Pearse Doherty (Donegal South West, Sinn Fein)
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Question 38: To ask the Minister for Finance if he will list those current members of the Bank of Ireland executive team and committee who were in place prior to the banking guarantee; if he will provide a rationale for the reason these persons are still in position in view of his statement in April 2011 indicating that all executive team and committee members from the pre-banking guarantee period would be removed as part of the restructuring of the banking system; and if he will make a statement on the matter. [9953/12]

Michael Noonan (Limerick City, Fine Gael)
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As the deputy is aware, in response to the Nyberg report and with regard to the restructuring of the banking sector, I stated that: "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 should apply to both Executive and Non Executive Board members and provides a process to ensure a smooth succession of incumbent board members who were in place before September 2008. I would expect this succession to be substantially completed by early 2012, and will use my powers as shareholder to affect such changes if necessary".

Across the financial institutions covered by the Credit Institutions (Financial Support) Act 2008, only 4 of the 74 board members in place in September 2008 remain in place. Only two of the fifteen board members of Bank of Ireland as at 30 September 2008 are current board members of the bank, Mr Richie Boucher and Mr Jerome Kennedy. Furthermore pursuant to an RNS communication issued by Bank of Ireland dated 23 December 2011, Mr Kennedy has indicated his intention to retire as a non executive director at the conclusion of the next Annual General Meeting.

I also stated that:

"steps would be taken to ensure that the skills and competence levels of senior managers are fully adequate to the demands of the current situation and the planned future of the Irish banking system".

The following table shows the very considerable change to the senior management team in Bank of Ireland as at 30th September 2008 and as at February 2012:

As previously announced, the Central Bank is reviewing the position of executive and non-executive directors of covered institutions that received state support and who are remaining in director posts after 1 January 2012 to decide whether or not an investigation into any of those persons might be appropriate.

The Central Bank Reform Act 2010 became operational on the 1st December 2011 when the Central Bank prescribed regulations into law setting out those functions ("controlled functions") which would be covered by the Act, and a smaller subset of controlled functions ("pre-approval controlled functions" or "PCFs") which will require the prior approval of the Central Bank before an appointment can be made to them.

The Central Bank will fulfil its functions under the Act by processing applications for approvals to all PCFs in all regulated financial service providers from 1 December 2011. The Central Bank may refuse to approve a proposed appointment to a PCF role where it is of the opinion that the proposed appointee is not of such fitness and probity as is appropriate to perform the relevant function. Where the Central Bank refuses to approve a proposed appointment, then a regulated financial service provider may not appoint the person to the role.

Further, the Central Bank as part of its role in the on-going supervision of the financial services sector, including the banking industry, may from time to time consider that there is reason to suspect the fitness and probity of any person performing a controlled function and may commence an investigation into that person. The existence and progress of such investigations are confidential and details of such investigations may not be disclosed by the Central Bank. As previously announced, the Central Bank is reviewing the position of executive and non-executive directors of covered institutions that received state support and who are remaining in director posts after 1 January 2012 to decide whether or not an investigation into any of those persons might be appropriate. This process provides opportunities for persons to make representations to independent decision makers appointed by the Central Bank. The Central Bank does not comment on individual cases.

All assessments of fitness and probity of persons being proposed to PCF roles, and of persons performing controlled functions are made with respect to the criteria set out in Section 25(3) of the Act and a Code issued by the Central Bank under Section 50 of the Act entitled "Fitness and Probity Standards (Code issued under Section 50 of the Central Bank Reform Act 2010).