Following Mr Ron Bolger's resignation the Government is under intense pressure to bring some order to the boardroom chaos in Telecom Eireann to ensure that the timetable for flotation is not disrupted.
It took the first step last night, moving quickly to replace Mr Bolger with Mr Pat Molloy, a former Bank of Ireland group chief executive and a very highly-regarded businessman. It is expected that the Public Enterprise Minister, Ms O'Rourke, will announce the appointment of a major US telecoms figure as deputy chairman next week.
The Telecom board meets today, and although it is a scheduled monthly meeting, this week's events are certain to dominate the agenda. In just 24 hours Telecom has managed to lose both its deputy chairman, Mr Bolger, and its chairman, Mr Brian Thompson, who left to take over as chief executive of GTS, a global telecommunications company with interests in Ireland.
The sudden resignation of Mr Bolger, who was Telecom chairman for six years, was the second blow to the flotation in 24 hours.
Mr Bolger, who delivered a one-line resignation letter to both the Minister and Mr Ray MacSharry, who replaced Mr Thompson on Monday, is understood to have been upset at not being offered the chairmanship the second time around, having stepped aside to make way for Mr Thompson.
The boardroom upheaval is unlikely to threaten the flotation timetable. A draft prospectus has been prepared, and the advertising has already being booked. But it has dealt a blow to Telecom's image. Sources said last night that overseas investors, who will be watching with some interest, will not be impressed.
They are likely to interpret the sequence of events as highly political, questioning how a company of Telecom Eireann's stature can become embroiled in this way. However, sources close to the flotation were adamant that everything remained on track and that the fundamentals of the company's business, the key factor for investors, remained attractive.
The new board must regroup quickly. A crucial aspect of a successful flotation will be the presentations to fund managers in Europe and the US which get under way shortly. Investors like to see a strong management team, aided by a credible chairman with some background in telecoms. Although a good businessman, Mr MacSharry has no such background.
Now the board has lost Mr Bolger, a former managing partner of the accountancy group KPMG, who was acknowledged as having a strong interest in the telecoms business. Sources said he had visited New Zealand and Australia to see how flotations had been handled there.
The Government will hope that the appointment expected today of an international telecoms heavy-hitter will help to give the newly structured board credibility in this key area.
Mr Molloy's appointment will also be seen positively. He is familiar with public companies, knows his way around the US and European investment communities and had a strong record during his time in charge at the Bank of Ireland.
Mr Molloy is also chairman of Enterprise Ireland. He is still a non-executive director of the Bank of Ireland and a director of CRH and several other public companies.
This week's events again raise the question of whether State boards should contain political appointees. As State companies play a pivotal role in the economy there is a growing acknowledgement that they should operate in the same way as private companies, and appointments should be made purely on business rather than political merits.