On 22 December 2014 the NTMA was reconstituted as an Agency with a Chairperson and eight other members reporting to the Minister for Finance with over-arching responsibility for all of the NTMA’s functions (excluding NAMA and the SBCI which have their own separate boards). Previously, the NTMA did not have a board structure and the Chief Executive reported directly to the Minister for Finance with regard to some functions while the NTMA acted as the executive to separate statutory boards with regard to other functions.

Six Agency members, including the Chairperson, are appointed by the Minister for Finance. The Chief Executive of the NTMA and the Secretary Generals of the Departments of Finance and Public Expenditure and Reform are ex-officio members of the Agency. The Agency reports to the Minister for Finance.

The term of office of an appointed member is five years, other than the initial appointed members of whom two members are appointed for three years and two members are appointed for four years. The Minister determines the level of remuneration of appointed members. The ex-officio members do not receive any remuneration in respect of their membership of the Agency.

Six members of the Agency were appointed by the Minister on 22 December 2014: Willie Walsh (Chairperson) (five years), Maeve Carton (three years), Brendan McDonagh (three years), Martin Murphy (four years), Mary Walsh (five years) and Susan Webb (four years). The three ex-officio members of the Agency are Conor O’Kelly, Chief Executive (with effect from 5 January 2015 following John Corrigan’s retirement from the position), Derek Moran (Secretary General of the Department of Finance) and Robert Watt (Secretary General of the Department of Public Expenditure and Reform).

The Agency met on 10 occasions in 2015.

The Agency has established four committees:

• Audit Committee.
• Investment Committee.
• Risk Committee.
• Remuneration Committee.

The Agency has adopted the Code of Practice for the Governance of State Bodies (the Code), adapted in a limited number of cases to reflect the Agency’s circumstances. Where necessary, it is putting in place arrangements to ensure compliance with the Code and will review its policies and procedures periodically to ensure continued compliance with the Code.

Codes of business conduct are in place for Agency and committee members and employees. Agency and committee members and employees are expected to ensure that all their activities are governed by the ethical standards reflected in the relevant code.

The NTMA has in place a Reporting of “Relevant Wrongdoing” and Protected Disclosures Policy whereby employees may, in confidence, raise concerns about possible irregularities in financial reporting or other matters.

The NTMA is a prescribed public body for the purposes of the Ethics in Public Office Acts 1995 and 2001. In addition there are specific disclosures of interest requirements under the National Treasury Management Agency Act 1990 (as amended) and the Code of Practice for the Governance of State Bodies. The NTMA has put in place procedures to assist Agency and committee members in meeting their disclosure of interest obligations.

The Agency is supported in its functions by the Agency Secretary who also co-ordinates the operation of the various Agency committees. Each of the committees is supported by the Agency Secretary or the Assistant Agency Secretary.

Audit Committee

The Audit Committee assists the Agency in the oversight of the quality and integrity of the financial statements and in reviewing and monitoring the effectiveness of the systems of internal control, the internal audit process and the compliance function. It reviews and considers the outputs from the statutory auditor, the Comptroller and Auditor General. It also oversees the implementation of the Reporting of “Relevant Wrongdoing” and Protected Disclosures Policy.

The Committee comprises three members appointed by the Agency:

• Martin Murphy, Chairperson.
• Maeve Carton.
• Susan Webb.

The Committee met on five occasions in 2015.

Attendance at Agency and Committee Meetings in 2015

The principal activities of the Committee in 2015 were as follows:

Financial reporting

The Committee reviewed the financial statements before their submission to the Agency. The review focused on changes in accounting policy and practices and consistency across the NTMA, major judgement areas, the methods used to account for significant transactions where different approaches are possible, and the clarity and completeness of disclosures.

Internal Controls

The Committee reviewed the adequacy and effectiveness of the internal control systems and the statements to be included in the Financial Statements concerning internal controls. The Committee’s findings were reported to the Agency.

Compliance

The Committee received regular reports from the Head of Compliance. It reviewed and recommended to the Agency the Anti-Fraud Policy and the Reporting of “Relevant Wrongdoing” and Protected Disclosures Policy.

Internal Audit

The Committee reviewed and approved the internal audit charter. It received regular reports from the Head of Internal Audit. It reviewed the key findings from the outcome of individual internal audit reviews under the 2015 internal audit plan and monitored the implementation of the internal audit recommendations. It approved the 2016 internal audit plan (the 2015 internal audit plan had been put in place under the NTMA’s previous governance structure).

Statutory Audit

The Committee reviewed the external audit plan in advance of the audit and met with the external auditor to review the findings from his audit of the financial statements. The Committee also reviewed management’s responses to the auditor’s findings and recommendations and monitored, on an ongoing basis, the implementation by management of the auditor’s recommendations.

During the year the Committee met individually with the statutory auditor, the Head of Internal Audit and KPMG (the external firm appointed to carry out internal audit work) without management present.

