Friday 13 December 2019

Thirteen new faces on board as Rehab bids to rebuild public trust

Angela Kerins, former chief executive of the Rehab group
Angela Kerins, former chief executive of the Rehab group
Shane Phelan

Shane Phelan

Rehab Group has changed all but three members of its 16-person board in a massive shake-up of the charity and commercial organisation.

The move comes after the group carried out a root and branch review of its governance in the wake of a number of controversies in the past year.

The organisation, whose companies receive over €80m in State funds annually to provide services to people with disabilities, faced severe criticism over high salaries paid to its management team and lucrative consultancy fees paid to former board member Frank Flannery.

Members of the previous board also endured a torrid time at a hearing of the Dail's spending watchdog, the Public Accounts Committee, where governance shortcomings were exposed.

Both Mr Flannery and former chief executive Angela Kerins refused to attend the hearing last April.

In its aftermath, most of the board decided to retire and 13 new board members were appointed at the group's AGM yesterday. The group, which faced much criticism for its secretiveness around salaries and accounts, also formally committed to the adoption of the fundraising code for charities and the governance code for voluntary organisations.

It has also committed to publishing accounts in line with the Statement of Recommended Practice for Charities (SORP), an accountancy standard used by charities operating in the UK.

Read more: Just three keep jobs on Rehab board after purge

The new board members include Stan McHugh, a former chief executive of FETAC; David Went, the former chairman of the Irish Times and ex-CEO of Irish Life & Permanent; senior counsel Niamh Hyland; Assumpta Kelly, a former administrative officer with Meath County Council; clinical psychologist Maeve Martin; and Brendan Nevin, chief executive of AA Ireland.

Remaining on the board are chairman Sean Egan, the former Aviva Ireland chief executive, who joined in May.

Businessman Don Tallon and chartered surveyor John F Smith are also staying on after successfully reapplying for their positions. The other new board members include former disability group trustee Patrick Salmon; development aid specialist Mike Williams; management consultant Steven Wrigley Howe; chartered management accountant Joyce Brereton; Microsoft executive Kevin Marshall; real estate manager Killian O'Higgins; and lawyer Fiona Ross. Each new member was recruited after the board positions were advertised externally.

Previously it had been the practice of existing board members to nominate replacements, leading to criticisms that it was a self-perpetuating board.

Former chairman Brian Kerr had sat on the board for 32 years before he retired earlier this year.

The new board members will not receive any fees, but can claim vouched expenses.

Rehab said it had ended the practice of giving consultancy work to board members, as was the case with Mr Flannery, who was paid €409,000 in consultancy fees between 2007 and 2013 for work which included lobbying the Government.

Mr Egan will continue to chair the board.

Read more: Changes send right message but it won't be easy to restore confidence

Rehab expects to fill the role of chief executive by next month. The salary of the new chief executive will be €140,000, a €100,000 drop on the package earned by Ms Kerins, who quit last April.

Following her departure, the then board appointed an external management consultant, Dr Eddie Molloy, to review its governance structures.

He was tasked identifying changes which needed to be made at board level and how to improve the financial transparency of the group.

In a statement, the group said it initiated a review last May "to address acknowledged failings in governance that had come to light earlier in 2014".

The statement added: "One of the aims of the review has been to rejuvenate the group board with independent individuals of broad ranging expertise who would be willing to lead the Rehab Group through a challenging period of transformation and change.

"In addition to their core skills and diverse professional backgrounds, many of the new board have significant personal experience and knowledge in relation to disability."

Mr Egan, who replaced Mr Kerr, admitted aspects of its governance and management "did not meet the high standards which the public rightfully expects of a charitable organisation". He continued: "My commitment today is to work along with the new board members and the incoming CEO to restore public confidence in Rehab and rebuild public trust."

Comment: Changes send right message but it won't be easy to restore confidence

REHAB Group AGMs rarely make the headlines.

Business has traditionally been conducted in private. Such was the recruitment process used by the charity and commercial group, with existing members nominating potential new ones, it was inevitable these would be dull affairs.

It was also inevitable that over time the board would become stale and that the organisation it presided over would become increasingly detached, insular and secretive.

Although receiving tens of millions of euro each year to provide services for people with disabilities, it developed a private mindset. Getting information about how public money was being spent on salaries was a torturous process for TDs who went looking for answers.

Bonuses were routine for senior executives, yet board members could not tell the Dail Public Accounts Committee how much home-help workers were being paid.

Top-ups were made to pensions, but Rehab would not say if this was the case with Angela Kerins.

It felt like information had to be almost dragged out of the board.

This is a bad recipe when you are a large business with 3,200 staff scattered across 260 locations and rely heavily on the good will of the public and the Government.

Thankfully this year's AGM was nothing like those before.

This time the board was almost completely gutted. A diverse range of candidates with skills across a variety of sectors were brought in.

The message sent out was clear. The group regretted its mistakes and now wants to restore public confidence and trust.

It will not be an easy task and incalculable damage has been done to the image of the group and it will take some time for it to recover.

Irish Independent

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