Memos reveal extent of EBS board divisions

Three documents from 2006 illustrate how badly relations had deteriorated within the society's board that year, writes Colm Keena, Public Affairs Correspondent

Three confidential and unusual memorandums prepared for the board of the Educational Building Society (EBS) during 2006 arrived in the post to The Irish Timesyesterday. No covering note was enclosed.

The memorandums illustrate just how badly relations had deteriorated within the society's board that year.

Ethna Tinney, the non-executive director who has put herself forward for re-election next Monday without the support of her fellow directors, does not feature prominently in the memos, two of which are produced by independent directors Ron Bolger and Cathal Magee.

However, the documents broadly support an outline of events hinted at by Ms Tinney in her letter to the society's 280,000 members, sent out last month.

In that letter, she said the board's refusal to support her re-election came down to three factors.

One was her opposition to a deal with Rabobank that was investigated by the EBS in 2004 and 2005. A second was an issue to do with the society's nominations committee, and a third had to do with matters of corporate governance and executive remuneration in 2006.

In her letter she stated, rather dramatically, that the board had "fractured" in 2006 over corporate governance.

In March this year, Ms Tinney made a pitch to the board for support for her renomination, but failed. A copy of that address has been seen by The Irish Timesand includes the statement that for a period of nine months in 2006, "a determined and at times very unpleasant effort was made to persuade Cathal Magee and Ron Bolger to resign".

The lengthy memos which are now in the public domain support the content of her short letter, and illustrate how she could have formed the view she expressed to the board in March of this year.

In his memo, Mr Magee said the environment for him within the board changed when he challenged "the executive handling of key business agendas" starting with the Rabobank project.

He raised issues concerning the level of independence of some of the independent directors, as well as matters that had been dealt with by the remuneration committee.

Mr Bolger, in his document, supported Mr Magee and added some criticisms of his own.

While Mr Magee said he had been the subject of "corporate bullying", Mr Bolger said he was "personally discredited" when he spoke up about matters he was concerned about. He threatened to raise aspects of the society's affairs with the financial regulator. The then chairman, Brian Joyce, responded to both these documents with a very robust outline of his views.

He described the two directors as "dissidents" and their "campaign" as persistent and unreasonable. He said Mr Magee had refused his request to step down from the remuneration committee and that "in truth one could argue that Cathal has more to answer to as a bully than anyone else around this table".

He criticised Mr Magee's attendance record, said he sometimes arrived late or left early, and was "frequently consulting his BlackBerry during meetings and invariably on his mobile at breaks".

Current chairman Mark Moran said yesterday that the difficulties covered in the memos were resolved in October 2006, when a review of the society's corporate governance was agreed.

In December 2006 Mr Bolger and Mr Joyce resigned from the board.

Mr Magee remains on the board and yesterday issued a short statement in which he said the issues covered in the memos were now closed.