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Banking Sector

Dáil Éireann Debate, Wednesday - 20 February 2019

Wednesday, 20 February 2019

Questions (88)

Kevin O'Keeffe

Question:

88. Deputy Kevin O'Keeffe asked the Minister for Finance the position regarding appointments to a board (details supplied) in view of his request in May 2018; and the applicants being considered for same. [8530/19]

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Written answers

As the Deputy will be aware, in 2018 the Government announced it would cease the appointment of new public interest directors (PIDs), in the banks in which the State holds a shareholding and reform the process by which State nominees were appointed to the board of the banks. Future appointments will be made on foot of my rights as shareholder in each of the banks and not using the powers contained in the Credit Institutions Financial Support (CIFS) Act as was the case with public interest directors. Pursuant to these rights I, as Minister for Finance, can appoint up to two directors to the boards of both AIB and PTSB and one director to the board of Bank of Ireland.

My Department and the Public Appointment Service, PAS, established a transparent process to identify appropriately skilled candidates for nomination to the three banks in which the State holds a shareholding. This process involves an independent assessment panel compiling a list of suitable applicants following which a preferred candidate(s) is selected by myself, as Minister for Finance. This preferred candidate would then be proposed as the Ministerial nominee to the individual institutions, who in turn will conduct the required governance and submit the candidate for SSM approval in line with their regulatory requirements.

In 2018 separate processes began in AIB, PTSB and BOI to appoint new state nominated directors under the updated regime. With regard to AIB, the preferred candidates have been proposed to the bank and are currently undergoing the standard fitness and probity assessments by the regulators. The processes at PTSB and BOI are ongoing.

It is important to note that any company director, regardless of whether or not they are a State nominated director, is subject to the requirements of company law to act in what he or she believes to be the interests of the company to which they are appointed. These are the director’s fiduciary duties which are owed to the company rather than to the appointing shareholder. However under the Companies Act 2014 (as amended) there is a provision allowing a nominee director to have regard to the interests of the appointing shareholder.

I would also note that the new appointment procedure for bank directors needs to have due regard to the distinct differences which exist relative to appointments to State boards. These include the requirements of the central SSM ‘Fitness and Probity’ regime and the requirement to have a broad set of expertise relevant to large regulated entities in an ever more complex banking regulatory environment.

Question No. 89 answered with Question No. 87.
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