Irish banks and insurance companies must have a "clear separation" between the roles of chairman and chief executive officer under proposals published by the Financial Regulator.
Matthew Elderfield today published a consultation paper in which he sets out the minimum standards and expectations that will apply to the boards of directors of banks and insurers.
It is proposed that chief executives, directors and senior managers be banned from becoming chairman for five years.
Other proposals include a minimum of five directors on company boards, requirements regarding the role and number of independent non-executive directors and limits on the number of directorships which directors may hold.
Under the proposals, anyone who does not comply with the standards would face sanctions.
The requirements will apply to all credit institutions and insurers licensed or authorised by the regulator including Irish licensed and authorised subsidiaries of international financial services groups.
The regulator asked for comments on the proposals by June 30th.
The Institute of Directors in Ireland (IoD) welcomed the consultation paper, describing it as a positive step.
"The proposals outlined today are in keeping with the combined code and will be essential to improving corporate governance standards in our financial and insurance institutions," said chief executive Maura Quinn.
"What we now need to ensure is that those who sit on all boards are appropriately selected, fully qualified and trained for their position and the responsibilities that come with it. This is a necessary step to improve and strengthen corporate governance frameworks throughout Ireland."