MULTIPLE LINKS between directors on Irish boards did not contribute to the collapse of the economy and often make sense, senior businessman and veteran director Laurence Crowley has said.
In an interview with The Irish Times, Mr Crowley, a former governor (chairman) of Bank of Ireland, also said the Government should raise the pay caps in place for both top bankers in State-supported banks and semi-State chief executives if it is to attract suitable candidates for the roles.
Mr Crowley (74) sits on the board of Bord Gáis, as well as holding directorships in organisations such as Aer Lingus and the ESRI. He acted as governor of Bank of Ireland between 2000 and 2005 and previously had a long career in insolvency practice.
He believes compliance among Irish directors is not as poor as some commentators would suggest and defended the links many bodies have traditionally had with each other through shared board members. Last year, a report by think tank Tasc found that between 2005 and 2007, Mr Crowley was one of 11 directors in the Republic’s top 40 private companies and State-owned bodies who had 10 or more links – via multiple directorships – to other companies in the network.
“You’d normally be hesitant to choose somebody you’d never heard of,” he said of the process of appointing new directors, adding that selecting the wrong person can mean “risking the cohesiveness of the board”.
He acknowledged that some firms may have crossed a line with their directors but he does not view this as “part of the problem” that brought down the economy. Mr Crowley described the semi-State and banking salary caps as “nonsense”.
It is Government policy to pay no more than € 250,000 in commercial semi-States and no more than € 500,000 in banks that have received State funds. A € 750,000 package would be more appropriate in the banks, he said. He also suggested he would have been tempted to legally challenge the semi-State cap if he had been affected by it.
He believes it may be possible for the Government to retain existing chief executives at the proposed pay levels but asked: “Who is going to replace them?”
Mr Crowley stopped short of accepting any responsibility for the banking crisis, arguing that Bank of Ireland was in good shape, with sound credit practices in place, when he retired.
While governor of Bank of Ireland, Mr Crowley warned against foreign ownership of Irish banks, worrying it would create a less understanding framework for corporate customers.
His view has softened somewhat but he retains concerns that non-Irish owners would not “care” about their business in the same way as their domestic equivalent, for example by choosing to globally exit loans to one sector without realising how important it might be in Ireland.
