THE 'whistleblowing' policies in financial institutions clearly did not work and there is no point in having such mechanisms in place if they are not effective, the Kenmare conference was told.
Prof Niamh Brennan, of the Quinn School of Business in UCD, said there was evidence that some individuals in these institutions knew the financial model was over-extended but did not blow the whistle.
"Ineffective corporate gover- nance mechanisms should be challenged, otherwise corporate governance amounts to no more than a meaningless corporate ritual," she said.
It was "disheartening" to learn that laws established to protect genuine entrepreneurs and business people allowed others to wriggle out of their liabilities merely by the simple step of transferring assets to their spouses and other family members.
"It is incredible that there are those in our society that can so easily escape the consequences of their reckless actions -- and do so richly rewarded -- leaving behind ordinary, decent people to suffer the consequences," Prof Brennan, who is now chairman of the Dublin Docklands Development Authority (DDDA), added.
In a paper entitled 'Checks and Balances in the new Corporate Structure' she said that, with the "notable exception" of Anglo Irish Bank, where the chief executive went on to become chairman, other banks adopted official governance standards and yet still got into financial difficulties.
"This would suggest that something beyond the standard corporate governance mech- anisms is required for good governance to prevail.
"Compliance with governance standards can easily be achieved by empty rhetoric and corporate ritual, rather than through meaningful observance of the spirit of the requirements.
"Some boards are full of illustrious names; corporate ornaments who look good in the annual report; full of applauding directors, 'yes' men. Independent thinkers are considered dangerous to the tranquillity of the boardroom.
"There is anecdotal information that some individuals hold so many directorships of IFSC investment funds companies that they are earning in excess of €1 million in directors' fees. If this is true, it is likely that such directors cannot give proper attention to all companies in their portfolio, which may result in unacceptably risky practices."
The way in which directors are appointed is also important. "One is reminded of that Bryan Dobson RTE interview in which our former Taoiseach described how state board directors were appointed: 'I might have appointed somebody, but I appointed them because they were friends, not because of anything they had given me.'
"Is it any wonder that public discourse refers so frequently to 'crony capitalism' as being responsible for so many failings during the Celtic Tiger years?" Prof Brennan said.
She favoured a separate advisory body for appointments to state boards -- to assess the suitability of candidates as directors of state companies.