanism in place to monitor performance against them?

Is the company solvent?

Does the Board have the mechanism/expertise to ensure that the company maintainsgood financial procedures and has sufficient financial strength?

Does the Board have a framework of delegation and internal control?

Does the Board have mechanisms in place to enable career progression for staff?

Does the Board ensure appropriate training opportunities for staff?

Does the Board ensure appropriate remuneration and pension contributions forstaff?

Does the Board have procedures in place to prevent any improper conduct orbehaviour likely to put the safety, health and welfare of employees at risk?

Does the Local Action Group have an up-to-date Safety Statement compiled by acompetent person?

Does the Local Action Group have a competent person as the organisation’s SafetyOfficer?

Are all staff duly briefed on the health and safety regulations of the company?

/continued



/continued

Consensus Oriented Yes No

Does the Board have a broad and long-term perspective on what is needed forsustainable development and how to achieve the goals of such development?

Do all members have an understanding of the historical, cultural and social contextsof the local community?

Are all decisions made by consensus?

Explain mechanism

Equality, Diversity & Ethics Yes No

Does the Board set strategies for and receive regular reports on the Local ActionGroups work to achieve equality and diversity?

Does the Local Action Group have clear targets for attaining equality and diversity?

When taking decisions does the Board always act in the interest of the Company asa whole, and not in the interest of only a section of its Members?

Is the Board impartial and independent and abstain from any preferential treatmenton any grounds whatsoever?

Does the Board have a commitment to act ethically and honestly?

Do the financial records and other reports accurately reflect the business of theBoard?

Does any member use the Company’s resources, time or decisions taken forpersonal gain, for the benefit of persons/organisations unconnected with the LocalAction Group?

Do all members complete a full register of interest and disclosure of interests?

Does the Board value and treat all clients equally?

Does the Board comply with employment equality and equal status legislation?

Does the Board ensure that the principle of equality of treatment is respected?

Is the Local Action Group an equal opportunities employer?

Does the Board have and adhere to best practice and employment procedures?

Does the Board ensure that staff appointments are made based upon demonstrablyobjective criteria and that company recruitment procedures are always adhered to?

/continued



/continued

Effectiveness and Efficiency Yes No

Does each member, before joining the Board of a Local Action Group, carryout a due diligence check on the state of the company’s affairs?

Does the Chairperson make sure that all members of the Board of Directorsunderstand their duties and responsibilities?

Does the Chairperson provide each new Director with a statement defininghis or her roles and responsibilities?

Does the Board meet regularly?

Does the Board retain full and effective control over the body and monitor theexecutive management and performance of the Company?

Explain mechanism

Does the Board contain enough Directors to provide the skills andexperience needed without becoming so large that decision-making becomesunwieldy?

Does the Chairperson ensure that all Directors can contribute at meetingsand that particular members do not dominate the proceedings?

Are all members including the chairperson and the Company Secretary clearon their roles and responsibilities?

Explain them Chairperson Secretary



A12 Model Procurement PoliciesPurchasing and Payments Procedures, and EU Directives On PublicProcurementPetty Cash

Petty Cash is used for the purchase of small items of class materials, which are required urgently. A single purchase islimited to €100.

To obtain a refund for a purchase you have made, you must submit a valid receipt, with a Petty Cash Docket signed by_______________________________.

Purchasing Of Items With A Value < €10,000.

Before a requisition for a purchase order can be completed, you must seek ONE quotation for all purchases over €100and below €300. Two quotations for purchases greater than €301 and below €1,000. Three Quotations for purchasesgreater than €1,001 and below €5,000. Four quotations for purchases between €5,001 and €10,000.

Quotations must be in writing, on Supplier's Headed Stationery. Quotations are usually valid for 30 days only, and ifthis period has elapsed you must obtain written confirmation from the cheapest supplier that the price still holds. In thecase of Sole Suppliers, some written evidence must be given, possibly from the supplier to back this up. Every effortshould be made to ensure that the necessary number of quotations are sought. When Catalogues are used for prices, thedate of the catalogue must be written on the requisition.

