Barry Cowen
Question:31. Deputy Barry Cowen asked the Minister for Finance his plans to schedule regular meetings with the public interest directors of the covered banks; and if he will make a statement on the matter. [2004/13]
View answerThursday, 17 January 2013
Questions (31)
Written answers
Public interest directors do not have a formal reporting relationship to the Minister or to the Department of Finance and as yet I have no plans to schedule regular meetings specifically with the public interest directors of the covered banks. However, I did meet with directors of the Boards of AIB, Bank of Ireland and PTSB last week at which 5 public interest directors were present. The Deputy should also be aware that officials from my Department meet with representatives of the various banks on a regular basis – including a monthly management meeting with each covered institution at which the CEO would usually attend. Department officials have held a meeting with AIB on the 14th January, will meet BOI today the 17th January and PTSB on the 31st January. Some directors from the various banks will be in attendance at these meetings. 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.
As I have stated many times before, the primary duty and responsibility of the public interest directors as well as all the other directors is to ensure that the institution on whose board they serve is run properly and appropriately. The responsibility of public interest directors under company law is to the institution on whose board they serve.
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.