As the Deputy is aware, in response to the Nyberg report and with regard to the restructuring of the banking sector, I stated that:
"a programme of rotation of board members, commencing with board members appointed before September 2008, will be expected to be part of the plan. This should apply to both Executive and Non-Executive Board members and provides a process to ensure a smooth succession of incumbent board members who were in place before September 2008. I would expect this succession to be substantially completed by early 2012, and will use my powers as shareholder to affect such changes if necessary"
Across the financial institutions covered by the Credit Institutions (Financial Support) Act 2008, only one of the board members currently in place was in place in September 2008. That director, Mr Richie Boucher of Bank of Ireland, has passed a full fitness and probity review by the Central Bank.
The Central Bank Reform Act 2010 became operational on the 1st December 2011 when the Central Bank prescribed regulations into law setting out those functions (“controlled functions”) which would be covered by the Act, and a smaller subset of controlled functions (“pre-approval controlled functions” or “PCFs”) which will require the prior approval of the Central Bank before an appointment can be made to a Bank.
The Central Bank fulfils its functions under the Act by processing applications for approvals to all PCFs in all regulated financial service providers since 1 December 2011. The Central Bank may refuse to approve a proposed appointment to a PCF role where it is of the opinion that the proposed appointee is not of such fitness and probity as is appropriate to perform the relevant function. Where the Central Bank refuses to approve a proposed appointment, then a regulated financial service provider may not appoint the person to the role.
Further, the Central Bank as part of its role in the on-going supervision of the financial services sector, including the banking industry, may from time to time consider that there is reason to suspect the fitness and probity of any person performing a controlled function and may commence an investigation into that person. The existence and progress of such investigations are confidential and details of such investigations may not be disclosed by the Central Bank.
As previously announced, the Central Bank wrote to all directors of the state-supported institutions in 2011 to determine their intention to remain in their posts beyond 1 January 2012. During the period of the review, many of the long-standing directors of the six State-supported credit institutions resigned. The Central Bank issued a statement on 28 June 2012 where it was outlined that the fitness and probity review of all sitting directors of the six banks and building societies covered by the State guarantee had concluded. A copy of this statement is available on the Central Bank website. In respect of remaining directors of these credit institutions, the Central Bank continues to carry out its role in respect of the supervision of the fitness and probity of those directors. New applications to sit on the boards of any of these institutions which remain under the Bank’s active supervision will require the applicants to establish, to the satisfaction of the Bank, that proposed directors meet the Bank’s minimum standards of fitness and probity.
All assessments of fitness and probity of persons being proposed to PCF roles, and of persons performing controlled functions are made with respect to the criteria set out in Section 25(3) of the Act and a Code issued by the Central Bank under Section 50 of the Act entitled “Fitness and Probity Standards (Code issued under Section 50 of the Central Bank Reform Act 2010).