Monday 26 September 2016

Noonan launches review of ‘public interest directors’ at banks

Published 03/07/2016 | 02:30

Responding to a parliamentary question on the matter from Fianna Fail finance spokesman Michael McGrath last Wednesday, Finance Minister Michael Noonan said:
Responding to a parliamentary question on the matter from Fianna Fail finance spokesman Michael McGrath last Wednesday, Finance Minister Michael Noonan said: "Nama intends to extend funding to willing Nama debtors and receivers on commercial arms-length terms". Photo: Irish Independent

Department of Finance officials are working on an overhaul of Government procedures for appointing directors to bank boards that could spell the end for so-called public interest directors.

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Finance Minister Michael Noonan said that the review would have 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".

The Programme for Government committed Noonan to stop appointing new public interest directors to the banks, and reform appointment procedures with a view to increasing transparency.

The right to appoint so-called public interest directors derived from the bank guarantee of 2008, which is to expire next year. The role was previously heavily criticised by Transport Minister Shane Ross, who wrote in this newspaper that public interest directors "serve no purpose".

By statute, the overriding duty of all directors of banks covered by the guarantee whether they are referred to as public interest directors or not, relates to the public interest, Noonan told the Dail. He said that given the guarantee is due to expire shortly, it now an "appropriate time" to review the appointment of public interest directors "and propose further... procedures for any future appointments to the boards".

Former NTMA boss Michael Somers, former Tanaiste Dick Spring, and former Fine Gael leader Alan Dukes were among the individuals appointed as public interest directors to covered banks.

Earlier this year Somers had his term at AIB extended through to the end of 2017.

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