The interwoven world of Irish banks' boards

As the world continues to cast an acerbic eye over the wreckage left behind by Ireland's banking crisis, now seems like a good time to look back at one of the root causes - too few people doing too many jobs at board level.

We're a little behind on this, but a report from independent economic think-tank TASC (published in May), highlights the low standard of corporate governance within Ireland's largest institutions, with overlaps and conflicts of interest occurring all over the place.

The study - called Mapping the Golden Circle - shows just how congested the boardrooms were during the Celtic Tiger (2005-07), with a network of 39 individuals holding 93 directorships between them.

Particularly culpable, predictably, was the financial sector - with 24 directors holding a total of 63 positions between them across 25 boards. Sound a little crowded?

Well, perhaps a good way to demonstrate this is the chart below - which is more confusing than a London tube map - and shows Irish financial institutions' influence on the inter-locking boards. Yes, Anglo Irish was the worst.

Of course, aside from accusations of an old boys' network, one of the easiest ways to justify this is a lack of a talent at director level. Certainly that was the financial institutions' excuse for paying over the odds for their directors and non-executive directors (as the chart below shows).

Unfortunately, TASC says there's "no evidence that retaining senior staff was difficult for the Banks."

Of course, this was all a long time ago and is surely water under the bridge by now? Well, much like the Irish banking crisis, properly improving corporate governance is a drawn out affair.

The Financial Regulator's recommendations were outlined in its consultation document 'Corporate Governance Requirements for Credit Institutions and Insurance Undertakings'. These requirements will be finalized in October and institutions then have six months to comply.