Streamlining Governance of State Bodies

The Irish Government is focused on increasing standards of governance across public sector bodies. The Institute of Directors Ireland recently engaged with various stakeholders to understand their perspectives. The process culminated in a 2025 position paper containing several recommendations. Our Public, Regulatory & Investigations team explains why the recommendations are designed to simplify governance, clarify legal duties and strengthen accountability across State bodies. Pending further reform in this area, public bodies should consider the recommendations and governance guidance.

What you need to know

• The Institute of Directors (IoD) Ireland makes 22 recommendations, including 7 priority actions aimed at enhancing governance standards across public bodies.
• Priority recommended reforms include:
  • Streamlining the Code of Practice for the governance of State bodies
  • Adding guidance on delegated authority and how to navigate fiduciary duties, and
  • Increasing clarity around engagement and oversight between public bodies and Departments.
• Periodic reviews of governing legislation should be prioritised. Governance training should be provided to civil servants overseeing State bodies.

Ireland’s public bodies have differing legislative obligations, accountability structures and transparency requirements to private or public limited companies. The Code of Practice for the governance of State bodies provides a framework to support public bodies in navigating through the corporate governance landscape. It is based on underlying principles of good governance, accountability, transparency and probity.

IoD released Supporting High Standards of Governance in State Bodies in Ireland in October 2025. The position paper is designed to support improvements to the Code. Drawing on feedback from over 380 members, the paper highlights the practical and legal challenges facing public bodies under the existing Code.

Key recommendations include:

The inclusion of clear provisions, principles and guidance around delegated authority (Recommendation 2 and 8)

Directors of State bodies owe fiduciary duties to the entity itself. However, they must also remain accountable to Ministers and the Department of Public Expenditure, Infrastructure, Public Service Reform and Digitalisation (DPER). The paper notes that IoD members have raised challenges experienced in exercising fiduciary duties in the context of State bodies’ accountability to the relevant Minister or parent department. Guidance has also been sought to help minimise fiduciary risk.

Ambiguity as to which matters are reserved for board decision or may be delegated to management is also highlighted. We previously set out principles and best practices when delegating statutory functions.

IoD urges DPER to issue scenario-based guidance to reconcile these obligations and reduce perceived personal and reputational risk. This risk was cited by 60% of surveyed directors as a reason for hesitating to apply for State board roles.

Role of CEO versus role of Chair, minute taking and crisis management (Recommendation 4)

IoD recommends enhanced guidance on the division of responsibilities between the Chair and CEO, particularly during crisis situations. Current practice lacks clarity on decision-making authority during routine operations versus crisis scenarios. It also recommends common minute-taking standards to ensure accurate records of board deliberations. In addition, it recommends clear crisis management protocols, including escalation procedures and communication frameworks.

When managing crises, including regulatory investigations, State bodies must navigate competing obligations. At the same time, they must ensure constitutional justice, fair procedures and regulatory compliance.

The current absence of clear crisis management guidance in the Code leaves boards navigating complex legal terrain without adequate support.

We previously addressed crisis management for healthcare organisations in a previous article, setting out practical steps and the key legal and regulatory considerations that arise in crisis situations. administrative law requirements, and other considerations.

Clarify decision-making powers between Boards and Ministers (Recommendations 5 and 9)

IoD emphasises that governance in State bodies functions as a system, requiring reciprocal accountability between the board, management, Ministers and Departments. Oversight Agreements should be updated to clarify what decisions sit with boards, which require ministerial approval, and how Chairs, CEOs and Ministers should engage with each other. This would reduce uncertainty in decision-making and limit potential administrative law disputes.

Departments and boards should jointly document the delegation of powers among boards and Ministers. More recent legislative practice is noted as helpful, with a number of Acts now specifying matters reserved for the board. For example, the Child and Family Agency Act 2013, Health Service Executive (Governance) Act 2019 and the Higher Education Authority Act 2022. Clear mapping would further improve accountability and reduce operational delay.

Comment

IoD’s position paper recognises that strong governance in State bodies underpins public trust and effective service delivery. The 22 recommendations provide a clear framework for reforming public sector governance.

Pending reform of the Code, State bodies would be well advised to proactively consider the recommendations outlined above and the practical guidance set out in our linked articles. Taking these steps can help strengthen governance arrangements, improve decision-making clarity and reduce the risk of legal challenge.

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The content of this article is provided for information purposes only and does not constitute legal or other advice.