Derek Deane letter to IFA Executive Council
Derek Deane’s letter to IFA Executive Council November 4, 2015.
I became a member of this Executive Council in January 2000 and I have been on Council for fourteen of the past sixteen years.
I have been honoured to serve as the National Livestock Chairman representing beef and suckler farmers for four years in that position and in representing them I did my best to improve their lot in an industry that I feel very passionately about. I was also honoured to be elected as Deputy President by the farmers of Ireland and I now find myself here today extremely concerned about the proposal in front of us for discussion.
This issue came to the attention of Executive Council because of the resignation of Mr. Con Lucey as Chairman of the Audit Committee which was reported in The Farmers Journal. Unfortunately, I believe we have not been kept fully informed by the President and General Secretary of events and issues that are important to this Executive Council which is the overall decision-making body of the Association. On his resignation, Mr. Lucey wrote two letters explaining why he resigned and raising concerns and issues that he felt needed to be addressed by the Executive Council. Unfortunately, after several requests it was decided by the Executive Board not to make these letters available to the Council. I now wish to thank the person who gave me access to these letters as I believe they are relevant to this debate.
Con Lucey, who had worked for more than 30 years in this Association as our Chief Economist, which he served with distinction, had raised concerns about the changes in accountancy practices which would need to be implemented by IFA. He also said that a lack of accountability existed in the setting of the remuneration of the two most senior office holders, the President and the General Secretary. On this issue, I welcome the decision to establish a Remuneration Committee, and the proposal to make the National Treasurer the Chairman of the Committee.
I now believe that we need, as a Council, to look at the proposed Terms of Reference for this Committee and the makeup of the Committee. Con Lucey had suggested that neither the GS nor President should be on this Committee and I believe that this is important because we should not have a member on the Remuneration Committee whose remuneration is being discussed and decided upon.
As Vice Chairman of ICBF for eight years, I chaired the Financial Committee and I was also Chairman of the Remuneration Committee which met on an annual basis to discuss the Chief Executives pay and bonus conditions. We discussed both his pay and bonuses and made the decisions based on the previous year’s performance and reported our findings fully to the Board of ICBF and our recommendations for decision and the reasons for it.
I believe we need the same level of transparency in this Association and I know we all agree that IFA must be above suspicion because of the responsibility it bears.
It is obvious that the Association needs to maintain the confidence of the very large membership base and needs to ensure that the Association’s work is not eroded by negative publicity and rumours. To maintain confidence, there should be clear accountability for all major decisions in relation to the governance of the Association. Whereas the rules in relation to elections and policy formulation are clear and transparent, the same is not the case in relation to top level remuneration.
The main issue to be decided today is the disclosure of total remuneration of key management personnel. The proposal being put forward to us today from the top table is to lump in the President, General Secretary, Executive Board and Executive Council members into one figure for the total. I have serious concerns about this and I believe if we go ahead with it we will be wilfully misleading our members. My understanding is we need this for March 2016 year-end accounts. I believe we will have to redraft the 2015 accounts in the new format for comparative purposes.
Thus the issue for Council is to decide who constitute key management personnel in IFA? When I have put this question to some farmers, I get a range of answers.
A) the General Secretary only
B) the President and General Secretary
C) the President, Deputy President and General Secretary
A recent survey by the Farming Independent showed that 86% of farmers surveyed expressed a wish for transparency in the payments to the General Secretary and President of the Association.
These are the people who are involved in managing IFA on a daily and hourly basis. The suggestion that members of the Executive Council constitute key management personnel is nonsense. We attend the Farm Centre for 8-10 days a year for a few hours a day and receive €100 a day compensation which would be about €1,000 a year. That would be a totally misleading interpretation of the true situation. It would risk bringing the Association into disrepute with our own members. Of course, it would also risk the image and credibility of IFA with the Government, the media and the general public.
In my view, going down that road would be a Cover Up and Cover Ups eventually get exposed. When that happens, the Association would be seriously damaged. I now ask the top table: For What Purpose? What will have been achieved?
I see a reference in the General Secretary’s note that a decision on compliance with the new accountancy standards will be based on the advice of our external auditors. Let me remind Executive Council that the six major banks that brought this country to its knees all had the advice of top companies of auditors in Ireland. Today, there are bankers in jail, there are bankers waiting trial and there is a banker facing extradition. Not one independent auditor has been held responsible. It is not for Deloitte to tell this Council who make up key management personnel. In my view, this decision lies solely with Council.
