Survey reveals 60% of directors deterred from being on a State Board due to potential reputational risk

Three out of five (60%) directors see personal or reputational risk as the main deterrent to being on a State Board, a new survey by the Institute of Directors (IoD) Ireland has found.

When asked if they would consider applying for a position on the board of a State Body, the new IoD survey nonetheless found that nearly 72% of directors and business leaders would still consider applying for a State Board position.

The sentiment towards the Code of Practice for the Governance of State Bodies amongst directors is mostly positive, with almost 73% saying it has been effective in supporting good corporate governance standards in State organisations and nearly 74% saying it has improved governance standards since its revision in 2016. 

The new survey by IoD Ireland, undertaken between 20^th and 29^th February 2024, assessed its members’ attitudes to State Board governance, and was completed by 382 directors and business leaders.

Speaking about the survey findings, IoD Ireland CEO, Caroline Spillane CDir, said:

“The results of this survey are very thought-provoking and shine a light on the reputational concerns directors now have when considering serving on State Boards in Ireland. And while there was a largely positive perspective offered by respondents on the value of having a Code of Practice in place, several respondents voiced the need to review its oversight, accountability, and implementation. There were also concerns raised on the recruitment process to State Boards, in respect of the relevant experience and skills. Directors also expressed the desire for the Code to be revised to reflect the latest in governance developments.”

Spillane continued:

“IoD Ireland will be conducting further research with directors and members with the aim of providing practical recommendations to help support the Government in further enhancing the governance of State agencies. This new survey will also inform our learning and development strategy for members and board directors who currently sit or are interested in sitting on State Boards.”

The directors surveyed are all members of IoD Ireland and represent a wide range of businesses including State or semi-State bodies, not-for-profit organisations, private sector SMEs and plc/multinationals.

As the foremost voice in the debate on improving governance standards, is dedicated to developing and improving the effectiveness and performance of directors and boards throughout Ireland. In October 2023, the organisation launched a new CPD framework for directors, c-suite and senior executives, and boards to drive higher standards in corporate governance in response to the ever-evolving policy, regulatory, macro-economic and governance environment in Ireland.

New IoD Ireland Learning and Development opportunities in this area, include: a dedicated short programme addressing boardroom culture and behaviours, titled Psychology of the Boardroom. This will be led by Dr Wieke Scholten, Social and Organisational Psychologist, in April. There will also be a dedicated workshop on State Board Governance led by Dr Margaret Cullen, Governance Advisor to IoD Ireland, in May.