25 Years of the Ifsc

IrishTHE OFFICIAL MAGAZINE OF THE INSTITUTE OF Director DIRECTORS IN IRELAND ISSUE 25 • AUTUMN 2012 €7.50 (STG £6.70)

25 YEARS OF THE IFSC

EYE ON THE ECONOMY MARKETING EXPORTING MANAGEMENT STRATEGY INNOVATION

contents

Letter from the Editor

Welcome to the autumn issue of Irish Director. In this issue, Alastair Campbell, who is probably best known as Tony Blair’s press secretary and director of communications between 1994 and 2003, shares his views on leadership and some of his strategies for success. Marking 25 years of the IFSC in Dublin, Constantin Gurgdiev profiles a sector that he describes as the prime platform for the Irish services exports generation, comparable in importance only to the booming ICT services sector. And we have a special report on Ireland’s top 250 exporters, who as a group have achieved substantial growth so far this year. We talk to some of Ireland’s most significant export companies – including Diageo and Google – and look at some of the emerging trends and challenges. We’re also introducing a couple of new regular features, 34 including an IoD member profile piece and ‘New Frontiers’, a section that will focus each issue on a company that is developing markets, products or processes to extend its business. First up is Carlow-based Netwatch, which is pursuing a strategy of international expansion. As ever, thanks to all the IoD members and other leaders who shared their time, expertise and valuable insights with us. We welcome all feedback and suggestions to [email protected].

Grainne Rothery Editor, Irish Director

Editor: Grainne Rothery Contributing editor: Sorcha Corcoran Production editor: Karina Corbett Art director: Michelle Gregan 52 For all advertising and marketing queries, contact Sam Hobbs on +353 1 6251425 or email [email protected] 42 Irish Director is published by Business and Leadership Ltd Tel: +353 1 6251400 Email: [email protected] Address: Top Floor, Block 43B,Yeats Way, Park West Business Park, Nangor Road, Dublin 12. © Business and Leadership Ltd 2012

ISSN: 1649-3621

www.businessandleadership.com

4 Irish Director Autumn 2012 contents Irish Director THE OFFICIAL MAGAZINE OF THE INSTITUTE OF DIRECTORS IN IRELAND 80

UP FRONT MARKETING 46 Reputation is a vital issue for NEWS FROM THE IOD 6 organisations, but many are failing A word from the Institute’s CEO to manage it in a structured way Maura Quinn IOD MEMBER PROFILE 50 THE ISSUES 10 Christine Moran, executive The latest news on the big issues director and head of recovery at KBC Bank Ireland EYE ON THE ECONOMY 14 How can new models of the Irish WEALTH MANAGEMENT 52 economy influence decisions in a Why cash is no longer king positive way? KNOWLEDGE CENTRE 56 VIEW FROM ABOVE 18 A look at just some of the latest Irish management leaders offer reports from our partners in the words of wisdom Business & Leadership Report Centre DIRECTOR PROFILE 22 Alastair Campbell, author, SPECIAL REPORT 57 speaker and broadcaster, on TOP 250 EXPORTERS leadership and success Emerging trends and opportunities

ONE TO WATCH 26 SENIOR APPOINTMENTS 76 50 Award-winning Equilume has Who’s moving where in Irish developed a pioneering product senior management that could revolutionise the horse breeding industry WHAT’S ON 80 Our selection of must-sees FINANCIAL SERVICES 30 over the coming months 57 Constantin Gurgdiev looks back at 25 years of the IFSC WEBSITE NEW FRONTIERS 34 Security systems company www.businessandleadership.com Netwatch is pursuing an ambitious for further information strategy of international expansion

STRATEGY 38 Applying metrics to corporate SUBSCRIPTIONS responsibility For subscriptions, please contact INNOVATION 42 [email protected] Making external input part of +353 1 6251422 the innovation process

