Competition increases VHI tension

SERIOUS tensions between the board and management of the VIII are likely to be aired at a meeting of the company's board later this week.

There is understood to be disagreement over the strategy the company is adopting in facing competition in the marketplace, with BUPA due to start offering policies from its new Irish operation shortly.

Seven new members were added to the board earlier this year - bringing the total to 12 - and two board subcommittees have been examining the company's strategy and its operations.

Some members of the board are understood to believe that significant changes in the company's operations and management structure are needed to face the new era of competition.

However, it is not clear at this stage whether these issues will come to a head at this Thursday's board meeting.

The board's strategy examination has been taking place against a background of tensions between the management and the board, including disagreements between managing director, Mr Brian Duncan and chairman, Mr Noel Hanlon.

The issues involved have include handling of a dispute with the Independent Hospitals Association and the role of a senior executive in the organisation.

It is understood that the board and management are again at odds over a more recent dispute on charges with the Galway University Hospital.

Some sources point to these disagreements as the root cause of the existing tensions as the VIII tries to get to grips with what will soon become a competitive marketplace.

But the examination by the new board is also understood to have focused on the wider issue of strategy and organisation. The role of chairman Mr Hanlon in these deliberations is not clear. However, with his current term due to be completed early next year, Mr Hanlon, while still completing fully his duties as chairman, is not thought to be as active in the organisation as he was in the past.

Mr Duncan joined the VIII from Irish Life two years ago. This followed the departure of the former managing director, Mr Tom Ryan, who disagreed with Mr Hanlon on his role at the organisation.