3.3 Port company boards

3.2 The Code of Practice for the Governance of State Bodies

3.3 Port company boards

The Ports Policy Statement 2005 proposed a reduction in the total number of directors in order to ensure that boards were “more focused and clearly aligned, on an individual member level, solely on the achievement of the commercial objectives and well-being of the port company”. Amendments contained in the Harbours (Amendment) Act 2009 have facilitated a gradual reduction in board size from 12 to eight, and by the end of 2012 all port company boards will comprise no more than eight directors.

All State bodies, including the port companies, must adhere to the requirements of the Code of Practice for the Governance of State Bodies.

The code seeks to provide a framework for the application of best practice in corporate governance across the State sector. Government expects State bodies to provide leadership by meeting the highest standards in all their commercial and non-commercial dealings.

For each company to achieve its full potential, it is essential that its board be active and contain the appropriate balance of skills. In particular, each board should contain members with appropriate accounting, legal, commercial and maritime/logistics training or experience.

Nevertheless, the code acknowledges that some of its requirements may be too onerous for smaller State bodies. In such cases, and as outlined in section 1.1 of the code, those bodies may engage with their parent Department to seek a more proportional approach toward the application of certain provisions.

The Code of Practice for the Governance of State Bodies states that boards should regularly review their operation and seek to identify ways to improve effectiveness. The code suggests that this review should include an identification of gaps in competencies at board level; it states that, where such gaps are identified, chairpersons should advise the Minister in due time ahead of any vacancies arising. A number of chairpersons have availed of this opportunity. The Government encourages this practice among the State commercial ports.

As part of the broader framework for re-organisation referred to in the section on ‘Organisational and Ownership Structure’, the proposed realignment of those smaller ports of regional importance within more appropriate governance structures will also allow them avail of shared resources in the area of corporate services. This is in line with the recommendations contained in the Public Sector Reform Plan, and in addition will alleviate concerns about the onerous nature of ensuring compliance with corporate governance requirements, among what are some of the smallest State commercial companies in existence.

In line with the Government’s commitment to ensure greater transparency in the State board appointment process, the Department has advertised publicly for expressions of interest from suitably qualified members of the public to serve on the boards of bodies under the Department’s remit, including the port companies. This process has attracted a wider and more diverse range of candidates for port board positions than the existing statutory consultation process, which involves formal consultation with stakeholder organisations. Therefore, it is proposed to remove the statutory consultation in favour of the broader expressionsof-interest process. However, it shall continue to be the practice, on a non-statutory basis, to consult the existing stakeholders on an annual basis with regard to forthcoming board vacancies.

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Government expects State bodies to provide leadership by meeting the highest standards in all their commercial and non-commercial dealings

It is important that all board members be aware that they are Ministerial appointees who, in addition to their legal and fiduciary responsibilities, must ensure that due regard is given to Government policy in decision-making. Board members are not appointed to, and should not seek to, represent local or sectoral