A Chairperson’s
Guide to Good
Governance
Foreword
Public Bodies make a major contribution to the lives of our citizens, through
the wide range of functions and services they provide. Good governance practice
in their leadership and management is essential to maintaining public trust
and confidence in their operation.
The recently revised Code of Practice for the Governance of State Bodies provides
an up-dated framework within which the Board of each Body is obliged to adopt
its own code of governance.
The Chairs Guide provides a source of easily accessible and user-friendly guidance
for Chairpersons on many of the key topics. It is an extremely useful publication
for those new to governance in the public sector and particularly for newly
appointed Chairs. It provides very practical guidance, based on the experience
of those who are already Chairs of public boards and should prove invaluable
as a companion to the recently revised Code.
I commend the chairs of Public Bodies for their foresight in establishing the
Chairpersons Forum and for their initiative in preparing the Chairpersons Guide.
My Department is fully supportive of the Chairs Forum in its mission of continuous
improvement in the standards of governance practiced in public bodies.
Brian Lenihan TD
Minister for Finance
Preparation of the Guide
This chairperson’s guide is an attempt to pull together the collected
wisdom of the Chairperson’s Forum. It does not displace or dilute in any
way the obligations arising from statute or the detailed provisions of the
Code of Practice for the Governance of State Bodies but is intended to
operationalise some of the more important provisions based on the
experience of members of the Chairperson’s Forum.
This is a first publication by the Forum and we see it as an evolving
document, the value of which should grow as the lessons of experience
are reflected in later editions.
We also see the leadership responsibility of chairpersons in the
development
of
good
governance
as
the
centre-piece
of
our
education/information activities for the foreseeable future. The Forum,
through its workshop events, policy briefings and website, can act as a
resource for the chairpersons of public bodies as they grapple with the
challenge of continuous improvement of governance in their particular
body. We should think of the pooling of knowledge and experience in
this field as another example of shared services or joint procurement.
Acknowledgements
This Guide could not have been completed without the efforts of a small
group who willingly gave of their own time to complete the project.
1
They are:
Michael Kelly
Chairperson
of
the
Higher
Education
Authority
[Leader]
Maurice Cashell
Chairperson of the Labour Relations Commission
Karen Erwin
Chairperson
of
the
Irish
Auditing
&
Accounting
Supervisory Authority and Chair of the Chairpersons
Forum
Breda Kelly
Chairperson of the national Library Audit Committee
Paul Kenny
Pensions Ombudsman
Pat O’Mahony
Chairperson of the Irish Medicines Board
Padraic White
Chairperson of St. Luke’s Hospital Board
Paul Turpin
IPA Governance Forum
Equally the Group’s work was greatly assisted by the professional back
up and support received from
Mary Rose Tobin and Liza Digan
(Chairs Forum Secretariat)
The Chairpersons’ forum is also indebted to those who provided
constructive feedback and advice on earlier drafts.
If you have any comments on the guide or suggestions about its future
development, or if you wish to share a particular experience or piece of
wisdom please contact us at:
Postal address: Forum for Chairpersons of State Bodies
57–61 Lansdowne Road, Dublin 4
2
Tel:
353 1 240 3775 or 353 1 240 3605
Email:
[email protected]
3
TABLE OF CONTENTS
INTRODUCTION
6
Purpose and context
6
Organisation of the guide
7
Considerations in taking on the role of chairperson
8
After appointment
9
SECTION 1. GOOD GOVERNANCE PRINCIPLES
1-1
1.1
Mission and values
1-1
1.2
Relationships with stakeholders
1-3
1.3
Key good governance principles
1-4
1.4
Corporate social responsibility
1-7
SECTION 2. CONSTITUTION AND STATUTORY RESPONSIBILITIES
2-1
2.1
Constitution
2-1
2.2
Broader statutory responsibilities
2-4
SECTION 3. BOARD PROCEDURES
3-1
3.1. Role of chairperson
3-1
3.2
Role of the board
3-4
3.3
Chairperson/CEO relationship
3-6
3.4
Role of committees
3-8
3.5
Role of secretary
3-10
3.6
Board composition and evaluation
3-13
4
3.7
Board meetings
3-15
3.8
Board confidentiality
3-18
SECTION 4. STANDARDS OF BEHAVIOUR
4-1
4.1
Confidential disclosures (whistle blowing)
4-1
4.2
Code of conduct
4-3
SECTION 5. STRATEGY AND PERFORMANCE
5-1
5.1
Outcomes
5-1
5.2
Dialogue with Minister/parent Department
5-3
SECTION 6. REPORTING, ACCOUNTABILITY AND RISK
MANAGEMENT
6-1
6.1
Reporting
6-1
6.2
Audit and financial controls
6-2
6.3
Risk management
6-7
6.4
Procurement and value for money
6-12
6.5
Communications
6-17
6.6
Oireachtas committees
6-20
APPENDIX 1. WHAT THE CHAIRPERSON SHOULD ENSURE
APPENDIX 2. BOARD EVALUATION
APPENDIX 3. INDUCTION OF NEW MEMBERS
APPENDIX 4. BOARD CALENDAR
5
Introduction
Purpose and context
This guide has been prepared by the Chairpersons’ Forum as a support
to chairpersons of public bodies. It is designed as a companion to the
Code of Practice for the Governance of State Bodies, most recently
revised in May 2009. It aims to amplify rather than detract in any way
from the obligations set down in the Code for chairpersons or boards of
public bodies. It builds on the earlier publication of On Board: a guide
for board members of state bodies in Ireland1 but addresses in a more
explicit way the areas likely to be of greatest interest and concern for
chairpersons of boards. Equally, in its preparation, the Forum was
conscious of the numerous guideline documents for chairpersons already
in print2 and that the generic advice they offer applies equally to the
board in all settings – public, private or not-for-profit. However, the
Forum also saw the value of a handy reference guide specifically tailored
to the needs of chairpersons of public bodies.
The preparation of the guide was undertaken by a Working Group of the
Forum and it reflects our state of knowledge at a point in time. The
Forum sees this publication as a live document that will be modified and
developed in the light of experience with its use over time. The Forum
hopes that it will have value for chairpersons but that it will also be of
assistance to board members more generally, to CEOs and to others
1
2
IPA, 2002
Examples include: The Chairperson’s Guide, Duffy, D (Prospectus, 2007); The Art of Chairing a Board
(The Change Partnership, 2005); Leading the Board, Kakabadse, A and Kakabadse, N (eds) (Palgrave
Macmillan, 2008)
6
with an interest in continuous improvement in the corporate governance
of public bodies in Ireland.
It will be clear that the guide does not set out to cover every
eventuality. Rather it concentrates on the areas that seemed to us to be
of greatest interest, leaving scope for shared discussion of other topics
through other activities of the Chairpersons’ Forum. In particular,
members are invited to make their views or needs known, via the
website, through participation in Forum seminars and briefings, or
through direct contact with any member of the Forum’s board. Please
also feel free to let us know how you think we can improve the guide in
the future.
Organisation of the guide
The guide has six sections, each covering a number of related topics.
While the sequencing and content do not directly mirror the revised
Code of Practice for the Governance of State Bodies, the material
relating to topics covered by the Code is designed to complement and
deepen understanding of the relevant provisions of the Code.
The coverage of each topic is organised under three headings:

the Code provision

commentary (by the Chairpersons’ Forum)

A summary of what the chairperson should ensure.
In addition, a complete listing of ‘What the chairperson should ensure’ is
provided in Appendix 1, as a convenient checklist. Further checklists for
Induction and Board Calendar are set out in Appendix 3 and Appendix 4,
7
respectively. These templates are all offered as useful guidelines and are
not intended as either exhaustive or prescriptive.
The following paragraphs are addressed to those considering acceptance
of an offer of appointment as chairperson of a public body and will not
be directly relevant to chairpersons already in situ. They are designed to
draw attention to some of the less obvious considerations to be taken
into account before formally taking on the responsibility.
Considerations in taking on the role of chairperson
The first question you should consider when the opportunity to act as
chairperson of a public body arises is whether to take it on or not.
Usually the invitation will follow from some definition of the role and
required profile, and the consideration of a number of potential
candidates by the appointing Minister. The best initial response, if you
are considering taking up the appointment, is a conditional yes but with
the proviso that you need time for further reflection.
This period of reflection should enable you to make all the necessary
enquiries about the body in question, the state of its relationship with
the Minister and relevant Department and other aspects of its
operations. You will also wish to consider what you can bring to the
board; what demands it may make on your time; what risks, if any,
there might be to your reputation; and, overall, how the Minister’s
objectives
complement
your
own
commitments and ambitions.
8
personal
and
professional
The same pre-appointment ‘due diligence’ examination can be adopted
for all boards.
Key questions to ask about the body include:

General perception of performance overall?

Future strategy and level of ambition?

Financial sustainability?

Track record on governance, risk management and accountability?

Track record on key relationships?

Composition of the board relative to the role?

Track record of the CEO and the executive?

Realistic assessment of time commitments required of you?

Degree of freedom allowed by the Minister in shaping the future?
This process, though onerous, is necessary: before you give a formal
response
you
should
understand
the
level
of
effort
and
time
commitment that will be expected of you. The main point of leverage
you will have in addressing any of your requirements will be in advance
of formally accepting the appointment. Once appointed the future
success or otherwise of the body concerned will colour not just its public
reputation but also yours, along with other members of the board and
the CEO.
After appointment
On appointment, it will be important visibly to assume your leadership
role at the earliest opportunity. This is best done in an active way,
through being clear in advance about your requirements and general
9
approach and presenting these at an early stage to the CEO and other
board members. While each chairperson will adopt his/her own
approach, defining some key steps may be helpful.
1
Make your own assessment.
There will already be set patterns as to how things are done at
board level and between the board and the executive. Make sure
you are comfortable with what exists already. If not, seek changes
and do so right from the start.
2
3
Be clear about your own requirements, for example, about:

information flow and reporting

frequency and servicing of meetings

Personal support, e.g. administrative, access, car-parking, etc.
Ensure access to key people.
It will be important for you to determine the level of access you will
need to the Minister, Secretary General and/or other senior people
in the Department.
4
Ensure sound governance practice.
At the earliest opportunity review the body’s code of governance
and how it works in practice. This should be done through
examination of documentation and discussions with the CEO,
internal auditor, chairperson of the audit committee, and other
board members.
5
Go for it!
Acting as a chairperson brings a great sense of personal satisfaction
in contributing positively to some aspect of public service with
direct impact on the lives and well-being of service users and
clients. The opportunity to shape the approach to delivering on
public policy goals is rewarding, though also demanding. Providing
10
leadership to the board, and working with the CEO, the chairperson
exercises considerable influence on the direction of the organisation
and the way it gets business done. How this is done will be unique
to each chairperson.
While many more topics will arise in the detailed briefing proposed for
induction of a new chairperson (Appendix 3), these are suggested as
key steps in the very early stages of making an active and purposeful
start in the role of chairperson.
11
Section 1. Good Governance Principles
1.1 Mission and values
The Code says:
‘State bodies must serve the interests of the taxpayer, pursue value for
money in their endeavours (including managing risk appropriately), and
act transparently as public entities.’ (p. 1)
High standards of Corporate Governance in all State Agencies,
whether in the commercial or non-commercial sphere, are critical to
ensuring a positive contribution to the State’s overall economic
efficiency and competitiveness.
(An adaptation from the OECD Guidelines on Corporate Governance
of State-Owned Enterprises)
Commentary
The mission of an organisation can be described as the overriding
purpose for its establishment and the rationale for its continuing
existence.3 It is the role of the board to ensure that the organisation is
clear about, and focused on, the achievement of its mission in line with
the values and expectations of its stakeholders.
The chairperson has a special role in ensuring that the board is aware of
the mission and effective in taking on its responsibilities.
3
Most public bodies are set up under an Act of the Oireachtas or a Statutory Instrument. There are often
significant amendments to this original legislation.
1-1
The board of a public body should be assured that the executives are
managing the body in a manner that:

conforms with all the laws that relate to that public body and, in
some cases, general company law, and

achieves, efficiently and effectively, the objectives that the board
has set for the public body.
The responsibilities of a public body board set down in the Code of
Practice for the Governance of Public Bodies are:

giving leadership and strategic direction

defining control mechanisms to safeguard public resources

supervising the overall management of the body’s activities

reporting on stewardship and performance.
The board should ensure that in its own activities and in its leadership of
the organisation there is an adherence to high standards of good
governance.
The Chairperson should ensure that:

the body has a clear statement and shared understanding of its
mission and that it is formally adopted by the board

the statement of mission is promoted internally and externally as
part of the identity of the body

