TASC, according to their website here is:
an independent think-tank dedicated to combating Ireland’s high level of economic inequality and ensuring that public policy has equality at its core.
Economic inequality is not confined to income inequality, but exists across many areas of the economy – for example, asset ownership, wealth, taxation, health, housing and education.
TASC also has a blog, progressive-economy@TASC, that’s worthwhile subscribing to, for, as they describe it themselves, “an alternative take on the Irish economy”.
Why I’m writing about this now is because TASC yesterday launched what I think is some stunning research on the multitude of cross-directorships that has existed in Ireland over the years. This research proves without doubt that there is in Ireland an exclusive “golden circle” supported by some of Irelands biggest companies, supported also by the state.
I think this report is a “must read” to see how rotten corporate governance was allowed become in Ireland over the years – and in many cases is still rotten.
The headline numbers in the report, from the summary linked above is as follows:
In the period 2005-2007, a network of 39 people held positions in 33 of the 40 top private companies and state-owned bodies. Between them, these 39 – referred to as the Director Network in TASC’s report – held a total of 93 directorships.
The 40 companies studied in this report are household names and include Bord Gáis, the Central Bank, AIB, Smurfit, Anglo Irish Bank, Ryanair and Aer Lingus. The total number of directors involved in managing these companies was 572.
Together, these companies employed 310,000 people and had a combined turnover (or equivalent) of nearly €80 billion. They included both private companies and state-owned bodies.
From my perspective, a very interesting insight is provided in the report in section 3.41, dealing with connections between directors on remuneration committees of boards. As highlighted in the report, members of a remuneration committee do not normally set the levels of their own remuneration.
However, wouldn’t it be brilliant if we were buddies and we were both on the boards of two companies. Then say, I was on the remuneration committee for one company, and then you were on the remuneration committee of the other company. You set my pay, and I’ll set yours. Perfect – and not a law of the land broken! From the report:
- Sean FitzPatrick, Ann Heraty and Gary McCann were members of the remuneration committee of Anglo Irish Bank that set the payment for the chairperson, who was Sean FitzPatrick;
- Sean FitzPatrick as chair of Anglo Irish Bank, was involved in setting the remuneration of non-executive directors, who included Ann Heraty and Gary McCann;
- Sean FitzPatrick was chair of Smurfit and was a member of the remuneration committee of Smurfit, hence involved in setting the remuneration of Gary McCann, who was CEO of Smurfit;
- Sean FitzPatrick was a member of the remuneration committee of Greencore, which set the remuneration of Ned Sullivan, chair of Greencore. Ned Sullivan was also a member of the remuneration committee of Greencore;
- Ned Sullivan was a member of the remuneration committee of McInerney Holdings;