Bank directors face grilling by Dáil committee

Public interest directors in bailed-out banks are to be hauled before the Oireachtas finance committee to explain their duties and roles, amid criticism of lenders.

The state-nominated directors, who represent the public interest on the boards of the covered banks, will be quizzed about what lenders are doing for mortgage holders and businesses.

The move to call the directors before TDs and senators was decided by the committee last week after it held several public hearings with the heads of the banks.

Ciarán Lynch, the finance committee chairman, said the decision to summon the directors was made as part of the group’s banking module.

The Irish Examiner revealed last week that the six nominated directors on the boards of the covered banks have made over €1m in fees, but have never met or communicated with the Finance Minister Michael Noonan about their duties since being appointed.

The top paid include Michael Somers (€248,000) and Dick Spring (€132,000) in AIB, Tom Considine (€240,000) and Joe Walsh (€217,000) in Bank of Ireland, as well as Margaret Hayes (€207,000) and Ray MacSharry (€183,000) in Permanent TSB.

Mr Lynch said members had agreed to invite the directors to explain their roles, responsibilities, duties, and functions in institutions.

“Among the issues we will want to address with the public interest directors are what distinguishes them from the other directors on the banks’ boards? Also, how do they invoke and carry out their roles? Who do they report to?

“Furthermore, what scrutiny do they apply to the banks’ lending policies, such as lending to SMEs?

“There’s also the question of do they comply with guidelines an options arising from the Keane Report to assist struggling mortgage holders such as split mortgages and mortgage to rent options?” he said.

Bank of Ireland CEO Richie Boucher was quizzed about public interest directors on the bank’s board at a finance committee meeting last Thursday.

He told members of the committee there was no difference in the roles of the two appointees compared to other directors on the board, except that they were not elected by shareholders.

Most public interest directors were appointed around the time of the bank guarantee four years ago by Brian Lenihan, the former finance minister.