Investment Committee

The Investment Committee is a statutory committee provided for by the National Treasury Management Agency Act 1990 (as amended).

The Committee assists the Agency in the control and management of the Ireland Strategic Investment Fund by making decisions about the acquisition and disposal of assets within such parameters as may be set by the Agency, advising the Agency on the investment strategy for the Fund and overseeing the implementation of the investment strategy. The Agency has delegated investment decisions up to €150m to the Committee. Proposed investments in excess of €150m are referred to the Agency with a recommendation from the Committee.

The Committee is required to comprise of two appointed members of the Agency and not more than five persons who are not members of the Agency but who have acquired substantial relevant expertise and experience and who are appointed by the Agency with the consent of the Minister for Finance (external members). The Agency has decided that the Committee should have three external members. The members of the Committee are:

• Brendan McDonagh, Chairperson (Agency member).
• Susan Webb (Agency member).
• Richard Leonard (external member). Managing Director Grant Thornton Financial Counselling Ltd and a member of the National Grant Thornton Management Team.
• Julie Sinnamon (external member). CEO of Enterprise Ireland.

There is one vacancy on the Committee. John Herlihy (external member) resigned from the Committee with effect from 1 May 2016.

The Committee met on 11 occasions in 2015.

The principal activities of the Committee in 2015 were as follows:

Investment Strategy

The Committee’s initial focus was on the consideration of the draft Investment Strategy and Business Plan in the context of the ISIF’s double-bottom line investment mandate of supporting economic activity and employment as well as generating investment return. It reviewed the draft Strategy and Business Plan and recommended the adoption of the Strategy and Business Plan to the Agency.

The Committee also reviewed and made recommendations to the Agency on the strategy for transitioning the Fund from a largely global portfolio into an Irish portfolio, as investment opportunities in Ireland are executed and drawn down.

Review of Investment Proposals

The Committee reviewed detailed investment proposals from management and approved or made recommendations to the Agency as appropriate. It also actively monitored the investment pipeline in order to provide timely feedback to management on potential investment opportunities.

Portfolio Monitoring and Review

The Committee received regular reports from management on the performance, asset allocation and economic impact of the Fund.

Risk Committee

The Risk Committee assists the Agency in the oversight of the risk management framework including setting risk appetite, monitoring adherence to risk governance and ensuring risks are properly identified, assessed, managed and reported. In addition, it oversees the risk management function. It sets standards for the accurate and timely reporting of critical risks and reviews reports on any breaches of risk limits and the adequacy of any proposed action.

The Committee comprises three members appointed by the Agency:

• Mary Walsh, Chairperson.
• Martin Murphy (also Chairperson of the Audit Committee).
• Robert Watt.

The Committee met on four occasions in 2015.

The principal activities of the Committee in 2015 were as follows:

Risk Management Policy and Framework

The Committee reviewed and recommended to the Agency the Risk Management Policy and Framework which sets the standard for risk management across the enterprise.

The Committee reviewed a number of specific risk policies as provided for in the Risk Management Policy and Framework: the Market Risk Management Policy, the Liquidity Risk Management Policy, the Counterparty Credit Risk Management Policy, the Business Continuity Management Policy and the IT Security Governance and Framework.

Risk Appetite

The Committee reviewed and recommended to the Agency the Risk Appetite Framework. This defines the risk appetite for each of the NTMA’s key risk categories.

Risk Register Review

The Committee reviewed risk registers from NTMA business units considering the principal risks identified and the key controls in place to mitigate these risks. It also reviewed the principal risks faced by the NTMA.

Risk Reporting

The Committee oversaw the development of the risk dashboard as a reporting tool and received regular reports from the Chief Risk Officer.

The Committee worked closely with the Audit Committee and received regular updates from the Audit Committee Chairperson (who is also a member of the Risk Committee) on risk-related matters discussed at the Audit Committee.

During the year the Committee met with the Chief Risk Officer without management present.

Remuneration Committee

The Remuneration Committee assists the Agency through review and approval of the NTMA’s overall remuneration policy, review and approval of any performance-related pay schemes operated by the NTMA and approval of the total annual payments to be made under any such schemes. It also makes recommendations to the Agency on the remuneration of the Chief Executive.

The Committee comprises four members appointed by the Agency:

• Brendan McDonagh, Chairperson.
• Martin Murphy.
• Willie Walsh.
• Robert Watt.

The Committee met on two occasions in 2015.

During 2015 the Committee reviewed and endorsed the NTMA’s key remuneration principles and in 2016 approved a formal Remuneration Policy to define the parameters within which the Chief Executive and management may operate to recruit and retain high calibre employees and encourage a high level of performance by staff, while complying with the FEMPI Acts, reflecting good corporate governance and being consistent with, and promoting, sound and effective risk management.

During 2015 the Committee also reviewed and approved performance related payments in respect of 2014 and reviewed the remuneration assumptions in respect of the 2016 NTMA operating budget.