Tuesday, 19 February 2019

Ceisteanna (188)

Thomas P. Broughan


188. Deputy Thomas P. Broughan asked the Minister for Public Expenditure and Reform the corporate and fiduciary responsibilities of civil servants appointed to State boards; and if he will make a statement on the matter. [8058/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Public)

All directors appointed to State corporate bodies or to State companies have a range of specific legal responsibilities, in terms of common law, statutory and fiduciary duties to the State body or company; and this applies equally to nominee directors such as civil servants who sit on State boards.

It should be noted that State bodies may be established as statutory bodies under their own bespoke establishing legislation and others may be established as companies incorporated under the provisions of the Companies Act 2014.

The Code of Practice for the Governance of State Bodies, 2016 sets out the key common law, statutory and fiduciary duties all for Board members. All board members owe these duties to the State body in the first instance. So for example, the fiduciary duty to act in good faith in the best interests of the State body is owed to the State body in the first instance.

It should also be noted that, in addition to the provisions of the Code, in the case of state bodies established as companies under the Companies Act, the responsibilities of Directors are also set out in the Companies Act.

Civil servants nominated and appointed to the board of state bodies can have regard to the Minister's interests when serving on a board. However, individual decisions are still taken in accordance with the full set of evidence before the board and on the basis of what the board member considers to be the interests of the company.

Circular 12/2010: Protocol for Civil Servants nominated to the boards of non-commercial State bodies provides for a process for the civil service board member to report to the relevant Minister. The purpose of the circular is to describe the reporting obligations of the nominee civil servant director in the extreme situation where the chairperson of the board does not report serious issues of concern to the Minister. For example, the circular states that information should be presented to the Minister where there are serious weaknesses in controls that have not been addressed, or where there is a significant strategic or reputational risk to the body that is not being addressed, or where there are serious concerns about possible illegality or fraud. The operation of the circular is subject to the legal common law, fiduciary and statutory responsibilities of the nominee civil servant director to the State body.