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Public Interest Directors

Dáil Éireann Debate, Tuesday - 30 January 2018

Tuesday, 30 January 2018

Ceisteanna (151)

Joan Burton

Ceist:

151. Deputy Joan Burton asked the Minister for Finance the status of the process for appointing State nominees to sit on the boards of the banks; and if he will make a statement on the matter. [4157/18]

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Freagraí scríofa

As the Deputy will be aware, the programme for partnership Government includes a commitment to cease the appointment of new public interest directors, PIDS, in the banks and reform the process by which State nominees are 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.

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.

My Department and the Public Appointment Service, PAS, have established a transparent process to identify appropriately skilled candidates for nomination to the three banks in which the State holds a shareholding. I expected that these processes will commence in the coming months and that a separate process will be conducted for each institution. I also intend that each competition will be posted on the PAS website and extensively advertised.

An independent assessment panel will compile a list of suitable applicants following which a preferred candidate(s) will be 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.

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