Crisis-hit Ryanair needs to take a hard look at its board
Many of them, particularly the chairman, are there well beyond what codes recommend
The travelling public’s attention switched to Monarch yesterday, but that did not mean Ryanair’s problems went away. The airline yesterday issued a bulletin detailing how it is managing the two waves of cancellations announced since the middle of last month.
It showed that 308,000 of 315,000 customers hit by flights cancelled up to the end of October have been given alternative routes or refunds. About 7,000 of them have yet to contact the airline.
Of those hit by cancellations over its winter schedule, it has emailed all 400,000 and offered alternative routes or refunds to more than 300,000. It expects that claims relating to 360,000 of them will be processed by the end of the week.
The bulletins are mostly aimed at telling passengers and the media how it is coping with the nuts and bolts of its problem. They shed little light on how it all came about or who was responsible.
Chief executive Michael O’Leary told shareholders recently that he was taking full responsibility. Nevertheless, few of them seem keen to push him out of the job, which is understandable given that he has led the airline from relative obscurity to the number one position in Europe, with almost 130 million passengers a year.
However, before the cancellations was ever an issue, questions were being asked about the board, many of whom are there long beyond what corporate governance codes recommend. That applies principally to chairman David Bonderman, who has been in that position since Ryanair floated 20 years ago.
Shortly before last month’s annual general meeting, a number of advisory firms questioned Bonderman’s independence, along with that of nonexecutive directors Kyran McLaughlin, Julie O’Neill, Michael Cawley, Howard Millar and several others. Cawley and Millar are both former full-time senior executives of Ryanair.
Shareholders voted all of them back on to the board by majorities exceeding 90 per cent. However, given the company’s ongoing problems and the fact that it is going to face new challenges as it continues to grow, it is more than fair to ask if that was wise.
Investors are unwilling to see O’Leary go, but they perhaps they should be willing to replace some of Ryanair’s board with independent figures willing to exert meaningful pressure on its chief executive if need be, and to help the airline navigate its way through the current crisis.