Supporting high standards of corporate governance in State Bodies

High standards of corporate governance in State Bodies are critical to ensuring a positive contribution to the State’s overall economic efficiency, competitiveness, social cohesion, and regional development.

A recent survey carried out by the Institute of Directors (IoD) Ireland assessed its members’ attitudes to State Body governance and was completed by 400 directors and business leaders. The results found that three out of five (60%) directors see personal or reputational risk as the main deterrent to being on a State Board. However, when asked if they would consider applying for a position on the board of a State Body, the IoD survey found that nearly 72% of directors and business leaders would still consider applying for a State Board position.

The sentiment towards the Code of Practice for the Governance of State Bodies among directors was mostly positive. The survey found that almost 73% of members note it has been effective in supporting good corporate governance standards in State organisations. In addition, a further result noted that nearly 74% said it has improved governance standards since its revision in 2016. Nonetheless, there has been wider feedback and thought from members that they would like to see the Code updated to better reflect the governance realities of State Bodies.

As the foremost voice in the debate on improving governance standards, IoD Ireland is dedicated to developing and improving the effectiveness and performance of directors and boards throughout Ireland. In response to this recent research, they have created new supports and resources on State Body Governance. These supports will be of interest to IoD Ireland members and directors who are on, or who are planning on joining, a State Body. The new resources and support included a new IoD Ireland Director Handbook on the Code of Practice for the Governance of State Bodies, a recent knowledge sharing event with an expert panel, and an upcoming workshop on State Body Governance.

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The Handbook provides an overview of the governance framework of State Boards. The Handbook addresses key areas such as: the roles and duties of the board, its chair and individual members, and committees; conducts and disclosures; reporting requirements; risk management; internal audits, and controls; and remuneration and superannuation. It is a key resource for all members of a state body or for a director considering applying for a state board role. This Handbook was created in partnership with Mazars.

“High standards of corporate governance in State Bodies are critical to ensuring a positive contribution to the State’s overall economic efficiency, competitiveness, social cohesion, and regional development. The Handbook will be extremely useful for our members considering sitting on a State Board. It’s important for us to outline the processes and standards surrounding the governance of State Bodies as these bodies are vital for fostering a favourable impact on the overall efficiency, competitiveness, social cohesion, and regional development of the State.”

She continued: “IoD Ireland is committed to enhancing the proficiency and efficacy of directors and boards across Ireland. This publication focuses mainly, and was prepared, based on the governance requirements applicable to State Bodies as detailed in the provisions of the Code, but it is acknowledged that a wider range of governance codes, Companies Acts, legislative provisions, Government circulars and guidance notes should be considered in conjunction with the Code.”

A recent IoD Ireland knowledge sharing event for members also reflected on this Handbook, as well as a line-up of expert speakers who shared their own experiences and insights on being a member of a State Body. The expert speaker line-up included: Terence O’Rourke, Chairman of ESB and RTÉ, and former Chairman of Enterprise Ireland, Fiona Ross, Chair, Córas Iompair Éireann, Aidan Williams CDir, Chairman of National Asset Management Agency (NAMA) and Member of the Remuneration Committee.

Terence O’Rourke, Chairman of ESB and RTÉ, and former Chairman of Enterprise Ireland reflecting on the new Handbook noted:

“Sitting on a State Board is a challenging, yet rewarding, endeavour. These positions require the ability to independently oversee and scrutinise the delivery of strategies of an organisation, and offer considered advice based on sound judgement and experience. This Handbook will prove to be highly valuable to those who sit on, or are interested in sitting on, State Boards.”

Fiona Ross, Chair, Córas Iompair Éireann, another panel speaker at the recent event noted:

“This newly published Handbook, from IoD Ireland, offers direction and insight into the world of State Body Governance, and will be indispensable to all who need it. The information contained within covers all aspects of the subject matter and will help all those who are, or considering, being on the Board of a State Body. From my experience, while the experience is fulfilling and worthwhile, being on a State Body brings with it responsibility to many stakeholders and this publication allows for decisions to be made in an informed manner. In essence, having access to it transforms ambiguity into opportunity, elevating the collective proficiency and stewardship of the Board.”

Speaking about the Handbook and the event, speaker Aidan Williams CDir, Chairman of National Asset Management Agency (NAMA), and member of the Remuneration Committee, said:

“This informative Handbook will serve as a compass guiding Board members through the complex landscape of corporate governance. It encapsulates essential policies, procedures, and regulatory frameworks, fostering clarity and alignment within the boardroom. Such a Handbook should become a cornerstone for effective decision-making. It not only cultivates a deeper understanding of the company’s mission, vision, and strategic direction but also empowers board members to navigate challenges with confidence and integrity.”

The event also included contributions from Kian Caulwell, Partner, Mazars. It was sponsored by Accenture.

IoD Ireland will also be hosting a dedicated upcoming workshop on the Governance of State Bodies. Participants will upskill on the duties and responsibilities of being a member of a State Body. This dedicated Workshop will include exploring the Code of Practice for the Governance of State Bodies (the Code), and the core tenets of best practice for State Body governance and their application. It will be led by Dr Margaret Cullen, Governance Advisor, IoD Ireland. More information about this workshop, is available on the IoD Ireland website.

IoD Ireland is committed to future research, taking the evolving nature of business, board structures and governance into account, to further extrapolate key learnings to enhance State Body Governance. Underpinning all of IoD Ireland’s work is their CPD Framework for Directors, c-suite and senior executives, and boards. Its aim is to drive higher standards in corporate governance in response to the ever-evolving policy, regulatory, macro-economic and governance environment in Ireland. As part of this research work, they have also noted they will be looking to develop recommendations as appropriate for State Boards, policy makers and the Government.

To learn more, visit www.iodireland.ie