The Requisition form must be completed fully, signed by the Requisitioner and countersigned by _________________.The Relevant quotations(s) must accompany the requisition. Please allow SEVEN working days for requisitions to beprocessed and an order generated. Splitting of requisitions to keep below the limits for seeking quotations is notpermitted, and if this is suspected, they will be returned to the Requisitioner. The time limit above will vary at certainpeak times of the year e.g. December, when a longer period of time for processing of requisitions will be required.

VAT is not payable to Foreign Suppliers unless they are registered in Ireland for VAT, and confirmation of their IrishVAT number must be submitted before an order is raised. Please bear this in mind when completing requisitions forthese suppliers; put in the quoted price excluding VAT.

It is important that the Administrator is made aware at the time of requisitioning what budget it is to be charged to.Please mark requisitions clearly e.g. Project Name.

Payment Of Invoices

With the Prompt Payment Legislation, payment must be made to the Supplier for all or part of an order received within30 days from receipt of invoice or Goods Inwards whichever is the latter. Failure to do this will result in an interestpayment to the Supplier.

Purchasing Of Items With A Value > €10,000.

Tendering And EU Directives On Public Procurement

A Fixed asset is a purchase with a value of €1,000 or more and with an expected life of one year or more. To make sucha purchase the Tendering Procedure must be used.

It is a basic principle of government procurement that competitive tendering should always be used. The EU Directivesare generally based on the principle that, if the value of a contract exceeds the financial threshold in the relevant EUDirective, the Contract must be open for competition across the European Union and must be advertised in the OfficialJournal of the European Communities. (OJEC).

EU Directives have legal force and must be followed.

Restricted Tendering may be used.

Invitation for tenders from firms on a list is permissible so long as the Local Action Group is satisfied that the list isreasonably comprehensive, up-to-date and not discriminatory in nature.

If the number of firms on the list is too large to invite all suitable firms to tender, a number of those firms may beselected for inclusion in the competition.

Selection from the list can be made randomly or by rotation, if firms on the list are of equal standing, but selection mayalso be based on factors such as overall suitability to the particular project - with due regard to experience, organisationand financial standing - and the fair distribution of opportunities. At least FIVE firms, if possible should be invited totender.

Each contract need not be separately advertised, but advertisements should be placed in the national media, at least everytwelve months, inviting firms to apply for inclusion on the list. Applications from firms, which seek inclusion on a list,should be accepted at any time if they satisfy the necessary criteria laid down by the Local Action Group. Theprocedures should be reviewed on a regular basis.

Tender Period

Adequate time related to the size, complexity, etc. of the work, should be allowed for the preparation and submission oftenders. The appropriate time periods set out in the EU Directives should be carefully followed. Queries from tendering



contractors should be dealt with quickly and appropriately. Special efforts to assist new firms or firms from overseasmay be required.

If, as a result of any query or queries, significant additional information has to be made available to any contractor,copies should equally be sent to all those who were sent tender documentation. Such information should be given ingood time before the date set for the receipt of tenders.

Tenders should always be in writing on the appropriate forms.

Tax Clearance Procedures.

It should be stated in the tender advertisement that, under the terms of the Tax Clearance Certification scheme, evidencefrom the Revenue Commissioners that the tenderer's tax affairs are in order must be provided before a contract isawarded.

If such evidence is not forthcoming within a reasonable period, the contract may be awarded on the basis of the nextmost suitable tender, the necessary evidence having been supplied. The GCC (Government Contracts Committee) shouldbe consulted as appropriate.

Receipt and Opening of Tenders.

It is important that no allegations of impropriety arise at this stage of the process, either in relation to commercialconfidence or fair treatment.

All tenders should be opened together at the date and time set for receipt of tenders. No tender should be opened inadvance, nor should any tender information that may have become available - by a casual remark from a supplier forexample - be passed on to others.

