One51 - Are the board doing their job???

beeftotheheels

http://www.irishtimes.com/newspaper/frontpage/2011/0702/1224299942655.html

I have to say I was shocked to read that the One51 board had removed Philip Lynch without either a specific threat from the DOCE or a shareholder rebellion (being what was required to oust Jim Flavin from DCC).

To recap Mr Lynch is currently being investigated in relation to dealings in C&C shares since he sits on the board of C&C (a little like Mr Flavin).

The share price has fallen, the company is involved in a frozen takeover attempt for Irish ferries which also involved allegations of misconduct on the part of One51, while personally Mr Lynch is taking a legal case, his success in which which hinges on proving his lack of financial acumen and inability to read a contract.

Is this evidence of an Irish corporate board actually doing their job and holding the chief executive to account?

Could this be catching?

Inverse to the power of one!

Interesting, I'd hold out in terms of wither this will catch or not tho, but it would be reassuring to see.

article wrote:

The Corkman’s contract was due to expire in 2014. It is understood he has received two years’ salary as his termination payment.

Mr Lynch has had a difficult year.

Tough times indeed.

later12

Well the share price is worth less than 20% of what it was worth prior to the crash, and it will be interesting to see how the company trades from here out. The dis-satisfaction with Philip Lynch seems to be quite a long running one, so one would hope that in order to prevent further instability, the board has a new CEO in mind who can come in and replace Lynch, preferably by Monday morning!

As I understand it, a big part of the corporate governance code that is currently knocking about in Ireland is the UK code, the one compiled by the FRC and UK shareholders. That code, if adhered to, strengthens boards of listed companies and is something that would certainly encourage more of this behaviour where a CEO was found to be lacking. As long as it does not destabilise excessively, I think that could only be a good thing.

Apparently a review of Irish company law is underway at the Department of Enterprise, in order that the Government might reform corporate governance with respect to listed companies in Ireland too, but I'm not sure how relevant that can be here.

beeftotheheels

I have to say that I'm in favor of the voluntary code for the UK and a statutory code for Ireland.

I think that the culture of many of our public companies, especially the likes of One51 and DCC which were run as personal fiefdoms for decades (One51 clearly hasn't been around for decades but Philip Lynch ran the businesses headed at 151 Thomas Street for decades) is too far gone for a voluntary code.

That said, this action by the board of One51 is making me wonder... If Philip Lynch can be removed from 151 Thomas Street by his board is anything now possible in corporate Ireland?

later12

Yes, indeed, it would be a very welcome new departure.

Would you welcome a statutory code for Ireland though, as opposed to the current 'comply or explain' model? I think such statutory provisions are good in theory, but wonder how attractive we would look as a place to do business should we have such a rigid statutory code. Might such deviation from the UK, and, indeed from the European norm put us at a disadvantage?

beeftotheheels

later10 wrote: »

Yes, indeed, it would be a very welcome new departure.

Would you welcome a statutory code for Ireland though, as opposed to the current 'comply or explain' model? I think such statutory provisions are good in theory, but wonder how attractive we would look as a place to do business should we have such a rigid statutory code. Might such deviation from the UK, and, indeed from the European norm put us at a disadvantage?

I think that the better question at the moment is whether our "Irish" approach to corporate governance puts us at a disadvantage and I believe that it does.

There is little evidence of effective corporate governance at Anglo (or indeed the other banks)...struggling...corporate governance...INBS...same sentence....

Legislation could make allowance for aberrations e.g. an executive chairman following the departure of a chief exec until a new CEO can be found. But we clearly have not been complying or explaining, we've been ignoring hence a statutory footing, at least for the time being.

Or, because I am so cheered by the events at One51 a threat of legislation, unless we see huge adoption of best practice by Irish Plcs.