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The golden circle loses sheen -- but still it turns

DISGRACED Sean FitzPatrick may have been the man about town when he was spotted around Dublin's Merrion Square last week.

Yet the exodus of the Anglo board -- shortly after he stepped down as chairman of the bank last December -- has certainly shaken up the golden circle of non-executive directors of which FitzPatrick was once such a prominent member. Until his D-Day last December 19, FitzPatrick had also been on the boards of Aer Lingus and Smurfit Kappa.

But the dire state of the nation's banks -- which prompted the Government to appoint its watchdogs to the boards of six Irish banks -- has also ruffled feathers in the golden circle.

Last month, former Bank of Ireland boss Maurice Keane was drafted in by the Government to beef up Anglo's skeletal board. However, Keane is no stranger to the golden circle -- he's a non-executive director of DCC and former director of Hibernian Aviva.

Some new faces have popped into the circle over the past year -- but do they deserve the "golden" tag?

Former IDA boss Sean Dorgan, is certainly moving up the ranks of the golden circle. Dorgan retired at the end of 2007 and since then, he's been appointed chairman of Ulster Bank and Tesco. Early last year, Dorgan joined the board of insurers FBD, technology firm Fineos and British aerospace firm, Short Brothers.

Gary Kennedy, the former AIB board member, meanwhile, added another notch to his belt when he was appointed to the board of Greencore last November.

About a year-and-a-half ago, Kennedy joined the board of niche investment company Finance Ireland, which itself is headed up by Billy Kane, a former Irish Permo boss. Kennedy is also on the board of Elan.

Liam O'Reilly, the former Financial Regulator boss, joined the board of Irish Life & Permanent last September. Early in O'Reilly's tenure, an investigation by the Financial Regulator uncovered €34.2m of foreign exchange overcharging at AIB -- but it took an AIB whistleblower, rather than any vigilant member of O'Reilly's team, to spur the investigation in the first place. O'Reilly, who took over the reins of the Regulator when it was set up in 2003, retired in early 2006.

Although O'Reilly must be given some credit for the investigations into bank overcharging in 2004 and 2005 -- and for exiting more quietly than his successor, Pat Neary -- the Regulator's own consumer panel has said it had "seen very little evidence in 2005 that the Financial Regulator had the resolve to stand up to some institutions and individuals who were misbehaving".

"The key issue which the chief executive must address is the slow speed at which the Financial Regulator operates," said the panel's review of the regulator's performance in 2005. "It is slow in processing consultation papers; it is slow in responding to complaints about advertising; it is slow in implementing sanctions."

About a year after he left the regulator, O'Reilly was appointed to the board of Merrill Lynch International Bank -- where he still sits.

While O'Reilly might be thanking his lucky stars he wasn't around for the Anglo mess, ex-PricewaterhouseCoopers' partner Donal O'Connor had no such luck. Appointed to the board last June, a month after joining the board of biotechnology company, Elan Corporation, he was landed in the Anglo hot seat last December when Sean FitzPatrick stepped down as chairman.

O'Connor had been a director of the Irish Auditing and Accounting Supervisory Authority -- set up to keep an eye on the accountancy bodies that regulate accountants. O'Connor, however, stepped down from this position last month.

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Anglo's own auditor Ernst & Young, who said it was unaware of the extent of FitzPatrick's Anglo loans, is due to be grilled by a Dail committee next week for its failure to pick up on the loans -- which could be in the region of €122m.

O'Connor is the former chairman of the Dublin Docklands Authority (DDA), a group that has had its share of mishaps. Plans for the 120-metre and €200m U2 tower in the Dublin Docklands have fallen flat on their face.

The DDA, which commissioned the project, had initially planned that building on the tower would start last year so it could be completed by 2011. However, the development has since been delayed.

In November 2007, the CHQ Shopping Centre in the IFSC opened its doors to shoppers. Trade at that shopping centre, which is owned by the DDA and was launched shortly before the recession officially hit Ireland, never seems to have kicked off.

Ned Sullivan was one of the five non-executive directors who stepped down from Anglo last month shortly after the bank was taken over by the taxpayer. And while Sullivan might be happy to kiss goodbye to the disaster-stricken bank, he hasn't been able to kiss away some of the problems which have rocked other companies where he's at the helm. McInerney Holdings, where Sullivan is also chairman, is in the eye of the property storm -- a year ago, the home building company's share price was about 13 times what it is today. Greencore, which he has chaired for the last six years, was rocked by a €20m fraud last summer.

Last October, Sullivan joined the board of debt-ridden Eircom -- following in the footsteps of Colm Barrington, who also joined the board that month. Barrington, a keen yachtsman and former boss of Babcock & Brown (Ireland), has long enjoyed membership of the golden circle.

A month before his Eircom move, he became chairman of Aer Lingus. Shortly after his Aer Lingus appointment, he found himself in choppy waters when Ryanair launched a hostile bid for the airline. Rejecting the offer, Barrington described the €1.40-a-share offer as a "rip-off" for shareholders.

With Aer Lingus shares continuing their journey southwards, he might soon be eating his words. At just over €1, the Aer Lingus share price is now less than half what it was a year ago.

Barrington once worked closely with Ryanair founder Tony Ryan at the Guinness Peat Aviation Group, an aircraft leasing company which collapsed in the early 1990s after being floated on the stock market.

Paddy Power could certainly do with a legal eagle before drawing up its next controversial advert, so it's probably a good thing the company has Arthur Cox's Padraig O'Riordain in its wings. O'Riordain, managing partner of Arthur Cox, became non-executive director of Paddy Power last July. O'Riordain -- whose firm has acted for Fyffes in the DCC insider dealing case -- is also chairman of the government's advisory forum on financial legislation and a director of TVC Holdings.

Paddy Power also has its hand in the golden circle -- its boss, Patrick Kennedy, joined the board of Elan last May and he was previously a director with Greencore.

Former EU Commissioner, David Byrne, joined the DCC board as deputy chairman last month. Byrne is also a non-executive director of Kingspan. Byrne will now be rubbing shoulders with Kevin Melia, a former non-executive chairman of Iona Technologies, who was appointed to the DCC board last December.

Tom Considine, the former secretary-general of the Department of Finance and a director of the Central Bank, became the state representative on the board of Bank of Ireland last month. Considine recently stepped down from the board of stockbrokers, Davy.

With the Irish economy, which is already in its worst shape in about 25 years, set for a further battering over the next 11 months (at least), members of the golden circle are unlikely to get the easy ride they once had. No doubt, they'll have to make -- and sign off on -- some tough decisions over the next year. Are they up to the job?


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