Thursday 14 November 2019

Siobhan Creaton: Who's really in charge of our semi-states?

IT IS pathetic to hear a government minister hopelessly say he can only put "moral" pressure on the men who run huge companies on behalf of the taxpayer to give up their big bonuses and salaries.

Can you imagine any other business where the main shareholder is powerless to force overpaid bosses to toe the line, particularly at a time of unprecedented economic disaster?

But this is the stick Public Expenditure and Reform Minister Brendan Howlin is going to beat the semi-state bosses with -- "moral" pressure.

He is utterly powerless to take the axe to the €752,568 package paid to ESB boss Padraig McManus.

He cannot touch the €568,100 paid to the Dublin Airport Authority head Declan Collier, or the €500,000 received by An Post's chief executive Donal Connell.

Nor can he cut the €417,000 Coillte pays its top executive David Gunning, or the €394,000 Bord Gais pays John Mullins, or any other of the semi-state's bigwigs.

I'm not going to be popular for saying this -- but that is how it should be. Politicians cannot be allowed to meddle in the running of these companies. They shouldn't have to. That is the job of the men and women the politicians appoint to the semi-state boards to ensure Ireland's beleaguered taxpayers aren't being short-changed.

But few taxpayers will feel well-served by what the McCarthy review had to say about the rates of pay and perks at these companies. Minister Howlin said the public would be "surprised and shocked" by the big pay packets and bonuses that are still being doled out in the semi-state sector.

Mark Fielding, the head of the small business group ISME, said that taxpayers have been "screwed" and it was thanks to the "disgraceful" behaviour of the semi-state directors for allowing the executives to run amok. He is right.

The owners and directors of small- and medium-sized businesses couldn't carry on like this. Cutting wages, reducing staff hours and letting people go have been firmly on their boardroom agenda as they responded to the harsh economic times.

The Government has been presented with a golden opportunity to immediately overhaul these gilded boardrooms.

All the vacancies on state boards in the coming year will be advertised to the public to give those from outside the political arena an opportunity to serve on the boards. After what was revealed this week, Joe Public will be even keener to get a seat on the board, if only to stop the nonsense of ludicrous bonuses and salaries.

The politicians themselves have a lot to answer for in terms of the make-up of semi-state and state boards. For decades ministers from every political party have enthusiastically put their friends and associates into these plum jobs.

That is not to say that many people who have served on these boards haven't made a significant contribution to these companies over the years. Some experienced and successful business people have offered their services to these companies in the past at a time when the remuneration on offer would have been chicken feed compared to what they could earn elsewhere.

ESB chairman Lochlann Quinn, who was paid €70,000 in 2009, is the founder of the electrical group Glen Dimplex, a multi-billion euro company that has made him a very wealthy man.

So why did directors like Mr Quinn and those on other board's rubber-stamp pay deals in the past couple of years despite government orders that all extra payments should be suspended?

Why didn't these directors take the actions required by their major shareholder -- the State? Were they, like the minister, powerless to do anything about it? Or were they all too similar to the bank boards where, as Nyberg concluded, "herd mentality" and "unquestioning consensus" was rife?

The same seems to have been the case in the semi-state companies.

Irish Independent

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