Editorial: Careful monitoring of bank bonuses needed
It is probably time to draw a line under the vexed issue of bankers' pay.
News that Bank of Ireland staff are set to get a one-off bonus as well as a pay increase probably leaves many readers feeling queasy, but the bank appears to have done a smart thing by replacing the old system of automatic increments for everybody with a new system designed to reward those who perform well.
Whether the new system works in practice remains to be seen, but it makes sense and does not appear to encourage rash or stupid behaviour, which is always a concern in the financial services sector
In any discussion about bonuses, a distinction must be made between organisations owned by the State and private companies (even if the State is a shareholder).
The result of the changes introduced by Bank of Ireland means that pretty much everybody gets a bonus. If that happens, it will be bad news for shareholders, but it won't matter to anybody else - and the shareholders can always punish the executive by voting against the board.
In the public sector - where there is little flexibility and the taxpayers' money is at stake - it is essential to get things right from the beginning. The public sector's clear inability to operate a genuine bonus culture (where poor performance is punished) means that so-called bonus schemes must be carefully watched.
Bank of Ireland has now repaid its debt to society. Like a dangerous maniac who has served its time, it should be closely watched because banks have the potential to destabilise the economy, but we should no longer seek to micromanage matters. The same applies to Ulster Bank, but Allied Irish must wait until it repays the €20bn it owes the State. It may well be that AIB will need a bonus system in future to retain talent, but that system should be scrutinised by the Department of Finance.
The bonus culture is part of the financial services sector in the same way that teachers enjoy long holidays. To deny this is to undermine the entire financial services industry. While bonuses can improve performance we have seen very clearly in recent years that they can also led to destructive and short-term thinking. That can never be allowed to happen again.
Safety on farms is a priority for all
Farm safety is a serious issue, so serious it has led to 26 fatalities on Irish farms so far this year. However, it would seem appropriate that the Health & Safety Authority, which has announced its intention to prosecute farmers for safety breaches, should have entered into consultations with farm organisations before launching what has been described as a crackdown on safety breaches on farms.
Farms are dangerous places, especially in the era of high-tech machinery. But they are also places where families are reared, where traditions are maintained and where children should grow up in harmony with the land and the agricultural activities that take place around them.
Maura Canning, IFA Farm Family chairwoman, is correct to assert that the best way to improve farm safety is by changing behaviour through education and training.
This should not be a contentious issue between the safety authority and the farmers. Nor is it too late for both sides, the HSA and farm organisations, to sit down together to discuss the issues involved. If it saves one child's life, or indeed any life, it will have all been worthwhile.