Code of Business Conduct for Directors
(The Code of Practice for the Governance of State Bodies)

FÁS Board Directors

Preamble

This booklet is intended to summarise the duties and obligations of Members of the FÁS Board. It is by definition a simplified statement of these duties and obligations and should not be viewed as a definitive statement. The Secretary of the Board will provide detailed advice on all these matters to all Members, and all queries should be addressed to the Secretary.

General Requirements.

It is a prerequisite of appointment to the Board, and to the retention of that position, that each Director shall:

• Be of good character
• Be ordinarily resident in the State
• Not be adjudged bankrupt
• Not make or have made a composition or arrangement with creditors
• Not be sentenced to a term of imprisonment or penal servitude.

Members of the Board must ensure that An Foras adopts best practices in relation to employment practices, planning and development procedures, environmental matters, data protection, freedom of information, taxation, procurement procedures and all applicable regulatory statutory instruments. Members must also ensure that An Foras complies with the requirements of the Code of Practice for the Governance of State Bodies. Whilst ensuring that An Foras is managed in an ethical manner, Members must ensure that the organisation conducts its affairs in a business like manner.

Fiduciary Duties:

Members must:

• Act in Good Faith and in the best interests of An Foras.

• Ensure that they are loyal to the organisation; avoid putting themselves into a position where their personal interest and their duty to An Foras may conflict, and that they conform to the highest standards of business ethics.

• Not divert to themselves business opportunities properly belonging to An Foras.

Good Faith

Members are expected to exercise their skills and abilities in the execution of their duties and failure to do so may render them liable to An Foras for breach of duty. A Member should not however be held responsible for errors of judgement provided he/she genuinely believed that the decision was in the best interests of An Foras.

Members are expected to attend to their duties with reasonable regularity. Members must give adequate consideration to the work of the Board, in particular, the approval of budgets and corporate plans; the production of annual accounts; major investment and capital projects, delegated authority levels, treasury and risk management; appointment, remuneration and performance of the Director General; and significant amendments to the pension benefits of the Director General and staff.

To assist Members in the execution of their duties they shall have (1) access to the advice and services of the Secretary of An Foras, (2) the right to retain independent professional advice, if necessary, in furtherance of their duties at reasonable expense to An Foras. In relation to (2) Members must:

(i) Notify the Chairperson that they intend securing independent advice,
(ii) In the event that the issue on which advice has been sought relates to the Chairperson, the Chairperson of the Audit Committee shall be notified,
(iii) When seeking advice, utilise one of the advisers prescribed by An Foras,
(iv) Where An Foras has not prescribed advisers, the Member shall secure the most competitively priced advice, and shall not exceed a maximum expenditure of €10,000.

Members who have secured independent advice must present the bills to the Secretary. Where a member is deemed to have acted inappropriately in securing independent advice, by reference to the frequency with which advice has been sought, the right to secure such advice may be suspended.

Conflicts of Interest

On appointment to the Board, and each year thereafter, each Member should furnish to the Secretary details relating to:

a) His/her employment

b) All business interests including shareholdings and professional relationships

c) Business interests of his/her family that he/she could reasonably be expected to be aware of

which could involve a conflict of interest or materially influence the Member in relation to the performance of his/her functions as a Member of the Board. In relation to (c) the Member should include:

i. A spouse, parent, brother, sister, child or step-child

ii. A body corporate with which the Member is associated

iii. A person acting as the trustee of any trust, the beneficiaries of which include the Member or the persons at (a) above or the body corporate at (ii) above

iv. A person acting as a partner of the Member or of any person or body who, by virtue of (i) –(iii) above, is connected with the Member.

As a general guideline, shareholdings of more than €15,000 or of more than 5% of the issued share capital of a company should be disclosed.

The Secretary of An Foras shall retain details of these interests in a confidential register that shall be updated on an annual basis. Only the Chairperson, Secretary, Head of Internal Audit and the Director General shall have access to the register.

Members must absent themselves when the Board is deliberating or deciding on matters in which they or a person connected to them, has an interest. Where a Member is uncertain as to whether a disclosure is required, the Chairperson shall decide.

Members must ensure that Board documentation relating to a decision in which a Member is concerned is not released to that Member or if so the Member must immediately return the said documentation on receipt.

Avoidance of Inappropriate Transactions

A Member shall be guilty of an offence where he/she (a) corruptly accepts or obtains, or (b) corruptly agrees to accept or attempts to obtain any gift, consideration or advantage as an inducement or reward in relation to his/her position as a Member of the Board of An Foras. Such an offence carries both a monetary fine and/or a term of imprisonment.

Gifts, hospitality or preferential treatment should neither be given nor accepted where such action could be perceived as affecting the ability of the donor or the recipient to make an independent judgement on business transactions. The general principle is that gifts should not exceed €75 in value with this threshold to be reviewed in 2005, and at regular intervals thereafter.

Members must not make a profit (in excess of normal fees and expenses paid by An Foras) from their involvement with An Foras. Where assets are disposed of to Members, their family, or connected persons such disposal should be at a fair and market related price. Transactions of this nature shall be made in accordance with public procurement regulations and relevant EU directives. An Foras shall maintain records of all such transactions.

Additional Requirements:

Reporting

All Members are required to accept responsibility for:

• Ensuring that accounts are prepared

• The annual review of the effectiveness of internal controls, including financial, operational and compliance control and risk management.

• Ensuring the Chairperson keeps the relevant Minister advised of matters in An Foras.

• Reporting that the organisation is a going concern with supporting assumptions or qualifications as necessary.

Confidentiality

All Members must treat the information presented to them, in their role as Board Members, as being confidential, unless the Board has authorised its release or its release is required by law. This duty is indefinite and applies even after a Member has ceased to be a Board Member. The breach of this duty is an offence and Members may be subject to a fine where they are guilty of such an offence.