Paddy Burke (Fine Gael)
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I welcome the Minister of State at the Department of Education and Skills, Deputy Cannon.

Feargal Quinn (Independent)
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I move: "That the Bill be now read a Second Time."
I welcome the Minister of State. It is the second time we have met this week and I am delighted to see him again on this basis. Being appointed to serve as a member of the board of a public body is, in many respects, an honour. Appointment on merit is an endorsement of the expertise of the person in his or her chosen field. People do not accept appointments to the boards of State bodies because they are attracted by the pay and want to make money. My first appointment to a State board was to An Bord Phoist, way back in 1979. At the same time as An Bord Phoist was established, An Bord Telecom was established, and I asked the chairman of An Bord Telecom, Michael Smurfit, what condition he made. His only condition was that he be paid £5,000, in breach of the guidelines or strict rules that had been put in. He had no intention of taking the money, but intended to give it to charity, as I did with my salary from An Bord Phoist.
During the 11 years I served on that board, there were no members who would have been unwilling to serve had the positions been unpaid. There is no need to pay a person for serving on the board of a State body, although board members should receive an allowance and expenses, which is covered well in the Bill. Those who want to be paid have no place on such boards. An appointment to serve as a member of the board of a public body invariably brings with it the right to be paid fees for that position, along with the right to claim expenses. When the economy was in good stead this may have been justifiable. However, in the age of austerity, where people are having to do more with less, it is appropriate that we look at the boards of public bodies to see if greater efficiencies can be gained.
This Bill is not about saving a relatively small amount of money. The objective at the heart of the Bill is to ensure that people who commit to serve on the boards of public bodies do so because they have expertise which they are willing to share. Although very many of the people who serve on the boards of public bodies are experts in their fields and face many competing demands, they find the time to dedicate to the service of public bodies. In most cases the fees paid to them fall well short of recognising the time, energy and commitment they put in, yet they persevere and give their all. They do so because they are motivated by the goal of improving the future of the public body they serve. For many, I suspect financial gain does not even enter the equation. The service they give is the essence of public service.
Recently I have become concerned at the extent to which board membership of State bodies has become discredited and demeaned. Recent events surrounding certain boards of public bodies - their memberships, fees and expenses and so on - have, regrettably, done a great disservice to all who serve as board members of public bodies. The Bill seeks to go some distance towards undoing some of the damage caused to those who serve on the boards of public bodies. While some may see it differently, this Bill is about recognising and safeguarding the role played by people appointed to serve on the boards of public bodies. I know very many people who would like to be able to share their expertise with State bodies for no pay and no expenses. However, many are deterred by the controversies associated with State body membership and do not wish to be portrayed as serving for the wrong reasons. Rather than limiting the pool of talent available to serve on the boards of public bodies, this Bill will make board membership more attractive to a great many more people in society.
The Bill has three objectives. First, it would preclude persons who serve on the board of a public body from being paid for their membership of the board. Second, people who serve on the board of a public body would be entitled to be employed or engaged by that public body only if they file a declaration with the Standards in Public Offices Commission detailing payments received. That is a very important aspect of the Bill. Third, persons who serve on the board of a public body would only be entitled to be reimbursed for vouched expenses if they file a declaration with the Standards in Public Offices Commission detailing payments received. Unvouched expenses would not be reimbursed.
The Bill highlights an issue which needs to be addressed and provides an appropriate and reasoned approach to resolving the problems in this area. I urge the Minister of State to accept this very worthy Bill and see to its enactment as a matter of priority. Recently, the Minister for Public Expenditure and Reform, Deputy Howlin, invited existing State board members to waive their fees if they wished. While I do not have the answer, the Minister seems to share my opinion that people would be willing to consider waiving their fees. We would have just as efficient, competent, capable and enthusiastic members of State boards even if they were not paid for their membership of State boards but were reimbursed for any expenses and costs they incurred. I urge the Minister of State to give it every consideration.

Sean Barrett (Independent)
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I welcome the Minister and compliment Senator Quinn on once again bringing a Bill before the House. He is one of the most prolific producers of legislation in the Private Members' Bill category. It is an honour to be asked by a Minister to serve the State. I have served on four boards without payment and one with payment. We need public service, the practical patriotism Senator Quinn has described. Many of us have talents because the State invested heavily in our education and it is a chance to pay back something when asked. It is an honour to serve the public and the next generation, because we must repair much of what has happened in recent times.

It was interesting to hear that the Minister, Deputy Howlin, thinks board members should consider waiving fees. Although the fees concerned are relatively small amounts of money, they, unfortunately, attract adverse comment and public odium out of all proportion, which nearly discredits the organisations. While media comment may be ill-informed, it creates the view that Ministers reward their supporters, friends, pals or cronies - that dreaded word - by making these appointments. This discredits the idea of public service because it is incumbent on all of us who have employment in other areas to offer something back to the State at this difficult time when we need to do so much better than we have in the recent past. We still have to make up more than 200,000 jobs which have been lost since the peak.

People do lots of things as part of public service to their communities, notably through sporting organisations and schools. It would be a great step forward if they were willing to serve when the Minister of State and his colleagues ask them to perform tasks on behalf of the country and I commend the Bill on that basis. The Minister, Deputy Howlin, has tackled the expenses culture, and it is addressed in section 3 of the Bill.

As we saw yesterday when the Companies Bill was introduced by the Minister of State at the Department of Jobs, Enterprise and Innovation, Deputy Sherlock, being on a board involves responsibilities that we may not have considered previously. It is not an honorarium and it is not a reward for services done. It is a job of work. We have asked so many people to make sacrifices for the country and I think this will add to the list. It will raise the status of boards and those who serve on them. It will also help combat the negative views that appointments to State boards can attract. Those views are often unfair to individuals, boards and Ministers who are trying to get the country back in good shape.

