Brian Lenihan Jnr (Dublin West, Fianna Fail)

The Bill with which we are dealing here this evening raises important issues of public interest and I thank Deputy Varadkar for allowing the House the opportunity to discuss them. While the Government is opposing the Bill on a number of grounds, we acknowledge the concerns that have been voiced by many Deputies. We agree that the aim to achieve best practice in the corporate governance of State bodies and statutory agencies is paramount. It is fundamental to the public interest. However, there are a number of different ways in which that aim can be achieved.

As already pointed out in the debate, individual Members of the Government have taken a number of initiatives in their own sectors. The Minister for Transport advertised for expressions of interest for suitable candidates when he was filling vacancies on the board of the Dublin Transportation Authority. The Minister for Communications, Energy and Natural Resources has given the relevant Oireachtas committee a role in the appointment of certain State boards. In my Department, I have consulted the main Opposition parties about the appointment of public interest directors to the State guaranteed financial institutions.

It is fair to say that in recent years the system of appointments to State boards has been refined and the overall calibre of appointees has improved. It is increasingly the practice to specify in the governing legislation the attributes required of board members. The legislation governing the establishment of NAMA is a case in point. I will consult with the Opposition parties about the chairmanship of the agency and I have written to the Opposition leaders in that regard.

The Government is anxious to innovate in this area and is keen to bring more accountability into the system of State board appointments. Having said that, it is not clear that the approach proposed in the Bill is the best way of delivering the improvements we all want to see. I am not convinced of the case for departing from the well-established corporate governance arrangements for the appointment of chief executives. The current practice whereby chief executives and other senior executives are appointed by the board is the norm internationally and is often specified in legislation. These appointments are conducted through a well-tried and independent process involving open competition and sometimes the use of recruitment agencies.

I am not aware of any dissatisfaction with this system and I am not sure that the legislature is the correct body to vet these appointments. There could be considerable operational difficulty with an Oireachtas committee assessing an appointment to such key positions as chief executives and chairmen in such a wide range of bodies. It might deter candidates from coming forward.

See this speech in context