The General Secretary seems intent to go to extraordinary lengths to keep the lid on his total cost to the Association. I believe that information on the pay and conditions of other staff members is not required as they are solely for the consideration of the General Secretary. As long as I know Pat Smith I would be confident that he does not overpay anybody that he is responsible for.
As General Secretary, Pat Smith is fully accountable to this Council, and I believe with what has happened in Rehab and other bodies that there is an overwhelming argument for the General Secretary’s costs to be fully transparent to our membership. My recollection is that when it became apparent that Angela Kerins was earning in excess of €400,000 the entire Board had to resign as this was an outlandish sum that nobody could stand over. The fact that the Board did not know this was no defence and they had to go. I believe we have now come to a point where IFA must be transparent on this issue as it has been raised by several of our members at public meetings around the country.
I just want to get rid of the Red Herring that has been floated in the General Secretary’s note of the proposal that the remuneration of all individual staff or all individual members of Executive Council should be disclosed. Time should not be wasted today in discussing this. Just because one Independent TD expressed this view and had it carried in the Farming Independent does not make it a credible proposal. This is not the issue before Council today and I personally would not support it.
At our last Council meeting, our Deputy President called for more transparency and corporate governance to be improved at FBD. At least FBD publish the salaries and costs of the Chief Executive in their Annual Report. I believe we must put our own house in order first.
In the General Secretary’s note and I quote “in July 2015, the Executive Board unanimously agreed the composition of the strengthened Remuneration Committee as President, Deputy President, National Treasurer and independent member John Moloney and that the Committee should get on with its work once the decision was advised to Council”. End of quote. This is totally contrary to the Rules of the Association and I quote from the IFA website on The Structure of IFA which states “the job of the Executive Board is to advise the President and manage the Association between Executive Council meetings. The Board implements the decisions of the Executive Council, coordinates the work of the Committees and Project Teams, and maintains communications with the County Executives”.
The Executive Council is the national governing body of the IFA. This is the decision-making body of the Association.
The General Secretary is the Chief Executive officer of the Association and he is accountable to Council.
The reason I am pursuing this issue is in the long term interest of a strong IFA that will have the full confidence of ordinary members and farmers throughout the country.
For the past twelve months I am being constantly challenged with rumours that the General Secretary cost the Association in excess of €400,000 in 2013. Ordinary members are dumbfounded. A figure of close to €300,000 plus a pension contribution and a car is being widely mentioned for 2014. This is more than double what comparable chief executives are earning. Is our General Secretary worth well more than the Taoiseach of the country? Enda is paid €185,000 which is €3,558 per week. While Pat’s widely mentioned figure is €5,570 per week – which is €2,000 per week more than the Taoiseach of the day. How can we stand over this?!! Ignorance is no defence. We have to ask ourselves these questions and we have to get answers. I will not be part of any secret society or any cover-up from somebody who is employed by this Council.
As a member of Executive Council, I cannot, or can anyone, stand over this and as a member of Executive Council I demand an answer from either the President or the Treasurer: What is the Chief Executive’s salary and total payments for 2014? We are the governing body of the organisation and we are entitled to know this.
I represented IFA on the Board of Teagasc, An Bord Bia and ICBF and my experience on all of those Boards was that transparency and factual information was paramount in the decision-making process. As a member of Executive Council for the past two years I have been constantly frustrated by not being given the relevant information on issues of concern and at our last Executive Council meeting I had to force the President to put this issue on the Agenda today.
I am disappointed to see that we have spent farmers’ money hiring Towers Watson to look at benchmarking for the General Secretary. This is the first we heard of this and I believe that there has to be a change at the top table as regards information given to the Council.
Today I can show Executive Council what is publicly available on the salaries and costs of the Secretary General of the Department of Agriculture, Aidan O’Driscoll which is €185,000, the Chief Executive of An Bord Bia, Aidan Cotter which is €149,000 and of the Director of Teagasc, Dr. Gerry Boyle which is €160,000. With the budgets of these organisations in excess of €100 million each we must look at the pay of these chief executives as more of a benchmark to our Chief Executives pay as surely there is some form of relativity here. I believe that we will have failed to represent our members and Association if we do not have the same level of transparency on this issue with our Chief Executive.
Today, I am asking you, the members of Council to take control of our organisation which is the responsibility given to us by the farmers we represent.
THIS IS OUR ORGANISATION.
Irish farmers need a strong organisation that is beyond reproach and it is up to us to deliver that when we accept the responsibility of being a member of this Council.
I am proposing to this Council today as a longtime member of the governing body of IFA that the General Secretary’s remuneration package be made known to Executive Council as it has become apparent that there is a real demand for it.
Derek J Deane
Carlow County Chairman 4th November 2015