Senator Quinn's Bill has my support as a call to people to serve their country and I commend it to the House.

Ciarán Cannon (Galway East, Fine Gael)
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I would like to commence by saying how pleased I am to have this opportunity to address the House in respect of the Public Service Management (Transparency of Boards) Bill 2014 brought forward by Senator Quinn. At the outset, I would like to say that policy proposals from our colleagues to further improve the effectiveness of corporate governance in the public service are greatly welcomed.

By way of outlining the context to and current developments at Government level on the important issues raised in this Bill, I can inform the House that a revised version of the code of practice for the governance of State bodies, last issued in 2009, is due for publication shortly. The guide has been revised to take account of general developments concerning both the supervisory and monitoring regime between Departments and the State bodies under their aegis and guidelines to be observed by the boards of State bodies in matters of internal governance. More specifically, the code of practice will include, for example, a checklist so that boards of State bodies can ensure compliance with the code on accountability for public money, reporting, audit, roles and responsibilities and standards of behaviour.

This Government has been pursuing a wide ranging political reform programme aimed at delivering open, accountable and ethical government underpinned by a transparent, efficient and effective public system to help rebuild trust in government and in the institutions of the State. Many of the commitments in the area of political reform set out in the programme for Government and in the public service reform plan are now in delivery phase and real progress is being made on several different fronts. This includes, for example: the extension of the Ombudsman's jurisdiction and powers; provision of a detailed legislative framework for parliamentary inquiries; the regulation of lobbying; extensive reform of freedom of information, FOI, legislation; and the introduction of legislation protecting whistleblowers.

I would further like to inform the House that an overhaul of the ethics legislation is now in hand in the Department of Public Expenditure and Reform aimed at supporting and promoting ethical conduct, creating an environment in which ethical issues and conflicts of interest are managed effectively and corrupt and unethical conduct are severely discouraged. Based on the work already done, it is clear that it is necessary to modernise the existing framework to make it simpler to understand and to administer. There is a need also to ensure that a consistent approach is taken to ethics related processes and duties, right across the public sector as a whole.

In this context it is of interest to note that the World Bank has stated that a key lesson from experience in tackling corruption is that it needs to be addressed simultaneously on two fronts, prevention and enforcement. Income and asset disclosure systems are gaining prominence as a tool in the fight against corruption and have the potential to support efforts in both prevention and enforcement. This contribution is recognised in the United Nations Convention against Corruption, UNCAC, and other international anti-corruption agreements. The World Bank has noted that a wide variety of approaches might be taken and a wide variety of challenges are faced by different disclosure systems. It is of interest that its main finding is that there is no single optimal approach to design and implementation. Context is essential and effectiveness depends on the right questions being asked and addressed at the right moment.

In terms of where this Government is currently at in addressing these critically important governance issues I can say that work on draft heads of a Bill to strengthen, modernise and reform the existing ethics framework are at a very advanced stage in the Department of Public Expenditure and Reform and it is hoped to bring proposals to Government in the coming weeks. While the amendments required are much broader than those provided for in the Bill before this House, the thinking behind certain of the proposals in the Bill will invariably have a bearing on them.

The intention is to refer the proposals to reform the ethics framework to the Oireachtas Joint Committee on Finance, Public Expenditure and Reform to request the joint committee's views. This will provide the joint committee with an opportunity to consult with civil society groups, advocacy groups and individuals with expertise in ethics. It will also enable the joint committee to provide input and to contribute to the development of the revised framework as envisaged in the Dail reform announced last September.

Turning attention to the Bill entitled the Public Service Management (Transparency of Boards) Bill 2014, I note that the central objectives of the Bill are: to preclude persons who serve on the board of a public body from being paid for their membership of that board; to ensure that persons who serve on the board of a public body will only be entitled to be employed or engaged by that public body in circumstances where they file a declaration with the Standards in Public Office Commission detailing payments received; and to ensure that persons who serve on the board of a public body will only be entitled to seek to be reimbursed for vouched expenses in circumstances where they file a declaration with the Standards in Public Office Commission detailing payments received. Expenses that are not vouched will not be reimbursed.

The Bill defines a public body as an entity that is wholly or partly funded directly or indirectly out of moneys provided by the Oireachtas or from the Central Fund or the growing produce of that fund and in respect of which a public service pension scheme exists or applies or may be made. The Bill includes subsidiary companies where the latter pension provision may exist. The list of bodies coming within the purview of the Bill would therefore include commercial State companies and non-commercial State bodies which are already come within the Ethics in Public Office Acts and the Standards in Public Office Act. The Bill also proposes to bring those not for profit organisations in receipt of public funding and having public service type pension schemes within its scope.

I would like to begin by making certain comments on the issue of the payment of fees to board members. This House will be aware that considerable work has been carried out by the Minister for Public Expenditure and Reform in reducing the levels of fees paid to individuals for participation on the boards of State bodies. Currently the fees payable to board members depend on the size and complexity of the State organisations they govern. In order to determine what level of fee is appropriate, State bodies are divided into four categories, depending on the pay of their chief executives. This rationale is regarded as being the fairest in terms of determining the appropriate fee payment to State board members. Overall, the fees have been significantly reduced in recent years. These fees were reduced by 10% in 2009 and, in the case of those bodies covered by the Financial Emergency Measures in the Public Interest (No. 2) Act 2009, were reduced by a further 10% in 2010. The current arrangements in relation to the payment of fees to board members is that they have been reduced significantly in amount in the period since 2009 and currently average in payment at €18,788 for board chairs and €10,421 for board members. In general, for fees to be payable to the chairperson or members of a board an enabling provision in the legislation governing the State body concerned is required. Such a provision typically specifies that members may be paid such remuneration, if any, that the sponsor Minister, with the consent of the Minister for Public Expenditure and Reform, may determine. It is the position that the payment of board fees is tightly controlled and monitored at central level.

