The Gazette 1985

INCORPORATED LAW SOCIETY OF IRELAND GAZETTE Vol. No. 79 No. 8

October 1985

Comment

In this issue . . .

Eternal Vigilance? A S the dust of the P.M.P. A. and Insurance Corpora- tion of Ireland debacles begins to settle, it is timely to reflect that the scale of each of these collapses was partly attributable to inadequate supervision of those bodies by those charged with that duty. The stewardship of the Department of Industry Trade Commerce and Tourism must be called into question in the P.M.P.A. case and, perhaps to a lesser extent, in the I.C.I, failure. The P.M.P. A. case was no sudden disaster; the omens were to be read even in the deplorably belated "blue book" of insurance statistics published by the Department. Whether the supervision of insurance companies should be in the hands of a Civil Service Department is open to question. The curious practice of shuffling staff around, so beloved of our Civil Service, may have some benefits but they are outweighed when it results in the regular practice of moving people out of particular positions in which they have acquired considerable expertise, to be replaced not by their well trained, experienced, assistants but "blow ins" from some totally unrelated area of the Department's activities. This is hardly a recipe for optimum efficiency. The political masters present a further difficulty; there appears to be evidence of foot-dragging in the P.M.P. A. case; a natural reluctance to be seen to oppose a populist movement tinged with patriotic sentiment. There is a strong case for an independent regulatory body outside the control of politicians and not part of the public service. A Commissioner for Insurance, with trained and experienced staff, could provide better and speedier supervision of this important area and protect the insuring public against the financial imposition brought about in the wake of the P.M.P.A. The I.C.I. case appears to have been more a failure of internal than of external supervision, though disturbing rumours about the company had circulated in Dublin for some months before the collapse. It raises the question of the role of the directors, most significantly the non- executive directors, of major companies. It may seem hard that for a modest annual fee (and some agreeable "perks",) a non-executive director should have to shoulder major responsibilities. It may seem hard, but it is the law and it is not clear how (or, indeed, why) exemption from liability should be conferred on non-executive directors. It is too easy to say that, just because a director does not hold a position of specific executive responsi- bility in a company, he is released from the duty to ensure that all information is made available to him to enable him to act at all times in the best interests of the company and its mentors. (continued on page 289) 267

Comment

267

Competition Policy of the European Community, Part II

269

^píictice Notes

278

Crossword

279

^Conveyancing (Flat Development) Referral Service

281

Solicitors' Golfing Society

283

^Serious Capital Loss in Companies

285

/ n o w Your Council 84/85

290

^Professional Information

294

Executive Editor: Editorial Board:

Mary Buckley William Earley, Chairman John F. Buckley Gary Byrne Geraldine Clarke Charles R. M. Meredith Michael V. O'Mahony Maxwell Sweeney

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The views expressed in this publication, save where other- wise indicated, are the views of the contributors and not necessarily the views of the Council of the Society. The appearance of an advertisement in this publication does not necessarily indicate approval by the Society for the product or service advertised.

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