Two decades on, lessons from a corporate pioneer on good business

 

BOOK REVIEW: SIMON CARSWELLreviews My Dear Mr McCourtby Eugene McCague; Gill Macmillan; €19.99 (£17.99)

A SENIOR Irish banker, one of the few to survive the year-old cull, recently questioned (privately) why non-bankers were not considered to replace the bankers who helped caused this financial crisis.

It’s a fair question and one that sprung to mind while reading this hagiography of the late businessman Kevin McCourt by solicitor Eugene McCague, a partner and chairman of Dublin law firm Arthur Cox.

This short account of a hugely significant and eclectic 20th- century Irish business career is timely, given the current pressures to improve Irish corporate governance following the stream of controversies across the State’s financial institutions.

McCourt’s career spanned 40 years, during which he managed large enterprises across such a diverse range of sectors as tobacco, broadcasting, distilling and steel-making. His experience and skills as a manager, strategist and negotiator served him well no matter what industry he worked in.

McCourt was in his time a member of the Industrial Development Authority (IDA); executive director of Dundalk- based tobacco company PJ Carroll’s; director-general of State broadcaster RTÉ; managing director of what became known under his watch as the Irish Distillers Group, and finally as chairman of Irish Steel.

His experience made him a much-sought-after corporate agony uncle and gentle interrogator on company boards as a non-executive director.

When he was in his 80s, he was appointed to the board to the board of IT consultancy firm Baltimore Technologies in the 1990s by shareholder and financier Dermot Desmond to act as an experienced foil to the firm’s founder Fran Rooney, whose mantra was “GBF” (“Get Big Fast”).

McCourt’s role was to “question everything”, according to Desmond. “He brought great order, great discipline to the board. He questioned the product, the vision, the marketing strategy, but always in a supportive way.”

Reflecting on his career in a speech to the Institute of Directors in Ireland in 1986, McCourt said that over 38 years in business, he had been a board member of 18 companies – four public, three banks and insurers and 11 industrial firms. Assessing the overlapping appointments, McCourt calculated that he had served 109 “board member years”, 39 of which were “chairman years”.

A consummate salesman, McCourt could be described colloquially as a “big picture” kind of guy and a “people person” who had the innate understanding of profitability through good human relations. He had “an unswerving belief in the need for Irish business to think globally rather than locally”, writes McCague, and was a leading Irish crusader for better marketing and branding.

He is portrayed as a corporate pioneer who regularly packed his bags for trips around the globe which lasted months on end with the objective of tapping lucrative export markets.

Shortly after joining PJ Carroll’s in 1951, McCourt struggled to persuade the family owners on the merits of spending big on advertising and increasing brand awareness. He was unable even to convince the family to spend on market research to understand customer behaviour better.

This was until fellow director, solicitor Arthur Cox, produced a scrap of paper at a board meeting noting the number and names of discarded cigarette packets he had found on his daily walks from his offices at 42 St Stephen’s Green to the St Stephen’s Green Club. The low scoring by the company’s brands loosened its purse-strings.

McCourt’s eight-year tenure at Carroll’s involved many long- distance trips to understand the smoking habits of overseas customers and competitors’ brands so his company could profit from exports. Growth in domestic demand through advertising and higher exports led to profits increasing 10-fold to more than £100,000 within four years under McCourt.

His battles with the political establishment, especially Charles Haughey, and the Catholic hierarchy, notably Archbishop John Charles McQuaid, on the content of programming mark out his time at RTÉ from 1963 to 1968. Challenging Lemass’s view of RTÉ as “an instrument of public policy”, McCourt, “with no great instruction book to guide him, set the standards for the future independence of the organisation”, broadcaster Gay Byrne said in a tribute.

However, it is McCourt’s later comments – now 23 years old – on the role of the director in a changing business environment that are most relevant today following the financial crisis.

He spoke about the need for directors to “embrace among other contributions, involvement, study, time-giving, learning about the business, recognition of legal and moral responsibilities.”

During an all-out strike at Irish Distillers Group in 1974, McCourt again focused on the bigger picture in words that have relevance today: “Our country is involved in a war, a war that threatens the development we all legitimately seek . . . We can go a long way towards winning our share in Ireland of this particular war by putting in more than we try to take out, by some reduction in self-interest in favour of the national well-being.”

Indeed, personal responsibility scores highly in McCourt’s business beliefs. On the role of the director, he said that “neglect is committed by individuals, not by fictitious creations like boards of companies” and that “total responsibility must be laid with individuals”.

Company directors and executives alike, particularly within the State’s financial institutions, would do well to read and reread McCourt’s wise words in this valuable book.