Autumn 2012 Irish Director 5 view from the institute

How well is your board UPCOMING IOD IN performing? IRELAND EVENTS The financial An independent evaluator is likely crisis has to be far less constrained and far 8 Oct WORKSHOP FOR DIRECTORS OF focused many more open and objective when report- SMES directors on the ing findings and identifying issues Venue: IMI, Sandyford, Dublin 16 importance of that may need to be addressed. The undergoing independent external involvement of an independent exter- 9 Oct WORKSHOP FOR EXPERIENCED evaluation of their board to ensure it nal assessor also provides greater DIRECTORS is performing at an optimum level. assurances to stakeholders. Venue: IMI, Sandyford, Dublin 16 The concept of evaluating a board’s performance is one that has long been What to look for 10 Oct WORKSHOP ON ESSENTIAL DOS in place among listed companies, with Undertaking an external evaluation AND DON'TS FOR COMPANY a recommendation within the UK enables directors to understand how DIRECTORS Corporate Governance Code for an well the board is operating when Venue: IMI, Sandyford, Dublin 16 annual board evaluation, which has compared to best practice standards. also been adopted by the Central The evaluation should concentrate on 18 Oct EVENING BRIEFING PRESENTED BY Bank of Ireland as a statutory everything from assessing the board’s EDELMAN – SOCIAL MEDIA OVERVIEW requirement for institutions regulat- performance in relation to the busi- Venue: The Fitzwilliam Hotel, St Stephen’s ed under its Corporate Governance ness strategy, to assessing risk man- Green, Dublin 2 Code. In addition both codes call for agement, internal controls and stake- an external evaluation of the board holder management, to analysing the 5 Nov WORKSHOP ON CORPORATE every three years. composition and practice of the board GOVERNANCE FOR DIRECTORS ON Undergoing a board performance and even evaluating the performance STATE BOARDS evaluation enables a company to also of committees and individual directors. Venue: IMI, Sandyford, Dublin 16 provide assurances to stakeholders As leading contributors to the and to potential investors that it is debate on corporate governance, the 6 Nov WORKSHOP ON FINANCE FOR committed to the highest standards Institute of Directors in Ireland (IoD) NON-FINANCIAL DIRECTORS of governance and probity as well as has detailed knowledge of what Venue: IMI, Sandyford, Dublin 16 effectiveness. makes an effective board and provides all of the above as part of its Details and booking forms available from Internal or external evaluation board performance evaluation service [email protected] or call 01 411 0010. An internal evaluation, generally con- which offers boards a range of evalu- ducted by the chairperson, is likely to ation options to choose from and is be relatively low-cost and cause little carried out using exclusively designed disruption to the board’s scheduled online technology. The IoD has a activities. However, the downside is panel of evaluators who are all expe- > NOT YET A MEMBER? that the process may be too subjective rienced directors themselves and who and can been seen as a box ticking are all chartered directors, thus com- exercise. In addition, the board itself bining both a wide range of practical To learn about your role and responsibilities as a may not have the specialist expertise hands-on experience as directors director and to develop your professional skills, to conduct an effective evaluation and with the highest level of knowledge knowledge and expertise, why not join more than such an approach may not provide and expertise of best practice. 1,600 fellow directors who are already members of much reassurance to shareholders Undertaking a performance evalu- the IoD in Ireland. given that an evaluation conducted ation allows a board to identify its internally lacks independence. strengths and weaknesses and is a You can also avail of our excellent membership Opting for an external experienced powerful investment in the future of benefits including access to the Stephen’s Green assessor to conduct such evaluations any organisation. Once a board knows Hibernian Club, selected airport lounges in Dublin, increases transparency and inde- where its strengths and weaknesses Cork and the UK, as well as bespoke director’s pendence and allows an appropriately lie, only then can it begin to tackle personal indemnity insurance through Glennon skilled external assessor to bring any difficulties and build on Insurance and access to the IoD’s Boardroom specialist know-how to the process. opportunities. Centre.

Call us today on 01 411 00 10 or visit www.iodireland.ie Maura Quinn CEO, Institute of Directors in Ireland

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8 Irish Director Autumn 2012 Expanding Abroad?