The opening of tenders should take place in the presence of at least two officials of the Local Action Group. At the timeof opening, a tender report should be completed. This report states the date the tender request was sent, and the date forreturn. The specification of the service/equipment required. The names of the Suppliers requested to tender, and namesof suppliers who returned the tenders. There is a section to insert all tender prices submitted. This report must be signedby the requisitioner and by____________________. The reason for acceptance of a particular tender must be clearlywritten, and sent with the requisition for an order together with the accepted tender. All other tenders must be retained bythe requisitioner in case a query arises from suppliers, the European Auditors or other relevant government personnel.

Tenders received after the closing time for receipt of tenders should not be opened.

Confidentiality of all Tenders.

Tenders and all information relating to the processing of them should be treated a strictly confidential, subject to theparticular procedures of the Contracting Authority. They remain confidential even after the contract is awarded.

Evaluation of Tenders.

Award criteria should be clearly indicated in the advertisements or the tender documents. Tenders should generally beevaluated according to the principle of obtaining best value for money.

Contracts should be awarded on the basis of either: -

The lowest suitable tender (suitability refers to such items as capacity, organisation, experience, performance onprevious contracts, financial standing relative to the contract and compliance with any specifications or qualitystandards laid down for the contract).

The most economically advantageous tender (factors such as period for completion, maintenance costs, technicalmerit, cost effectiveness etc., may be taken into account is particular circumstances warrant it).

If it is proposed to pass over the lowest tender, the permission of the Board must be sought.

Informing Unsuccessful Tenders.

Tenders should be informed without undue delay if they have been unsuccessful. It is recommended that the LocalAction Group adopts a policy of releasing general information to unsuccessful tenderers if they enquire why theirtenders were unsuccessful (e.g. they may be told that they were unsuccessful on price grounds). This should be donewithout revealing information about other tenders, which could enable the price or other details of individual tenders tobe identified.

Re – invitation of Tenders.

When the award of a contract has had to be postponed and the validation period of the tender exceeded, the ContractingAuthority may need to consider re- invitation of tenders for a new competition.

In certain circumstances, it may be necessary to re-advertise a contract because of insufficient initial competition.

When preparing of specifications for tender it is illegal to specify trade names or manufacturers' marks, without the useof the words 'or equivalent'.

40 days must be given to each Tenderer to return the completed tender.

The use of the 'Urgent' procedures, or accelerated, restricted procedures, as they are referred to in the Directives, must bejustified and have been caused by events outside the control of the Local Action Group. Delays by the Local ActionGroup in instituting tendering procedures is not sufficient reason for applying accelerated procedures.

Summary

What needs to be done when sending out tender requests: -

Complete specification and remember if you specify trade names or manufacturers' marks to use the words 'orequivalent' on the form;



Include other terms and conditions documents;

Choose at least FIVE suppliers from the supplier's list;

Allow appropriate period for return of completed tenders;

Send return envelope to each supplier: This envelope must state what type of equipment this tender is for and therequisitioner's name. The return address should be: _________________________________________

After the closing date the appointed body of the Local Action Group (Committee etc.) will open and evaluate eachtender submission based on the criteria as stipulated in the tender documents. Following this evaluation, anevaluation report will be completed, which will include an analysis of performance against criteria, pricing detailsand a recommendation with reasons for acceptance.

This report must be sent with the requisition and accepted tender to the Administrator to generate an order.

You must have received THREE replies with prices before you can proceed with an order. If this is not the case, itwill be necessary to contact the suppliers who did not reply, and request them again.

Evidence of Tax Clearance Certificates will be required at this stage; the Administration will undertake this task.



A13 Resource Agencies

Organisation Scope

Pobal, (Formerly Area Development ManagementLimited - ADM)Holbrook House,Holles Street,Dublin 2.Tel: [01] 6613611.Fax: 6610411.E: www.pobal.ie

Pobal is a not-for-profit company with charitablestatus that manages programmes on behalf of theIrish Government and EU.

Carmichael Centre for Voluntary Groups,Carmichael HouseNorth Brunswick StreetDublin 7Tel: 01 873 5702Fax: 01 873 5737E: [email protected]

Provides accommodation and services to smallvoluntary organisations.

