Central Bank says 13 people share 652 directorships
Irish residents who sell their services as directors to international investment funds will have to cut back on the number of boards they sit on if the Central Bank decides they are taking on too much work.
Ireland's success in establishing itself as a hub for the global funds industry has created a lucrative business for lawyers, accountants and consultants who are hired by fund managers based in New York or London to sit as directors of the management companies that oversee the funds.
Funds based in Ireland have to have a board of directors overseeing their operations and at least two directors have to be Irish residents. The directors are meant to represent the interests of the funds' shareholders, usually pension funds and institutional fund managers.
The annual income is around €20,000 plus per directorship.It is common for individuals to sit on multiple boards because some funds are sub-divided into separate standalone companies. The Central Bank has identified 13 individuals who between them have 652 directorships.
Such a welter of directorships, averaging out at about 50 each, raises questions about those directors' ability to properly scrutinise the risks those funds take on, particularly if the individuals are also holding down full-time jobs as lawyers or accountants.
"We will be putting pressure on those individuals and we will use the full range of our supervisory tools and regulatory powers where necessary," Gareth Murphy, head of markets supervision at the Central Bank, told Reuters yesterday.
The central bank is not putting a cap on the number of directorships that one person can hold but it will monitor directors who work more than 2,000 hours a year and have seats on at least 20 boards.
"It's not a target but it does mean you are on our radar screen," Murphy said. "We will look more closely at what you are up to and it is very likely that authorisation as a fund director will take longer."