The Irish Association of Investment Managers has welcomed Dr Michael Smurfit's decision to step down as chief executive officer of the Jefferson Smurfit Group. It will shortly issue a report on corporate governance at Irish public companies which is likely to bring further pressure for changes at Smurfit.

IAIM secretary general, Ms Ann Fitzgerald, said the association, which was the industry body representing the major investment institutions in the Irish market, had been seeking Dr Smurfit's retirement as chief executive for some time.

"We are very pleased with the announcement. We had been looking for it for a long time," she told The Irish Times yesterday.

The IAIM is finalising a review of corporate governance in Irish public companies.

This is expected to be used as a blueprint by the institutions to secure further changes at Smurfit.

The IAIM has been critical of Dr Smurfit's position as chief executive officer and chairman of the public company which is against the best-practice corporate governance codes advocated by the industry.

Dr Smurfit announced late on Friday night that he would step down as chief executive of Jefferson Smurfit from October 31st, 2002. He will remain as chairman of the group's board of directors.

Mr Gary McGann has been appointed chief executive designate and Mr Tony Smurfit will move up to become president and chief operating officer designate. These appointments will come into effect from November 1st.

The IAIM report will almost certainly place more onerous responsibilities on the role of independent non-executive directors of public companies who sit on key committees which decide on issues ranging from directors' pay to appointments to the board.

Mr McGann will come under pressure to implement reforms specifically on these two committees given much criticism of how they have operated.

The €6.6 million (£5.5 million) remuneration package approved for Dr Smurfit last year was sharply criticised as being more than five times higher than that awarded to his peers at other Irish public companies.

It was noted that the package was sanctioned when the company was performing very poorly.

Last year, three Irish institutions, Aberdeen, Irish Life and AIB Investment Managers, voted or abstained on some resolutions in protest at Dr Smurfit's remuneration package. Smurfit's biggest shareholders, Bank of Ireland Asset Management (BIAM) also abstained from the motion to re-elect the five directors.

Other family members were paid generous packages with his brothers, Mr Dermot Smurfit and Mr Alan Smurfit, paid more than the chief executive designate, Mr McGann.