Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 86: To ask the Minister for Finance the reason skills, competence and qualifications in the area of corporate governance were not included in the public advertisements for positions on the board of the State-owned banks despite failures in corporate governance being highlighted as contributing to the banking collapse here; and if he will make a statement on the matter. [13791/11]

Michael Noonan (Limerick City, Fine Gael)
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I wholeheartedly concur with the Deputy that failure at a board and individual director level of corporate governance standards played a major factor in the banking crisis. This is supported by the findings of the various reports commissioned on the subject. To strengthen oversight in this area, the Central Bank of Ireland has issued a mandatory Corporate Governance Code for Credit Institutions and Insurance Undertakings effective from 1 January 2011, subject to certain transitional procedures.

The code defines corporate governance as "procedures, processes and attitudes according to which an organisation is directed and controlled". It imposes minimum core standards upon all credit institutions and additional requirements on entities designated as major institutions. In addition, the Bank has issued a consultation paper (No. 51) – The Fit and Proper Regime in Part 3 of the Central Bank Reform Act 2010 – which seeks to address how new legislative powers relating to new and existing appointments, at individual executive and non-executive level mainly, will be implemented with a proposed effective date of 1 September 2011. The advertisement for the positions specified that all appointments would be subject to regulatory approvals.

While the competency of corporate governance was not specifically listed in the advertisement, headings such as risk management and business management – integral components of corporate governance - were mentioned. Likewise, considerable experience in financial services was cited which, by definition, would have to entail exposure to corporate governance requirements. The listing was not intended to be exhaustive. It is my intention and that of the Government to ensure, through these processes and procedures, that individuals of high calibre and competency are available for selection for appointment to the boards of the covered institutions. The Deputy will see from this reply that the issue of corporate governance will play a pivotal role in any prospective appointments.