Inside The World Of Business

Fresh blood needed on boards

It’s is tempting to conclude that we have learnt very little when looking at the Government’s choices of non-executive directors for Anglo Irish Bank.

All three of them fall foul one way or another of the box-ticking approach to corporate governance and in particular its obsession with insiders.

One of the nominees, Gary Kennedy, was singled out recently by Tasc, the left-leaning think tank which conducted a survey of Ireland’s rather shallow pool of boardroom talent. Mr Kennedy, who sits on the boards of Elan and Greencore, was highlighted as one of Ireland’s best connected directors by Tasc, which established links with seven other members of what they rather provocatively termed the “directors’ network”. The presumption is that this is a bad rather than good thing, although views diverge.

Attention has also been paid to the fact that even though Mr Kennedy’s appointment has been approved by the Financial Regulator, it cuts across the view expressed in the regulator’s recent consultative report on corporate governance that all else being equal five directorships is the most that the average man or woman could hold without there being a question mark as to their ability to devote the time needed to fulfil the role.

The former AIB finance director sits on the board of Friends First and several other private companies.

Mr Kennedy is joined on the Anglo Board by Aidan Eames, who in contrast stands accused of not having enough experience, serving “only” of the board of Bord Gáis and a number of small private companies.

While he has also been approved by the Financial Regulator, much is being made of the fact that he is a former Fianna Fáil senator and political activist. There is less fuss about the third appointment, Dr Noel Cawley, but he again is a busy man serving as the chairman of Teagasc and a director of Bord Bia and One51 plc.

There is plenty in all three appointments to give corporate governance zealots something to complain about. But any criticism must be tempered by the reality that finding anyone willing to serve on the corporate train wreck that is the Anglo Irish Bank board must have been difficult. And in addition, it is now 100 per cent owned by the Government and on a very tight leash from the Department of Finance. Many would also argue that the bank is not long for this world and nor should it be.

All this is true, but some fresh blood would have been welcome just the same.

Much huffing and puffing expected

We can look forward to a great deal of huffing and puffing this week with the publication of two reports into the causes of the Irish banking collapse.

Anyone expecting dramatic revelations is likely to be disappointed and may also be missing the point of the two reports, one by Central bank governor Patrick Honohan and the other by outside banking consultants Klaus Regling and Max Watson.

The reports will almost by definition be inconclusive, given that they are supposed to point the way towards the issues that the upcoming Statutory Commission of Investigation should look at.

The real test of the two reports will be how much wriggle room they give the Government in framing the unwanted inquiry, the terms of which are to be published by the end of June.

It has to be remembered that the Government was decidedly cool on the idea of an inquiry into the causes of the banking crisis given that they were in the driving seat for the relevant period.

It’s hard to see anything positive from a Government perspective emerging from the impending statutory investigation and damage limitation will be the aim of the day.

An investigation that throws a few senior public servants to the wolves would not be a bad outcome, but one that focuses in on the failings of politicians is to be avoided at all costs.

We will know shortly if Mr Honohan and his colleagues have given them any place to hide.

Today

Budget airline Ryanair this morning publishes its annual results for the year to the end of March 31st last.

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