The mission statement is reviewed periodically to ensure continuing
relevance and accuracy, in particular when reviewing strategy
documents.
1-2
1.2 Relationships with stakeholders
The Code says:
‘State bodies and their subsidiaries are required to confirm to the
relevant Minister that they comply with the up-to-date requirements of
the Code in their governance practices and procedures.’ (p. 1)
‘In general, it is recommended that each Department/Office set out in
writing the respective roles of its Accounting Officer and the Chief
Executives of any State Body under its aegis.’ (p. 12)
Commentary
All public bodies have, in the most general sense, the same stakeholders
– the Government, as the sponsor of each body; the taxpayer, as the
provider of funds; and the Oireachtas, which oversees public bodies. At
a high level, therefore, governance arrangements must reflect the duty
of care to those stakeholders.
However, public bodies also have particular stakeholders, varying from
one body to another, whose identity will be determined by the nature
and objectives of the body concerned. In some cases, the number of
stakeholders will be small and specialised. In others, there may be many
different stakeholders with disparate needs and expectations. For
complaint-handling bodies, the stakeholders will include those who are
entitled to complain, the organisations and sectors under scrutiny and
any consumer and trade bodies. For bodies concerned with particular
sectors of the economy, or those that fulfil social functions, stakeholders
will be identified with the sector or field of activity in which the bodies
1-3
engage. Supervisory and regulatory bodies’ constituencies will include
those providing the regulated services and the consumers of those
services.
It is essential that the governance arrangements of each public body
take account of the needs and interests of its own various stakeholders.
That means, in the first place, that stakeholders should be clearly
identified and that those responsible for the governance of the public
body should have a clear understanding of their needs and expectations.
Stakeholder mapping is best undertaken as an integral part of business
planning, but the board will need assurance that the stakeholders are
adequately identified, that appropriate relationships with them are put in
place and that those relationships operate effectively.
The Chairperson should ensure that:

there is an effective process for identifying stakeholders and for
follow-up with them

the body, through its board and the executive, are seen to take due
account of stakeholder concerns

The process is reviewed periodically.
1.3 Key good governance principles
The Code:
The Code is silent on this matter; however, there are many international
statements of good governance that can be used as a benchmark to
1-4
compare standards while allowing for the particular circumstances of
Irish public bodies.
Commentary
The OECD principles emphasise the role of the State as shareholder and
apply, in particular, to commercial public bodies. They call for a level
playing field where they are competing with private entities and for the
State to play a role as a more informed and active shareholder.
A summary of the principles is presented below.
OECD principles of corporate governance for State-owned
enterprises
The OECD guidelines represent an international benchmark for
governments in improving the corporate governance of public
bodies. They address the State as an owner and represent what
OECD governments agree are the core elements of a good
corporate governance regime for these bodies. They provide
standards
and
good
practices,
as
well
as
guidance
on
implementation, and are recommended for adaptation to the
specific circumstances of individual countries.
The guidelines call on governments to:

ensure a level playing field for State-owned enterprises that
compete with the private sector and clearly separate the
State’s ownership role from its regulatory role

become more informed and active shareholders by simplifying
the chain of accountability, reducing political interference in
1-5
day-to-day
management
and
introducing
a
transparent
nomination process for boards, based on competence and
skills

empower boards by clarifying their mandates and respecting
their independence and systematically monitoring the board’s
performance

improve transparency by strengthening internal controls and
external audits and producing aggregate performance reports.
The role of board members is to ensure that the organisation for which
they are responsible addresses the purpose of the organisation and
works in the public interest. The Langlands Commission
4
proposed six
principles to provide guidance for services provided by public bodies.
Good governance means:
1
focusing on the organisation’s purpose and on outcomes for citizens
and service users
2
performing effectively in clearly defined functions and roles
3
promoting values for the whole organisation and demonstrating the
values of good governance through behaviour
4
taking informed, transparent decisions and managing risk
5
developing the capacity and capability of the governing body to be
effective
6
engaging stakeholders and making accountability real.
4 The Good Governance Standard for Public Services: The Independent Commission for Good Governance in
Public Services, Office for Public Management (OPM) and the Chartered Institute of Public Finance and
Accountancy (CIPFA) London, 2004)
1-6
The Chairperson should ensure that:

the board’s approach to governance is guided by an appropriate set
of principles – some are made explicit in the Code of Practice for
the Governance of State Bodies

board members and the executive have a shared understanding of
these principles

the principles adopted influence the frame of reference for
performance evaluation, for both the board and CEO

The board annually reviews the principles and operation of the
governance of the body (see Appendix 2).
1.4 Corporate social responsibility
The Code:
The Code does not explicitly address corporate social responsibility.
Commentary
The practice of Corporate Social Responsibility (CSR) involves companies
and organisations integrating social and environmental concerns into
their
business
operations
and
into
their
interaction
with
their
stakeholders. It is a voluntary concept, there is no statutory obligation,
and there are no administrative guidelines.
At the heart of CSR is the notion that the company or public body is
aware of how its operations impact on all of its stakeholders and that it
pursues responsible practices. Internal and external promotion of CSR
activities can improve the reputation of an organisation or business,
1-7
provide a framework to disseminate core values and beliefs to a wide
range of stakeholders and bring about a better public understanding of
the business and its operations.
It is up to each organisation to define its CSR objectives, if any. CSR is
still a relatively new phenomenon and public bodies will learn, over time,
what works and what doesn’t work for them. Some of the most
frequently cited CSR activities from company case studies include
business–education
programmes;
philanthropy;
waste
recycling
initiatives; diversity and human rights initiatives; and the establishment
of community consultation fora. Some idea of the scope of CSR activity
and its similarity to other policies can be gleaned from a list developed
by a Brussels-based Employer Body in 2006.5
CSR for public bodies is likely to focus initially on incorporation of better
environmental
and
sustainability
practices
in
business
planning,
addressing diversity and building strong networks with stakeholders.
Given their dependence on public funding and the nature of their
respective missions (non-commercial, social purpose) many are unlikely
to embrace the full CSR agenda found in commercial firms.
The Chairperson should ensure that:

the board considers CSR as part of its brief

any areas to be pursued are identified

CSR is incorporated into business planning and external reporting.
5
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/06/358
1-8
Section 2. Constitution and Statutory
Responsibilities
2.1 Constitution
The Code says:
The
‘provisions
of the
Code
do
not
override
existing
statutory
requirements and other obligations imposed by the Companies Acts’ (p.
1), the specific statutory provisions relating to the public body itself and
any other relevant legislation. The board should satisfy itself that all
such obligations are identified and made known to it. The board is
collectively responsible for promoting the success of the State body by
leading and directing the body’s activities.
Commentary
Most public bodies are set up under an Act of the Oireachtas or a
Statutory Instrument. A corporation set up by statute derives its
authority directly from the statute and may not, therefore, need to be
incorporated under the Companies Acts. A limited number of public
bodies
have
been
established
as
public
or
private
companies
incorporated under the Companies Acts. Directors of such companies
have specific legal responsibilities prescribed by the Companies Acts.
There are two broad categories of public body – those that carry out a
‘commercial’ function on behalf of the State and those with ‘noncommercial’ functions.
2-1
The commercial bodies derive the bulk of their revenue from trading and
commercial activities. They produce goods or provide services that are
sold
directly.
The
non-commercial
bodies
may
have
regulatory,
developmental, promotional, service delivery or advisory roles. While
many non-commercial public bodies are entirely exchequer-funded,
others raise revenue by charging a fee or levy for some or all of the
services they provide.
Public bodies established by Act of the Oireachtas are usually ‘bodies
corporate with perpetual succession’. Governance arrangements for
these bodies will usually include a board and an executive.
Some public bodies may have boards appointed for a fixed term, where
all members are appointed at the same time for a fixed period. Others
allow for rotation of directors on an ongoing basis.
These corporate arrangements are not the only method of establishing a
public body. Alternatives can include the appointment of a single office
holder, e.g. the Ombudsman, who may or may not also be the
accounting officer of the organisation; multi-person commissions, e.g.
Garda
Ombudsman
Commission,
Revenue
Commissioners;
and
tribunals, e.g. the Labour Court, an Bord Pleanála.
The size of public bodies can vary quite considerably. It is quite possible
for a public body constituted as a corporation to have only a few
employees, while an individual may head up quite a large public body in
terms of numbers employed.
2-2
Practical governance requirements may also vary a great deal. An
individual office holder may be assisted by a council which has no part in
the deliberative process but fulfils other functions, e.g. the Financial
Services Ombudsman. Some bodies may have an executive chairperson,
with or without a CEO.
It is clear that detailed governance arrangements must take the
particular structures in each case into account.
The size, constitution and objectives of different public bodies may
therefore mean that the detailed guidance given in this guide may not
apply with equal relevance to all public bodies. It is nevertheless
essential that the basic principles of good governance be observed by all
bodies. Insofar as governance is not directed by founding statutes, the
Code provides that each such body should agree with its sponsoring
Minister the detailed arrangements for adhering to these principles, and
these must be published in annual reports or other appropriate media.
The Chairperson should ensure that:

the
board
explicitly
considers
and
adopts
its
own
code
of
governance, informed by the principles and general requirements of
the Code of Practice for the Governance for State Bodies but
tailored to its specific needs

The code is reviewed annually and updated as required.
2-3
2.2 Broader statutory responsibilities
In addition to the basic statutory requirements, every public body will
also be subject to a range of other statutory responsibilities, the
principal of which are outlined below.
Employment legislation
There is a wide body of employment law governing areas such as
recruitment, contracts and terms and conditions of employment,
payment of wages, holidays and different types of leave of absence,
grievance and disciplinary matters, equality, health and safety, data
protection, and termination of employment, with which employers are
required to comply.
Safety, Health and Welfare at Work Acts, 1989–2005
These Acts focus on the prevention of workplace accidents, illnesses and
dangerous occurrences. Bullying and harassment are also covered. Key
features of the Acts include a:

requirement of all employers to prepare a safety statement and to
update the statement annually

requirement to conduct health and safety risk assessments – in
many cases, individual board members have responsibility under
the legislation and it is wise to include it as an agenda item at each
board meeting.
Freedom of Information Acts, 1997–2003
The FOI Acts established three statutory rights:
2-4

A legal right for each person to access records held by public bodies
covered by the legislation.

