Rift in the boardroom ruffles EBS

The society's board members are refusing to re-elect one of their number after a heated series of claims and counter-claims. Colm Keenareports

The 280,000 members of the Educational Building Society find themselves confronted with a "who to believe" choice as the society's annual general meeting approaches.

Ethna Tinney, a producer with Lyric FM and an independent non-executive member of the EBS board since 2000, is seeking re-election but does not have the support of the board.

Ms Tinney, in a letter to members circulated this week, claimed there were "three reasons why the board does not support my re-election" (see panel). In essence she said she was being shafted because of her independent views.

The EBS chairman, Mark Moran, in a letter accompanying that of Ms Tinney, said her given reasons were "without foundation". He said all the matters raised by her had been "unanimously concluded upon by the board, including Ethna".

Mr Moran said the issue has to do with Ms Tinney's performance as a director. "Unfortunately, in the light of appraisals of her performance as a director, and the board's assessment of her subsequent performance, Ethna has lost the confidence of the board."

A major effort is under way to get out the vote in favour of the board. EBS head office has been instructing branch staff to encourage members who visit the branches to vote on the issue or to fill in proxies for the use of the chairman. In the branch on Liffey Street, Dublin, yesterday, free pens and toffees were being given out as part of the effort to encourage involvement.

During the week, The Irish Times was shown a January 28th, 2004 letter to Ms Tinney from the then EBS chairman Brian Joyce concerning her performance as a director. The letter was written in the wake of a meeting between the two, at which Ms Tinney's below-average performance in an appraisal of directors' performances was discussed.

The letter stated that a further appraisal was to occur in a year's time and that her performance "requires to be improved".

Mr Joyce wrote that Ms Tinney would be provided with assistance to improve her performance and that, on the basis that she agreed with the content of the letter, he would recommend her renomination to the board. Ms Tinney wrote the word "agreed" and her signature on the letter.

A further appraisal of all the members of the board was conducted in late 2004. According to Mr Moran, Ms Tinney's score was still "significantly below average" but "no action was forthcoming". On Wednesday of this week, when he spoke to The Irish Times, he did not know if Mr Joyce had a further conversation with Ms Tinney on the matter but yesterday he stated that the result of the second appraisal was discussed with Ms Tinney at the time. A spokesman said Mr Moran had in the meantime spoken with Mr Joyce. Mr Joyce was not available for comment.

Ms Tinney said she had never discussed the second appraisal outcome with Mr Joyce. To this day, she said, she does not know her result.

The Irish Times has seen a copy of Ms Tinney's address to the board on March 1st of this year, when she unsuccessfully sought its approval for her re-election. In the address Ms Tinney said she was "never given the result of the 2004 review and indeed, it was never mentioned to me. Now it is being used against me, although I have no idea what it contains.

"Apart from such a flagrant breach of natural justice, if those results plus the letter I signed [ in January 2004] had any significance, the time to use them against me was January 2005."

Ms Tinney also made a reference to previous boardroom differences involving other directors.

"It is important to note that I am the third director to fall foul of some of the members of this board. From March to December of 2006, a determined and at times very unpleasant effort was made to persuade both Cathal Magee and Ron Bolger to resign. This effort commenced when they both expressed reservations about fiscal and other corporate governance matters, and it was led by our former chairman, Brian Joyce, and our chief executive, Ted McGovern, largely supported by the rest of the board.

"I took the view that the reservations expressed by Ron and Cathal deserved the respect and attention of the board and supported both of them against a variety of aspersions cast on their motivation in the certain knowledge that I would have to pay a price for that support."

These remarks seems to be a reference to the boardroom "fracture" mentioned in her letter sent to members this week.

Ms Tinney is paid €42,000 a year for her work with the board. Mr McGovern was paid €654,600 in 2005, excluding his pension payments.

Mr Bolger resigned from the board last December and Mr Magee remains on it. Requests for comment to both men yesterday met with no response.