As part of the preparations for the initial public offering (IPO) of shares in Telecom Éireann which is planned for around the middle of this year, depending on market conditions, it was appropriate for me, based on recommendations from the advisers engaged by my Department, to review the structure of the board of Telecom Éireann.
My advisers strongly recommended that the board of Telecom Éireann should be strengthened, as soon as possible and in advance of the IPO, by the appointment of new non-executive members who had wide experience of board membership of major listed companies and relevant international industry/telecoms experience and of an additional executive director. The board should attract the confidence of institutional investors, whose focus would be seen as driving shareholder value into the future and which would position the company for the IPO and post flotation.
Against this background, I met individually with each of the five non-executive directors and, having explained the position to them, I asked them to consider relinquishing their position on the board. As the Deputy will be aware, four agreed to resign, while one decided to remain on the board. I also met with the chairman of the board at that time who agreed to relinquish that position and to accept the position of deputy chairman of the board. It was entirely a matter for each individual concerned to consider their position and I left the matter with each of them on that basis.
I should stress that my request to them to relinquish their position was in no way a reflection on the integrity, reputation or competence of the people concerned who are all of the highest standing and have served admirably as members of the board. However, the advice available to me was that I should seek to appoint new board members with particular expertise and experience and I explained this to each person when I met them.
As regards the criteria for further new appointments to the board of Telecom Éireann, there is currently only one vacancy on the board. Based on the advice available to me, this position is being reserved for the appointment of a further executive director and will be filled in due course. Furthermore, over the coming months there will be discussions with the Strategic Partners in Telecom Éireann as well as with the Union Coalition and the Worker Directors Group of ICTU in relation to the structure of the board post IPO.
