Tuesday 20 March 2018

'Let's forget entitlement and focus on performance'

Ex-army man and Bord na Mona CEO believes his and other public-sector salaries should be based on results and has written to Enda Kenny to tell him so, writes Thomas Molloy

GABRIEL D'Arcy is one of several Irish business leaders who cut their teeth in the army in the 1970s when the defence forces expanded rapidly to counter the IRA. Like many other ambitious officers, he left 12 years later when a promotions bottleneck brought their careers to a halt.

The Bord na Mona chief executive's military experiences seem to have been happy although he was one of the first officers on the scene when Private Michael McAleavey snapped and shot dead three comrades in the Lebanon back in 1982.

One of 10 children, from Ballinmon in Co Leitrim, D'Arcy only joined the army by accident when he failed to get the points for engineering and his father sent in an application.

While clearly enjoying sports in the army (where he played football for his county), D'Arcy found time to study science at University College Galway where he fell in love with chemistry and later food science in University College Dublin, where he did a thesis on how army rations could be improved.

"I fell in love with biochemistry," he says, with a passion that is still quite evident. "Of all the sciences, chemistry explains everything."

Tiring of the promotions bottleneck, D'Arcy answered a newspaper ad for a new company called Kerry Group that was just beginning to make waves.

Despite doing an interview with a broken nose, torn cheek and chipped teeth, thanks to a clash on a GAA pitch, he got the job, left the army to work for less and moved to Blennerville near Tralee.

Kerry Group in 1989 was at the beginning of the long march towards greatness under Denis Brosnan that would catapult the company from a caravan in a field into one of Europe's largest food companies.

D'Arcy remembers it as a company where there was "continual movement – you were never in the same job for long". During his 19 years in the company he grew to greatly admire Denis Brosnan for his no-nonsense approach. "He was very intense. Not one who verbalises ad nausem," D'Arcy remembers. "Brosnan has this inate ability to foresee what is going to happen in five years, in 10 years, in 15 years. He could then strategise."

The other factor that set Kerry apart from the country's numerous food companies was implementation.

"There was no such thing as implementation deficit disorder," D'Arcy remembers. "There was strong implementation and no excuses."

D'Arcy points to one final element to Kerry's success often lacking elsewhere; the bonus culture. Half his salary came from a performance-related bonus that depended on group and personal performance. "We were very well rewarded."

The question of pay has overshadowed D'Arcy's tenure at Bord na Mona, which he joined five years ago when he was headhunted and where he earns €237,000, or more than most other semi-state chiefs.

"I know any of the Irish food groups would have loved to hire me," he says matter of factly. "I am on a fixed-term contract (that was recently extended) and I want some kind of base."

He took a pay cut in 2008 but D'Arcy is unrepentant about his reluctance to take further cuts but emphatic that his salary and many other salaries in the public sector should include a large proportion of performance-related pay.

"There is a culture of entitlement. We have to get to a culture of performance," he says. D'Arcy has written to Taoiseach Enda Kenny about the issue of performance-related pay in the public sector but not yet received an answer.

While most of us probably think of Bord na Mona as a company that makes briquettes for the fire and peat for the garden, D'Arcy and his colleagues see the semi-state as an energy company with a bright future.

D'Arcy bristles with pride as he describes Bord na Mona as the first company in the British Isles to design, build and operate a wind farm, which has since paid for itself "one hundred times" over.

Ireland is uniquely well placed to generate energy from wind thanks to the winds howling off the Atlantic Ocean, and Bord na Mona wants to use the company's 200,000 acres (or 1pc of the landmass) to build enormous wind farms in isolated spots to channel this energy. "We don't approve of having a wind farm at every crossroads," he says.

The company's remote holdings along with access roads and the like make it the ideal landowner to host windmills, he argues. D'Arcy rejects arguments from economists such as Colm McCarthy, who concluded in the Bord Snip Nua report that too many state-owned companies are competing against one another to produce wind power. He argues that Bord na Mona has the landbank, the ecological knowledge, including a resident ornithologist, great planning skills and a reputation in local communities.

D'Arcy says that Ireland could soon be exporting renewable energy. "The Midlands is closer to London than parts of Scotland," he says.

Water is Bord na Mona's other great hope. While Bord Gais won the Government's blessing to create Irish Water, Bord na Mona still hopes to create a massive reservoir in the Midlands to secure the water needs of Dublin and other towns.

He dismisses critics who claim the project will "steal" water from the Shannon to hydrate the gardens of feckless Dubliners, claiming instead that the project will lead to the rejuvenation of the Midlands and create an extraordinary recreational facility.


That argument is likely to run for some time but D'Arcy clearly follows his own advice. In the course of the interview, he muses on what constitutes good leadership and concludes that a large part of it is "doing the right thing" and being "careful where you spend your time."

That often means "sitting on the bridge, knowing where the icebergs are and how fast they are coming."

While that sounds easy, it is obviously not something that many chief executives appear to be good at.

As D'Arcy talks about his career and the issues facing Bord na Mona, it is difficult not be believe that he has cracked the challenge of working and playing hard, thinking strategically and getting well paid for his trouble.

The problem with strategy, of course, is that we won't know whether he is right for another 10 years at least.

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