At an afternoon board meeting on Thursday, November 3rd, the fraying thread holding the board of the national governing body for equestrian sports together broke, setting off a wave of resignations and turmoil within the industry.
Most members of the Horse Sport Ireland (HSI) board attended the crunch meeting in person at its Naas headquarters, with some directors joining the discussion remotely.
Tensions had been brewing between different camps on the governing body’s board for months over several issues.
Since May, some directors had been opposed to the current chief executive, Denis Duggan, who had started the job in January.
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Separately, a number of directors had been complaining about significant sums the organisation had been spending on severance payments and settlements to resolve disputes with staff in recent years.
Documents seen by The Irish Times show HSI has paid more than €650,000 in staff severance or settlement payments since 2018, as well as spending €400,000 in legal fees on the cases.
Another flashpoint at board level came when HSI decided to take a judicial review against its main funder, the Department of Agriculture, over its decision to award a contract for marketing services promoting the industry to the Irish Horse Board.
Senior staff had believed there were deficiencies in how the department had decided the winner of the contract, with a High Court legal challenge the only way to try to appeal the decision. The judicial review was lodged in mid-October, ratcheting up tensions in the organisation’s boardroom, with several directors opposing the legal challenge.
Dressage Ireland
The final board split came to a head during the meeting on November 3rd, where a majority of directors voted to effectively dismiss Mr Duggan.
One of those opposed to the move was chairman of the board Joe Reynolds who had been a HSI director since 2016.
Mr Reynolds, who founded a successful fuel transportation business, was previously chairman of Dressage Ireland, with his daughter Judy Reynolds representing Ireland in the sports at the Olympics.
Legal advice provided to the board at the meeting warned there could be legal ramifications for voting to dismiss Mr Duggan. The vote went ahead and was passed. Mr Duggan, who remains in place, has not responded to requests to comment on the controversy.
The day after the board meeting, Prof Mary Lambkin Coyle, a UCD Smurfit business school academic, and David O’Meara, resigned as directors.
The following Tuesday, Mr Reynolds met Minister for Agriculture Charlie McConalogue in his department office on Kildare Street to brief him that the HSI board had irrevocably split.
[ Chairman resigns from board of Horse Sport IrelandOpens in new window ]
The Minister appoints four directors to the organisation’s board, with the department providing €5 million in funding to HSI this year.
During the meeting Mr Reynolds offered to step aside as chairman of the board — however, it is understood he was asked to remain in place until department officials found replacements to appoint to the board.
In public, the governance controversy facing the organisation continued to deepen, with four further directors resigning that Friday, November 11th.
The four, which included former Fine Gael TD Lucinda Creighton, had been opposed to the current chief executive and had a lack of confidence in the management and direction of HSI.
Mr Reynolds met with Mr McConalogue again in Agriculture House offices on Tuesday, where department officials had drawn up a provisional list of people to approach to step in as new directors.
That night, several affiliate organisations of HSI broke ranks to criticise the management of the organisation, calling for the chairman to resign or be removed.
A letter to the Minister seeking for him to intervene was signed by senior figures in Dressage Ireland, the Irish Horse Board, and Showjumping Ireland.
One source close to Mr Reynolds said he was being “pummelled” both in the press and on social media, but while privately having agreed to step down, could not publicly respond.
The next day the only other remaining board member, Edward Doyle, also resigned, putting further pressure on the Minister to act.
Three appointments
On Thursday, Mr McConalogue announced Mr Reynolds was stepping down. Michael Dowling, former chairman of Kerry Group and a former secretary general of the Department of Agriculture, was appointed as chairman in his place.
The Minister appointed three other directors; Prof Niamh Brennan, founder of the UCD centre for corporate governance; Zoe Kavanagh, chief executive of the National Dairy Council; and Dr Kevin Smyth, former chief financial officer at the Department of Agriculture.
One department source said the appointees were the only four people approached and all agreed to take on the board positions.
In a statement announcing his departure, Mr Reynolds said “deep divisions” had arisen at board level which had not been possible to bridge.
He said matters had come to a head at the board meeting earlier in the month, where a number of directors had voted for a motion despite specific legal advice on the issue. “The course of events led directly to the ongoing board issues becoming irreconcilable,” he said.
The chairman said he was stepping aside to allow the new board to have a “clean slate”.
The other vacant boardroom seats will be selected from advisory councils made up of industry groups, who are expected to meet next week.
The two big issues facing the new board will be taking a decision on the position of Mr Duggan, as well as whether to progress the judicial review against the department over the contract, sources said.
Christy Murphy, chairman of Showjumping Ireland, said the calibre of new board members was “quite impressive”.
The reaction of the wider horse sport industry was “positive”, with trust in the new board “to get the show back on the road”, he said.
However, some have called for a wider shake-up of the organisation’s role in the industry following the governance controversy. Warmblood Studbook of Ireland, a rival company, has questioned the relationship between the department and HSI.
Long-running complaint
The company previously made a complaint to the European Commission in 2018, alleging the department’s funding to HSI amounted to illegal State aid and gave it an unfair advantage over other stud books.
The long-running complaint eventually led to the department agreeing to run an open competition for three contracts earlier this year, for services it had previously funded HSI to run.
While HSI won the contracts to keep running the State’s stud books and a national equine breeding service, it lost the contract to provide marketing services for the sector, later taking a legal challenge over the decision.
In a statement on Friday, Thomas Reed of the rival studbook questioned whether the “deep integration” between the department and HSI was “in the best interests of the industry and the public”.
