Flavin given role as DCC executive chairman

DCC chief executive Jim Flavin is to take on the additional role of executive chairman for the next three years.

In a statement to the Irish Stock Exchange yesterday, DCC said that since it announced the retirement of the current chairman Alex Spain in May last year it had been considering its plan for succession.

Mr Flavin (64) set up DCC in 1976 and has been heavily involved in running the business ever since.

Following consultation with the group's non-executive directors, major shareholders and the Irish Association of Investment Managers (IAIM), the nomination committee has decided that Mr Flavin should become executive chairman with a primary responsibility for strategy development, the company said.

Tommy Breen, currently chief operating officer, should become group managing director and take on "significant elements" of the current chief executive's responsibilities.

Mr Breen should have primary responsibility for day-to-day operational matters, it said.

While the act of having the same person filling both roles of chief executive and executive chairman is unusual - DCC will be the only public Irish company with such a management structure - it does not contravene corporate governance legislation, according to the IAIM.

Frank O'Dwyer, chief executive of the IAIM, said the legislation is there as a guideline and that in this case he was satisfied that the non-executive directors had addressed the relevant issues.

DCC justified the appointment saying the diversified nature of the business - it is involved in areas ranging from food and energy to healthcare and technology - made it more complex to manage and therefore such a handover of responsibilities was necessary.

Analysts were in agreement, saying they weren't surprised by the announcement and that if anything they were in favour of the structure.

In three years' time, Mr Flavin is expected to give up the role of chief executive and become, as is usual, a non-executive chairman.

Last year he received a total salary of €1.625 million, an amount that is likely to rise this year given the new role.

The Supreme Court is expected to set a date this month for the hearing of an appeal by Fyffes of the insider trading action they took against Mr Flavin and DCC. The High Court cleared Mr Flavin of using insider information when disposing of DCC's stake in Fyffes over six years ago.