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In brief President Michael D European Commission suggests Government Higgins speaks of consider all Budget options role of corporate THE European Commission has urged governance the Government to consider all options for the forthcoming Budget. It has suggested that Finance Minister Michael Noonan should think about targeting welfare payments and broadening the tax base to protect the poor. Following the release of another €1bn of funds for Ireland, the Commission also warned of the significant challenges facing the economy. “These include the still large fiscal deficit, the country's high and increasingly long-term unemployment rate and the high private sector debt overhang,” it said it its report for the troika. The banks’ failure to make profits continues to endanger Ireland, it added. The International Monetary Fund and the Fiscal Advisory Council have already urged the Government to reconsider promises not to increase income tax or cut welfare in Budget 2013. President Michael D Higgins Trinity only Irish university to make top 100 Addressing more than 600 people that corporate governance is IRELAND has just one representative at the Institute of Directors’ regarded as more than an idealistic in this year’s QS World University autumn lunch in the Burlington aspiration or, worse, just another Rankings, with Trinity College Dublin Hotel on 14 September, President of piece of red tape to be complied placed in 67th position. It’s a drop of two Ireland Michael D Higgins spoke of with.” places in the last year for Trinity, which the need for corporate governance The President also spoke of the had a high in the rankings of equal 43rd to transcend technical compliance. importance of ethics to Ireland’s in 2009. He said corporate governance can recovery and renewal. “Having University College Dublin (UCD) is in many ways be regarded as a experienced the failure of recent ranked number 131 in the world in 2012, moral compass to guide a compa- years and endured the pain of its up three positions from last year. In ny’s actions. “It is a fundamental consequences, returning to the sta- 2009, UCD was 89th in the rankings. part of the ethical infrastructure tus quo ante is not a viable option – University College Cork fell nine that is required if good business neither morally nor in terms of its places in this year’s ranking to 190. practices are to be sustained,” he practical workability. We need There was better news for NUI Galway, noted. together to imagine and devise an which climbed 11 places from 298 last “Asyouknow,manylawsand economy that operates on ethical year to 287 this year. DCU rose by two codes of conduct are already in principles, is inherently integrated places to 324. Queen’s University place and more are expected. into a just society and allows all our Belfast, meanwhile, jumped from 193 to However, vigilance and commit- citizens to fairly participate in its 166inthelastyear. ment will be required to ensure prosperity.”

10 Irish Director Autumn 2012 MyMy bbusinessusiness needsneeds eefﬁciency.fﬁciencyy.. MyMy bbusinessusiness needs Three.rreee. the issues

In brief Ireland ranked 10th in

Ireland climbs two places Tim Berners-Lee web index in WEF competitiveness report DESPITE concerns about the macroeconomic environment, Ireland has jumped two positions to 27th place in The Global Competitiveness Report 2012–2013, released recently by the World Economic Forum (WEF). This follows a slide in competitiveness for Ireland from 22nd to 29th in recent years. According to this year's report, Ireland continues to benefit from a number of strengths, “including its excellent health and primary education (12th) and strong higher education and training (20th), along with its well-functioning goods and labour markets, ranked ninth and 16th, respectively”. Ireland has come 10th in a new web (21) in Ireland is substantially It says these attributes have fostered global index of the state of the web lower than any of the countries in a sophisticated and innovative busi- in 61 countries around the world. the top 10, ranking below nations ness culture, resulting in a ranking of The study, which was launched including Chile, Colombia and 18th for business sophistication and by Tim Berners-Lee (pictured Egypt. According to the Web 21st for innovation. above) on behalf of the Web Foundation, there is significant “Yet the country’s macroeconomic Foundation, placed Sweden in first scope for the Government to environment continues to raise signif- place for putting the web to work, increase the extent to which it icant concern (131st), although mat- followed by the US and the UK. uses the web to engage and inter- ters seem to be moving in the right The top 10 is rounded out by act with citizens. direction following the Government’s Canada, Finland, Switzerland, New Elsewhere, the study finds that massive bailout of the banking sector. Zealand, Australia, Norway and the web remains a largely Of related and continuing concern is Ireland, respectively. Nepal is untapped resource in much of the also Ireland’s financial market (108th), placed bottom of the list, followed world, with only one in three peo- although this seems to be tentatively by Cameroon, Mali, Bangladesh, ple using it globally and fewer than recovering since the trauma faced in Namibia, Ethiopia, Benin, Burkino one in six in Africa. recent years.” Faso, Zimbabwe and Yemen. The index reveals that high Elsewhere, Switzerland tops the According to the study, Ireland broadband prices and trends overall rankings for the fourth consec- outpaces all other countries in the toward censorship are major barri- utive year, while Singapore remains in index in terms of the web’s effects ers to making the web useful to all. second position and Finland overtakes on its economy. It notes that Almost 30pc of countries covered Sweden (fourth) for third position. between 2007 and 2010, ICT serv- by the index face moderate to These and other northern and west- ice exports accounted for 14.8pc of severe government restrictions on ern European countries dominate the GDP – exponentially ahead of any access to websites, while about half top 10 with the Netherlands (fifth), other nation. of them show increasing threats to Germany (sixth) and UK (eighth). Ireland is ranked sixth for over- press freedom. The US (seventh), Hong Kong (ninth) all impact, 10th for the web and “The web is a global conversa- and Japan (10th) complete the ranking 11th for readiness. tion,” said Berners-Lee. “Growing of the top 10 most competitive However, the study states that suppression of free speech, both economies. there is considerable room for online and offline, is possibly the improvement in other areas. For single biggest challenge to the example, the political impact of the future of the web.”

