NOT a good week for the NEDs.
The NEDs ?
Yes, the NEDs.
First, the Bank of Ireland hid its NEDs from its shareholders.
Then CIE hid its NEDs from the public.
NEDS are the best buried bodies in Ireland.
At the Bank of Ireland AGM on Wednesday they re-elected 10 NEDs (non-executive directors).
Shareholders asked for them to stand up and offer reasons why they should be re-elected. A reasonable request.
Governor Pat Molloy refused. Such a sniff of shareholder democracy will never suit the oligarchs in the Bank of Ireland .
Ten NEDs at the Bank of Ireland stayed stuck to their seats as they were automatically re-elected courtesy of Pat’s proxies. Millions of votes from fellow institutions, deep in the governor’s pocket, ensured their safe passage. The NEDs never had to mix it with the masses.
So well-hidden were the BofI’s NEDs that they were taken off the platform this year and seated among the mob in the main hall at the AGM.
That is par for the course at Ireland’s banks. They have not changed their spots. Bankers’ NEDs are a protected species. They earn five figure sums, never answer questions from shareholders and trouser the fees.
If the bankers are past masters at hiding their NEDs, how do the quangos rate?
Last Monday a letter arrived in Leinster House. It was from the boss of one of Ireland’s most generously subsidised quangos.
John Lynch , former head of FAS and now CIE boss, wrote a stunning reply to an ‘invitation’ from the Oireachtas Transport Committee. It left the bankers in the shade.
His NEDs were refusing to answer questions to the committee about how CIE was run. He gave no reason. They simply were not going to appear. They were intent on defying democracy.
A most unusual, if not unprecedented, decision.
The non-executive directors of both CIE and Iarnrod Eireann were running scared. They were not willing to be questioned in public about their stewardship of the State’s transport companies.
CIE’s NEDs prefer the closed door method of corporate governance.
Not surprisingly. In recent months the most devastating news has broken about corruption, backhanders and waste at Iarnrod Eireann.
These NEDs are paid €17,000 a year each. Their pay is courtesy of the taxpayer. It is reasonable for taxpayers to know if the NEDs were kept in the loop. Or even if they asked any questions. A curious taxpayer might even want to know what happened at board meetings.
As the directors would obviously prefer to remain anonymous, let us name some of them.
CIE’s board includes Paul Kiely , a close associate of former Taoiseach Bertie Ahern. He heads up the audit committee. Strangely enough, CIE chairman John Lynch publicly told me a few months ago that Paul was an accountant.
Strangely enough, Paul has since told me that he has no accountancy qualification. Paul should know.
The two colleagues seem to have their wires crossed.
Strangely enough, John Lynch told me at the committee that the NEDs of both CIE and Iarnrod Eireann had received a copy of the Baker Tilly Report that found corruption at Iarnrod Eireann.
Strangely enough, Mr Lynch came to a subsequent committee meeting and retracted that statement. He had been mistaken: his NEDs had not received a copy of the report.
Is it any wonder that we would like to talk to the NEDs?
The report cost €500,000. It was kept under wraps. Like a lot of sensitive information at CIE.
Nor was the minister for Transport Noel Dempsey, the ultimate shareholder, informed of the report or its findings until it was publicised in the Sunday Independent.
It is not the first time the minister was left out on a limb. A few weeks ago he was forced to admit that CIE had never told him of a three-year delay in a key DART project.
It would be interesting to know if the NEDs were told.
NEDs are meant to monitor the CIE management. Now that could be interesting.
They are responsible for corporate governance. They are accountable to the shareholders.
In the Bank of Ireland’s case it is the shareholders who have put their money up front; in CIE’s case the shareholders are you and me, the taxpayers who fork out the €300m subsidy. Baker Tilly found that some of that €300m had been embezzled at Iarnrod Eireann.
So, as the guardians of the €300m and the watchdogs over Mr Lynch and his executives, it is reasonable that the NEDs should have a conversation with elected TDs and senators.
It seems the NEDs do not want to have that conversation.
Their refusal to appear has prompted the committee to seek legal powers to compel their presence. We should soon be able to shine a light on the NEDs. Currently, the annual report simply provides their names and initials. No CVs, no photographs , nothing. Even at the Bank of Ireland you would not get away with that.
NED Paul Kiely, a member of the Drumcondra mafia, is not the only director with a Fianna Fail pedigree.
NED Neil Ormond is another. His brother was a Waterford TD and his sister is a Fianna Fail senator.
Nothing wrong with that; but it would be interesting to ask Paul and Neil how two soldiers of destiny stood up to all that stress during 2009 when they were the only members of the CIE audit committee for several months.
It would also be helpful to talk to director Mary Canniffe, currently working for the (guess who?) financial regulator Matthew Elderfield , and to hear her tales of corporate governance at CIE.
Or to talk to Brian Cowen’s financial supporter Seamus Sheerin, formerly of AIB, who left the bank in a flurry after a bitter spat, but somehow landed on his feet as a €17,000-a-year CIE director.
Let us hear about their brave struggles as they fearlessly entered into robust discussions with executive chairman Lynch. Let us hear if they were vigilant about the Baker Tilly Report and its findings. Let us hear how the fraud happened. Let them earn their €17,000 a year. And let them stop defying the democratic process.
If they do not turn up , Minister Noel Dempsey should immediately fire them for giving the V sign to the democratic process.
Last week their CIE spokesman was defiant. Once again the semi-state sent out its spinner to give the reasons for their ‘no-show’.
On RTE’s’ Morning Ireland with Fine Gael’s talented Transport spokesman, Fergus O’Dowd, the spinner was the master of diversion. He tried to duck the ‘no-show’ of the NEDs, but instead launched into a hilarious personal attack: “You know this agenda began because we have a journalist senator on the committee who rarely attends the committee. . .”
Deputy Fergus O’Dowd: “That’s very unfair. . .”
Spinner: “Will only appear to attend the committee when there to promote pre-established editorial positions and who has repeatedly wilfully ignored any. . .”
Presenter John Murray: “A Shane Ross witch hunt, is that what you’re suggesting?”
Spinner: “Well the facts are there, anybody can read the transcripts, any or all facts or responses which don’t support the stories already written are wilfully ignored. He runs around town, denigrating our workforce on the basis of the, of the faults of three individuals and in many . . .”
No quarrel with the smears, they go with the territory .
No quarrel with the decent CIE workforce either. Let us talk to the guys at the top.
It is high time we heard from the NEDs.