Irish Farmers’ Association controversy is fundamentally an issue of weak governance and lack of transparency

The most successful lobbying organisation in the State has much soul-searching to do

 

Excessive pay at senior executive level is regarded by a majority of business owners as the single biggest threat to public trust and to the reputation of their companies. They know their clients. The payment of huge salaries and massive bonuses in major corporations, regardless of performance, is deeply resented by the public and seen as a failure of corporate governance. Far down the business chain it is no different. Salaries are expected to reflect not just personal competence, but the size of a business and its culture. That was why the charities sector suffered such damage following the disclosure of pay levels at Rehab and Central Remedial Clinic.

The current Irish Farmers’ Association controversy contains many of those elements and has some way to run. The resignation of its former general secretary Pat Smith, following disclosure of his remuneration, set the scene. Farmers, who had been struggling to cope with reduced prices, were appalled to learn that – for the years 2013 and 2014 – his salary amounted to almost €1million. Not satisfied with Mr Smith’s resignation, some sections of the organisation have called for the removal of any official who was complicit in the arrangement. Since then, the president of the association Eddie Downey has “stepped back” from his role to allow a full review of governance structures to be carried out.

The man chosen to conduct this review involving remuneration policy and corporate governance and to make recommendations is Con Lucey, its former long-term chief economist. He may also examine details of any severance package negotiated by Mr Smith. It was a clever choice because of Mr Lucey’s personal standing with members and his proven concern for the association. At the same time, deputy president Tim O’Leary will take on the functions of president. This is a full-on damage limitation exercise by the most successful lobbying organisation in the State. It is also a necessary apology to its members for having got things so wrong.

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