Questions for Irish Nationwide

THERE are questions of more far reaching importance and urgency arising with respect to Irish Nationwide Building Society than those relating to the €€1 million pre-contracted incentive bonus paid to the chief executive last November and the timing of his resignation.

Cumulative directors’ emoluments at Irish Nationwide between 2000 and 2007 amounted to €€16.75 million, a very large sum for a mutual society, with 400 employees and 50 branches, whose directors advocate cost control as a major policy objective in each of its annual reports. The chairman of the society was paid €€100,430 and the two non-executive directors were each paid €€53,240 in 2007. The emoluments of the chief executive increased from €€1.83 million in 2006 to €€2.31 million in 2007 and this included a bonus of €€1.4 million. The board of the society, with just four members in 2007, was small for an institution of its scale.

How can the normal procedures of corporate governance with respect to issues such as the evaluation of board performance, nominations to the board and its remuneration and strategic decision making be effective with such a small number of board members, each with long tenure?