I assume Walsh's decision has something to do with the dysfunctional governance structure at INBS.
Fingleton resigned as a director in Jan 2008, when the turned 70.
He was apaprently hanging around until he made a few bob from a sale but what is he likely to get now apart from a big pension?
So simply, Fingleton runs a "one-man-show" and the board members are a bunch of puppets as they take responsibility for someone who may have the same legal status as the receptionist on the Grand Parade?
Walsh has been chairman since 2000 and was on the board for a few years before that. In fact, he has been on the board for over a decade.
Even the situation you outline of Mr Fingleton still being chief exec but not been on the board has been in place for over a year, and Dr Walsh made no attempt to change it (that we are aware of).
Speculating that Dr Walsh suddenly decided in February 2009, after over a decade on the board (most of it as chairman), that he was not happy with the governance structure is not a serious theory. Le Fournier's theory on it makes much more sense, IMO.