A legal right for each person to have official information relating to
him/her amended where it is incomplete, inaccurate or misleading.

A legal right to obtain reasons for decisions by public bodies
affecting oneself.
The Data Protection Acts, 1988–2003
These Acts deal with the privacy issues arising from the increasing
amount of personal information kept on records. The Acts also put
responsibilities on those who keep personal information. A body subject
to the provisions of these Acts has a responsibility to ensure that it is in
compliance with the provisions of the legislation.
The Official Languages Act, 2003
The OL Act places a statutory obligation on public bodies to make
specific provision for a statutory planning framework, known as a
‘scheme’, to be agreed on a three-year renewable basis between the
head of the body concerned and the Minister for Community, Rural and
Gaeltacht Affairs.
Ethics legislation
Public bodies are required to ensure that all board members observe the
highest standards of business ethics. The key instruments of ethics
legislation in Ireland include:

Ethics in Public Office Act, 1995 (the Ethics Act), which provides for
the
disclosure
of
interests
by
2-5
holders
of
designated
board
memberships and occupiers of designated positions in the civil
service and the semi-state sector

Standards in Public Office Act, 2001, which provides for the
establishment of the Standards
in
Public
Office Commission
(Standards Commission).
Companies Acts (for relevant bodies)
Directors
of
such
companies
have
specific
legal
responsibilities
prescribed by the Companies Act.
The Chairperson should ensure that:

the body has a summary of its legal obligations as a resource and
source of guidance for the board, management and employees

the body has processes in place to enable compliance with the
relevant legislation

performance and compliance with the relevant legislation are
reviewed each year and appropriate changes, if any, are made to
ensure compliance.
2-6
Section 3. Board Procedures
3.1. Role of chairperson
The Code says:
‘Each body should be clear about its mandate and from that identify the
various functions, roles and responsibilities entailed in the delivery of
that mandate.’ (p. 2)
‘The Board should have a formal schedule of matters specifically
reserved to it for decision to ensure that the direction and control of the
body is firmly in its hands.’ (p. 2)
‘The Board should meet regularly. The collective responsibility and
authority of the Board should be safeguarded.’ (p. 3)
Commentary
Appointment as chairperson of a public body connotes an investment of
public trust and entails the taking on of considerable responsibility. The
chairperson is usually also nominated by the sponsoring Minister and
approved by the Government. The primary role of the chairperson is to
provide leadership to the board in discharging the responsibilities
assigned to it under its establishment statute, other relevant legislation
and approved codes of good practice in governance and business
behaviour.
Particular responsibilities
3-1
While the chairperson’s role will vary to some extent depending on the
nature of the organisation’s business, the personal style of the individual
concerned and the relationship between the chairperson and CEO, the
following framework summarises the main responsibilities arising:

Managing the board
o
Set the agenda and frequency of meetings.
o
Think out, agree and establish the committee structure, roles
and memberships.
o
Identify, agree and execute the reserved functions of the
board.
o
Chair effective meetings – characterised by clear decisions and
the balancing of contributions from board members and the
CEO/executives.
o
Ensure that the CEO provides the board with sufficient
information to support decision-making.

Managing key relationships with
o
the CEO
o
the Minister and Department
o
other key external parties
o
The board – establish a tone of respect, trust and candour that
will allow for challenging questions and inputs.

Leading on performance management – for the body overall, for the
CEO and for the board

Leading on compliance – by effective internal and external audit
arrangements and full compliance with all key regulatory and
reporting requirements

Establishing good governance
3-2
In practice, boards will generally operate as a collective decisionmaking body, working in a collaborative way with the CEO and
other managers and employees more generally. However, this
assumes that the respective roles of board and executive are well
understood and that the appropriate balance is struck in that set of
relationships. Ultimately, it is the responsibility of the chairperson
to ensure that the respective roles are made clear and that an
effective
governance
framework
is
in
place.
Very
often
a
chairperson can expect to inherit an existing set of arrangements
and pattern of relationships. While in most situations these will
suffice, a newly appointed chairperson will need to ensure, at an
early stage, that a complete understanding of the arrangements is
in
place, that the
arrangements
are
adequate
for
effective
governance and, where any doubts exist, that any modifications
needed are proposed to the board.
Appendix 3 provides a guide to the induction of a new chairperson and a
new board member.
The Chairperson should ensure that:

he/she provides the necessary leadership to the board

existing practices comply with governance best practice in all
aspects

there is a process at board level for review of governance practices
and for follow-up on any weaknesses identified.
3-3
3.2 Role of the board
The Code says:
‘The Board is collectively responsible for promoting the success of the
State body by leading and directing the body’s activities. It should
provide strategic guidance to the State body, and monitor the activities
and effectiveness of management. Board members should act on a fully
informed basis, in good faith, with due diligence and care, and in the
best interest of the State body, subject to the objectives set by
Government.’ (p. 2)
The Code also refers to specific responsibilities of the board, including
the adoption of a Schedule of Reserved Functions, which obliges it to:

meet
regularly
and
ensure
that
collective
responsibility
is
safeguarded

comply with all statutory obligations

confirm annually the adequacy of internal financial controls

oversee major items of expenditure

establish
and
monitor
procedures
for
the
post-retirement
employment of directors and employees

establish and monitor procedures for managing potential conflicts of
interest

publish annual report and accounts

maintain appropriate relationship with the external auditor

have a properly constituted audit committee and other committees,
as appropriate

establish a procedure for ‘confidential reporting’ and meaningful
follow-up of matters raised
3-4

prepare a strategic plan within the requirements set down

review the board’s operation and effectiveness.
Commentary
The above listing might be seen as reflecting the conventional role of a
board, which would include:

Strategy

Management Oversight

Risk Management

Performance Management

Reporting and Accountability

Succession Planning.
While each of the functions listed will require board attention, the
relative weighting and priority attached to each will be specific to each
body at a point in time.
Given the breadth of the board’s role, it will be important to ensure that
all aspects are covered in a balanced way over the annual cycle. The
board calendar at Appendix 4 may be useful in this context.
The Chairperson should ensure that:

all aspects of the board’s role receive appropriate attention

the right balance is struck in the allocation of board time

The board is properly structured and supported to discharge the full
range of its responsibilities.
3-5
3.3 Chairperson/CEO relationship
The Code says:
‘The role of Chairperson and Chief Executive Officer should not normally
be combined … The respective roles should be agreed and documented.’
(p. 4)
Commentary
While the formal reporting relationship of the CEO will normally be to
the board, in practice, the chairperson–CEO relationship is a key
element in the governance of all bodies. There is an onus on both
parties to make the relationship work. Success in doing so will be more
likely where the respective roles are both understood and accepted and
where the personal styles of both parties are compatible. Achieving this
normally requires ongoing commitment and effort on the part of both
chairperson and CEO.
While the exact division of responsibility will be specific to each body, in
broad
terms,
the
CEO
should
lead
the
organisation,
while
the
chairperson leads the board. In practice, the roles involve a mutual
dependence – each requires the support and cooperation of the other for
effective performance.
Key features of the relationship:

This relationship forms the main link between the board and the
executive.

The CEO must ensure a good flow of timely and relevant
information to the chairperson and board.
3-6

The chairperson and CEO should agree challenging objectives
relating to strategy, plans and budgets for presentation to the
board for decision.

The chairperson takes the lead on performance evaluation of the
CEO.

The chairperson and CEO normally sign off on expenses, annual
leave, etc.

The chairperson and CEO should jointly consider the composition of
board
committees, board
agendas,
frequency
and
timing of
meetings and attendance of other executives.

The
chairperson
and
the
CEO
together
should
report
on
performance at least once a year to the Minister/Secretary General.

The
chairperson
should
maintain
a
supportive
confidential
relationship with the CEO, in which support and advice can be
offered on a range of issues, as required.

In recruiting a new CEO, the chairperson should take the lead and
ensure that in the recruitment process all best practice guidelines
are adhered to.
Board and executive relationship
The board relates primarily to the CEO, either at board meetings or
through the chairperson. The board generally has access to the
executive only at formal board meetings.
In a board committee structure, individual board members who are
members of board committees will have direct access to certain
members of the executive in the context of the work of these board
committees, e.g. audit committee chairperson and finance director.
3-7
The Chairperson should ensure that:

the respective roles of chairperson and CEO are clearly understood
and documented

In partnership with the CEO, key relationships work satisfactorily.
3.4 Role of committees
The Code says:
‘The Board Audit Committee and other Board committees should have
written constitutions and written terms of reference and the Board
should agree the intervals within which these should be reviewed by the
main Board and updated as appropriate.’ (p. 3)
Commentary
In general, board committees are established to deal with issues that
are too specialised and/or numerous to be handled by the entire board.
Although members of the executive and other persons external to the
board may participate in the work of such committees, they are
committees of the board and report only to the board of the body.
Committees usually recommend policy for approval by the entire board,
or oversee particular activities on behalf of the board. They make use of
board members’ expertise, time and commitment, and promote diversity
of opinions. Any powers that they exercise derive from the board.
Key features for each committee, to be agreed by the board:
3-8

The terms of reference of each committee, the powers delegated to
the committee and any specific limitations placed on those powers
should be clearly defined.

The number of board members for each committee should be fixed
and any process for rotation of membership should be established.

Committees may meet with whatever frequency they and the board
agree, often between full board meetings. Minutes should be taken
of their proceedings and their chairperson should report, preferably
in writing, to the board.
The number and types of committees will be decided by each board
according to the needs of the body. Certain committees may be required
by legislation. The committees most commonly required might include a
finance committee (which could also oversee procurement matters),
audit committee (to which it may be necessary to co-opt external
members)
and
a
remuneration
and
management
development
committee.
Boards may find it useful to distinguish between permanent committees
such as the above and groups that have a defined task (e.g. specific
project) to perform within a particular timeframe. The important thing is
that there should be a manageable number of committees, consistent
with the needs of good governance of the public body concerned.
The Chairperson should ensure that:

the business of the board is supported by the required number of
committees and that this is reviewed by the board periodically
3-9

the constitution, role, membership, limits of authority and reporting
relationship of each committee are agreed by the board

The committees function as planned, with any remedial action
agreed by the board.
3.5 Role of secretary
The Code:
While the Code does not explicitly address the overall role of board
secretary, it is implicit in the obligations and responsibilities set out for
boards that they will need to be supported in a number of ways and that
an effective secretary to the board will be important in achieving the
required level of functionality at board level. In addition, the Code does
attribute responsibility for some specific roles to the secretary (pp. 5–6).
Commentary
Just as the role of the board in all public bodies has become more
prominent in securing good governance, so too has the role of the board
secretary in supporting the board in its activities. In the past it was not
unusual to consider the role of the board secretary of public bodies as
an aspect of the CEO’s functions. This was in contrast to practice in
commercial companies where, under company law, the company
secretary had a formal role and responsibilities set out by statute.
It is now accepted as a distinct role, often assigned to another member
of the management team, but reflecting the nature of the governance
relationship between the board and the CEO.
3-10
Given this background and the key importance of the board secretary’s
role in supporting the board, it should be a priority for each board to
ensure that the role is clearly defined and assigned to an appropriate
person in the organisation. The nature of the role is relatively specialised
and may require specific training or expertise.
Where the role is assigned to a person with other responsibilities
reporting to the CEO, the formal assignment should make it clear that
the secretary must act autonomously in this role, with a direct reporting
relationship to the chairperson. The secretary needs to understand that
these two reporting lines are separate and must preserve confidentiality
between the two roles.
The role of the secretary should be seen as a support to the board. The
scale and scope of the role will depend, to some extent, on the size,
responsibilities and nature of the body in question, but the following list
of functions would be appropriate to the role:

Organise,
attend
and
administer
board
(and
committee
as
appropriate) meetings in accordance with agreed board meeting
protocol.

