The board of IDA Ireland decided to place their outgoing chief executive Martin Shanahan on gardening leave to avoid any “perception of a possible conflict of interest”.
Mr Shanahan had told the State agency last July of his plan to leave the organisation in 2023, with it emerging some months later that he planned to take up a role as partner with consultancy Grant Thornton Ireland.
At a meeting in September the IDA’s organisational development committee agreed they would need to consider whether a period of garden leave would be required. Minutes of a non-executive board member meeting from October 24th detail how Mr Shanahan was asked not to take part “in accordance with conflict of interest procedures”. A note of the minutes said: “The board agreed, to avoid the perception of a possible conflict of interest, to place the CEO on ‘garden leave’ with effect from October 26th for the remaining period of contract.”
The IDA has confirmed that Mr Shanahan is entitled to his full salary of €193,500 per year until the end of his garden leave period in January.
A schedule of records released under Freedom of Information (FOI) also details how the IDA had extensive correspondence with its legal advisers over how to manage the outgoing CEO’s departure. Seven records containing references to Mr Shanahan’s garden leave were withheld under FOI, with the IDA saying they were legally privileged and contained confidential communications.
The records also show the IDA had forewarned the Department of Enterprise that there could be a pending issue around “conflict of interest”.
A letter sent to the department’s secretary general, Dr Orlaigh Quinn, by IDA chairman Frank Ryan on September 29th said: “Once I am in receipt of formal resignation and notice from the CEO in writing, the board will have to determine if there is a conflict of interest and, if so, may have to invoke garden leave.”
In a statement the IDA said the department had no input into their decision and was simply being kept informed of what was happening.
A spokeswoman said the IDA chairman had been informed of Mr Shanahan’s intention to leave in advance of mid-year results in July. She said: “[Mr Shanahan] advised the board of IDA Ireland of his intention to step down from his role at a date to be agreed in early 2023. In keeping with that timeline, Martin officially tendered notice of his resignation on October 25th, to take effect in January 2023 and, in accordance with best practice and good governance, and with his agreement, he commenced garden leave with effect from October 26th.”
The spokeswoman said garden leave was a standard practice used by employers to protect their business interests where an employee – usually due to seniority – would have “greater access to confidential or sensitive information and a wide pool of clients”.
“This approach was agreed by the board of IDA Ireland to avoid the perception of a conflict of interest. It is standard practice that salary is paid during the period of garden leave.”