Regarding public servants who are members of State boards, the one person one salary, OPOS, rule applies and fees are not payable to them in respect of their board membership. There is however an exception to this restriction in that worker directors on certain commercial State boards are for legal reasons required to be remunerated on the same basis as other board members in respect of such board representation. Since 2012 formal provision has existed to allow board members the option to choose to waive their fee payment and many do so, forgoing personal gain in the interests of the State.

The benefits to public spending of reducing State board fees have constituted but a small element of the financial contribution in the overall scheme of other remuneration reductions affecting public servants and can be said to have ensured a degree of solidarity in this regard. It would be erroneous however to assume that such fee reductions may in some way imply that the payment of fees does not have a place in the provision of board members' services to the State. For the most part, while the fees that are paid to board members could only be regarded as a disproportionately small level of recompense for the work that they undertake, such fees nevertheless enable the State to continue to access a wider pool of candidates for State board appointments with valuable private sector expertise that may otherwise be unavailable to it.

It is unclear as to whether this range of candidate would be available for board appointments were the board fee payment to be removed.

The proposal in the Bill to abolish the fee payment would represent a major departure from current practice. It would constitute a move which has the potential over time to have an adverse impact on the economic profile of board members available for such State board appointments. This is because the personal circumstances of the individual involved could, in the absence of a fee payment, determine whether they may or may not go forward for State board appointments. The abolition of the fee payment is not in the long term regarded as being supportive of ensuring boards are composed of suitably qualified candidates drawn from a wide range of social and economic backgrounds. In addition, and as already alluded to, there are certain legal constraints in regard to removing fees from certain board members such as worker directors appointed under the Worker Participation (State Enterprises) Acts. Accordingly, for the reasons that I have outlined, it is not considered to be in the best overall interest of State organisations for the Government to support this Bill on the particular measure of its proposal to abolish the payment of fees to State board members.

I turn now to those provisions of the Bill that ensure that persons who serve on the board of a public body will only be entitled to be employed or engaged by that body in circumstances where they file a declaration with the Standards in Public Office Commission detailing payment received, or that persons who serve on the board of a public body will only be entitled to seek to be reimbursed for vouched expenses in circumstances where they file a declaration with the Standards in Public Office Commission detailing payments received along with the requirement that unvouched expenses would not be reimbursed. In examining the call in the Bill for a personal declaration with SIPO, I think it would be useful to outline the current statutory arrangements for State board members in this regard.

The Standards Commission has a supervisory role under three separate pieces of legislation: the Ethics in Public Office Acts 1995 and 2001; the Electoral Act 1997, as amended; and the Oireachtas (Ministerial and Parliamentary Offices) (Amendment) Act 2001, which will be replaced from 1 July 2014 by the Oireachtas (Ministerial and Parliamentary Offices) (Amendment) Act 2014 regarding the parliamentary activities allowance. The function of the Standards in Public Office Commission under the Ethics Acts in so far as members of State boards are concerned relates to the disclosure of interests by State board members, guidelines for State board members on compliance with the Ethics Acts, and complaints and investigations regarding contraventions of the Ethics Acts or alleged specified acts within the meaning of the Ethics Acts by State board members.

State board members are required by the Ethics Acts to make statements of interests to an officer of the body determined by the Minister and to the Standards in Public Office Commission. Such a statement is required where the board member or a connected person, such as a spouse or child, has a material interest whereby they might seek to influence the board member to benefit themselves.

The supervisory role played by the Standards in Public Office Commission does not extend to the proposals set out in the Bill requiring board members to file a declaration with the commission detailing payments received in respect of work that may have been carried out by the board member on behalf of the organisation or reimbursement of expenses that are vouched. While it can be expected that the generality of expenses claimed by board members will be, for example, for travel and subsistence payments, it is noted that the Bill draws particular attention to those payments that might arise from the conduct of business by board members with their respective State organisation and which are not explicitly addressed in current legislative provisions.

Taking into account the current statutory provisions set out in the Ethics Acts in respect of the declaratory requirements of board members, and having regard to the proposals in the Bill in respect of widening the scope of such declarations to include the detailing of payments received by board members on a vouched basis, I can assure the House that the proposals in the Bill will be fully taken into account in the context of the development of legislation to put in place a revised ethics in public office framework, which I referred to earlier. While the Government will not be proceeding with this Bill due to the fact that its own Ethics in Public Office Act reform legislation is pending, it is nevertheless the position that certain of the proposals in the Bill will be closely considered in the context of drawing up a revised legislative framework in this regard.

Thomas Byrne (Fianna Fail)
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The Minister of State's speech is quite balanced except for the last paragraph where the Government and the Civil Service need to get with the programme. The Minister of State said, "While the Government will not be proceeding with this Bill". With all due respect to the Government, it is a matter for the Seanad and Senator Feargal Quinn as to whether the Bill is proceeded with. The Senator proceeded with Bills in the past that did not have Government approval or support. Senators must assert themselves and let the Government know their views even though we are delighted that the Minister of State is here. I am delighted with his balanced speech and agree with many of its aspects. Proceeding with the Bill, however, is a matter for the Seanad and my party supports the Bill. When Senator Quinn brings forward legislation, he does so in a genuine way to address specific problems. His legislation has a great record of success that I think has not been equalled by any Member. It is very hard as a Private Member to get a Bill through this House and the Dáil, but he has done so.