Prepare an agenda, in liaison with the chairperson.

Ensure that the agenda is accompanied by all documents that need
to be considered by the board in sufficient advance of meetings

Notify board members of the time, date and place of the board
meeting.

Circulate minutes and agenda in advance of the meeting, in
accordance with protocol.
3-11

Support the chairperson in ensuring that any conflicts of interest
are brought to light and dealt with as per protocol.

Ensure that any registers that need to be inspected by the board
are available.

Prepare minutes, obtaining chairperson approval and distributing to
members for approval at the next meeting.

Make the minutes available to the auditors.

Prepare the annual report (including financial statements following
approval by the Comptroller and Auditor General).

Maintain the statutory books of the body and ensure compliance
with statutory and regulatory requirements.

Ensure that statutory forms (including auditor reports, annual
accounts, management accounts and board member declarations)
are made promptly to the appropriate authority.

Monitor conflicts of interest and bring to the notice of the
chairperson where appropriate.

Maintain and update the governance manual and complete and
confirm to the board the annual governance checklist.

Act as a confidential sounding board to the chairperson and board
members.
The Chairperson should ensure that:

the role of secretary is clearly defined and is effectively discharged
in support of the board

The secretary provides and maintains a board calendar (Appendix
4).
3-12
3.6 Board composition and evaluation
The Code says:
‘The Board should constantly review its own operation and seek to
identify ways of improving its effectiveness. This will include the
identification of gaps in competencies and ways these could be
addressed.’ (p. 4)
‘The Board should keep under review its own performance and that of its
committees and individual directors. The attendance of each Board
Member at Board meetings should be reported in the Annual Report.’ (p.
5)
Commentary
Board composition
A board should have within its membership the range of expertise and
skills necessary to effectively discharge its role. The main factors that
contribute to the effectiveness of the board are the overall suitability of
the members nominated, their success at working together and the
knowledge and skills they acquire while members.
The most common form of board in the public sector is that nominated
by the Minister of the parent Department. This nomination process will
often be set down in the foundation legislation.
There are, however, several variations to this model, including:
3-13

a requirement to chose a specified number of members from
nominees of specified groups

a requirement to include nominees with specified qualifications

a requirement to include nominations from employees

more than one Minister may have a nominating role

stakeholders may have direct nomination powers.
In most cases the chairperson is nominated by the Minister. Under the
Code, the chairperson is required to be in a position to advise the
Minister, when future nominations are under consideration, on the
appropriate mix of skills and expertise that would best enhance the
board. A structured board evaluation can provide valuable assistance to
the chairperson and board in providing such advice.
Board evaluation
The evaluation of board performance is a constructive aid to the
development of a board’s effectiveness. It can be used to identify
development needs for a board and as a source of guidance on future
nominations.
A board evaluation should provide insights on the effectiveness of the
board in monitoring performance and providing leadership to the
organisation. An evaluation should look to identify gaps in knowledge
and skills and weaknesses in boardroom process. An evaluation can
provide valuable feedback for the chairperson in overseeing the
operation of the board.
3-14
Board
evaluation
is
regarded
as
a
principle
of
good
corporate
governance. As the board is required to take responsibility for governing
its own activity, self-evaluation plays an important role in the overall
assessment.
Typically, public bodies have undertaken board evaluation at the level of
the board and not at individual member level. This tends to be a
valuable starting point. While a variety of approaches can be taken, the
framework outlined in Appendix 2 may provide a useful starting point for
bodies undertaking their first round of board evaluation.
The Chairperson should ensure that:

rigorous and formal board evaluation is in place

any developmental initiatives or procedural improvements are
actively followed up

any gaps in board competencies or expertise are made known to
the key decision-makers regarding future board appointments

the reporting requirements regarding board attendance are met.
3.7 Board meetings
The Code says:
‘The Board should meet regularly. The collective responsibility and
authority of the Board should be safeguarded. All Board members must
be afforded the opportunity to fully contribute to Board deliberations
3-15
while excessive influence on Board decision-making by one or more
individual members should be guarded against.’ (p. 3)
Commentary
Board meetings are a key part of the effective leadership of a body. It is
the responsibility of the chairperson to ensure that the meetings make
effective use of the time and skills of the members and produce outputs
in accordance with the organisation’s objectives. The agenda should
reflect issues that are within the responsibility and competence of the
board.
The agenda should be agreed by the chairperson and circulated with
supporting papers to the members before the meeting. The intention is
to give members sufficient time to consider issues before the meeting.
Normally, a board will have a standard format for agenda items which
can be modified from time to time by the chairperson in consultation
with the board members and the CEO. Additional items can be added by
the chairperson, taking account of any specific request from a board
member. It should be the responsibility of the person acting as secretary
to the board to ensure that compliance issues are tabled at the
appropriate times. These will include external financial reporting and
ethics declarations. Most of the compliance issues can be scheduled in
the annual board calendar.
In dealing with ‘any other business’, the board should ensure that this
does not take an excessive amount of time. Only in exceptional
3-16
circumstances should substantive issues be raised without allowing for
prior consideration by other members.
A typical agenda might include:

Minutes

Declaration of conflicts of interest

Compliance issues

CEO’s report

Business items

Committee reports

Finances

Any other business
The chairperson should make the final decisions on whether items
should be included on the board agenda. The criteria for deciding on
inclusion include:

Is the issue embraced by the mission and responsibility of the
organisation?

Does the issue require board input or is it an issue appropriate to
the executive?

Does the matter require further consideration at executive or at
committee level before presentation to the board?

Can the item be handled differently or postponed in the event of a
crowded agenda?
In drawing up the agenda it may be useful to consider the appropriate
allocation of time over the different items and to have clarity on whether
items are for noting, for discussion or for decision. In the event of board
3-17
meetings regularly exceeding the time allotted the board should
evaluate the reasons and look for ways to address this.
All board members should have the opportunity and be encouraged to
contribute to the deliberations; no one member should have an
excessive influence; and once decisions are made the board should
speak with one voice.
The Chairperson should ensure that:

there is a common understanding of the process, timing, support
and organisation of board meetings

each meeting is deliberately planned and effectively managed

all key aspects of the board’s role are covered in the annual
calendar of meetings

each meeting yields clear decisions based on adequate information
and substantive discussion on key items.
3.8 Board confidentiality
The Code says:
‘All State bodies should have written Codes of Business Conduct for their
directors and employees …’ and should make clear that ‘certain
obligations to the State body regarding, in particular, the non-disclosure
of privileged or confidential information do not cease when Board
membership or employment in the body has ended’. (pp. 6–7)
Commentary
The duty of a board member is to the body and to its legitimate
objectives, as determined by legislation and by the board. Even though
3-18
a board member may be nominated to the board by a particular group,
department, body or sector, board members do not sit at the board
table in a representative capacity for that nominating body. They bring
to the board table knowledge of the group, department, body or sector
from which they are nominated as well as their own experience; and
they legitimately express their views and use that knowledge to inform
the decision-making process. However, for the purposes of decisionmaking, their duty is to the board, even if the decision that the board
makes is in conflict with the policies or objectives of the nominating
body.
Board members have a general duty to maintain confidentiality about
the business of the board – both in board papers and in any board
discussions. In certain instances, it is envisaged that a State body’s
governing legislation may explicitly provide that a board member is not
prevented from disclosing information to the relevant Minister.6
Given that on many boards at least some of the board members are
nominees of particular interest groups, it is sensible at the end of each
meeting to agree what of the discussion or agreement at the board table
can be relayed and/or incorporated in an agreed statement and to whom
it may be given. Some boards put their minutes or a statement of
discussions/agreements on their website.
6 Such disclosure is provided for in the Labour Services (Amendment)
Bill, 2009 for example, and it is possible that this principle could be
applied more generally. Further guidance on this point will be
considered at a later stage.
3-19
The requirements of confidentiality may not be understood by the
relevant board member or body that nominates them and it should be
raised at the induction meeting with all new board appointees. Newly
appointed board members should be encouraged to inform the relevant
nominating body of the confidentiality constraints which apply.
A
board
member
from
the
parent
Department
and
any
other
Department can bring the benefit of current ministerial or departmental
thinking to the table and provide invaluable guidance on the best way of
progressing or agreeing proposals of the board. It has already been
noted that in the case of certain State bodies the governing legislation
may provide that nothing prevents a Departmental representative from
disclosing information to the relevant Minister. More generally, if there
are emerging issues that may enter into the public arena, or are
otherwise likely to be of serious concern to the Minister or Department
the Departmental representative can, if agreed by the board, usefully
ensure that the Minister and Department are made aware of them in a
timely fashion.
It requires a particularly experienced or mature approach on the part of
the departmental representative to act in the best interests of the public
body
at
board
meetings
and
in
the
best
interests
of
the
Minister/Department when carrying out their daily role and functions.
The normal channel between the Department and the board should be
either between the chairperson and the Minister (or other designated
person) or between the CEO and the Secretary General (or other
designated person).
3-20
The organisation, especially if a regulatory body, may have statutory
provisions in relation to confidentiality and to the sharing of information
with other bodies, and all directors need to be aware of these. They may
also have to consider this if asked to appear before an Oireachtas
committee.
3-21
Section 4. Standards of Behaviour
4.1 Confidential disclosures (whistle blowing)
The Code says:
‘The Board should put in place procedures whereby employees of the
State
Body
may,
in
confidence,
raise
concern
about
possible
irregularities in financial reporting or other matters and for ensuring
meaningful follow-up of matters raised in this way.’ (p. 3)
Commentary
Putting effective measures for whistle blowing in place will require a
balance to be struck between the level of trust invested by the board in
the executive, including the normal processes of management and
control,
and
the
board’s
overriding
responsibility
to
ensure
full
accountability for the proper use of resources and for meeting all
relevant
regulatory,
legal
and
policy
requirements.
Ignoring,
or
dismissing without due process, issues that are raised internally is likely
to lead to external disclosure and a loss of control by the board in the
investigation and follow-up of such issues. The assumption should
normally be, therefore, that there is substance to an issue raised in this
way, pending thorough investigation. The possibility of unfounded or
malicious allegations being raised should also be provided for.
The process adopted will vary depending on the human resource
management processes in each body, the signals that emanate from the
4-1
board and the executive about expected behaviours and the level of
formality of internal communication.
A key component would be the adoption of a protocol, which makes it
clear that the board is receptive to receiving such information and
outlines the method to be used for raising these issues and the
processes to be followed.
Aspects to be covered in the protocol:

Provide universal coverage that will apply to all employees.

Provide
for
confidentiality
and
no
retribution
where
the
whistleblower is acting in good faith.

Outline processes for raising and, if necessary, escalating issues of
concern, e.g. with the line manager, section head, CEO or other
designated person.

Establish a response mechanism, e.g. who investigates and who
decides on the follow-up, the timescale involved and how the
complainant receives feedback.

Establish a process for anonymous complaints.

Clarify the distinction between this process and normal grievance
procedure.

Disclose any personal conflicts of interest early on.

Establish how any legal issues will be addressed.

Provide for access to the chairperson and/or other board members
by members of staff in the event of serious concerns which they
believe, for stated reasons, cannot be addressed via the normal
management chain.
4-2

Maintain a confidential record and, where appropriate, communicate
the issues raised to the audit committee.

