Institute of Directors: Conflicts of interest are rampant on Irish boards

Conflicts of interest are rampant on Irish company boards, a survey of directors who sit on the boards has found.

The Institute of Directors (IoD) in Ireland, which canvassed the views of 431 firms, said its survey of boardroom ethics was the first of its kind to be carried out here. The findings showed a dearth of controls of key governance issues and were a matter of “concern”, the IoD said.

Half of the directors responding to the detailed survey of 40 questions said there was “a prevalence of conflicts of interest” on boards.

And 40% of respondents said the behaviour of the board’s chair was either not monitored in terms of ethics or it was unclear whether it was monitored.

The IoD survey was carried out in February and most directors cited “recent controversies and public scrutiny” for increasing attention on ethics.

Directors cited fears of a media scandal or reputational damage as the reasons they thought their boards were paying attention to ethics for the first time.

IoD chief executive Maura Quinn said that, in a small country such as Ireland, it was perhaps not surprising that many directors believed there was a high level of conflicts of interests among boards.

“What is of concern” is the survey indicates that many directors believed there were no proper procedures to assess whether conflicts of interest persisted, she said.

The new Companies Act lists the duties that directors are obliged to carry out, and it includes monitoring for conflicts of interest.

The survey, therefore, suggests that directors were not aware of their responsibilities.

Ms Quinn said directors and the board’s chair need to be aware of their roles and responsibilities and to ensure that robust controls were in place.

“They are saying all is not what it should be,” she said. The institute said there were “positives”, too, in the survey but that there was “still work to be done”.

The survey covered all types of businesses, including financial firms. Almost a third of respondents worked in private companies and about a tenth were public- listed companies.