The Institute of Directors Ireland (IoD) has urged the Government to look at reforms to the existing code of practice for the governance of State bodies to boost accountability, transparency, and oversight.
The IoD also said research it carried out found that while there continues to be a strong appetite to serve on boards of State bodies, many potential candidates were concerned about potential reputational risk involved in taking up such positions.
“Thus, while 72 per cent of respondents to an IoD Ireland member survey expressed an interest in applying for a State body board position, 60 per cent of respondents identify personal or reputational risk as a deterrent to applying or reapplying for such a role.”
In a new paper, to be published on Thursday, the IoD recommended parent departments should work better with State bodies to clarify matters reserved for board decision-making versus matters requiring ministerial/ parent department approval.
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It suggested periodic reviews ensuring that the legislation underpinning the State body remains fit-for-purpose and enhanced engagement by strengthening the interactions between State bodies and parent departments.
It urged that learning be improved by facilitating structured education programmes on corporate governance issues including for civil servants and that the chair of State bodies should be involved in the assessment process and ultimate recommendation to the Minister on appointments to boards.
The code of practice, which was first issued in 2009 and updated in 2016, is designed to ensure that State bodies operate with a high standard of governance, accountability and transparency. The code sets out principles, guidelines and best practices for the management, oversight and operation of State bodies to ensure that they fulfil their responsibilities effectively and ethically.
The IoD paper said at 72 pages, including appendices, the current code is lengthy.
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The paper also recommended that the code be augmented to include “core principles and provisions” related to the role of the CEO and management in executing delegated authority from the board, the structure of the system of internal governance within a State body and the appointment of a senior independent director to State body boards.
It said additional guidance should be provided within the code guidance document on proportionality relevant to State body type, size etc.
[ Directors cite ‘reputational risk’ as main deterrent to sitting on State boardsOpens in new window ]
Minister for Public Expenditure Jack Chambers welcomed the IoD paper and said the Government wanted to drive the highest standards of governance across State bodies.
“The importance of State bodies and agencies cannot be over-stated. They provide vital services that help influence and shape Irish society. The role of State board members, in turn, provides essential oversight and strategic direction to these bodies for the benefit of the public they serve”, he said.
IoD chief executive Caroline Spillane said: “Our recommendations in this paper are aimed at bolstering State body accountability, transparency and oversight. They cover a wide range of areas from periodic reviews of the code to enhanced engagement between the body, parent department and Oireachtas, to enhancements around state body governance learning and education, and recruitment.
“Our objective with this new paper is to identify areas requiring attention to support best-in-class State body governance in Ireland.”