Review the process periodically.
The Chairperson should ensure that:

there is a policy and procedure in place and that it is widely
communicated

The appropriate balance is struck between confidence in normal
management and control processes and the need to address
genuine concerns on the part of employees.
4.2 Code of conduct
The Code says:
‘All State bodies should have written Codes of Business Conduct for their
directors and employees.’ (p. 6)
Commentary
The Code requires that all public bodies should have a written code of
business
conduct
for
their
directors
and
employees.
It
should
incorporate the mandatory elements of the Code of Practice for the
Governance of Public Bodies but should otherwise be tailored to reflect
the specific circumstances of the public body. The code should be
prepared using a participative approach and should be approved by the
board. It should be available on request through the public body’s
website, and hard copies should be circulated to directors, management
and employees.
4-3
The code should refer to the need for each member of the board of the
public
body
and
each
person
holding
a
designated
position
of
employment with a public body to ensure his/her compliance with the
relevant provisions of the Ethics in Public Office Act, 1995, and the
Standards in Public Office Act, 2001. It should also identify relevant
provisions regarding conduct/conflicts of interest in the governing
legislation of the body.
The organisation should:

behave with integrity by ensuring that:
o
board members disclose outside employment or business
interests that are in conflict or in potential conflict with the
business of the organisation
o
management and employees are not involved in outside
employment or have business interests that conflict or are in
potential conflict with the business of the organisation
o
the giving or receiving of gifts, sponsorship, hospitality,
preferential treatment or benefits which might affect or appear
to affect the ability of the donor or the recipient to make
independent judgement on business transactions are avoided
o
the purchase of goods or services is conducted in accordance
with best business practice
o
its financial reports and statements accurately reflect its
performance and are not misleading or designed to be
misleading
o

Its resources are not used for personal gain.
promote transparency and accountability by:
4-4
o
complying with relevant statutory provisions such as data
protection and freedom of information legislation
o
ensuring that access is readily available to general information
relating to the organisation
o
respecting the confidentiality of sensitive information such as
commercially sensitive information, personal information and
information received in confidence
o
undertaking appropriate prior consultation with third parties
where, exceptionally, it is proposed to release sensitive
information in the public interest.

meet statutory and regulatory obligations by:
o
complying with detailed tendering and procurement procedures
as well as with prescribed levels of authority for sanctioning
any relevant expenditure
o
introducing controls to prevent fraud, including adequate
controls to ensure compliance with prescribed procedures in
relation to the claiming of expenses for business travel
o
ensuring that board members make reasonable efforts to
attend all board meetings.

promote loyalty, propriety and fairness by acknowledging, in its
dealings with the public and the private and voluntary sectors:
o
the duty of all board members and employees to conform to
the highest standards of business ethics
o
the responsibility of board members to be loyal and fully
committed to promoting its purposes and interests
o
the need to comply with employment equality and equal status
legislation
4-5
o
a commitment to fairness and equality of treatment in all its
dealings with the public.
It is not feasible to have a code of conduct that will specifically provide
for all situations that may arise. Therefore, board members and
employees should be aware that they are primarily responsible for
ensuring that all their activities, whether covered specifically or
otherwise in the Code, are governed by the ethical and other
considerations implicit in it.
Framework for a code of business conduct
Guidelines for the practical implementation of the general principles of a
code of business conduct are as follows:

Suppliers who are also prospective suppliers
o
Where any existing supplier is reasonably expected to tender or
is tendering for any contract to be awarded by the public body,
that supplier must be treated as a prospective supplier to the
greatest extent possible, consistent with continuing existing
business relations with them.

Gifts
o
Gifts should never be accepted from any prospective supplier.
With the exception of gifts with a nominal value, no gifts may
be accepted from any existing supplier. Where any gift that is
not of a nominal value is sent to a board member or employee,
it should be returned to the sender with a note advising that
acceptance would be contrary to public body policy or, where
this cannot be done, given to the company secretary who will
donate it to charity and inform the sender of this.
4-6
o
Cash or any vouchers or other documents that may be
exchanged for cash should not be accepted, regardless of the
amount.
o
Details of all gifts offered or received other than ones of a
nominal value must be notified as soon as possible after they
are received to the secretary. Gifts must never be solicited,
directly or indirectly.

Sponsorship
o
Sponsorship should neither be requested nor accepted from
any existing supplier except from individuals who have regular
contact with the public body for amounts less than €30 for
charitable events being undertaken by individual members of
staff or for charities with which those staff are involved.

Hospitality
o
Modest hospitality (including invitations to sporting events and
golf
outings)
could
be
accepted
from
existing
suppliers
provided: the frequency and scale of hospitality is not more
than the public body might be expected to give in return; the
number of public body board members or employees availing of
the hospitality is kept to a minimum; and invitations do not
include
the
provision
of
foreign
travel
or
overnight
accommodation.
o
Hospitality that includes travel and overnight accommodation
within Ireland should only be accepted from existing suppliers
in exceptional circumstances and with the express prior written
approval of the secretary.
o
Hospitality should not be accepted from any prospective
suppliers (including, as noted above, suppliers who are also at
4-7
the relevant time prospective suppliers). This does not exclude
attendance at events such as seminars which may be organised
by prospective suppliers for the members of a profession
generally; however, no public body board members or staff
should receive any hospitality at such events that is not being
provided to all attendees.
o
Details of all hospitality offered or received, other than where it
is of a cursory nature, such as minor refreshments at meetings
or functions or generally available at seminars, should be
notified as soon as possible after it is received to the secretary.

Remuneration of the executive and directors’ fees
o
Chairpersons and boards of all public bodies are required to
implement Government policy in relation to the remuneration
of the CEO/MD and to ensure that the arrangements authorised
from time to time cover total remuneration. Arrangements put
in place by a relevant Department or the Department of
Finance for determining and approving the remuneration of the
CEO/MD must also be implemented and adhered to.

Fees to board members
o
The guidelines issued by the Department of Finance in March
1992 should be observed.
The Chairperson should ensure that:

the required codes of conduct and the processes required to give
effect to them are in place

the codes are being complied with

The codes are periodically reviewed.
4-8
Section 5. Strategy and Performance
5.1 Outcomes
The Code says:
‘The preparation and adoption of a strategic plan is a primary
responsibility of the board of a state body. Such plans should set
appropriate objectives and goals and identify relevant indicators and
targets against which performance can be clearly measured.’ (p. 4)
Commentary
One of the most important responsibilities of the board is to establish a
clear statement of the organisation’s purpose and intended outcomes.
This is a necessary prerequisite for planning and for guiding people’s
actions and decisions within the organisation.
Outcomes need to be expressed in terms that permit performance to be
measured. In the case of outcomes that are attainable only in the
medium or longer term, milestones have to be established and
achievements measured against them. The focus on outcomes marks a
shift away from an over-emphasis on compliance and input controls and
towards what is achieved – or not achieved – with those resources.
A board should keep under review the decisions it takes to ensure that
all decisions are consistent with the organisation’s purpose and
contribute to the intended outcomes for the stakeholders and users of
the services provided.
5-1
Boards of all public bodies are now being asked to be more explicit
about
objectives,
expectations,
service
levels,
timescales
and
performance targets; to be clear about prioritisation; and to be realistic
about what can be achieved with the resources deployed. The
Government Statement on Transforming Public Services7 envisages that
all public bodies (in addition to Departments) will produce output
statements relating resources to planned achievements. Moreover, all
public bodies are to produce an integrated annual report (covering both
input usage and output delivery) as a basis for Oireachtas scrutiny. The
system for measuring and reporting outputs will be subject to external
validation.
Boards should give consideration to the definition of outputs and
performance criteria and how they are to be meadured should form part
of the performance diaalogue with the partent department. Developing
meaningful outcome measures and indicators of performance is a
challenge for most if not all organisations. This can be tackled by
building on the foundations already laid, e.g. in strategy statements,
annual plans and budgets. In particular, Boards should reflect on how to
create:

more relevant and measurable performance indicators

real-time operational data

baseline performance information

more quantifiable targets which measure outputs and outcomes as
opposed to processes.
7
Further guidance is expected from the Department of Finance on the development of models of
performance reporting.
5-2
The Chairpersons’ Forum will consider what further guidance it might
provide on this particular aspect of the Code, conscious that there are
already good working models in place in the form of performance
contracts and service level agreements between Departments and
specific public bodies.
The Chairperson should ensure that:

the board gives explicit consideration to this aspect of its planning,
performance management and reporting

a suitable framework based on outcomes is put in place

Future plans and reports are prepared in this context.
5.2 Dialogue with Minister/parent Department
The Code says:
‘The guidelines concern both the internal practices of the bodies and
their external relations with the Government, the relevant Minister
under whose aegis they fall, the Minister for Finance and their respective
Departments.’ (p. 1)
Commentary
This is a key set of relationships for all public bodies. In practice, the
Code
does
not
explicitly
address
the
relationship
with
the
Minister/Department other than in relation to approvals required and
reporting requirements, suggesting a one-way set of relationships. The
Forum sees the need to acknowledge the two-way nature of this key
5-3
relationship and for this reason has given it particular attention in this
guide.
When the State establishes a separate organisation under company law
or by specific Act of the Oireachtas the relationship between the
Minister, Department and public body is governed by the specific
objectives, mandates, powers and relationships contained in the
relevant Memorandum and Articles of Association or in the Act. The legal
obligations laid on the chairperson, board and executive require them to
act in defined ways and by due process. The respective responsibilities
of the public body and Minister are usually defined. Typically, the public
body will have its specific functions and powers defined; it will be
required to submit a business plan, annual report and accounts to the
Minister and to seek the Minister’s approval and perhaps that of the
Minister for Finance for certain actions. The legal framework for public
bodies makes it clear that the relationship between the Minister and the
public body is fundamentally different from the Minister’s relationship
with, and responsibility for, the Government Department.
Although, ultimately, a public body is an instrument of public policy, it
will operate in a more effective manner and with integrity when its legal
status and distinct difference from the Department are understood and
respected by the Minister and officials.
For example, decisions on specific projects are a matter for decision by a
public body’s board in the first place, taking account of any general
policy directives laid down. Where it is appropriate for a Minister to issue
a new policy directive or instruction, it should be done in accordance
5-4
with the specific legislative provision for such directives/instructions.
With a view to developing a shared understanding of their respective
roles and establishing relationships, opportunities should be created for
briefing the civil servants to whom public bodies report on the relevant
legal basis and mandate of the public bodies. In particular, a public body
should not be seen simply as an extension of the Department, without
respect for the appropriate boundaries. If a Minister is unhappy with
some aspect of a public body’s actions, it is entirely appropriate for him
to raise the matter with the chairperson.
In the long run, the State is better served by its public bodies when
there is mutual respect between public bodies on the one hand and
Ministers/Departments on the other; and when their respective roles
and mandates are respected, while the status of the Government as the
ultimate shareholder, on behalf of the State, is maintained.
While the lines of the relationship with the Minister and Department will
be specific to each body, the following general principles are suggested
based on experience.
1
The first priority should be transparency and clarity in the two-way
relationship, with the public interest in mind. The public body
should be given a clear indication of the expectations of the Minister
and Department in regard to performance. In return, the public
body needs to know that in carrying out the activities and the
mandate of the parent Department it will receive sufficient support
to carry out these activities effectively.
5-5
2
The chairperson and CEO should meet at least once a year with the
Minister and/or Secretary General for a review of plans and budgets
in progress and significant issues.
3
In so far as possible, issues/problems should be resolved within the
public body’s jurisdiction rather than passed up the line to the
parent Department or Minister.
4
The Department, however, should be alerted to any serious issues
that may be of concern to it, the Minister or the public. The Minister
and the Department should not be left exposed or surprised;
neither
the
Minister
nor
the
Department
should
hear
key
information from another source.
5
Ongoing day-to-day dialogue with the parent Department falls
within the remit of the executive. To this end, it is important to
have established open lines of formal and informal communication
based on trust.
The Chairperson should ensure that:

