Ryanair is warned over danger of 'crony' board
Watchdog warns of 'non-independence'
LOW-COST airline Ryanair has slapped back a claim that its board is coasting close to cronyism. The warning came from a respected shareholder watchdog body following the planned appointment of Michael O'Leary's long-time colleague and stalwart, Ryanair figure Michael Cawley as a non-executive director.
"It is in danger of becoming a crony board," Sarah Wilson, the chief executive of Manifest, the shareholder representation body, said of the carrier's corporate structure.
"The board needs refreshment, without a doubt," she said last week. "There are a lot of people on it who are not independent and to add somebody who has been an insider will very much tip the balance to non-independence."
Cawley has been the carrier's deputy chief executive, running its impressive commercial operation, for 10 years and has worked for the airline since 1997. He leaves that role in March to "pursue other interests" but will become a non-executive board director.
Private equity tycoon David Bonderman has been chairman of Ryanair's board since 1996. Bonderman's TPG has a large share in the airline.
Three other directors – Kyran McLaughlin, who heads up capital markets at Davy Stockbrokers, the airline's broker, former INM director and Goodbody solicitors managing partner James Osborne and aviation consultant Michael Horgan – have served there for well over a decade.
Last year Ryanair refreshed its board, adding two female directors, former Department of Transport secretary general Julie O'Neill and PayPal boss Louise Phelan. Former Finance Minister and European Commissioner Charlie McCreevy and ex-PwC partner Declan McKeon joined in 2010.
While Manifest claims that only four of the carrier's nine directors could be considered to be independent, Ryanair called the accusation "ludicrous".
Wilson also said that Ryanair's board stood out among big European multinational companies in having few foreign directors, with all but Bonderman being Irish. "We could legitimately raise questions about the diversity of this board," she said.
The airline's spokesman said that the company's board considers that Cawley will count as being considered independent when he joins the board as "he will have no ties to the company" – despite his 16 years prior working there.
"The board is very diverse, including a mix of genders and nationalities," he added.
"While obviously diversity is in the eye of the beholder, we have received no feedback from shareholders suggesting that we should address any diversity issues," he said.
Ryanair's spokesman pointed to its latest annual report, saying it shows how the company complies with current corporate governance requirements.