John O'Donoghue (Kerry South, Fianna Fail)

I confirm that I described the governance arrangements at the Abbey as Victorian. The theatre is owned and operated by the National Theatre Society Limited, a private company limited by share capital whose shareholders are the nine members of the board of directors and no fewer than 23 others who are now collectively termed the advisory council. The term "shareholder" when used publicly refers generally to advisory council members, which is to say those shareholders who are not members of the board. The shares issued are purely nominal and have no economic value.

It is necessary to change the governance which obtains at the Abbey, in which context I await recommendations from the Arts Council. I am very conscious of the need to retain the independence of the Abbey in the context of its artistic contribution and have no wish to interfere with a heavy hand. While I considered direct funding of the theatre in the aftermath of the discovery of an increased deficit, on further consideration and in the final analysis it is probably best for the Arts Council to continue to fund the Abbey. The council has greater discretion in the funding it can provide from time to time. With the independence of the theatre in terms of its artistic contribution to the forefront of my mind, I consider that the arms-length principle should be retained.

Future governance arrangements will be brought before the Government after discussions have been completed between the Arts Council and me and it is anticipated there will be change. I hope it is change everyone accepts for the better. Having given a great deal of consideration to future practice in the keeping of accounts, rather than become directly involved in the funding of the Abbey, it would be better to appoint an officer of the Department to the finance committee of the national theatre to ensure there is no recurrence of previous events.

I am very disappointed at what happened, which did not represent the most professional accounting performance I have witnessed. I have no doubt, having had dealings with them, that the two gentlemen who have departed operated in good faith at all times. Unfortunately, there were errors in the theatre's accounts which came to light.

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