Shane Ross (Dublin South, Independent)
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Question 113: To ask the Minister for Finance if he is satisfied with the decision of AIB public interest directors to approve the payment of a €3 million compensation package to the last chief executive (details supplied) of AIB; if he intends to support their continuation in office; and when he intends to make further appointments to the boards of banks. [9900/11]

Michael Noonan (Limerick City, Fine Gael)
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The Taoiseach has already made clear to the House the Government's very serious concerns regarding the payments made to the former Managing Director of the bank, particularly in light of the huge commitment of public resources made to support the bank and the public interest obligations which arise from that support. My officials are investigating a number of issues relating to the circumstances in which these payments were approved by the Board and made to the Managing Director. The Deputy will, I hope, appreciate that in order to ensure that these investigations are not prejudiced in any way I do not wish to say anything further on these matters at this stage. However, I will of course advise the House of the findings of this process in due course. I also wish to advise the Deputy that following a request from my Department the National Treasury Management Agency, which has legal responsibility for managing the State's shareholder relationship with the banks, has recently written to all the covered institutions in requesting that they undertake a review of remuneration practice, that they have further discussion with the Department of Finance ahead of any commitment to additional redundancy payments, and that the bank does not commit to further termination payments until after the review is completed. An analysis of severance entitlements has also been requested. In addition, the Deputy will be aware that in my statement on the Nyberg Report in this House on 20 April 2011, I set out a number of measures designed to strengthen Bank boards and bank management. These measures provide that the Chairman of each institution provides me and the NTMA with a Board Renewal Plan. Each institution will also be asked to provide a Management Renewal Plan. The Board Renewal Plan will set out for each institution the steps to ensure that the skills and competence levels of board members are fully adequate to meet the demands of the current and future banking system. In this regard, a programme of rotation of board members, commencing with board members appointed before September 2008, will be expected to be part of the plan. This will provide for a smooth process which will ensure the succession of incumbent board members who were in place before September 2008. I expect this succession to be completed by 2012.

Finally, my Department recently placed advertisements in the national papers seeking expressions of interest from suitably qualified persons for inclusion among those to be appointed or nominated to Boards of Directors of Banks. This gives all persons who are interested in and qualified to act as Directors the opportunity to advise me of their interest. The advertising for expressions of interest should ensure a high calibre field from which Directors may be chosen and makes the process more open and transparent. It is part of the commitments given in the Programme for Government to re-structure bank boards and replace directors who presided over failed lending practices. The closing date for receipt of expressions of interest is Thursday 12 May.