UCD faces income cut as business school mulls investment strategy
School of Business may reduce the multimillion annual share it pays college
Former chief executive of Unilever Niall FitzGerald said the business school needs to refine its policy for the next five to 10 years. Photograph: Aidan Crawley/The Irish Times
UCD could be facing a substantial reduction in its income over coming years as its school of business considers cutting the multimillion annual dividend it pays to the university.
The business school is reviewing how best to use its resources to raise its international reputation and its chairman, eminent businessman Niall FitzGerald, has indicated that this could involve paying less to its parent university for a time.
In an interview with The Irish Times, Mr FitzGerald said the prestigious business school needs to examine the strategy whereby the bulk of any profit it makes is returned to UCD, as is normal practice for such bodies.
“The entity today is profitable as a standalone school of business, but much of its surplus goes to the rest of the university. We need to refine the strategy for the next five to 10 years.”
He acknowledged that the amount returned to UCD would “probably” need to reduce because the business school “will decline if we continue to do what we’re doing”.
Mr FitzGerald, former chief executive of Unilever and one of Ireland’s most prominent business figures, took over the position of chair at UCD’s Michael Smurfit Graduate Business School late last year. The role includes oversight of all aspects of the business school’s workings.
The most recently available accounts for the UCD school of business show it generated a surplus of almost €9.5 million on income of €48.2 million in the 2012/3 academic year. Of this, it returned a dividend of about €8 million to the wider university, retaining €1.3 million for investment. This was a reduction from the €3.3 million it retained in the previous year.
UCD as a whole had total income of €497 million in the year to the end of September, 2013. Its surplus for that year was €12.2 million.
‘Unique bundle’Mr FitzGerald said the business school offers “a unique bundle” to students, with its combination of undergraduate, postgraduate and international courses. He believes, however, that the school will need investment even to stand still, with more required if it is to grow. The board he chairs hopes to put figures on both strategies by the end of April, at which point it will be ready to present them to the wider university and, in FitzGerald’s words, say: “Here’s your choices.”
“In the end, the university will have to take a view,” he said.