I am glad the Minister of State has said he will look at this Bill in the context of the Ethics in Public Office Act. Having said all that and having expressed our support for the sentiments and content of the Bill that Senator Quinn has put forward, I wish to raise some related issues that could benefit from being included in such legislation. The first relates to the appointment to State boards, which is the nub of this issue. I believe that if the system of appointments to State boards was completely open and transparent, and perhaps based on merit and public application, the public would not have as much of a problem with the payment of an allowance.

As has rightly been explained by Senators Quinn and Barrett, there is public odium and disquiet about the payment of an allowance due to the manner of appointment and the fact that these boards are seen as plum jobs for favourite supporters. That is the problem. If there were an open competition and people could apply for these jobs, I am not sure there would be much disagreement about paying members for their role.

Senator Quinn is right that there are many people who would be more than happy to carry out the role for nothing. The problem lies with the transparency of appointments to boards. I am not going to blame this Government for that but it has continued a tradition that has gone on since the foundation of the State. Some Ministers have made changes and I know Eamon Ryan, who was a member of the previous Government, began to make changes. Some appointments must, under statute, go through the relevant Oireachtas committee, which is a positive move. Under the previous Government, the position of member of the RTE authority was advertised, which is also a positive move. Transparency about appointments is the nub of the problem and is directly related to the issue raised by Senator Quinn, but I believe it to be a more serious problem.

I have one other concern that I discussed with Senator Quinn before this debate and it concerns the position of worker directors. Section 3 of Senator Quinn's Bill talks about transparency arrangements for board members being employed or engaged. I would not like to increase the burden on worker directors because they play a particularly important role. I know from reading the guidelines that they get paid the same as other board members, but that is not the case in all instances. Many people employed by the State do not get a payment for being a director, but that situation does not apply to worker directors for legal reasons. I would not like to put too much of a burden on worker directors because they play a very important role in State bodies, a role that should be recognised. I am sure that worker directors would have no problem with transparency and all the rest. It is my impression that they are not on a gravy train and work in the interest of the companies of which they are directors. That is their first duty but they are also there to represent their fellow workers. It is important to remember the good work that they do.

My party will support the Bill. I do not know whether Senator Quinn will put it to a vote. I am glad the Minister of State has indicated that the Bill will be looked at in terms of the ethics legislation that the Government is putting forward. However, the Minister has rejected the central premise of the Bill that board members are not paid fees. I hope the Bill has opened a wider debate on the issue. I would like to widen the debate a bit further in terms of the appointment of board members and how one gets on a board, but that may be a matter for another day.

I commend Senator Quinn on his outstanding record of legislation and legislative production in this House. Regardless of whether the Bill is accepted by the Government, all of it or many parts of it will probably find their way into Government legislation. The sentiments the Senator has expressed may well become the meon an phobail or common opinion and general consensus in regard to this issue. That is what may happen as a result of him putting forward the Bill. I thank him for doing so and we will support it if he does put it to a vote.

Tom Shehan (Fine Gael)
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I welcome the Minister of State to the House and congratulate Senator Feargal Quinn on bringing forward the Bill. My fear is that State boards would be made up of an elite group, probably from the same socio-economic background and more than likely would all come from Dublin. It is aspirational to believe that people, and there are great people on State boards, would give of their time for nothing. Many of the people I know are self-employed. They have a business background and give of their time to improve the State board that they represent. It is open to any member of a State board to forgo the remuneration. Given that a provision is already in place whereby one can forgo his or her remuneration, why is there a need for the Bill?

Senator Feargal Quinn comes from a business background. We have much in common but not on the same scale. The Senator is aware that to get the best in any organisation, one has to pay for it. I am sorry, but that is my firm belief. Were this restriction to be introduced, the number of people who would qualify and be interested and give of their time free of charge would be considerably reduced.

It is a positive development that the Minister of State has indicated he will take on board some parts of the Bill in forthcoming legislation. I reiterate that to get best, one has to pay the best. If the Bill was to be enacted, we would find that State boards would probably be made up of retired wealthy individuals. I do not think the socio-economic backgrounds of the whole country would be represented on State boards. As the vast majority of boards meet in Dublin, would it mean that people from Kerry, Cork, Mayo and Donegal would not serve on State boards because of the time involved and the fact that there is no remuneration package? I return to my initial point that to get the best, one has to pay.

Mary Ann O'Brien (Independent)
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I welcome the Minister of State and his officials. I congratulate Senator Feargal Quinn on bringing the Bill before the House. I spoke to him about this legislation before this afternoon. As we are all aware, as a country we are still hugely burdened with a terrifying amount of debt. Many of our citizens are unemployed, many have huge mortgages, there is a great deal of homelessness and a huge amount of suffering. As Senator Feargal Quinn said, we are asking that some sacrifices be made by the bright and the best. I take the Senator's point that if Senator Quinn wants the best, he pays for it. We all know that the payments made to those who serve on these boards are not large and the Bill allows for expenses. Whether one comes from Cork, Kerry, Donegal or Mayo, provision is made for expenses but it is one's time, expertise, skill and experience that is being sought.

When doing my research, I noted that it was the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, who put forward the idea of asking people to waive their fees. I remember the 2011 Global Economic Forum when a very brilliant, plain speaking man from Limerick, Mr. John Hartnett, who is busy on the west coast of America in the tech industry, suggested looking at the brilliant people in the diaspora. Many people who wanted to help in Ireland came forward and served on boards without being remunerated. I take the point that we want everybody. We want transparency and not just wealthy retired individuals. From my experience, many people who would regard it as an honour to serve on State boards and would be willing to give of their time.

