Director told of 'corporate bullying'

Magee Memo: Non-executive director Cathal Magee said he had his first experience of corporate bullying after he raised a number…

Magee Memo:Non-executive director Cathal Magee said he had his first experience of corporate bullying after he raised a number of matters with the EBS board.

Mr Magee, managing director of Eircom Retail and a member of the board of Eircom since 2004, joined the board of the EBS in January 2003.

On March 30th, 2006, he wrote an eight-page memo to his fellow EBS directors entitled "re corporate governance standards".

He said his experience with the board over the previous 12-18 months had been difficult.

"The environment . . . changed once I began to challenge the executive handling of key business agendas starting with Project Nova, followed by the €5 million special pension contribution to the managers' and senior managers' pension fund, and finally with the handling of executive remuneration, pension and retirement benefits in the remuneration committee.

"It is my first experience of being corporately 'bullied' as a director because of positions I have articulated." He said the EBS was "slowly and painfully" emerging from a legacy building society governance culture and many key decisions were vested in the "CEO/chairman axis and non-executive directors and many sub-committees were either administrative or little more than rubber stamping."

He said a change in governance culture was required and suggested the Prof Niamh Brennan of UCD to do a corporate governance audit.

He said he appreciated the support he had received by the then board vice-chairman, non-executive director Ron Bolger.

The memorandum covered a number of areas concerning corporate governance and the Combined Code (a corporate governance code). On the remuneration committee issue, Mr Magee cited the early retirement package that was given to the former financial director, John Cullen, "which did not come before the remuneration committee for approval" and the remuneration package for the new chief financial officer, Alan Merriman.

He also cited the minuting of the committee's meetings which, he said, had been "particularly problematic" and the fact that the then chairman, Brian Joyce, had been "critical to me of my approach to minutes of the remuneration committee".

He said a review of senior management remuneration, commissioned by the committee in March 2004, had not been received by the committee until May 2005. "This was after the new remuneration package for the new CFO had been executed."

He said a number of papers on market positioning and the structuring of the reward package had been presented by consultants Towers Perrin to EBS "but none of these papers were brought forward" to the remuneration committee for consideration.

Mr Magee remains a non-executive director of the EBS.