The supine nature of the Irish fund management community has been demonstrated once again by the Rusnak affair. The publication of Mr Eugene Ludwig's report into how the bank allowed one man, in a overseas office wipe out half of last year's profits was greeted with a deafening silence by the custodians of your and my pension funds, who between them own some 20 per cent of the hapless bank.

The Irish Association of Investment Managers proceeded to congratulate the board of AIB on a job well done and fudged the issue of whether the appropriate people had been held accountable. "The question of whether their actions go far enough has to be viewed with the range of decisions they took and not just on whether Ms Keating should have kept her job," was the somewhat elliptical comment of Ms Anne Fitzgerald, the association's secretary general.

Ms Keating is of course the chief executive of Allfirst and lucky enough to be on the level above which the buck does not travel in this particular $691 million management disaster.

The IAIM response is - to say the least - somewhat tepid by comparison to the broadside launched by Ms Fitzgerald's opposite number in the UK, Mr Alan Rubenstein, chairman of the National Association of Pension Funds investment council. "If she [Ms Keating] did know about it [the losses] she should go. If she didn't know about it she should go. In corporate governance the buck stops with the chief executive," he said. No circumlocution there.

The other contrast between the Irish and UK investment industry highlighted last week is the willingness of individual British fund managers to stand up and speak out. As it stands you have a better chance of shooting a rhino on St Stephen's Green than getting an Irish fund manager to criticise an Irish company on the record.

There has not been a squeak out of them about AIB, while their UK counterparts have by contrast been extremely vocal. Mr Aidan Fowler, the head of pan-European equities at Aberdeen Asset Management - which has a substantial slice of the Irish pension fund management business - has accused AIB of failing to "grasp the nettle". Another UK fund manager Mr Richard Champion of MGM Assurance was quoted as saying the problem has been glossed over.

Of course it is easier for Mr Fowler and Mr Champion to criticise AIB from the safety of a foreign shore. They do not face the prospect of running into an irate company chairman down at the golf club. Therein lies the rub. The Irish professional investment community is very small. There are probably not more than a couple of hundred people actually involved in front line investment management.

It is part of a wider financial and business community, which many feel is far to cosy.

Some aspects of the recent court case between Fyffes and DCC seemed to bear the hallmarks of a investment and business community that tends to close ranks when the going gets rough. Fyffes has accused DCC and its chief executive Mr Jim Flavin of using insider information when deciding to sell its stake in Fyffes two years ago.

The fruit distributor brought its action within days of the expiry of the statute of limitations on such actions and it was not until Fyffes moved that Irish fund managers seemed to wake up to the situation.

Two of the fund managers that bought the DCC shares, Eagle Star and Hibernian, have now joined the action, but with all the appearances of having done so reluctantly and merely to cover their posteriors should Fyffes be successful. Both agreed to the issuing by DCC of a convoluted and rather Jesuitical statement, the import of which was that although they were suing DCC and Jim Flavin they were not accusing them of doing anything wrong. Work that one out.

It is worth noting that the two US fund managers that also joined the fray do not appear to have agreed to a similar statement.

The argument put forward by supporters of the low-key approach adopted by Irish fund managers to corporate governance and other issues is that flexing their muscles in public achieves little. The theory is that they can achieve more by making their concerns known directly to the company and if necessary exercising the ultimate sanction of disinvesting. It is a variation of the argument that the market will always find out and expose weak management.

A recent example is Bank of Ireland Asset Management and Elan where the sage-like Mr Chris Riley was apparently not enamoured of the drugs company and its innovative approach to accounting. Rather than launch a public attack on Elan to try to bring about change, BIAM simply stopped buying Elan stock. The stockmarket bloodbath that engulfed Elan earlier this year appears to be a vindication of the non-confrontation approach.

Another argument in favour of this approach is that it is counter productive to talk down the management of a company in which you are a major shareholder.

It is not without merit, but there is a responsibility on large institutional shareholders to show leadership in areas such as corporate governance, although it is perhaps naive to expect them to put this ahead of beating the index or what ever other criteria their annual bonuses are based on.

It would be comforting to think that Mr Riley and his peers will all be now having a quiet word in the ear of Mr Lochlann Quinn, the AIB chairman.

Hopefully they will be a little less complacent in private about the decision not to hold senior executives to account than they have been in public. One would also hope that Mr Quinn will take this criticism on board and act appropriately. We will know the answer if Mr Michael Buckley, the chief executive, and Ms Keating are still at their posts this time next year.

jmcmanus@irish-times.ie