Brian Lenihan Jnr (Dublin West, Fianna Fail)

I have a particular concern that large companies — particularly banks, for which I bear ministerial responsibility — are overly reliant on a small circle of persons for appointments to their boards. It is important, in the long-term interest of the companies themselves and in the interest of the public and stakeholders, that there should be an opportunity for new voices to be heard and fresh thinking to be deployed. Where a relatively small group is meeting and working together over time, an accepted way of working and viewing issues tends to become established. Many of us could produce examples from different areas of life where it was a newcomer or outsider who first identified something that was missed by all the insiders.

Clearly, in a relatively small company, the number of suitable people for promotion to senior positions will be always limited. However, I am of the view that we must do more to encourage boards to bring in those with a wider range of views and backgrounds. I am also of the view that alignments between bank directors and other companies — in other words, cross-directorships — are not helpful to the proper management of the banking system. That is why I have raised this specific issue. It is one of the lessons we must learn from the events we have witnessed in the past year.

The circumstances of the loan between Mr. FitzPatrick and the Irish Nationwide Building Society are under investigation by the regulator. We must await its report, which I have no doubt will establish the facts, as it has established the facts in regard to other matters. In regard to Mr. Fingleton's pension arrangement and the payment to him of a bonus, we must distinguish between the two transactions. My Department is in correspondence with the Irish Nationwide Building Society on the matter of the bonus payment. I have also asked for further information about it. It seems the bonus arrangement was sanctioned before the guarantee was given but paid afterward. I want to be in a position to assess my options in regard to that bonus payment to see whether it can be recovered, first by the society itself, or, in the absence of a power in the society to do so, what options are available to me as Minister to deal with it on foot of the guarantee arrangement.

In regard to the pension fund, again, the full facts will have to be established. From the limited information available to me on the basis of such conversations as I have had with the two directors appointed at my request to the board of the Irish Nationwide Building Society, the value of the amount transferred into the pension fund in the first instance is substantially less than the figures quoted. The current value of the pension fund has substantially diminished with changes in stock values. That being said, this matter requires further examination and establishment of the facts before further assessment can be made of the options open to the institution and, in default of such an option, the options available to me as Minister for Finance.

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