A report urging a corporate governance revamp in the Republic's boardrooms threatens to end the era of comfortable non-executive sinecures for retired high-fliers, writes Una McCaffrey.
Boardrooms will never be the same again, at least not if Mr Derek Higgs has his way. The proposals contained within his report, issued earlier this week, must have left many directors quaking about the future shape of their roles. The days of the comfortable non-executive sinecure for retired high-fliers would seem to have passed, at least in the UK.
But what of the Republic? While the Irish corporate world is a smaller and more familial place than its UK equivalent, surely it is only a matter of time before a similar corporate governance shake- up hits the Republic's boardrooms too?
Research shows that seven of the Republic's top 16 public companies would fall foul of at least one of the Higgs proposals, while several would break more.
Among the companies surveyed by The Irish Times, the most common failing stems from the strong family ties prevalent throughout the Republic's business community. Three of the top 16 - Ryanair, Independent News & Media and Jurys Doyle - include at least two non-executive directors who are related on their boards.
Mr Higgs believes that family connections between directors can affect the independence of non-executives, a characteristic that he sees as crucial to effective corporate governance.
This "independence" should be encouraged, Mr Higgs believes, by regular meetings between non-executives, at which executive directors should not be present.
While most Irish public companies accommodate this in the context of audit or remuneration committees, at least three - AIB, Ryanair and IAWS - have no formal arrangements for such a process.
Moving up the boardroom scale, a number of the Republic's most prominent chairmen would see their roles change radically if Higgs-type proposals worked their way into Irish practices.
Independent News & Media chairman, Sir Anthony O'Reilly, would be forced to separate his chairmanship and chief executive roles, as well as having to relinquish his chairmanship at Waterford Wedgwood, another major company on the Irish exchange.
Galen chairman, Dr John King, could also run into difficulties because of his history as an executive within the group.
Mr Higgs is a fan of meritocracy and transparency, proposing clear procedures for the election of non-executives to public boards.
He believes "daylight" should shine on the non-executive side of boards, proposing for example that candidates from the non-commercial sector should be given more prominence in plcs.
He also suggests that a strict balance be achieved between executives and non-executives on every major board. Two of the Irish companies surveyed - Fyffes and DCC - would fail to meet this requirement because they have more executives than non-executives.
Ryanair would also break the rules, but for the opposite reason. The company's chief executive, Mr Michael O'Leary, is the only Ryanair board member to hold an executive role, thus skewing the balance in the other direction.
While Mr Higgs concentrates much attention on non-executives, he also suggests a few standards for executives, who he believes should not involve themselves heavily in other large listed companies. Very few big Irish plcs would have a difficulty with this recommendation, but Mr Philip Lynch of IAWS, who is also a director of Heiton and FBD, could fall just slightly to the wrong side.
It should be recognised, however, that Mr Higgs, an experienced financial professional, has merely offered "a counsel of best practice that can be intelligently applied". As they look on at the scrambling among their UK counterparts, Irish directors might like to gain first-mover advantage by taking note of his philosophy now.
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