Government ends public interest directorships in banks
State to remain involved in the nomination of bank directors through reformed process
Michael Somers, the former National Treasury Management Agency chief executive who was appointed to the board of AIB in 2010 as a non-executive director stepped down last month
The Government will no longer appoint public interest directors to bailed-out banks, after the final two ministerial nominees on boards of Irish lenders retired at the end of December.
Michael Somers, the former National Treasury Management Agency chief executive who was appointed to the board of AIB in 2010 as a non-executive director, and Tom Considine, a former secretary general of the Department of Finance who joined Bank of Ireland’s board in 2009, stepped down from their respective institutions last month.
Minister for Finance Paschal Donohoe presented the plan to Cabinet this week to fulfil a programme for partnership government measure to cease the appointment of new public-interest directors and reform the process by which state nominees are appointed to bank boards in future.
The then government moved to appoint public-interest directors to bailed-out Irish lenders after the State was forced to guarantee the industry to prevent it from collapsing in 2008. No new ministerial nominees have been put forward to the banks since 2010.
The Minister plans to continue to have an input into new bank board appointees in AIB, Bank of Ireland and Permanent TSB, where the State remains a shareholder following the crisis. This will be along the lines of current guidelines of appointment to state boards, where panels of potential candidates are compiled by the Public Appointments Service in conjunction with the Department and preferred individuals are proposed to the nomination committee of the relevant bank.
The banks, in turn, will have to conduct its required governance and submit the candidate for approval from the European Central Bank’s supervisory arm, which took control of oversight of euro zone banks in 2014.