Business Irish

Saturday 24 February 2018

It's time to 'free up' NAMA's CEO McDonagh, says review

Changes must be made at the top level to ensure agency delivers for taxpayers

Emmet Oliver Deputy Business Editor

THE chief executive of NAMA, Brendan McDonagh, is managing an "extraordinary'' workload, but needs to be freed up to concentrate on developing the agency's wider strategy and property skills, a key report has concluded.

The review -- by ex-HSBC banker Michael Geoghegan -- strongly hints that changes are needed in how NAMA runs internally. Mr McDonagh's role, in particular, is commented upon in relation to workload. NAMA should also hire another 200 staff, at a cost of €25m, the report states.

Mr McDonagh is a former National Treasury Management Agency official and was appointed by former Finance Minister Brian Lenihan.

"The chief executive, who is respected by all for his ability to absorb a very intense workload, manages an extraordinary level of administration,'' Mr Geoghegan comments.

But he adds that Mr McDonagh is not "liberated to focus on the more strategic or entrepreneurial aspects of the role''. Later in the report, Mr Geoghegan states that, for NAMA to deliver for taxpayers, structures at the top level need to change.

If they don't it could cost the taxpayer billions of euro, Mr Geoghegan warns.

"A failure to complete this evolution is likely to cost the Irish taxpayer a number of billion euro and make the achievement of NAMA's key targets particularly challenging," he says.

A range of changes are needed: "These include reinforcing the executive, freeing the chief executive to focus on the value-added elements of the business, and introducing greater entrepreneurial and property skill sets to the board,'' he adds.

Describing the NAMA board as lacking in entrepreneurial figures, Mr Geoghegan says it is a very active board. But administrative work is consuming a lot of time internally at NAMA.

"This is manifested in the large number of internal meetings, long agendas and substantial numbers of attendees."

Despite questions over how the agency is run internally, Mr Geoghegan overall gives his praise to the progress made so far.

"In summary, NAMA is at a point where I would have expected it to be at this juncture,'' he says.

Other recommendations from Mr Geoghegan include:

• There should be stress tests of the assets under NAMA's control from time to time.

• Slices of NAMA's portfolios should be given to third parties to manage from time to time.

• NAMA must add value to assets or there is a danger assets could simply be moved on to third parties to manage.

Irish Independent

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