3.1 Introduction

3. Corporate Governance

3.1 Introduction The State-owned port companies are valuable assets and have important economic, social and environmental functions. It is incumbent on those entrusted with the management of these assets that the ports fulfil the expectations of the shareholder, the public interest and the economy at large. To do so the ports require direction and clarity as to what those expectations are.

The Government’s Public Sector Reform Plan, published in November 2011, contains a number of commitments in relation to improving the performance of State bodies. Included among these are proposals for robust Service Level Agreements between parent Departments and State bodies, which will focus on outputs, accountability and efficiencies.

A key driver behind the proposed organisational restructuring is the requirement that Ireland be served by a first-class commercial port network. As our primary international trading gateways, it is critically important that our Ports of National Significance (Tier 1 and 2) provide an efficient and cost-effective service to our economy.

The Department of Transport, Tourism and Sport has indicated its intention to implement new arrangements for managing the performance of state bodies, making greater use of framework agreements where appropriate, and focusing on outputs and outcomes. This renewed focus on issues such as outputs, accountability and efficiencies generally has equal relevance within the State commercial ports sector and should be at the centre of the shareholder relationship between the Department and company boards.

The ports policy review consultation document referred to the potential for a system of regular performance measurement. Since 2006 the Irish Maritime Development Office (IMDO) has provided the Department with a comparative analysis of the port companies’ financial accounts from which a number of efficiency ratios have been derived to inform Departmental consideration of performance.

At an operational level, and as stated in the consultation document, the development of a performance measurement system should not occur in isolation. Rather it must be viewed within the broader context of the development of port performance indicators at a European level. This work at European level is continuing; the Department will work with relevant national stakeholders to determine how best to build on this work, incorporating the work already undertaken by the IMDO, and introduce a national port performance measurement system to aid Government’s evaluation of its shareholding in the State port companies. This system will be introduced by 2016.

The Department is committed to ensuring that regular meetings at both Ministerial and official levels occur with the boards and executives of the port companies to ensure that the expectations of the State as shareholder are embedded within all levels of corporate and commercial development.