IoD Recommends Enhancements to State body Governance Code to Boost Accountability

The position paper presents a set of strategic recommendations aimed at bolstering accountability, transparency, and oversight, with a focus on streamlining the Code and improving it to better include core principles and provisions in relation to governance. 

The paper also recommends: parent departments to better work with State bodies to clarify matters reserved for board decision-making versus matters requiring ministerial/parent department approval; periodic reviews ensuring that the legislation underpinning the State body remains fit-for-purpose; enhanced engagement by strengthening the interactions between State bodies and parent departments; learning and education by facilitating structured governance education programmes including for civil servants; and the involvement of the Chair of the State body in the assessment process and ultimate recommendation to the minister on appointments to State body boards. 

The paper, developed through engagement with IoD Ireland's membership base - many of whom serve as directors or senior managers within State bodies - and the Department of Public Expenditure, Infrastructure, Public Service Reform and Digitalisation, outtlines a series of recommendations for review by relevant government departments. 

Welcoming the paper, Jack Chambers, Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation said: 

"The importance of State bodies and agencies cannot be over-stated. They provide vital services that help influence and shape Irish society. The role of State board members, in turn, provides essential oversight and strategic direction to these bodies for the benefit of the public they serve. As outlined in the Programme for Government 2025, our ambition is to drive the highest standards of governance across State bodies. I welcome this paper from the Institute of Directors (IoD) Ireland and acknowledge its important role in elevating the governance standards of State boards nationally."

Caroline Spillane CDir, CEO of IoD Ireland, commented:

"IoD Ireland recognises that high standards of corporate governance in State bodies are critical to fostering economic efficiency, competitiveness, social cohesion, and regional development while maintaining public trust. 

"Our recommendations in this paper are aimed at bolstering State body accountability, transparency, and oversight. They cover a wide range of areas from periodic reviews of the Code to enhanced engagement between body, parent department and Oíreachtas, to enhancements around state body governance learning and education, and recruitment. Our objective with this new paper is to identify areas requiring attention to support best-in-class State body governance in Ireland."

Spillane concluded: 

"We have noted the new Government's ambitions to drive exacting standards of governance across State bodies, as reflected in the Programme for Government 2025, in Budget 2026 and, indeed, in the feedback we have received from the Department of Public Expenditure, Infrastructure, Public Service Reform and Digitalisation in the drafting of this document. We will continue to work with the relevant government departments, sharing our research and expertise to provide a supportive and constructive platform for consultation, as well as providing learning and education opportunities and forums," 

State bodies in Ireland, which include both commercial and non-commercial entities under Government ownership and control, operate within a unique legislative and accountability framework. The paper makes important points regarding modernisation of legislation, so that the governance of these entities can align with the evolving landscape of corporate oversight and public accountability.

The ‘Code of Practice for the Governance of State Bodies’ serves as a cornerstone for corporate governance within the public sector. However, to ensure its continued effectiveness, IoD Ireland sought to evaluate both the enablers and barriers to optimal governance through extensive member consultation, including surveys, focus groups, and direct discussions.

Institute of Directors Ireland conducted previous research, and the findings suggest that while there continues to be a strong appetite for serving on boards of State bodies in Ireland, many potential board candidates are concerned as to the reputational risk involved in taking up such positions. Thus, while 72% of respondents to an IoD Ireland member survey expressed an interest in applying for a State body board position, 60% of respondents identify personal or reputational risk as a deterrent to applying or reapplying for such a role.