Speech
Speech on publication of 'Governance for Directors on State Boards’
From Department of Public Expenditure, NDP Delivery and Reform
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From Department of Public Expenditure, NDP Delivery and Reform
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Wednesday 22 November 2017
SPEECH BY PASCHAL DONOHOE TD, MINISTER FOR FINANCE AND FOR PUBLIC EXPENDITURE & REFORM
Good morning everyone – I am grateful for the invitation from the Institute of Directors and Mazars to launch their jointly produced ‘Governance for Directors on State Boards’.
This important publication builds on the principles of good governance that are contained in my own Department’s Code of Practice for the Governance of State Bodies, 2016.
The incorporation of requirements under that code with best practice for board directors is a valuable innovation which should make a very important contribution to the effective governance of State Boards.
I am grateful to and would like to compliment the Institute and Mazars for their initiative on this project.
The attendance here this morning is a sign of the value we all place on good governance and transparency.
Our State Bodies play a central role in the delivery of a tremendous range of public services across all aspects of government activity.
In that respect, to be a Board member is to help our country deliver all the services and drive all the projects that it hopes to provide to our citizens.
There could hardly be a more important job than that.
And one of the strongest influences on that delivery is the quality of the governance at Board level.
Publications such as the one we are launching this morning are essential to embedding a culture of
in our State Boards and consequently our State Bodies.
An essential part of this is an awareness of how important it is that the Board sets the correct ‘tone from the top down’.
It is something we in political life know all too well.
We know, too, that when that leadership fails to be shown, bad things happen.
As I highlighted at the launch of the Governance Code last year, a key feature of the Code is the substantially greater emphasis on accountability and transparency.
The Code of Practice is grounded in four key principles relating to;
And on that final point, capacity and capability is fundamental to the performance of the Boards of State Bodies.
It is, therefore, vital to ensure that the appropriate balance of skills, expertise and experience on State Boards is achieved, so that Board members can successfully deliver their challenging and demanding mandate.
As you may know, and as is laid out in this morning’s document, the Government introduced significant reforms to the system for State Board appointments during 2014, building on a number of earlier innovations that were originally introduced in 2011.
The revised approach has the following three key principles at its core:
The Public Appointments Service- or PAS- has a significant role under the new arrangements, in preparing a sufficient list of suitable candidates so that Ministers are able to exercise effective choice.
This provides independent assurance that the appointee is of sufficient calibre and quality to allow them to add significant value to the work of the relevant board.
The positive impact of these reforms has been confirmed by research published by the Institute, which highlights the extent to which the new system has increased transparency and enhanced confidence in the appointments process.
My predecessor as Minister for Public Expenditure and Reform issued Guidelines on Appointments to State Boards in November 2014, setting out in detail how the process works.
The operation of the Guidelines has been viewed very favourably to date, but the option to make amendments to further improve the process remains under consideration, following a review that was carried out last year.
A particular aim of the Government has been to increase the level of participation by women on State Boards.
A target of 40% female membership has been set and, in addition, where a board met the 40% target successfully, the aim should be to increase the target to 45%.
A database maintained by my Department on State Board Appointments shows that steady progress is being made on increasing female participation.
Some 40% of all Board members are now female, although this percentage obviously varies from Board to Board.
Indications are that 48% of State Boards have reached the target of a minimum of 40% female membership set by the Government and indeed that some 35% of Boards have met the higher 45% target.
This compares very favourably, as previously reported on by Institute of Directors, with Boards in the private sector.
I would also support measures by Departments to increase awareness of State Boards in their sectors, with the particular aim of increasing applications from women.
That being said, the guidance contained in this publication is not operated and applied in a vacuum and it is essential that there is ongoing dialogue and engagement between Government Departments and State Bodies under their aegis, based on a common understanding of the objectives of the State body and the actions through which it seeks to achieve those objectives.
The area of corporate governance is constantly evolving.
Board members have a duty to continually update their knowledge and skills to ensure that they do not fall short on their duties and responsibilities.
It is publications such as this that lend weight to the importance of instilling good corporate governance practices in our State Bodies and give Board members the tools to achieve high standards in corporate governance.
I might just say that my Department will shortly be publishing a newly developed guidance booklet, setting out how the new requirements and financial reporting disclosures under the updated Code of Practice for the Governance of State Bodies 2016 should be reported in the financial statements of State Bodies.
This will provide State Bodies with practical assistance in implementing the requirements of the updated Code.
The guidance has been developed by the Office of the Comptroller General, in consultation with my Department, and takes account of comments provided through direct engagement with State Bodies in the course of the C&AG audits and with representatives at presentations and workshops relating to the Code.
We have also consulted with the wider auditing profession, who are involved in auditing commercial State Bodies, and the Secretary General of the Department of Public Expenditure and Reform will be writing out to all Government Departments advising of this new guidance and asking them to bring it to the attention of all State Bodies under their Department’s aegis.
Officials from my Department and from the Office of the Comptroller and Auditor General will also continue to engage with and assist State Bodies in effecting the changes brought about by the new requirements, in the updated Code of Practice.
As stated at the launch of the 2016 Code, ‘it is intended that this Code will be a living document which will evolve in line with best practice’.
We owe it to everyone- taxpayers, customers and citizens – to ensure these boards operate both ethically and effectively, and I think these developments show that we are all determined to do just that.
So, I would like to thank the Institute of Directors and Mazars for their work on this publication and I would also like to thank all the individuals- men and women- who add to public life and contribute to public service by lending their skills to the activities of our State Boards.
I am keenly aware of the sacrifice and the often thankless work that is involved.
Your service does not go unnoticed by me or by the Government.
So I thank you again for this invitation, as it gives me an opportunity to acknowledge that. I hope you have a good morning.
Thank you.
ENDS
See here for information on obtaining a copy of the publication.