the
lines
of
the
relationship
between
the
body
and
the
Minister/Department are appropriate, mutually acceptable and
understood by the board and the executive

the mechanisms adopted work satisfactorily

there is a process for periodic review, jointly with the Department,
as required.
5-6
Section 6. Reporting, Accountability and Risk
Management
6.1 Reporting
The Code says:
‘The corporate governance framework should ensure that timely and
accurate disclosure is made on all material matters regarding the State
body, including the financial situation, performance and governance of
the body.’ (p. 15)
In addition, detailed requirements are set down (para. 12) regarding the
submission of interim and final accounts and annual reports. In para.
13, additional reporting requirements are assigned to the chairperson of
each
body,
confirming
compliance
with
a
range
of
governance
requirements.
Commentary
The publication of an annual report and audited accounts is a primary
expression of public accountability for all State bodies and should be
treated in a serious way by the board. The new drive for output and
outcome reporting should lead to change in the nature and content of
annual reports and should form the basis for a more informed dialogue
between bodies and their sponsoring Departments.
The timing of annual reports is linked to the final clearance of audited
accounts by the Office of the Comptroller and Auditor General. Where
unacceptable delay occurs, boards may need to consider the separate
6-1
publication of the annual report and accounts. The Code requires that
annual reports be published on the website and, in general, bodies are
asked to consider on-line publication when this can reduce costs.
The Chairperson should ensure that:

all reporting requirements under the Code (or company law where
relevant) are met within the timescales set out

Where timescales cannot be met (e.g. due to audit delays), the
board agrees on an alternative course and informs the Minister
accordingly.
6.2 Audit and financial controls
The Code says:

‘The accountability of the Accounting Officer/Accountable Person to
the Oireachtas must be differentiated from that of the Board’s
general responsibilities.’ (p. 12)

‘The Board is responsible for the body’s system of internal control
…’ (p. 12)

‘Each State body should have a properly constituted internal audit
function …’ (p. 13)

‘The Board of any Body with more than 20 employees should
establish an Audit Committee …’ and ‘should satisfy itself that at
least one member of the Audit Committee has recent and relevant
financial experience’. (p. 13)
6-2
In addition, more detailed requirements are set down (para. 10) about
the operation of the audit committee and internal audit function.
Internal audit function
Each public body is required to have a properly constituted internal audit
function or to engage appropriate external audit experience which
should operate in accordance with the Code of Practice for the
Governance of Public Bodies. It should have a formal charter and terms
of reference, which should have the approval of the board. Reporting
structures should be clear and formally documented.
In the case of small organisations, it may not make economic sense to
have a full-time internal auditor, and an external expert from an
accounting firm can be contracted to provide the service. The person
should not be from the accounting firm that carries out the audit of the
annual accounts. Where an internal person is appointed, they must be
assured of the full support of the CEO and the board in carrying out their
functions.
The primary role of internal audit is to give assurance as to the
adequacy of the organisation’s system of internal controls. It is the
responsibility of internal audit to draw up a strategic work programme
for the internal audit function, to be approved by the board on the
recommendation of the audit committee and in consultation with the
CEO. Internal audit is responsible for providing audit assurance that all
significant operating risks are identified, managed and controlled. It
should seek to identify and report on deficiencies or weaknesses in
systems and make appropriate recommendations. It should do this by
6-3
critically and objectively examining on a risk-focused basis. In planning,
executing and reporting its work, internal audit should ensure that
value-for-money auditing receives adequate attention. It should also
review compliance with procurement and disposal procedures as
required.
Internal audit reports should be provided transparently to the audit
committee,
which
is
responsible
for
considering
the
appropriate
response and then reporting the key findings of the internal audit and its
own recommendations to the board.
In order to preserve its objectivity and independence, internal audit
must remain independent of the activities that it audits. For this reason
and because specific expertise is required, it is now common practice for
smaller bodies to outsource their internal audit function. Doing so in a
joint procurement with other bodies can deliver better value and a more
tailored service.
Audit committees
The board should establish an audit committee of at least three
independent non-executive directors with a written charter and terms of
reference that deal clearly with its authority and duties. The board
should satisfy itself that the committee, in its composition, has the
relevant competences required and the explicit authority to investigate
any matters within its terms of reference.
To comply with the framework code of best practice, the audit
committee should:
6-4

be a formal sub-committee of the board

have at least three members – for commercial public bodies, these
members must be non-executive directors; the chairperson may
not chair this committee

have a formal charter, including terms of reference, which have
been approved by the board

meet at least four times a year

have sufficient standing in the organisation with explicit authority to
investigate any matters within its terms of reference, the resources
that it needs to do so and full access to information

be able to obtain outside professional advice and, if necessary,
invite outsiders with relevant experience to attend meetings.
The charter and terms of reference of the audit committee should be
reviewed by the board from time to time and updated as appropriate.
Specific responsibilities of the audit committee should include:

approval of the annual audit programme

review of the annual financial statements and audit report of the
Office of the Comptroller and Auditor General before presentation to
the board

review of internal audit reports and management letters in terms of
recommendations made

oversight of the implementation of recommendations by internal
and external auditors

safeguarding the independence of the function

liaison with the Office of the Comptroller and Auditor General
6-5

approval of the annual audit report for submission to the board for
their approval

Submission of a report to the next board meeting of items reviewed
by the audit committee.
Review
The chairperson of the audit committee, the chairperson of the board
and the CEO should review the operation of the audit committee after a
three-year period. A report of this review should be submitted to the
board.
External audit
The external audit of non-commercial public bodies in Ireland is carried
out by the Comptroller and Auditor General.
An integrated system of controls requires an appropriate degree of
liaison between internal audit, audit committee and external auditors. In
particular, the potential for cooperation between internal audit and
external auditors should be probed through meetings of the relevant
parties. The audit committee is also required to make the external
auditors aware of the corporate governance issues in the Code with
which the body is required to comply. The audit committee is also
obliged to periodically consult with the external auditor on the operation
of the internal audit function, e.g. on staffing, work programmes and
testing activities.
6-6
This is a key set of relationships which underpins the integrity of the
system of internal controls, and their operation should be kept under
review by the board of each body.
The Chairperson should ensure that:

there is a competent internal audit function in place

there is a competent and properly functioning audit committee in
operation

the board considers all reports from the audit committee and
ensures appropriate follow-up on all issues of concern

The appropriate relationship is established and maintained between
internal audit, the audit committee and the external auditor.
6.3 Risk management
The Code says:
‘Each state body should develop a Risk Management Policy and the
board should approve the risk management framework and monitor its
effectiveness.’ (p. 11). The Code also requires each body to put in place
a robust system of internal controls.
Commentary
The systematic assessment and management of risk is recognised as an
important aspect of internal control. There is an abundance of guidance
available on the general topic of risk management. This guideline
assumes a general level of awareness of the relevance and approaches
6-7
to risk management and provides some pointers that have been found
useful in a public body context.
Identifying and prioritising the risks
The chairperson will need to ensure that risk management is on the
board agenda and that the board has a meaningful process in place to
provide assurance that key risks are identified and managed. The
chairperson will also need to periodically review the effectiveness in
practice of the framework in place.
Previous practice in public bodies tended to focus on financial risk and to
leave the task of managing it largely in the hands of internal audit and
the audit committee. Current practice looks at risks in a broader frame,
for example:

Strategic

Financial

Legal and Regulatory

Operational

Reputational.
This list is not intended as exhaustive – each organisation will have its
own customised menu based on its particular role and situation.
Bodies with very large budgets will inevitably put a lot of weight on
financial risks. Bodies working in sensitive or high-risk areas, e.g. health
care, may require a multi-dimensional framework for effective control.
Bodies with a quasi-judicial role are likely to place a heavy emphasis on
reputation. The mix and points of emphasis in each case will be shaped
6-8
by the role, scale and environment within which a particular body
operates.
There is a variety of user-friendly tools available for identifying and
prioritising risks under each heading. The general aim is to list them, put
some order of magnitude on the impact of an adverse event, estimate
the likelihood of this happening in each case and, out of this analysis,
derive a statement of the priority risks that
will need explicit
management. In an ideal world all risks would be followed up thoroughly
and managed to extinction. In practice, public bodies are likely to find
that senior-level attention is focused on high and medium risks and that
the normal processes of management within the executive of the body
take care of more minor items.
Risk management framework
Once identified, it becomes easier to work out the process for managing
each risk and to define the respective roles of the board (including
committees), the CEO, individual managers and employees.
A risk management committee reporting to the CEO and involving each
manager with responsibility for an area of risk can be a good means of
ensuring ongoing management attention. In the case of each risk
requiring attention, it will be necessary (perhaps through a risk
management committee) to review systematically the adequacy of the
controls and to determine the additional actions or controls required to
mitigate the risk to an acceptable level.
This process involves:
6-9

defining what is an acceptable level of risk to take – the ‘risk
tolerance’

identifying a range of options for treating the risk

evaluating these options

designing an action plan to implement the preferred option.
During this process it will be necessary to:

consider the appropriateness and adequacy of controls in place

ensure that feedback from internal audit reviews are effectively
assessed and that appropriate action is taken

ensure that incidents and issues are logged and their resolution
documented

ensure that all critical systems are regularly reviewed.
Risks can be dealt with in a number of ways:

Transfer – sharing or transferring the responsibility or burden of
loss, e.g. outsourcing. One example would be to ensure that all key
IT systems have appropriate external maintenance agreements.
Buying insurance cover may also be a cost-effective way of
transferring some risks.

Avoidance – taking an informed decision not to become involved in
a risk situation, e.g. by not investing time/resources into an area
where the outcome is uncertain.

