Concern as three more MDU directors resign

The Government has expressed concern about a boardroom crisis which has led to the resignation of four non-executive directors of the Medical Defence Union (MDU), which provides cover for up to 1,000 Irish doctors.

The MDU is a British-based international medical indemnity organisation owned by its members.

The Irish Times has learned that in recent days three non-executive directors of the MDU resigned from its board in a row over corporate governance issues, especially disclosure of executive remuneration.Another director stepped down for similar reasons some months ago.

The four non-executive directors who have resigned, including a former British minister and a senior civil servant, have filed a report on the issue to the Financial Services Authority (FSA), the regulator for the sector in the UK.

The three non-executive directors who resigned recently are Lord Glenarthur, a former British minister; Sir Robin Mountfield, a former permanent secretary at the cabinet office; and Prof Andrew Chambers, a senior British expert in internal audit and corporate governance. A fourth director, Michael Arnold, resigned in March.

A statement issued yesterday on their behalf said: "Prof Andrew Chambers, Lord Glenarthur and Sir Robin Mountfield have resigned because of concerns about several aspects of corporate governance, especially disclosure of executive remuneration. They have made a report of the circumstances to the FSA, jointly with Mr Mike Arnold, who resigned in March with similar concerns."

The Department of Health in Dublin yesterday wrote to the MDU expressing concern about the resignations and seeking information. It is understood the department said the Government considered the provision of medical indemnity to be a critical issue for doctors and patients.

In a statement last night the department said it believed "the Irish members of the MDU would expect that the organisation to which they have entrusted the defence of their reputations and interests would conform to the highest standards of corporate governance".

The MDU yesterday declined to provide a breakdown of its Irish membership. However, it is believed that it has up to 1,000 Irish doctors as members.

The State reimburses up to 500 GPs in the general medical service scheme for the cost of medical indemnity cover put in place by the MDU. It is estimated that this could cost up to €1.5 million annually.

Consultants and other doctors working in public hospitals are covered by a State indemnity scheme. However, most have arrangements with either the MDU or another international indemnity organisation for supplementary cover in relation to private practice or for dealing with complaints about them made to the Medical Council.

The Government is still in dispute with the MDU over who should have responsibility for meeting the cost of cases against obstetricians for incidents which took place before State indemnity was introduced in 2004. These costs could run to hundreds of millions of euro.

In a statement last night that MDU said: "We can confirm that four non-executive members of our board resigned this year. We were sorry to lose them as they contributed fully and thoughtfully to the board's deliberations over the years. If the FSA thought any investigation was appropriate, we would, of course, provide our full co-operation.

"In respect of disclosure of executive remuneration, the annual report and accounts, which members are now receiving in advance of our agm in September, contain financial statements which have been prepared in accordance with the Companies Act 1985 and applicable accounting standards, and independently audited. These contain information about the company, its staff and directors, including executive remuneration."