While preparing for the debate, I came across a survey from MERC Partners which was published in March 2013. Some of the results contained in that document brought home to me something which I felt was the case in any event. However, the situation appears to be more grave and warrants discussion and proves why Senator Feargal Quinn's Bill is timely and the Government should consider accepting it. The survey found that just 80% of respondents would be happy to put themselves forward for a position on a State board with the remainder fearing negative publicity or being unlikely to be successful without political affiliations. We should consider this statement. To my mind, that means there is a good chance that currently we are not attracting the best people to our State boards. Given that the MERC Partners survey was conducted among the country's leading executives and directors, the statistic that only 20% of respondents would be willing to serve on State boards is a matter of concern. Since the Government came to office, one Minister has appointed 311 people to State boards, only one fifth of whom were selected from the Government's much heralded public advertising process. That is a worrying statistic.

An issue I focused on, and the Minister of State referred to it in his contribution, is that the Bill defines "public body" as an entity that is wholly or patly funded directly or indirectly out of moneys provided by the Oireachtas or from the Central Fund. I refer to the not-for-profit charity sector and some of the terrible events that have unfolded in the past ten months and the damage done to the wonderful volunteers around Ireland who give of their time to do so much work for vulnerable people. I ask the Minister of State to consider the Bill in respect of this particular area. Any charity, not-for-profit entity or commercial entity that is funded by the State should be treated today like a State board. We all want complete transparency. We want to see people with the skills and strategies needed for these charities, not-for-profits or the commercial entities that are afforded funding by the State. As well being transparent, the selection process must be objective, impartial and fair. We are seeking the right mix of skills, knowledge and expertise. There is no doubt that the dreadful publicity is all about money and what people are being paid and if they gave service to the board. If those people had been paid nothing, there would have been nothing for the newspapers to write about. This is a difficult issue about which I have thought long and hard but there are so many people who would give of their time, for example, a day a month which involves much reading and preparation.

It is a significant problem which has been highlighted by the Committee of Public Accounts. I thank the Minister of State for his contribution and I am pleased that heads of a Bill will be prepared. I ask him to please consider Senator Quinn's Bill because the question of payments to members of boards can be very problematic as we have seen in recent years.

Aideen Hayden (Labour)
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I welcome the Minister of State to the House and I thank Senator Quinn for presenting this Bill. I do not think anyone doubts his bona fides in this matter.
Membership of boards generally, whether State boards or otherwise, is becoming a fraught issue. This is the case in particular in the sector with which I am most familiar, the NGO sector, which as Senator O'Brien said, has been rocked by recent revelations of poor corporate governance and the salaries paid. State boards have been the subject of much media criticism and accusations that parties in power, whether on this side of the House or the other side, have been appointing people through cronyism and jobs for the boys.
Senator Quinn's Bill deals with an important issue. I have served on a State board and it has been my personal experience that the vast majority of people who serve on State boards do so out of the highest sense of public duty and a desire to give something back to society and this should be acknowledged. I was disappointed when doing my research that there was extensive media coverage on the composition of State boards but not one report referred to the excellent service given by many people to the State through their performance as members of State boards. No one can argue that being a member of a State board will make one rich or famous, at least not famous in the way that one would like to have fame. As the Minister of State pointed out, the average fees paid to members of State boards are very modest, at €18,788 for a chairman of a board and €10,421 for an ordinary member.
I am very concerned at what Senator Quinn is proposing because I do not want a society ruled by the great and the good. We have had enough of that, in my opinion, in the past. If a situation is created where the only people who can serve on State boards are those who are either retired or independently wealthy or in many instances, are former civil servants, that is not a situation that we want in this country. Senator Quinn's proposal is that aside from claiming out-of-pocket expenses, nobody is entitled to any remuneration and I wish to deal with that point. What about a self-employed person such as an architect, for example? We all know that the construction sector has gone through very tough times. For example, what is the situation for an architect who is offered an appointment to An Bord Pleanála? Nobody in that situation could afford to take up that appointment and that is the reality. I do not favour that situation. In my view, State boards represent the people and as such, anybody on a State board must represent the people and therefore, State boards have to represent an inclusive society which means representing people from every economic profile. It is critical that in order to participate we are not asking people to effectively subsidise the State which is what would happen. If we do not give recognition to the time that people spend on State business it is a fake virtue to encourage people to put themselves forward and not accept remuneration. Unfortunately, Senator Quinn's Bill goes too far, in my view. It does not encourage access to participation on State boards and it does not make way for people who do not have the resources to effectively do what I am suggesting which is to subsidise the State.
I do not think the kind of fees paid to people on State boards merit derision because they are very modest. I will move on to refer to some international research on this issue. I cite the OECD paper, Corporate Governance Working Papers No.2, authored by W. Richard Frederick. He deals with the issue of remuneration and states:

Indeed, board members are motivated by their sense of duty and loyalty to country and the SOE, and the prestige of a board membership. However there are also indications that board member compensation sometimes borders on the limit of Herzberg’s “hygiene level”, i.e. that board members are not willing to put in quite as much effort in an SOE when the work is equally as demanding and the remuneration is less than in the private sector.
...The ability to find and motivate talent is critical...ultimately remuneration has to be regarded as fair and that the use of compensation to get the best people onto state boards is a critical factor.

I do not believe the existing level of remuneration is in any way excessive. I also believe that it is a good feature of all director appointments that there is some consideration paid to reflect the significance of the responsibility being taken on. Of course - [a view reflected by others] - it is open to any individual to voluntarily forgo payment and this should be a personal choice.

