A NSW parliamentary inquiry has been told the wife of former icare chief executive John Nagle was paid $800,000 over three years after being awarded a contract without a tender.

The figure was revealed for the first time by the worker's compensation insurer's board members who were grilled over their handling of the episode, which lead to Mr Nagle's recent resignation.

Board member David Plumb told the inquiry Mr Nagle's wife was paid $750 a day under an icare contract to train staff.

"She was paid $750 per day, and she was paid over three years," Mr Plumb said.

"She started somewhere in early 2016 and finished in early 2019 and it was an amount in excess of $800,000 over that period of time."

Mr Nagle was sanctioned and had a pay bonus withheld by the board after failing to declare the serious conflict of interest to board members.

NSW Labor Party President Mark Lennon defended not moving to sack John Nagle for failing to disclose the conflict to board members.

He said Mr Nagle was still the best person for the role at that time because of his extensive experience.

"What was evident is the system broke down," he said.

"There were senior executives in the organisation, various ones, who were informed about Mr Nagle's wife working in the organisation, but no one thought it necessary to tell the board."

Mr Lennon dodged questions about whether he had resigned recently after being pressured to do so by the State Opposition leader or staff in her office.

Asked whether the entire board of the scandal-plagued organisation should be replaced, he said: "That's a decision not for me, that's a decision for other people to make".

Board members were also questioned about the alleged bullying and intimidation of a whistleblower who worked at icare.

Former detective Chris McCann was the head of compliance at icare from 2016 and tried to raise the alarm about developing scandals.

He was sent threatening, abusive and homophobic emails from an anonymous address, warning him to "get out".

"Icare does not want gays in the workplace, you should get out," the email read.

"Do not touch our cups, plates or cutlery, your type are disgusting."

Board member Gavin Bell described the emails as "disgraceful" but dismissed suggestions he was targeted for raising the alarm about scandals within icare.

"We did investigate it, we had our internal IT people try to trace the source of those emails, they were unable to do so," he told the inquiry.

"They weren't from an icare address, they were from an address outside the organisation and we were not able to ascertain who left the letter.

"But the issues that Mr McCann raised in relation to impropriety were completely separate.

"I do not believe that the person who sent the emails had anything to do with any other issues."

It was also revealed that icare executives were handed bonuses of more than $800,000 while the insurer was losing millions, and despite deteriorating return to work rates among injured workers.