Reduction – eliminating the source of the risk or reducing the
likelihood of its occurrence, e.g. training, preventive maintenance,
day-to-day procedural and management controls or minimising the
consequence
of
risks,
e.g.
contingency
management, contract terms and conditions.
6-10
planning,
crisis

Acceptance – accepting the risk or the residual risk, having applied
one or more of the above risk-action options.
In most instances, it is appropriate to accept some level of risk.
This process should lead to preparation of a report on the high-level
risks and agreed mitigating actions in respect of each risk area and a
review of high-level/strategic risks facing the organisation as a whole.
Monitoring and reporting the risk management process
Monitoring an organisation’s risk profile is a continuous process. The
purpose is to:

provide assurance that risks are being managed as expected

assess whether the risk action plans remain relevant

Ensure that the risk profile anticipates and reflects changed
circumstances and new exposures.
Each organisation will have is own approach to this but review and
reporting would be expected to take place on a regular basis, e.g.
quarterly at a number of levels, with, for example:

section heads and their employees

risk management committee

Audit committee.
Documenting risks and risk actions – risk register
The risk register is used to record risks, controls and individual risk
rankings. The risk register may also record:

additional controls/actions required to effectively mitigate risks
6-11

Deadlines for the introduction of these actions.
The Chairperson should ensure that:

the board adopts a risk management policy covering all relevant
risks

based on reporting to the board/audit committee, an appropriate
risk monitoring and reporting system is in place

the risk register is properly maintained

The policy and procedures are periodically reviewed.
6.4 Procurement and value for money
The Code says:
‘It is the responsibility of the Board to satisfy itself that the
requirements for public procurement are adhered to and to be fully
conversant with the current value thresholds for the application of EU
and national procurement rules.’ (p. 19)
Commentary
Key principles
Procurement in a public body is one of the highest predictable risk
areas, both on ethical grounds and on grounds of fairness and equality
of treatment to potential suppliers. Effective and efficient procurement
policies, procedures and practices can have a significant impact on the
accountability and value-for-money aspects of the purchase of goods
6-12
and services by the State. Ensuring value for money in procurement is
fundamental to delivering high-quality, cost-effective public services.
Procurement plan
Competitive tendering should be normal procedure in the procurement
process of public bodies. The board should ensure that there is a clearly
defined procurement plan in place. The plan should address the policy
and practical approach to be adopted by the organisation and should set
objectives that seek to improve the way the organisation acquires and
pays for goods and services.
The purpose of procurement is to meet the user’s requirement, including
the project brief. The requirement, including any specified level of
quality or standard of service, must, however, be tested critically for
need, cost effectiveness and affordability. The plan should clearly chart
the regulations governing procurement as well as identify national and
European value thresholds, and should be reviewed on an annual basis.
Thresholds
Due to Ireland’s membership of the EU, the award of large public sector
contracts is regulated by European treaties and by European directives
and national rules. Member States of the Union are also party to the
World Trade Organization’s Agreement on Government Procurement
(GPA). It must be stressed that the directives impose legal obligations
on public bodies in regard to advertising and the use of objective
tendering for contracts above a certain value thresholds (Department of
Finance, Public Procurement Guidelines – Competitive Process booklet,
6-13
Appendix 1). The board must also comply with procedures for lesser
contracts/purchases as set out by the Department of Finance.
The procurement plan should set down value thresholds of contracts
that require specific board approval. While such values will vary from
organisation to organisation, a threshold value level of €50,000 and
above does not seem unreasonable. In such cases the board should
establish an evaluation group with relevant knowledge and expertise
and, if required, relevant external expertise. In the case of significant
contracts, the board should agree the weighting to be assigned to the
defined criteria, e.g. price, proven competencies in the contract area,
financial stability of the bidder. Management should include an analysis
of the scoring for each supplier in making its recommendations to the
board. For contracts or purchases below the board level threshold,
management
should
provide
for
each
board
meeting
a
list
of
contracts/purchases awarded in the previous month by management
decision. Such a list would provide transparency to the board on the
outcome of all contracts.
The plan also needs to examine the potential for procurement
aggregation of commonly used goods and services. Also, appropriate
contracting arrangements should be put in place for efficient and costeffective delivery of recurring supplies and services.
Risk assessment and management
Public bodies should engage in risk assessment and management in
procurement where:

the value of the purchase is high
6-14

the procurement process is complex

adverse consequences could significantly affect the public body’s
operation

delivering
the
public
body’s
services
to
the
community
is
significantly affected.
Risk and procurement
When risk is being considered with respect to procurement, public
bodies should ensure that risk is assessed in relation to each category of
goods and services, with reference, for example, to the following
factors:

nature of the supply market, i.e. does it favour the buyer or the
supplier

probability of supply failure

impact on the body of supply failure

Complexity of relationship with supplier.
Value for money in public procurement
The main aim of the national policy on procurement is to achieve value
for money, having regard to probity and accountability. While price is
very
important
in
determining
value-for-money
outcomes
in
procurement and for certain categories of purchases in particular, it is
not the only variable that needs to be considered. Value for money also
encompasses non-cost factors.
When purchasing goods and services, consideration should be given to
whether they are fit for the purpose for which they are intended,
whether the goods and services provided are of sufficient quality and
6-15
whether the level of service or support meets the requirements. There
are other issues that should also be considered, including ‘whole-of-life’
and
transaction
costs
associated
with
acquiring,
using,
holding,
maintaining and disposing of the goods and services. Value for money in
procurement is therefore the optimal combination of ‘whole-of-life’ costs
and/or price, where appropriate; quality (fitness for purpose); and
capacity to meet users’ requirements.
Collective procurement
Purchasers should, wherever possible, seek opportunities with other
public bodies to share procurement in respect of common requirements.
This will help to avoid unnecessary duplication of effort and have the
benefit of aggregation of requirements and economies of scale. In
seeking value for money, purchasers may choose to enter into contracts
under framework arrangements put in place by others. The body
responsible for the framework should advise whether the framework
agreement has been awarded in accordance with EU rules on behalf of
other potential users. In deciding whether to make use of collective
contracts, the costs of undertaking separate procurement processes
must be taken into account.
Measuring the achievement of procurement objectives
Performance measures should be established in relation to specific
strategies and key processes as set out in the body’s procurement plan.
Such measures should be simple, relevant, specific, proportionate,
agreed by stakeholders and within the control of the purchasing body.
They should measure the procurement aims and objectives set out in
the plan.
6-16
General
The chairperson should, in the annual report to the relevant Minister,
affirm compliance with procurement procedures as outlined in the
organisation’s policy document.
Management and, ultimately, the board should ensure that there is a
strong focus on the role and expertise of the procurement function and
that
purchasing
personnel
are
properly
conversant
with
all
developments in this area.
Procurement practices are subject to audit and scrutiny under the
Comptroller and Auditor General.
The Chairperson should ensure that:

there is a clearly defined procurement policy, adopted by the board

the threshold for board approval and the reporting process for other
procurements are adequate

there is a process for bringing any breaches promptly to board
attention

the policy is regularly reviewed.
6.5 Communications
The Code:
While the Code does not explicitly address this topic, it is implicit in
many of the Code’s requirements that each public body should adopt
effective processes with regard to communications.
6-17
Commentary
Communication describes the interaction between the organisation and
all of its stakeholders.
Stakeholders include internal and external individuals and groups who
have, or could have, any interest in, or influence on, the operation of
the organisation. Typically (for public bodies), the stakeholder list will
include parent Department; customers/clients/service users; the general
public; employees; politicians and officials; suppliers; trade unions;
partners; trade and professional bodies; media; and related public
bodies. The stakeholder list will be specific to each organisation,
depending on the nature of its work.
Communications protocols relevant to the board
The induction pack for new board members should include a list of
stakeholders relevant to the organisation and the general principles
underpinning communication with each group.
The board should agree and review periodically a communications
strategy and set of policies. The communications strategy should
support the corporate strategy and goals of the organisation and should
describe the way in which the organisation communicates internally and
externally.
Communications strategies, policies and programmes at every level
should embrace the organisation’s commitment to key values such as
6-18
respect, integrity, honesty, transparency and responsibility, as well as
its loyalty to overall board policy and necessary levels of confidentiality.
Any change management programmes agreed by the board, involving
any change to the operation of the organisation or its employees, should
have a communications plan accompanying the programme at the time
of presentation to the board.
Board members should be encouraged to ask executive management
attending board meetings for their comments on the communications
issues and risks associated with any plan, policy or programme.
Appropriate levels of communication between the board and the
executive team should be encouraged and assisted by the chairperson.
The chairperson and board should encourage and, where relevant,
participate in two-way communication with key stakeholders, including
parent Department, Oireachtas members, employee groups, partners,
clients, service users. The board should ensure that it is in receipt of full
information on relevant issues from each stakeholder and that, in turn,
each stakeholder receives full information on relevant issues from the
organisation.
A policy on public comment should be in place, providing guidelines on
who within the organisation should act as spokesperson(s) on corporate
issues. In some cases it will be relevant for the chairperson to act as
spokesperson, while, in general, the CEO would be the primary
spokesperson. On specialist or divisional matters, other members of the
management team may be designated.
6-19
The policy should also set out the protocol to apply where public
comment by a member of the board about an aspect of the board’s
activities becomes necessary.
All press releases issued by the organisation which are of relevance to
the board’s work, should be circulated to all board members at the same
time as public circulation.
Any crisis or emergency plans which are developed for the organisation
should have a communications plan included.
External communication is one area of each body’s activity that requires
close
linkage
with
the
relevant
Minister’s
or
Department’s
communications function. Alerting the Department in advance of
significant announcements should be the norm.
The Chairperson should ensure that:

the Board adopts a communications strategy and policies and that
these are reviewed periodically

Any departures or inadequacies are promptly followed up.
6.6 Oireachtas committees
The Code says:
While the Code does not explicitly address this topic it does reflect
clearly the accountability of public bodies to the Oireachtas.
6-20
Commentary
The legislation establishing the State-funded body may make provision
for designated persons from the body to attend before committees of
the Oireachtas. Usually this will be the chairperson and the CEO.
An invitation to attend may be directed to the CEO only, so the
chairperson will need to consider if he/she should attend as well. This
can be a very sensitive issue so the chairperson may wish to take
soundings to see if his/her attendance is appropriate in the particular
circumstances. The approval of the Oireachtas committee is required to
the proposed attendees from the public body.
The invitation to attend may allow for witnesses from the body and will
ask the invitee to specify who is going to attend and their function. The
notice of attendance can vary widely from very short notice to a
lengthier period. If the relevant parties are not available to attend on
the specified date then postponement should be considered.
The request to attend may allow for a short opening statement to be
made and copies of this (a specified number) may have to be lodged
within a particular timeframe. The chairperson and the secretary should
look at the precise wording of the request to attend and review the
legislation or founding documentation to check that it is an appropriate
request.
With the agreement of the committee, a PowerPoint presentation can be
used to communicate an opening statement. The opening statement
6-21
should confine itself to the request. So, by way of example, if the
purpose of the request is to discuss the role of the body, the response
should be to that and should be based on the Statute or Memorandum
and Articles of Association.
The members of the Oireachtas committee will have privilege and are
protected in what they say from defamation. The same is not true of the
chairperson or any other witness the body brings, so care needs to be
taken with the manner of response to questions.
If there is a confidentiality section in the legislation establishing the
body, the Chair will need to ensure that giving evidence to the
committee does not put them in breach of the section. In the case of a
regulatory body, even if there is an overriding provision to report to the
Oireachtas, care will need to be taken not to prejudice an ongoing
investigation or inquiry in any way.
Notice will normally not be given of the questions to be asked, so the
team fielded needs to be prepared to cover a wide range of topics.
Although, if detail is required, it can be agreed to provide it at a later
date, it is preferable to give as much information as possible at the
hearing.
After the opening statement has been read members of the Committee
will normally be asked by the Committee Chair to put their questions in
turn. A member may be allowed to ask further questions at a later
stage.
6-22
Respondents need to bear in mind that answers are on the record, are
being televised, are not covered by privilege and may be repeated, not
necessarily in context, to the Minister, the Department, stakeholders
and the media.
Preparation is extremely important as is a cohesive approach between
the team members. It is useful to agree beforehand who is going to field
the questions. The committee may direct particular questions at
particular witnesses so all need to be prepared.
It is worth noting that:

There are no official guidelines on the parameters governing the
aspects of the body or the degree of operational detail that are
subject to committee examination.

If committee queries in public sessions extend into commercially
sensitive information, the chairman or CEO will need to convey this
to the chairperson of the committee and decline to disclose such
information in public session.

If questions relate to something sensitive you may raise that and
have the matter heard privately.