The Working Paper concludes that the key success factors for the public ownership function in enhancing SOE boards include a shared vision for the governance reforms that are to be achieved; clearly communicated policies and objectives to SOEs; abstaining from ad-hoc interventions in SOEs once their objectives have been defined; well-designed training programmes for board members as well as the government ownership representatives; enhanced channels of communications between CEOs, boards and the ownership function; and increased transparency around the conduct of SOE boards, management and the government ownership function.

Paschal Mooney (Fianna Fail)
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Like my colleague, Senator Byrne, I welcome Senator Quinn's initiative. I welcome the Minister to the House and I thank him for a very balanced response to Senator Quinn's submission. The Irish Timespublished a survey about a year ago across a variety of interesting questions. I refer to one of the questions which I will paraphrase. It asked the respondents to say in their opinion that since 2009 do they believe that politicians' pay, (a) increased (b) decreased (c) stayed the same. The overwhelming number - well in excess of three quarters of the respondents - said they believed that politicians' pay had increased. We know different, of course. Right across the entire panoply of representation in both Houses, from the very bottom to the very top and from the top to the bottom, Ministers, Taoisigh, Ministers of State, Deputies and even lowly Senators, have experienced something in the region of more than 20% reduction in their salaries. Also, we are the only group in the public service which has had its long-term increments abolished. There is a great deal of talk at the moment among the trade unionists and the trade union movement about the amount of money they received in recent times as part of the increment dimension to their pay. Ours disappeared, literally overnight, by a decision of a former Minister for Finance but I have no doubt that the current Minister would have done exactly the same in the circumstances. While I applaud Senator Quinn for his sincerity and for his motives in bringing forward this Bill, from his own remarks and those of Senator Barrett, somehow the implementation of these measures will restore public confidence and a perception that the public service is not coining it or milking it, I wish that in the real world that were true.

As one Deputy told me after the most recent cuts in our salaries, if Members of this House or the other House were to stand on Kildare Street with a brush and shovel and tell people they were not receiving any money, members of a cynical public, fuelled by an equally cynical media, would ask us whether we would be willing to pay to serve as Members of the Oireachtas. This general cynicism is not the result of the most recent economic crash but dates back to the year dot. Politicians everywhere are viewed as somehow milking the system and this perception will never change. I wish it would change and I hope the measures proposed in the Bill will go some way towards achieving that.

The nub of the problem, to which previous speakers alluded, is the following comment by the Minister of State: "For the most part, while the fees that are paid to board members could only be regarded as a disproportionately small level of recompense for the work that they undertake, such fees nevertheless enable the State to continue to access a wider pool of candidates for State board appointments with valuable private sector expertise that may otherwise be unavailable to it." This sentence caught my attention and that of other Senators. There is an old saying that if one pays peanuts, one gets monkeys. As the reports cited by Senator Hayden bear out, human nature dictates that some form of incentive is necessary. Even among the wealthy and the great and the good, we find that more than three quarters of members of the Institute of Directors in Ireland are unwilling to serve on State boards without some form of remuneration.

I have mixed feelings about the Bill. While I applaud and support what Senator Quinn is doing and understand his motivation of restoring public confidence in the system of public governance, I also agree with previous speakers, including Senator Hayden, that the principal issue is the manner in which appointments to State boards are made. Public cynicism has evolved over the years as a result of the common practice of successive Administrations appointing their own people, either on taking office or before handing over power.

I look forward with great interest to the heads of the Bill to which the Minister of State referred. I hope he will consider the many other matters raised by Senator Quinn. The Government refers to the need to have access to a wide pool of qualified individuals. The previous Government initiated a process that culminated in 900 elected members of local authorities being precluded from sitting on State boards. The Minister of State should consider the level of expertise that is available across all parties and none and from every walk of life. Local authority members mirror and reflect the real Ireland as opposed to an elite group.

Senator O'Brien referred to the Farmleigh forum of 2011 at which it was suggested that certain people should serve on State boards. I would love to know how many of the individuals in question have since been appointed to a State board and how many declined an offer of appointment. While I recall applauding the idea at the time, I have not heard anything since the offer was made. It would be interesting to establish how many members of the diaspora are serving on State boards. The bottom line is that people must receive some form of remuneration.

Senator Quinn's Bill does not refer to the role of chairpersons of boards. While board members may attend a monthly meeting, the role of chairperson is much more time consuming. Having served as the chairperson of Fáilte Ireland in the north west, I am aware of the time required for such positions and the small amount of money involved. I did not take the position for the money on offer as I was delighted and honoured to be given the role at the time. While I was informed I would not be paid, I received a modest allowance which was subject to taxation. It should be noted that the average figures provided by the Minister of State are gross rather than net, which means the average allowance of €18,000 works out at approximately €10,000. One can also deduct 50% from the other figure to which he referred. As such, the net cost to the Exchequer is small.

Perception was the factor that motivated Senator Quinn in introducing the Bill. As one says in politics, perception is everything. From that point of view, the Senator has done a good day's work. If the Government cannot accept the legislation, as presented, I ask that it give serious consideration to certain aspects of the Bill.

My view echoes the sentiment expressed by Senators Sheahan and Hayden on the need to provide some form of incentive. The Minister's statement appears to indicate that the Government shares our view that busy people who are prepared to give their time to the State must be given some form of incentive. While I have no doubt that people would still be prepared to give to the State if no money was offered, that is not the issue. The issue is that we need to have the broadest possible pool of expertise available. Many decent, honourable people who would give their time are not wealthy and do not belong to the business elite and, therefore, need some form of recompense for the work the are prepared to do. The payment of expenses does not meet that requirement because expenses have been drastically cut. I know from speaking to people that the expenses provided by some boards do not compensate for the amount of time and effort they invest.

