Irish

Thursday 31 July 2014

Spring and Somers face vote by AIB shareholders

First chance to decide on all 10 board members since 2009

Donal O'Donovan

Published 21/03/2013|04:00

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DICK Spring and Michael Somers, the two state-appointed directors of AIB, will face a shareholder vote this year for the first time since their appointment as taxpayers' watchdogs on the board of the bank.

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The two men are public-interest directors at AIB, who were parachuted into the bank to represent taxpayers when the bank was bailed out.

Dick Spring is a former tanaiste and Labour Party leader and has been on the board of AIB since January 2009.

Michael Somers is a retired public servant who was the head of the National Treasury Management Agency (NTMA). He has been on the board of AIB since January 2010.

Similar appointments, including other retired ministers and civil servants as public-interest directors, were made to the boards of the other bailed-out banks.

Unlike other board members, public-interest directors do not face an annual shareholder vote to keep their seat,

They are appointed, effectively permanently, by the finance minister.

In the case of Mr Spring and Mr Somers their appointments were made by the late Brian Lenihan, when he was minister.

However, AIB shareholder Niall Murphy has now tabled a motion calling for the removal of all 10 directors of the bank and this will be voted on at the bank's AGM in June.

The other eight out of the 10 directors of AIB, including chairman David Hodgkinson and chief executive David Duffy, automatically put themselves up for re-election to the board every year anyway.

His resolution is unlikely to succeed, because AIB is more than 99pc state-owned and the real decision-making power is held by the Finance Minister Michael Noonan who can dominate any vote.

The motion does mean that all shareholders, including the minister, will have a chance to vote on whether or not they back all 10 directors, for the first time since 2009.

Honesty

The vote will go ahead because even though the bank is more than 99pc state-owned the tiny fraction still in private ownership is still traded on the stock market, and under its rules, any shareholder is entitled to put forward a resolution to be voted on at the AGM.

Shareholder Niall Murphy wrote to the bank requesting that his resolution be added to the agenda for the June AGM on March 7.

He represents shareholders committed to the "restoration of honesty and integrity throughout AIB", he said in his letter.

The public-interest directors of AIB were forced to defend their role, including tens of thousands of euro in fees they receive, at a hearing of the Oireachtas Public Accounts Committee last year.

Irish Independent

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