The Gazette 1985

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INCORPORATED LAW SOCIETY OF IRELAND
GAZETTE
Vol. No. 79 No. 8 October 1985
In this issue . . .
Competition Policy of the European
Community, Part II 269
Crossword 279
^Conveyancing (Flat Development) Referral
Service 281
^Professional Information 294
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necessarily the views of the Council of the Society.
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does not necessarily indicate approval by the Society for
the product or service advertised.
Published at Blackhall Place, Dublin 7.
Comment
Eternal Vigilance?
AS 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