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Public Interest Directors

Dáil Éireann Debate, Tuesday - 13 November 2012

Tuesday, 13 November 2012

Questions (197, 198)

Pearse Doherty

Question:

197. Deputy Pearse Doherty asked the Minister for Finance if he will provide in detail the responsibilities of public interest directors in the formerly six covered financial institutions and to contrast those responsibilities with the responsibilities of other directors on the boards of those financial institutions. [49480/12]

View answer

Pearse Doherty

Question:

198. Deputy Pearse Doherty asked the Minister for Finance if he will provide an assessment of the performance of each the public interest directors at the six formerly covered financial institutions. [49481/12]

View answer

Written answers

I propose to take Questions Nos. 197 and 198 together.

As I detailed in the answer to question numbers 167, 168 and 172 which were taken together on 9 October 2012, the legal position is that any director appointed to the board of the covered institutions whether under the Credit Institutions (Financial Support) Scheme 2008 or otherwise is subject to the requirements of company law in relation to the discharge of their responsibilities as a company director. As such, the director is legally bound to act in what he or she believes are the interests of the separate legal entity that is the institution itself. These are the directors so called fiduciary responsibilities. To address the scope for actual and perceived conflicts between the fiduciary duties of the directors of financial institutions under company law and the wider public interest in circumstances where those institutions have received huge financial support from the State, legal clarity, not just to the role of the public interest director but to that of the entire boards of those institutions, was provided under Section 48 of the Credit Institutions (Stabilisation) Act 2010. It provides that the overriding duty of directors of the covered institutions relates to the public interest as set out in the Act.

Accordingly, public interest directors do not have a formal reporting relationship to the Minister or to the Department of Finance. As Minister for Finance, I am strongly committed to ensuring that the boards of the covered institutions act at all times in a manner fully consistent with key public interest objectives for the banking sector.

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