FAI rent payments to John Delaney may spark wider ODCE review

Non-disclosure of former CEO’s full remuneration will raise further questions

John Delaney: stood aside as FAI chief executive  after it was revealed that he had written a cheque for a €100,000 “loan” to the association. Photograph: Morgan Treacy/Inpho

John Delaney: stood aside as FAI chief executive after it was revealed that he had written a cheque for a €100,000 “loan” to the association. Photograph: Morgan Treacy/Inpho

 

The revelation that the FAI was paying John Delaney’s €3,000 monthly rent over a prolonged period of time may prompt the Office of the Director of Corporate Enforcement (ODCE) to expand its review of the association’s finances, according to an expert in corporate governance.

Prof Niamh Brennan of the UCD College of Business suggests that a failure to reflect the full extent of its former chief executive’s remuneration in its annual accounts is likely to raise further questions for the ODCE.

Delaney was replaced as FAI chief executive on Saturday night amid renewed scrutiny of his financial relationship with his employer, after it was revealed that he had written a cheque for a €100,000 “loan” to the association in April of 2017. It was also reported that he subsequently invoiced the organisation for a similar amount two months later.

“There is already a question mark over the loan not being disclosed in the 2017 statements,” Brennan says. “The Sunday Times say that he paid benefit in kind on it [the rent] and so it is therefore part of the CEO’s remuneration, but was it disclosed in the financial statements?

“That would definitely be an issue. The ODCE are examining the loan and if there is non-disclosure of the rental payments, €3,000 a month is quite a substantial sum and so that might also come into the ODCE’s review.”

Expenses

There is no reference to the rental payments in the published FAI accounts, although it has always been widely believed that Delaney was in receipt of substantial expenses payments from the association in addition to his salary of €360,000.

On the eve of the latest story about his financial relationship with his employers, the association announced on Saturday night that Delaney is to be replaced as chief executive of the organisation with immediate effect. He is to be moved to a newly created role of “executive vice president”. The organisation’s recently appointed chief operating officer, Rea Walshe, will step into the CEO role on an interim basis, with the association saying that it hopes to make a permanent appointment ahead of its AGM in July.

In a lengthy statement, the association’s president, Donal Conway, said that the FAI board made the change due to recommendations in an independent review of the organisation’s structures. The review was conducted by the outside consultant Jonathan Hall, a former executive director of the English FA and former secretary and legal officer with the RFU.

On the face of it, the move represents a major demotion for Delaney, although there is considerable dissatisfaction among his critics that he will retain significant areas of responsibility and answer directly to the board rather than his successor.

Pay cut

The association also confirmed over the weekend that Delaney is to take a “substantial” pay cut. It is understood that his new salary will be in the region of €120,000, but it also believed that he will in future keep the money he receives from Uefa for his role on its executive committee (board). This amounted to some €160,000 last year.

The new arrangements have generated a considerable amount of criticism from ordinary supporters on social media as well as, in private, individuals with experience of both business and football. Many suggest the effective splitting of the chief executive role and the retention of Delaney, long perceived to be the dominant force in Irish football, will deter high-calibre candidates from applying for the job.

Brennan, though, sees some of the changes suggested by Hall as both positive and significant while describing the dual leadership roles as “unusual rather than unheard-of”.

“One of the things that he refers to is that the new chief executive and the new executive vice president will be attending board meetings but they won’t actually be members of the board,” she says. “That’s a little nuance that people who don’t know about governance mightn’t understand, but it’s quite an important principle – the principle being that a board of directors should meet privately in the absence of management.

The difficulty of having two chiefs, I think that those arrangements can turn out to be fraught with difficulty

“That would be the recommendation of the UK Corporate Governance Code applying to UK and Irish-listed companies. It would be a taken-for-granted principle of governance nowadays, so when I read that I thought that the recommendations are at least coming from somebody who is recommending basic best practice. That these executives will only attend meetings by the invitation of the board puts down a marker between the board and the management.”

Source of complaint

The previous blurring of this particular line where Delaney was concerned was an enduring source of complaint since he initially took up his position more than 14 years ago.

“The difficulty of having two chiefs, I think that those arrangements can turn out to be fraught with difficulty,” Brennan continues. “I would say that there are few companies where there would be two chiefs and where it has happened, it has often not worked out, and so they have reverted to having a single chief executive, with other senior managers reporting to that person.

“Still, you do see it occasionally. It is unusual rather than unheard-of but the practicalities of it . . . I do see as being tricky.”

Politicians will get to ask Delaney about the new arrangement, his and his employer’s finances and other issues next month when he appears before the Oireachtas Committee on Transport, Tourism and Sport, something the association has confirmed he will still do.

Asked about the situation on Sunday on RTÉ radio, Taoiseach Leo Varadkar observed: “There have been some unusual arrangements when it comes to the FAI’s finances. Certainly a bridging loan is unusual in an organisation of that size and scale; with banking facilities, I’d assume they could get hold of a loan of €100,000 if they needed to.

“Obviously questions have to be answered, the joint Oireachtas committee will carry out hearings later in the week. The most important thing from a public point of view . . . is that that money has all been spent on the purposes intended.”

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