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Maintaining high standards in Ireland’s boardrooms

After 21 years, Professor Niamh Brennan reflects on her motivation for setting up the UCD Centre for Corporate Governance

For the past 21 years, Prof Niamh Brennan has been helping to enhance the standards of corporate governance in Ireland. Firstly, through the Centre for Corporate Governance that she founded at the UCD Quinn School of Business in 2002 and then through the UCD Smurfit executive development diploma in corporate governance which she established in 2004.

Now entering her final year as director of the diploma programme, she reflects on her motivation for setting up the Centre for Corporate Governance. “I had taken on a number of non-executive directorships at the time but what did I know about being a company director?” Brennan recalls. “I realised there were a lot of other people in the same situation and my motivation was to provide training for them when there was no training in place.”

The centre provides short courses on corporate governance for company directors as well as customised courses tailored to the specific governance needs of individual companies.

The diploma in corporate governance is regarded by many as Ireland’s gold-standard qualification in the discipline. It is a one year, part-time accredited programme which leads to a UCD qualification in corporate governance.


“I started the programme in the 2004-05 academic year,” says Brennan. “It was the first executive development diploma in the Smurfit School. I had spent two years offering short courses and in-house courses for directors and others interested in the area at the Centre for Corporate Governance and I developed the accredited diploma programme at the same time. It was a question of crawling before you walk and walking before you run.”

Confidence and trust

High standards of corporate governance have grown in importance since then. Governance failures have the potential to undermine confidence and trust in business generally as well as in critical areas of the economy such as the financial system. That highlights the need for company directors and senior directors to have the technical knowledge necessary to carry out their governance duties. The Smurfit diploma programme imparts that knowledge and offers in-depth exposure to all aspects of corporate governance.

While it may be tempting to attribute business failures and reversals in fortune to low standards of governance, this is not always or even often the case, Brennan explains, pointing out that the main aim of incorporation is to protect entrepreneurs and business owners in the event that things go wrong.

“Things can go wrong due to competitive forces or market shifts,” she notes. “It can also be due to an error of judgment. It’s not against the law to make an error of judgment. For example, in the UK, the government report into RBS following the banking crash did not find against anyone. It found errors of judgment but no case of people setting out to do bad things.”

What good corporate governance does is put in place checks and balances to ensure things are done properly. That will not prevent genuine errors of judgment but it will lessen the chance of people wilfully making bad choices.

“This applies especially to people at a senior level who have a lot of power. The risk is at the top of the organisation, not at the bottom. A petty cashier is audited several times a year but the risk there is tiny. The real risk is at the very top.”

That’s why a core principle of good corporate governance is the distribution of power across more than one person. “The dominant chief executive is now rightly seen as a bad thing. The combination of the chief executive and chair roles is a bad thing. That power should not be concentrated in one individual,” says Brennan.

Structures and processes

Governance starts at the top, with the board and responsibilities of directors, and cascades down through the organisation into its day-to-day activities, Brennan adds. “Having the structures and processes in place starts at the top,” she says. “These structures and processes protect shareholders and other stakeholders and the long term sustainability of the enterprise. The job of the non-executive director (NED) is to exercise challenge.”

In this context, Brennan recalls the banking crisis in Ireland and some of the risks taken by certain organisations at the time. “Non-executives may sometimes be reluctant to do so and in some cases will rather leave the board than go to the trouble of challenging,” she says. “There was a touch of that during the banking crisis. Some NEDs might look back and think they should have exercised stronger challenge.”

The UCD Smurfit programme covers both the technical aspects of corporate governance and the less formal side. “Students learn about the legal and regulatory aspects and the different codes that apply, including the Stock Exchange codes and so on,” Brennan explains. “There are a lot of codes out there. They also learn about the softer side, the behavioural and psychological issues.”

But it’s not all chalk and talk. “What really makes it interesting is what the students learn from each other,” she continues. “The students bring a wealth of experience into the class. We get a really interesting and broad mix of backgrounds, roles and sectors. We don’t set out to achieve that mix but the course attracts it. That makes for a rich learning experience for everyone, both students and lecturers. Lectures are held on Monday and Tuesday evenings and there is a break for the students to get something to eat. That’s really important for networking and the conversations where knowledge exchange takes place.”

Brennan looks forward to welcoming another diverse set of students to the next course, which begins in September. “Applications are open now and I expect to see another very interesting group of students on the programme during my final year as director.”