Incorporating a broader perspective at home by promoting best of rest

ANALYSIS:The hiring of foreign nationals to key roles is beneficial and reflects manifold realities

ITALIAN GIOVANNI Trappatoni isn’t the only foreign-born manager shaping Ireland’s fortunes at present. Dublin Zoo, the State’s busiest visitor attraction, is run by Dutchman Leo Oosterweghel while reports have suggested that two overseas candidates are in the running to be given stewardship of the State’s art collection at the National Gallery of Ireland. The head of financial regulation, Matthew Elderfield, is an Englishman.

Increasingly, overseas senior executives are shaping strategy and policy within our corporate boardrooms.

Some of Ireland’s best-known companies are now run by foreigners. These include Aer Lingus, Eircom, department store Arnotts, cider maker C&C, Woodies DIY and most of our delinquent banks.

In the case of the domestic financial sector, the reasons for this are obvious.

Seán FitzPatrick, David Drumm, Eugene Sheehy, Brian Goggin and others made disastrous strategic decisions in the Celtic Tiger years that have left us all picking up an expensive tab.

The only solution was a clearout of senior management and board members and their replacement, at executive level at least, with a group of overseas bankers. Remarkably, this purge has still to be completed three years on from the crash.

But why are a growing number of Irish companies in other sectors looking abroad to hire their top executives? Is it simply a coincidence? Does it reflect a lack of senior management talent in Ireland? Or is it merely mirroring wider changes to our population base?

After all, roughly 10 per cent of the people living here are foreign nationals. It’s not unreasonable in that context to expect a significant cohort of senior executive would be drawn from overseas.

Danny McCoy, director general of employers’ group Ibec, argues there are a variety of reasons for this trend.

“It tends to be very sectoral,” McCoy says. “Retail banking has gone that way and there are also other pockets, like telecoms.”

McCoy also notes how Irish executives have been given senior roles at a number of high-profile multinational companies in Ireland.

He cites Martin Murphy, managing director of HP Ireland; John Herlihy, Google’s vice-president of global advertising operations, and Colm Long, director of online operations at Facebook.

This is a point echoed by Tom McCarthy, chief executive of the Irish Management Institute.

“If you go back 30 years, the CEOs of multinationals here were predominantly non-Irish,” he says. “But if you look today, there’s actually a lot of Irish people in senior roles.”

He also believes Irish boards are taking a more “global view”, and that sectors such as financial services and telecoms will always bring a “throughput” of foreign executives. It’s just the nature of those businesses.

Earlier this year, UPC Ireland, which offers a bundle of cable TV, broadband and fixed-line phone services to customers, appointed American-Australian Dana Strong as its chief executive. She had previously worked in Australia for UPC’s American parent group Liberty Global.

Strong was appointed ahead of local candidates here and succeeded Scot Robert Dunn, who in turn moved to the Netherlands.

Strong puts this down to Liberty and UPC being multinationals which simply look across their businesses to fill their top jobs – and says it was not a reflection on local management talent.

“I don’t think it would be fair to say it’s the quality of management here in Ireland, because you see Irish people over-indexing, so to speak, in regards to CEO chairs internationally,” she says. “I’ve always found the Irish extraordinary in boxing above their weight class.”

Ireland, being an English-speaking country, is easier for people to “transition into” than, say Romania, where language would be an obvious difficulty, she points out.

“You have more people who throw their hat in the ring ,” she added.

Strong is also firm in her view that UPC might one day be run by an Irish executive.

“Absolutely. There are so many talented people . . . I don’t see any reason why there won’t be a future CEO here that will be Irish one day. There are no worries about that.”

Mike Maloney, the current head of epayments group Payzone, is well positioned to give a view on this. He spent four years working for Digital Equipment and nine years with Gateway Computers – roles that involved him working abroad in senior roles in Asia and Scotland.

“Multinationals promote from within, but they see it in a different way,” he explains. “We need to be careful not to be insular around this. It’s common practice for multinationals to move executives around, particularly high potential executives, to sharpen their skills and test them.

“I think that’s a good thing. It makes people more rounded. I was a massive beneficiary of that when I was moved to the Far East. I’d like to think I’ve been able to apply all of that experience in Payzone.

“A lot of Irish people travel and move around and get promoted. It’s a good thing in my view.”

McCarthy notes that while there is significant talent within the ranks of Irish senior executives, indigenous companies are not investing sufficiently in management development or management practice.

“We don’t see it as something that we need to work hard at,” he argues. Germany, he says, is “well ahead” of Ireland in this regard and it’s an issue we need to tackle, in his view.

Prof Mary Lambkin of the UCD Smurfit graduate school in Dublin suggests another reason for some of the appointments of overseas executives.

“Ireland is such a small pool to choose from and everybody knows everybody. It’s often hard to get a fresh face who doesn’t bring any baggage.”

The banking sector is a clear example of this, with most of the domestic banks looking overseas to fill its top ranks.

When such a way of doing things might change is not clear. The purge of local executives has been so extensive – and there is more to come – that it will take some time for a new generation of Irish bankers to come through to run our financial institutions.

“Until we create the conditions for succession at local level, you will continue to see the banks go outside this jurisdiction,” said one senior banking source who asked not to be named. “I would say that will be a long-term feature.”