Charities must question senior staff salaries - former AIB executive

Former AIB senior executive Donal Forde has said the Irish charity sector needs to ask some "searching questions" in light of the scandals last year involving the Central Remedial Clinic (CRC) and Rehab.

Speaking at the Irish Charities Tax Reform (ICTR) annual conference, Mr Forde said charities need to ask whether they are paying their senior staff the right salary.

“It is a mad scenario when chief executives go out to justify their own pay, it makes no sense,” he said.

“That’s up to the chairman of the board and they can only do so with credibility if there has been a rigorous process underpinning the decision they have made.”

Mr Forde, who is now the secretary general of the Irish Red Cross, said he knew the pain of reputational damage and had the “scars on my back” to prove it.

He likened his three appearances in front of the Oireachtas Finance Committee in 2008 to a "public crucifixion".

Mr Forde was the head of AIB’s Republic of Ireland division during the boom years between 2002 and 2009.

He told the Finance Committee in 2008 that AIB had “behaved very responsibly in recent years” and had “maintained a very prudent credit stance”.

Months later AIB needed a multi-billion euro bailout and was taken into public ownership after its share price collapsed.

Mr Forde told the ICTR annual conference that charities’ boards needed to have the right expertise.

“I have been part of a situation where that failed with horrible consequences,” he said.

They need to ask if their money was being spent wisely and if their finances would survive an audit by the Comptroller and Auditor General (C&AG), he said.

Though charities were passionate about what they did and hugely committed, they could also come across as obsessive and having a sense of entitlement, he said.

“That’s a very dangerous mentality to have in the times we are in.”

ICTR chair Caitríona Fottrell described the controversies surrounding the CRC and Rehab as a “devastating crisis for a sector already dealing with six or seven years of cutbacks”.

The Minister for Justice Frances Fitzgerald said the new Charities Regulatory Authority, which was set up last month, will help restore confidence in the sector. She said a lot of damage had been done to the sector because of the recent scandals.

“This is about rebuilding trust. The vast majority of charities are completely trustworthy and that the public know there is that independent regulation now and that all of the charities are subscribing to it.”

Giving the key note address at the charity conference, the Archbishop of Dublin Diarmuid Martin said the charities sector should “not be stigmatised for the misdeeds of the few”.

“When the image of the charities sector is undermined, society is weakened.”

He welcomed the introduction of the Charities Regulatory Authority and said charities were not entering into it under duress but were anxious to ensure that good standards prevailed across the sector.