If you don’t have the detail to hand you may agree to submit it at a
later stage.
The Chairperson should ensure that:

attendance before Oireachtas committees is given due priority as
an important dimension of accountability

the body is appropriately represented at, and briefed for, the
hearing
6-23

there is a process for follow-up to the hearing, e.g. submission of
further details.
6-24
Appendix 1. What the chairperson should ensure
1.1 Mission and values
The Chairperson should ensure that:

the body has a clear statement and shared understanding of its
mission and that it is formally adopted by the board

the statement of mission is promoted internally and externally as
part of the identity of the body

the mission statement is reviewed periodically to ensure continuing
relevance and accuracy, in particular when reviewing strategy
documents.
1.2 Relationships with stakeholders
The Chairperson should ensure that:

there is an effective process for identifying stakeholders and for
follow-up with them

the body, through its board and the executive, are seen to take due
account of stakeholder concerns

the process is reviewed periodically.
1
1.3 Key good governance principles
The Chairperson should ensure that:

the board’s approach to governance is guided by an appropriate set
of principles – some are made explicit in the Code of Practice for
the Governance of State Bodies

board members and the executive have a shared understanding of
these principles

the principles adopted influence the frame of reference for
performance evaluation, for both the board and CEO

the board annually reviews the principles and operation of the
governance of the body.
1.4 Corporate social responsibility
The Chairperson should ensure that:

the board considers CSR as part of its brief

any areas to be pursued are identified

CSR is incorporated into business planning and external reporting.
2.1 Constitution
The Chairperson should ensure that:

the
board
explicitly
considers
and
adopts
its
own
code
of
governance, informed by the principles and general requirements of
the Code of Practice for the Governance for State Bodies but
tailored to its specific needs

the code is reviewed annually and updated as required.
2
2.2 Broader statutory responsibilities
The Chairperson should ensure that:

the body has a summary of its legal obligations as a resource and
source of guidance for the board, management and employees

the body has processes in place to enable compliance with the
relevant legislation

performance and compliance with the relevant legislation are
reviewed each year and appropriate changes, if any, are made to
ensure compliance.
3.1. Role of chairperson
The Chairperson should ensure that:

he/she provides the necessary leadership to the board

existing practices comply with governance best practice in all
aspects

there is a process at board level for review of governance practices
and for follow-up on any weaknesses identified.
3.2 Role of the board
The Chairperson should ensure that:

all aspects of the board’s role receive appropriate attention

the right balance is struck in the allocation of board time

the board is properly structured and supported to discharge the full
range of its responsibilities.
3
3.3 Chairperson/CEO relationship
The Chairperson should ensure that:

the respective roles of chairperson and CEO are clearly understood
and documented

in partnership with the CEO, key relationships work satisfactorily.
3.4 Role of committees
The Chairperson should ensure that:

the business of the board is supported by the required number of
committees and that this is reviewed by the board periodically

the constitution, role, membership, limits of authority and reporting
relationship of each committee are agreed by the board

the committees function as planned, with any remedial action
agreed by the board.
3.5 Role of secretary
The Chairperson should ensure that:

the role of secretary is clearly defined and is effectively discharged
in support of the board

the secretary provides and maintains a board calendar.
4
3.6 Board composition and evaluation
The Chairperson should ensure that:

rigorous and formal board evaluation is in place

any developmental initiatives or procedural improvements are
actively followed up

any gaps in board competencies or expertise are made known to
the key decision-makers regarding future board appointments

the reporting requirements regarding board attendance are met.
3.7 Board meetings
The Chairperson should ensure that:

there is a common understanding of the process, timing, support
and organisation of board meetings

each meeting is deliberately planned and effectively managed

all key aspects of the board’s role are covered in the annual
calendar of meetings

Each meeting yields clear decisions based on adequate information
and substantive discussion on key items.
3.8 Board confidentiality
The Chairperson should ensure that:

there is a protocol adopted by the board, setting out the general
rules regarding confidentially, which is reviewed periodically

Any breaches are followed up and remedial action taken.
5
4.1 Confidential disclosures (whistle blowing)
The Chairperson should ensure that:

there is a policy and procedure in place and that it is widely
communicated

the appropriate balance is struck between confidence in normal
management and control processes and the need to address
genuine concerns on the part of employees.
4.2 Code of conduct
The Chairperson should ensure that:

the required codes of conduct and the processes required to give
effect to them are in place

the codes are being complied with

The codes are periodically reviewed.
5.1 Outcomes
The Chairperson should ensure that:

the board gives explicit consideration to this aspect of its planning,
performance management and reporting

a suitable framework based on outcomes is put in place

future plans and reports are prepared in this context.
6
5.2 Dialogue with Minister/parent Department
The Chairperson should ensure that:

the
lines
of
the
relationship
between
the
body
and
the
Minister/Department are appropriate, mutually acceptable and
understood by the board and the executive

the mechanisms adopted work satisfactorily

there is a process for periodic review, jointly with the Department,
as required.
6.1 Reporting
The Chairperson should ensure that:

all reporting requirements under the Code (or company law where
relevant) are met within the timescales set out

where timescales cannot be met (e.g. due to audit delays), the
board agrees on an alternative course and informs the Minister
accordingly.
6.2 Audit and financial controls
The Chairperson should ensure that:

there is a competent internal audit function in place

there is a competent and properly functioning audit committee in
operation

the board considers all reports from the audit committee and
ensures appropriate follow-up on all issues of concern
7

The appropriate relationship is established and maintained between
internal audit, the audit committee and the external auditor.
6.3 Risk management
The Chairperson should ensure that:

the board adopts a risk management policy covering all relevant
risks

based on reporting to the board/audit committee, an appropriate
risk monitoring and reporting system is in place

the risk register is properly maintained

the policy and procedures are periodically reviewed.
6.4 Procurement and value for money
The Chairperson should ensure that:

there is a clearly defined procurement policy, adopted by the board

the threshold for board approval and the reporting process for other
procurements are adequate

there is a process for bringing any breaches promptly to board
attention

the policy is regularly reviewed.
8
6.5 Communications
The Chairperson should ensure that:

the Board adopts a communications strategy and policies and that
these are reviewed periodically

any departures or inadequacies are promptly followed up.
6.6 Oireachtas committees
The Chairperson should ensure that:

attendance before Oireachtas committees is given due priority as
an important dimension of accountability

the body is appropriately represented at, and briefed for, the
hearing

there is a process for follow-up to the hearing, e.g. submission of
further details.
9
Appendix 2. Board Evaluation
Evaluation of Board Performance
Best practice in corporate governance includes regular evaluation of the
Board’s own contribution and performance. The purpose is four-fold:

to enhance the contribution made by the Board through greater
clarity about its role;

to consider more deliberately the profile and composition of the
Board;

to identify and address any weaknesses or areas of underperformance; and

To demonstrate accountability in relation to the Board’s own
performance.
The first step involves adoption by the Board of a decision to proceed
with evaluation and of a methodology. The latter could be worked
through with professional guidance but for the first cycle might be based
on the following framework:
1.
2.
Individual Board Member assessment of:

Own role on Board

Own role on Board committees

Board performance overall

Committee performance overall
Chair’s assessment of:
1

Board overall

Board committees

Own role
Each assessment should be made on a self-assessment form with the
opportunity to discuss outcomes with external facilitator.
3.
While not prescriptive as to content, aspects likely to be probed
would include:
4.

Organisation and Clarity of Role(s)

Conduct of Meetings – Chairing, Support, Documentation

Information requirements being met

Risk Management

Balance of Content : strategic vs. operational

Any training or development needs
Feedback:
External facilitator to feed back to Board on overall results and
outcomes and on areas for improvement and proposed actions for the
following period
2
Appendix 3.Induction of New Members
The Code says:
‘The Board should be supplied with information which is of a suitable
quality to enable Board members to satisfactorily discharge their duties.’
(p. 5)
The secretary of the body should brief new directors (para. 4).
Induction of a new chairperson
Commentary
The following is a checklist to help you to consider how best to proceed
on being appointed.
Meet:

CEO

Minister

Secretary General (or relevant Department officials)

Company secretary

Chairperson of the audit committee

Chairperson of the remuneration committee

Chairpersons of other board committees

Other directors

Previous chairperson
Documents:

Relevant legislation relating to incorporation of body (if applicable)
1

Relevant legislation relating to the objectives of the body

Memo and Articles

Standing Orders

Board protocols

Governance documents, e.g. On Board

Minutes for last 12 months

Last annual report and accounts

Published documents (other than annual accounts)

Management accounts

Delegated powers to CEO

Procurement procedures

Risk assessment

Health and safety statement

A list of directors and their profiles and nominators (if applicable)

Organogram (organisational chart)

Details of declarations of interest/conflicts

Details of solicitors, auditors, bankers, PR advisers and other
relevant professionals

Board dates and calendar, if available

Statutory confidentiality provisions, if any

Corporate and strategic plan

Business plan

Last CEO review

Previous expense claims
Agree:

Board dates, times, venues

Strategic meeting
2

Board communication protocol

Minutes protocol

Outline agendas

Board calendar

Spokesperson (separation of roles)

Procurement rules

Risk rules

Separation of roles between chairperson and CEO
Induction of board member
Meet:

Chairperson

Company secretary
Organise:

Induction briefing with CEO

Presentation by senior executives
Documents:

Memo and Arts

Standing Orders

Board protocols

Governance documents, e.g. On Board

Last annual report and accounts

Management accounts

Delegated powers to CEO
3

Procurement procedures

Risk assessment

Health and safety statement

Directors’ and officers’ insurance

Relevant legislation relating to incorporation of body, if applicable

Relevant legislation relating to the objectives of the body

A list of directors and their profiles and nominators, if applicable

Organogram (organisational chart)

Details of declarations of interest/conflicts

Board dates and calendar, if available

Statutory confidentiality provisions, if any

Expense claims
4
Appendix 4.Board Calendar
Illustrative – to be adapted as appropriate
Board
Annual
January

Board calendar circulated to all board members

Calendar, including standard items that will happen during the year,
including allocation to particular months

Approval of accounts

Strategy and Business Plan Review

Annual report

AGM (if relevant)

Risk assessment review

Health and safety review

Procurement review

Directors’ and officers’ insurance review (if relevant)

Challenging objectives set

Challenging objectives reviewed

CEO’s remuneration

Directors’ interests

Book board room for meetings – secretary
July

Chairperson fixes dates for board meetings, including a strategic
board meeting, for following calendar year
1
Monthly

Ten days before board meeting: draft agenda presented by
secretary to chairperson

Draft approved by chairperson in discussion with CEO

Agenda and papers circulated to board not less than seven days
before board meeting

Minutes of board meeting: (The 2x2x2 rule applies) secretary
drafts in two days; chairperson approves in two days; secretary
circulates in two days
General

How to get items on to agenda

Rules re. board communicating with executive

Use of email, i.e. centralised publication

Confidentiality

Board members not representatives

Conflicts of interest
Committees
Annual
January

Committee calendar circulated to all committee members (if
necessary liaise with other committee chairpersons)

Notify secretary to insert into calendar
2

Calendar, including standard items that will happen during the year,
including allocation to particular months
Monthly

Ten days before Committee meeting draft agenda presented by
secretary to chairperson

Agenda and papers circulated to Committee not less than seven
days before board meeting

Minutes of Committee meeting: (The 2x2x2 rule applies!) secretary
drafts in two days; chairperson approves in two days; secretary
circulates in two days
General

Same general points apply as to board
3