Citizens Information Centres (CICs) - Comhairle,7th Floor,Hume House,Dublin 4.Tel: [01] 6059000.Fax: (01) 6059099.E: [email protected]

Locally based with more than 85 branches aroundthe country. For contact addresses see TelephoneDirectory. Provide information to people andorganisations on rights and entitlements.Resourced and supported by Comhairle.

Combat Poverty Agency,Bridgewater Centre,Conyngham Road.,Islandbridge,Dublin 8.Tel: [01] 6706746.Fax: (01) 6706760.E: [email protected]

Acts as a national resource agency supportingand encouraging community development activity.Publishes research into aspects of poverty andcommunity development and has a libraryspecialising in these and other social issues whichis open to the public.

Comhairle,7th Floor,Hume House,Dublin 4.Tel: [01] 6059000.Fax: (01) 6059099.E: [email protected]

Comhairle mainstreams information services forall citizens, including people with disabilities. Itaims to inform and empower individuals andcommunities by ensuring they are aware of theirrights and entitlements and of the social servicesthat exist to support this.

National Women's Council of Ireland (formerlythe Council for the Status of Women),16-20 Cumberland Street South,Dublin 2.Tel: [01] 66152686611791.Fax: (01) 6760860.E: [email protected]

National representative body for 144 women'sorganisations throughout Ireland. Providesinformation and support to women and theirorganisations.

/continued



/continued

Organisation Scope

National Youth Council of Ireland,3 Montague St.,Dublin 2.Tel: [01] 4784122.Fax: (01) 4783974.E: [email protected]

Coordinating body for voluntary youthorganisations. Provides general informationservice and international contacts.



A14 Government Departments and AgenciesDepartment/Agency Responsibilities

Comptroller and Auditor General,Treasury Block,Dublin Castle,Dublin 2,Tel: 01 603 1000Fax: 01 603 1010E: [email protected]

Comptroller and Auditor General (Amendment) Act1993

Department of Community, Rural and GaeltachtAffairs,Dún Aimhirgin43-49 Mespil Road,Dublin 4Tel: 01 6473000Fax: 01 6473051E: [email protected]

LEADER ProgrammeOfficial Languages Act, 2003

Department of Finance,Government Buildings,Upper Merrion Street,Dublin 2.Tel: 01 6767571Fax: 01 6789936E: [email protected]

Freedom of Information Act, 1997

Health and Safety Authority10 Hogan PlaceDublin 2Tel: 1890 289 389Fax: 01-614 7020E: [email protected]

Safety, Health and Welfare at Work Act 2005

Office of the Data Protection Commissioner3rd Floor, Block 6Irish Life CentreLower Abbey StreetDublin 1Tel: (01) 874 8544Fax: (01) 874 5405E: [email protected]

Data Protection Acts 1988 and 2003

Standards in Public Office Commission8 Lower Leeson Street, Dublin 2, Ireland.Tel: 01 639 5666Fax: 01 639 5684E: [email protected]

Ethics in Public Office Act 1995



Selected Bibliography

Publication Date Publisher

Circular no: 15-02 4th June 2002 DCR&GA

Companies Acts, 1963 – 2005 1963-2005 Government Publications

Company Law Enforcement Act 2001 2001 Government Publications

Comptroller and Auditor General (Amendment) Act 1993 1993 Government Publications

Data Protection Acts 1988 and 2003 - 1988-2003 Government Publications

Freedom of Information Act, 1997 1997 Government Publications

Gender Proofing Handbook – Donegal, Galway, Offaly,Roscommon, Sligo and Westmeath County DevelopmentBoards

2002 Government Publications

Good Governance - A Code for the Voluntary andCommunity Sector

June 2005 Dóchas

Official Languages Act, 2003 2003 Government Publications

Safety, Health and Welfare at Work Act 2005 2005 Government Publications

Standards in Public Office Act 2001 2001 Government Publications

Voluntary Organisations and Accountability 1986 National Council for VoluntaryOrganisations