Pearse Doherty (Donegal South West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

228. To ask the Minister for Finance if he will put before Dáil Éireann any job description, advice, guidance given to Alan Dukes upon his appointment as a public interest director in Anglo Irish Bank in December 2009. [34329/13]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The legal position is that any director appointed to the board of the covered institutions whether under the Credit Institutions (Financial Support) Scheme 2008 or otherwise is subject to the requirements of company law in relation to the discharge of their responsibilities as a company director. As such, the director is legally bound to act in what he or she believes are the interests of the separate legal entity that is the institution itself. These are the directors so called fiduciary responsibilities. To address the scope for actual and perceived conflicts between the fiduciary duties of the directors of financial institutions under company law and the wider public interest in circumstances where those institutions have received financial support from the State, legal clarity, not just to the role of the public interest director but to that of the entire boards of those institutions, was provided under Section 48 of the Credit Institutions (Stabilisation) Act 2010. It provides that the overriding duty of directors of the covered institutions relates to the public interest as set out in Section 4 of the CISA Act.

Section 4 of the Credit Institutions (Stabilisation) Act 2010 states: 4. The purposes of this Act are—(a) to address the serious and continuing disruption to the economy and the financial system and the continuing serious threat to the stability of certain credit institutions in the State and the financial system generally,-(b) to implement the reorganisation of credit institutions in the State to achieve the financial stabilisation of those credit institutions and their restructuring (consistently with the state aid rules of the European Union) in the context of the National Recovery Plan 2011 - 2014 and the European Union/International Monetary Fund Programme of Financial Support for Ireland,-(c) to continue the process of reorganisation, preservation and restoration of the financial position of Anglo Irish Bank Corporation Limited begun with the Anglo Irish Bank Corporation Act 2009,-(d) to continue the process of preservation and restoration of the financial position of building societies through the issue of special investment shares under section 18 (1A) of the Building Societies Act 1989,-(e) to protect the interests of depositors in credit institutions,-(f) to address the compelling need—(i) to facilitate the availability of credit in the economy of the State, (ii) to protect the State’s interest in respect of the guarantees given by the State under the Act of 2008 and to support the steps taken by the Government in that regard,(iii) to protect the interests of taxpayers,(iv) to restore confidence in the banking sector and to underpin Government support measures in relation to that sector, and (v) to align the activities of the relevant institutions and the duties and responsibilities of their officers and employees with the public interest and the other purposes of this Act,- (g) to preserve and restore the financial position of a relevant institution, and- (h) to empower the Court to impose reorganisation measures through orders made in reliance on the CIWUD Directive.

I am satisfied that with twenty years’ experience in politics, four Ministerial portfolios and three and a half years as Leader of the Opposition, Mr Dukes had reasonable experience to assess what was in the public interest.

Pearse Doherty (Donegal South West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

229. To ask the Minister for Finance if job descriptions were provided to public interest directors as they were appointed to the banks; if they underwent interview procedures or were appointed; the person who made the decisions about their appointments; and if they are reviewed in their roles and how frequently. [34330/13]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As I have stated many times before, the primary duty and responsibility of the public interest directors as well as all the other directors is to ensure that the institution on whose board they serve is run properly and appropriately. They serve on many Bank committees as well as the Boards themselves and their breath of experience brings a deeper and wider knowledge base and understanding to all the Banks which they serve. Our stated policy is to get the Banks fully functioning and run on a commercial, cost effective and independent basis to ensure their value as an asset to the State. The public interest directors have an essential role to play in assisting our aims.

Of course, the legal position is that any director appointed to the board of the covered institutions whether under the Credit Institutions (Financial Support) Scheme 2008 or otherwise is subject to the requirements of company law in relation to the discharge of their responsibilities as a company director. As such, the director is legally bound to act in what he or she believes are the interests of the separate legal entity that is the institution itself. These are the directors so called fiduciary responsibilities. To address the scope for actual and perceived conflicts between the fiduciary duties of the directors of financial institutions under company law and the wider public interest in circumstances where those institutions have received huge financial support from the State, legal clarity, not just to the role of the public interest director but to that of the entire boards of those institutions, was provided under Section 48 of the Credit Institutions (Stabilisation) Act 2010. It provides that the overriding duty of directors of the covered institutions relates to the public interest as set out in the Act. This recognises the fundamental role that all public interest directors serve.

As the Deputy will be aware this Government has not appointed any public interest directors to the boards of the Banks since taking office. I understand that in addition to their other experiences, the public interest directors currently on the boards of the covered institutions were nominated by my predecessor on the basis of the Minister’s assessment of their civic mindedness and sense of where the public interest lies to inform their view of what was in the institution’s interest. I am advised that the Department of Finance held generic briefing sessions on the CIFS scheme in general and on the fiduciary duties of non-executive directors for individuals on the panel from which the covered institutions appointed public interest directors but that there was no job description or scope of work set out for them as this was determined under company law. In addition, for this reason public interest directors did not have a formal reporting relationship to the Minister or to the Department of Finance.

The public interest directors serve at Ministerial request and it is the prerogative of the Government to request them to step down or be replaced.

The public interest directors at Bank of Ireland do not have a specified time in office as stated in response to PQ 49476/12. The same situation applies to the public interest directors at AIB. In PTSB, there are currently no public interest directors as they stepped down at the AGM in May 2013.