Aindrias Moynihan (Cork North West, Fianna Fail)
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210. To ask the Minister for Finance the number of the current board members of a bank (details supplied) who have been appointed to represent the public interest; and the full extent of reporting between such board members and the Government and-or its representatives. [36667/17]

Aindrias Moynihan (Cork North West, Fianna Fail)
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211. To ask the Minister for Finance the number of the current board members of a bank (details supplied) who have been appointed to represent the public interest; and the full extent of reporting between such board members and the Government and-or its representatives. [36668/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 210 and 211 together.

Currently, there is one State nominated director on the board of each of AIB and BOI.

As the deputy will be aware, the State has rights to appoint directors as a significant shareholder in the banks and not just public interest directors appointed under the guarantee schemes. The rights for the State to appoint Public Interest Directors to the boards of the Covered Institutions were derived from the terms of the guarantee schemes introduced in 2008 and extend over the period of the guarantee. The last of the guaranteed liabilities are due to mature between now and Spring 2018 and as such I do not expect to make any new appointments of Public Interest Directors to the boards of the banks. 

Going forward however, the State does have the ability to appoint directors to the banks in which it has large equity ownership positions. So in line with the commitment in the PPG, officials in my Department are currently reviewing options in relation to the appointment procedures for bank directors having due regard to distinct differences which exist from appointments to other State boards, not least the requirements of the Central Bank/SSM Fitness and Probity Regime and the requirement to have a broad set of expertise relevant to large regulated entities in an ever more complex regulatory environment.

In terms of reporting, the legal position is that any company director regardless of whether or not they are a State nominated director is subject to the requirements of company law to act in what he or she believes to be the interests of the company to which they are appointed. These are the director’s fiduciary duties which are owed to the company rather than to the appointing shareholder. Accordingly, State nominated directors to the banks do not have a formal reporting relationship to the Minister or to the Department of Finance.  However, in carrying out its role in monitoring the performance of the banks in which we have a shareholding, officials in my Department meet the senior executives of each of the banks on a monthly basis and have access to monthly board papers.