“I do not mean this disrespectfully but a large segment of the public sees the public interest directors as being about as useful as paps on a bull.” Part of Senator Paul Coghlan’s brief contribution to the Oireachtas finance committee hearing with Permanent TSB public interest directors, Ray MacSharry and Margaret Hayes on 19th December 2012
Okay, he didn’t say “tits” but down our way, we’ve never heard of “paps”.
On 19th and 20th December 2012, the Oireachtas Finance, Public Expenditure and Reform committee met with six – the two from each of AIB, Bank of Ireland and Permanent TSB – public interest directors, though in Michael Somers’s case, he is a “government nominee”. The 2-day hearings established there was no difference between public interest directors and non-executive directors only – this revelation came as a surprise to some TDs and senators. And despite being appointed by the Minister for Finance to whom they are nominally responsible, there hasn’t been a single meeting between director and the Minister.
The PIDs have cost us well over €2m in total to date. They don’t have any termination date for their terms of office. And over the two days, TDs and senators struggled to see what contribution the PIDs had made to their respective organizations, not just what you might perceive as a “public interest” contribution but any contribution.
So, why keep them?
Back in 2009, then-finance minister Brian Lenihan had reportedly lost all trust in the management of the banks, so he hand-picked a number of former politicians and public servants, from which were appointed the PIDs. The PIDs didn’t stop the burgeoning losses at the banks and didn’t even manage to get the banks to reveal their true capital requirements – that fell to the Central Bank of Ireland with a group of global consultancies under the watch of the bailout Troika. There was no evidence of support or lobbying in favour of the new Personal Insolvency Act, signed into law by the President on 27th December 2012, and just now awaiting a commencement order from justice minister, Alan Shatter. Payment of bonuses and the pension top-up at AIB seem to have passed largely unnoticed by the PIDs.
It is not in dispute that the PIDs haven’t contributed to the running of their respective organizations or that there is evidence that they were any less effective than fellow non-executive directors. But 3-4 years after their appointment, it may be time to consider if there are better qualified non-executive directors out there who are not protected in their roles indefinitely by the Minister for Finance.
The hearings on 19th and 20th December 2012, were particularly bad-tempered with impatient argument about differences between public interest and “normal” non-executive directors as well as remuneration. Mind you, there was some sharpness between new chairman, Ciaran Lynch and members of the committee as well. It was Senator Paul Coghlan who popped in from other business in the Oireachtas who “respectfully” passed on the public assessment of PIDs.
There is a feature blogpost here on Public Interest Directors and the government nominee, Michael Somers
The Directors are as useful to Ireland now as they were before their appointments.