Inside the world of business
Small pool of talent on Irish boards in need of refreshing
It is hardly contentious to say the boards of Irish plcs and State agencies could do with some fresh talent. Studies have shown repeatedly that there is a relatively small network of business people who continue to crop on the boards of both public and State enterprises.
When it is raised as an issue, the stock response is that the “small pool” of experienced executives available to sit on the boards of large organisations means the same faces are inevitably going to be appointed – which makes it all the more surprising that the overseas executives, who have offered their services to sit on State boards free of charge until 2016, are getting frustrated at a lack of response by the Government.
The initiative was announced at “Farmleigh 2”, the Global Irish Economic Forum, which took place in Dublin Castle last October. Its main proponents are John Hartnett, founder of the Irish Technology Leadership Group; former mayor of San Jose, Tom McEnery; Barry O’Sullivan, a senior vice-president at technology firm Cisco; Rory McInerney, a vice-president with Intel, and Conrad Burke, general manager of solar-energy firm DuPont Innovalight.
The list of those with Irish connections who have volunteered their time includes executives from the New York Stock Exchange, Goldman Sachs, Walt Disney, Citrix and Microsoft.
While it is understandable that there may not be immediate roles available for all of them on State boards, this could easily become an opportunity lost. The current list of executives is skewed towards the tech sector. But at a time of austerity, when IT offers the possibility of increased productivity, that could be a plus. They also bring the experience of business in the US, China, Japan and Europe.
The Government is fond of telling us about the power of the Irish diaspora. It is time they tapped into that resource themselves.
Investors will go elsewhere if they sense unfairness in the air
It might be stating the obvious, but if there’s one thing the Republic needs a lot of right now, it’s capital. The banks don’t have any – or, at least, they’re not keen on doing any meaningful lending with what they do have. The other source is investors, and this includes investors from abroad.
There are said to be plenty of them looking around the Republic at the moment for opportunities, presumably in the belief it is at the point where good businesses or assets can be had for prices that offer decent returns. One thing likely to put off investors is the fear that any bidding process they enter is not 100 per cent fair.
Since Siteserv announced in mid-March that it has agreed to sell the business to Denis O’Brien for just over €45 million, other potential buyers emerged with claims they would have paid more for the construction services group.
The company issued a statement yesterday saying the board is satisfied “the process was conducted in the best interest of the shareholders and stakeholders of the company as a whole”. It also said 67 per cent of the shareholders have approved the deal, so a majority of them are happy with the outcome.
Whether or not the complaints about the Siteserv sale are justified remains to be seen. There are two sides to the story. A number of parties who lost out are crying foul, but the board and its advisers, Davy and KPMG, are adamant they acted in the company’s best interests.
The deal involves a listed company and a State institution, the Irish Banking Resolution Corporation. Organisations such as these have to be seen to act fairly and openly.
In one way, it does not matter whether or not the complaints about the process are justified. What matters is that all deals, and especially those involving either public companies or State institutions, are not just conducted fairly and within the rules, but are seen to be done in such a manner.
There is plenty of competition out there for investors’ money. If they feel there is the slightest thing wrong with the way deals are transacted here, and that disadvantages them, they will simply go elsewhere.
EirGen looks outside the usual channels
Ireland has long-recognised the importance of foreign investment in developing Irish businesses and sectors. Traditionally, that investment has come from the United States, and it remains the most significant source of financial support.
However, companies are increasingly broadening their horizons, and Waterford speciality pharma business EirGen Pharma has just announced a major investment from a listed Saudi pharmaceuticals business that will, it says, allow the Irish company progress to the next stage of development.
EirGen has an established track record of looking outside the usual channels in its efforts to grow its business. Last year, the company announced a partnership with South African group Equity Pharmaceuticals, which the Irish firm estimated could be worth as much as €3 million a year to the firm. And back in 2009, it broke into the Latin American market with a €500,000 deal with Uruguayan group Laboratorios Clausen.
This latest deal will allow the specialist pharmaceutical company, which produces high-potency cancer drugs to fund its own product development, rather than through partnerships with other pharmaceutical companies as has previously been the case. This is precisely the sort of move up the value chaint the Government is hoping to encourage and shows other businesses the importance of thinking outside traditional lines in challenging times.
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