Wednesday, November 14 10:14:30
A 'who you know' culture still exists on Irish boards and, while regulation can go some way to address the failings of the past, changes need to be made, a study by the Institute of Directors in Ireland (IoD) found today.
An overwhelming majority of the directors surveyed would like to see a minimum level of training introduced for directors in Ireland, the survey showed.
The study of the attitude of 50 Irish directors under the age of 50 found that the focus of that training being on corporate governance, the responsibilities of the role and on the legal aspects of being a director.
Just under half (48pc) of the directors surveyed have themselves undertaken formal director training with 1 in 4 (25pc) intending to undertake such training within the next one to two years. Encouragingly, 79pc of those surveyed feel adequately qualified to serve as a director, while two-thirds (66pc) consider themselves up-to-date with the latest developments in corporate governance and the legal and regulatory environment.
Over 2 in 5 (43pc) directors under the age of fifty admit to having reservations at the time of becoming a director, with the responsibilities of the role and the potential personal liability, both financial and reputational, cited as major concerns.
When asked to describe the selection and appointment process to boards in Ireland, the largest proportion of responses were based on 'who you know', with just 1 in 10 (9pc) of the view that the process of appointment is open and transparent.
Commenting on the findings in the report, Maura Quinn, Chief Executive, Institute of Directors in Ireland, said; "The rationale for undertaking this 50 under 50 research was to gauge the views of directors under fifty in Ireland. What the findings show is that while overall, directors in this cohort have had a positive experience of being a director, they are nonetheless concerned about the 'who you know' culture, which they believe, still exists in the appointment process to boards in Ireland."
"We must tackle this culture without delay. Openness and transparency in the appointment process to boards is crucial to rebuilding confidence and trust in directors and boards in Ireland."