While we have all noted the flaws in the legislation, Senator Quinn's objectives are laudable and morally correct none the less. If the Bill helps to restore public confidence in the system of governance and in parliamentarians and members of State boards, I would welcome it on that basis.

David Cullinane (Sinn Fein)
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I welcome the Minister of State and commend Senator Quinn on introducing the Bill and providing Senators with an opportunity to discuss this important issue. In January 2013, several news outlets ran with the story that the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, had appointed Mr. Noel Ward, a former constituency organiser for the Minister, to the board of Ordnance Survey Ireland. Mr. Ward was appointed although he did not apply for the position following a public advertisement by the Department. The position to which he was appointed paid €7,695 per annum for attending board meetings. As Senators are aware, this practice has taken place under the watch of this Government and previous Governments.

I concur with Senator Mooney's general point on remuneration, namely, that the vast majority of people would serve on boards, irrespective of whether financial rewards were available. Sometimes, however, money makes a difference. One need look no further than councils up and down the State to see the way in which membership of strategic policy committees and positions of mayor and deputy mayor are being carved up. When a role involves money, it will be contested whereas there is much less contention when positions do not involve money. Payment has an impact and to argue that money is not an issue is to bury one's head in the sand.

Fine Gael and the Labour Party promised in their pre-election manifestos to end the culture of political cronyism in State appointments. Unfortunately, political appointments persist and the Government has failed to tackle other State board governance issues. The Central Remedial Clinic scandal is a good example of what is wrong with the system. The CRC case highlighted how loose corporate governance of boards can result in potential financial and regulatory fallout. Similarly, the position at Rehab, where members of the public waited for weeks to discover the salary of the then chief executive, Angela Kerins, directors and other members of the board, highlighted a lack of transparency in agencies in receipt of public money. I hope we will move in a new direction in light of what occurred in the case of Rehab.

The Rehab scandal highlighted a number of bad practices on boards. We saw, for instance, that there was no proper appointments process in place despite the fact that the Health Service Executive had emphasised that it did not want appointments made without due process. Brian Conlan was a former member of the board of the Central Remedial Clinic which signed off on a highly dubious €742,00 golden handshake for Mr. Paul Kiely when he retired. When the Committee of Public Accounts inquired as to the reason this payment had been allowed, Mr. Conlan denied knowledge of any of the details and, when questioned further, stated he was a member of numerous boards - I believe the figure was 12 - his attendance at CRC board meetings was infrequent and his interest was passive. Mr. Conlan sat on the CRC board to do a job. This case raises the question as to how one individual could be on 12 different boards and give each of them his or her full attention. It is not possible to do so and the case highlights that certain people have been appointed to multiple boards, not on the basis of a particular skill but for reasons of political patronage, favours and so forth. The CRC case is illustrative of a wider malaise in the system.

There is a process for making public appointments, and it is important to acknowledge that the Government has improved that process for the better. The problem, however, is that Ministers have routinely flouted it and, in so doing, have undermined the very process they sought to enhance and the boards to which those appointments were made. In 2010, TASC produced a report entitled Mapping the Golden Circle which identified a directors' network of 39 individuals who were members of at least two boards across 33 of the 40 boards included in the study. The revelation that Brian Conlan, the former chief executive officer of the Central Remedial Clinic at one time, was a member of 12 boards, including a number of public boards, may be startling but is not surprising. It does beg the question, however, of how many boards one individual can sit on while still being able to give each his or her full attention. This is particularly a problem when people sit on both public boards and private boards, where there could potentially be conflicts of interest, some of which go undeclared.

While Fine Gael and the Labour Party railed and rallied loudly in opposition against Fianna Fáil's insider system of appointments, they have, since entering government, taken up where the last Administration left off. Indeed, more than 60 appointments to State boards in the three years since the Government took office have not been made in a fair way. Ministers have essentially ignored applications submitted through the public advertisement system established by the Government. For example, only 15 of the 64 individuals appointed to State boards under the auspices of the Minister for Jobs, Enterprise and Innovation applied through this advertisement system. Of the 40 who applied for positions on the board of the Health Information and Quality Authority, HIQA, only one was appointed through this process. The Minister for Health appointed 52 people to State boards early in 2013, including a Fine Gael councillor who was appointed to the board of St. James's Hospital and a former party programme manager who was appointed to the board of HIQA. A former Fine Gael councillor from my own city of Waterford was appointed to the board of Irish Water in what was clearly a political appointment by the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, who is a personal friend of this individual. Meanwhile, in his first two years in office, the Minister for Education and Skills appointed just five of the 190 members of the public who applied to sit on the three education boards under his remit. None of the 49 who applied through the Public Appointments Service to sit on the board of Léargas, for instance, was deemed appropriate to be appointed by the Minister. When the Institute of Directors in Ireland undertook a survey of appointments to State boards in 2012, it found that almost three quarters of the candidates for such positions whom they interviewed believed the process of appointment was not fair and transparent.

The Government must begin the process of addressing this issue by compiling a database of all commercial and non-commercial State agencies, boards, board members, competencies and remuneration. This work must come under the auspices of the Department of Public Expenditure and Reform. Six years after the financial crisis, the absence of Government action in this area is allowing problems to continue in State boardrooms. It is in the interests of all political parties and everybody in the political system to deal with this issue once and for all. I have already acknowledged the positive changes the Government has made and its improved performance in comparison with that of its predecessor. We still, however, have a long way to go. We support Senator Quinn's Bill.

