The national governing body for equestrian sports in Ireland spent more than €650,000 on severance payments and settlements to resolve disputes with staff in recent years, which caused serious concern to several board members who recently resigned.
An internal financial analysis found Horse Sport Ireland (HSI) had spent €2 million in recent years on legal costs, consultancy fees, and payouts to staff members as part of settlements or severance agreements.
The entire board of the organisation had resigned in recent weeks. On Thursday, Mr Reynolds stepped down as chairman, with Michael Dowling, former chair of Kerry Group plc, appointed in his place.
Minister for Agriculture Charlie McConalogue said he had appointed Mr Dowling to the board, along with three directors. They were Prof Niamh Brennan, Zoe Kavanagh, chief executive of the National Dairy Council, and Dr Kevin Smyth, former chief financial officer at the Department of Agriculture.
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Four of the seven directors who have stepped down, including former TD Lucinda Creighton, did so due to a lack of support for the current management of HSI.
[ Chairman resigns from board of Horse Sport IrelandOpens in new window ]
In a statement, Mr Reynolds said “deep divisions” had arisen at board level, which had not been possible to bridge.
“Matters came to a head recently when a number of Directors voted in a favour of a motion at a Board meeting against specific legal advice. The course of events led directly to the ongoing Board issues becoming irreconcilable,” he said.
Mr Reynolds said he offered to step down 10 days ago during a meeting with the Minister, but he was asked to remain in place until new directors could be identified.
He said he had decided to step aside now to allow a new board have a “clean slate”.
It is understood several directors had previously expressed concern at significant costs the governing body was incurring as a result of disputes with staff, leading to significant severance payments.
Documents seen by The Irish Times show HSI has paid more than €650,000 in staff severance or settlement payments since 2018, as well as spending €400,000 in legal fees on the cases.
The organisation spent €475,000 to settle one case, which involved a significant payment and more than €200,000 on associated legal costs. The case related to a senior employee who left the organisation in the last 18 months.
HSI spent more than €200,000 to resolve an employee matter in 2020, €180,000 on another case later that year, and €190,000 on a further human relations case in 2018.
In total the organisation spent €840,000 in legal fees over the last four years, and a further €490,000 on consultancy fees.
It spent more than €237,000 on a plan to relocate from Naas to Greenogue, Rathcoole, Co Dublin, where it hoped to construct a “centre of excellence”. The proposal was abandoned earlier this year, due to inflation in construction costs following the war in Ukraine.
Confidential material
In a statement, Horse Sport Ireland criticised the leaking of “highly confidential board material”, which it said was below basic corporate governance standards.
“HSI’s motivation in either defending the organisation from cases taken by third parties over the past four years, or instituting cases on its behalf, is to protect the interests of the horse sport sector,” it said.
A spokesman added any legal or staff-related costs had “at all times” been approved by the board.
The organisation had been undergoing “significant change and reorganisation” in recent years, during which time some staff had left. “It is entirely normal in such circumstances that certain staff and other related costs arise,” he said.
Many of the changes had been in line with previous recommended reforms to overhaul structures within the organisation, he said.
The organisation is facing two further claims from former employees over alleged poor treatment by HSI, sources said.
In one case a severance payment was made to the former staff member, who is separately taking legal action against HSI over stress and other matters. In recent days a second former employee has filed a legal claim against the organisation, alleging she was a victim of bullying and harassment at work.
HSI received more than €7 million in public funding this year, from the Department of Agriculture and Sport Ireland.
One source in HSI said “deep divisions” had arisen on its board this year, with directors split on a range of key issues, which had led to the current turmoil.