Catherine Noone (Fine Gael)
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I welcome the Minister of State, Deputy Ciarán Cannon, and thank Senator Quinn for drafting this legislation. The Government has pursued a wide-ranging political reform programme aimed at delivering open government underpinned by a transparent, efficient and effective public sector, which is vital to rebuild trust in government and the institutions of the State. Notwithstanding his criticisms of aspects of the Government's performance, I welcome Senator Cullinane's acknowledgment of the efforts that have been made in this regard. Reforms are set to include an overhaul of the ethics legislation aimed at supporting and promoting ethical conduct and creating an environment in which ethical issues and conflicts of interest are managed effectively and corrupt and unethical conduct is severely discouraged. It is important, now more than ever, that we continue this work of reforming politics to bring about transparency, accountability and honesty. At the same time, we must work to reform the public sector in the same way, bringing to the fore the principles of accountability and honesty. I commend Senator Quinn on crafting the Bill with that intention in mind.

The legislation proposes to bring an end to the practice of paying those who serve on the boards of public bodies and similar entities. This seems like a fair move in many cases, as long as reasonable expenses are paid to persons who are out of pocket. However, there are some boards where such an arrangement may not be practical due to the large workload and frequent meetings. Additional provision should be made to accommodate that reality.

The Bill requires that the employment of a person by a public body be conditional on his or her filing a declaration with the Standards in Public Office Commission, SIPO. Aside from the additional administrative work for the commission, I see no reason to oppose this reasonable proposal. In addition, the Bill requires that the payment of expenses to persons who serve on the boards of public bodies must likewise be conditional upon their filing a declaration with SIPO. Again, this imposes an additional administrative burden but should pose no real difficulties. It is my understanding that the list of bodies coming within the purview of the Bill would include commercial State companies, non-commercial State bodies and profit organisations in receipt of public funding and having public service-type pension schemes.

Although I agree with some aspects of the Bill, it must be acknowledged that reform in this sector is already under way. The current arrangements in regard to the payment of fees to board members has seen a significant reduction in such fees in the period since 2009, with current payments averaging at €18,788 for board chairmen and €10,421 for board members. In the case of public servants who are members of State boards, the one person, one salary rule applies. In other words, fees are not payable to these individuals in respect of their board membership. In addition, since 2012, formal provision has existed to allow board members the option of waiving their fee payment. Many have chosen to do so, forgoing personal gain in the interest of the State.

I agree, however, with Senator Sheahan's observation that we do not want a situation where board membership is dependent on a person's wealth or personal circumstances such that it would become a somewhat elitist activity. I suggested during the debate on the referendum to abolish the Seanad that membership of the House should be voluntary. That debate is over, but I do take the point that such prescriptions have the potential to result in elitism and, in some cases, a Dublin-centric bias. The retention of fees would enable the State to continue to access a wider pool of candidates for State board appointments, including those with valuable private sector expertise. I echo the comments made by Senators Sheahan and Hayden in this regard. The proposal in the Bill to abolish the fee payment represents a major departure from current practice and has the potential over time to have an adverse impact on the economic profile of persons available for such appointments. Moreover, there are legal constraints applying to the withdrawal of fees from certain board members, including, for instance, worker directors appointed under the Worker Participation (State Enterprises) Acts.

That said, certain aspects of the proposals contained in this Bill should be given close consideration in the context of drawing up a legislative programme. I applaud Senator Quinn for his efforts in bringing them forward.

Feargal Quinn (Independent)
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I thank the Minister of State and colleagues for giving such close attention to these proposals. It has been a very interesting debate. Sometimes, in bringing forward legislation, one's real aim is to encourage and facilitate changes in the law. The Bill itself might not be accepted by Government, but something broadly similar, one hopes, might become law in due course. In that regard, I welcome the Minister of State's assurance that while the Government will not proceed with this Bill, its proposals will be fully taken into account in the context of the development of pending legislation to put in place a revised ethics in public office framework.

He said in conclusion, "While the Government will not be proceeding with this Bill due to the fact that its own Ethics in Public Office Act reform legislation is pending, it is nevertheless the position that certain of the proposals in the Bill will be closely considered in the context of drawing up a revised legislative framework in this regard." I think that that will bring some satisfaction to all of us who have been involved in the discussion today.

We have had much input into the debate. Senator Barrett referred to people who serve on various boards, whether they are in hospitals, schools or elsewhere. They do that without pay; they do not do it for the purpose of pay. Senator Byrne talked about the need for change, particularly in how we approach appointments. He brought up the question of worker directors. Clearly, that has to be considered seriously.

I thank Senator Sheahan for explaining his concerns. I am not sure that I quite accept his concern that only wealthy Dublin retired people would attend. If expenses are being paid, it does not matter where one lives. However, I understand his concern. That concern was expressed also by Senator Hayden, who talked about the need to encourage participation. Senator Mary Ann O'Brien placed great emphasis on transparency, particularly in appointments to State boards. We have to do something about that. I know that efforts have been made in that area.

Senator Mooney talked about what was morally right and logical. He has had the experience of being a chairman on a State board. Senator Cullinane talked about the lack of standards in appointments to State boards, which has come up in our discussion of the Bill today. Senator Noone spoke about finding a way of achieving a wider range of candidates and expressed concern that that might not happen if there was no salary for board members.

This has been a useful discussion. I was helped a great deal in putting the Bill together by somebody who has helped me in the past, Brian Hunt. I think that the Bill will give rise to discussion. On a number of occasions in the past, I have introduced Bills that became law. I have also introduced Bills which did not become law but which became law in a different manner shortly afterwards. I thank everybody who has been involved in the discussion, in particular the Minister, and suggest that we adjourn the debate at this stage in the hope that it will encourage the Government to grab hold of these matters, particularly on the basis that the Minister has said that certain of the proposals in the Bill will be closely considered in the context of drawing up a revised Bill.