12 Irish Director Autumn 2012

eye on the economy

MODEL MAKING With the current financial crisis so unprecented, how can new models of the Irish economy influence decisions in a positive way? Brendan Keenan reports

14 Irish Director Autumn 2012 eye on the economy

‘A whole range of indicators, from

the Live Register Brendan Keenan to credit card

income and an even bigger one in money income – that spending, suggest perhaps no model could be expected to cope. But there have been signs that forecasting is not up to the job in that the period of other bigger economies, where the crash was not of quite such apocalyptic proportions. contraction has The US has both the biggest economy and the most elaborate statistics and econometric models. Yet the recovery has been both slower and different in charac- come to an end’ ter than conventional forecasts would have said. This has left US policy-makers in a quandary. The August statement from the Federal Reserve clearly implied doubts about the wisdom of another round of money creation through quantitative easing (QE). The US economy is growing; but, at 1.5pc, is well below what is thought to be its natural rate of growth. That natural or ‘trend’ figure is itself open to more It sounds like quite a job. The Central Bank and the doubt than ever, given the length of the slowdown and Economic and Social Research Institute (ESRI) are the possible changes in the responses of consumers and looking for someone to head a team of researchers who investors as compared with the pre-crash world. will develop “a suite of modern macroeconomic/econometric In such circumstances, would more QE do any good, models of the Irish economy as a basis for informing the Fed’s Open Market Committee seemed to be won- macroeconomic, monetary, financial sector and fiscal dering. Given the hundreds of billions of dollars already policy decisions”. created and injected into the system, it would certainly Reading that sent a bit of a shiver down my spine – increase the risk of inflationary problems down the line. and not because I’m thinking of applying. Rather Perhaps it is time to let things take their own course for because it seemed to confirm the view espoused by a while. many commentators, at home and abroad, that existing Overall, the US balance sheet recession may be worse forecasting models may not work in the current than that of the eurozone (although that is by no means unprecedented circumstances. certain) but, because of the euro crisis, European con- The problem is that they are unprecedented. A model ditions have altered even more than those in the US. of the economy is meant to be exactly that–amathe- There is no art to find that complexion in the existing matical description of how it works. It is constructed on models. the basis of how the economy responded to different conditions in the past. But if present conditions have no German weakening real past parallels, can the model predict the effects The clear weakening of the German economy is a case they will have? in point. One can see the causes on the export side, as The Central Bank/ESRI statement seemed to con- demand for German goods slows in the rest of the euro- firm this view – saying the project “is of critical impor- zone and in China. tance to both organisations”, particularly in light of the But how much of the cooling in the domestic economy current challenges facing the economy. It may also is due to worries about the cost to Germany of meas- make sense if they both work off the same model. ures to stabilise the euro? How does one quantify such The Irish economic crash was so profound – with a worries in a forecast? 10pc fall in real output, a bigger one in real national In the less favoured parts of the eurozone, the

Autumn 2012 Irish Director 15 eye on the economy

‘The December Budget will undoubtedly be a nudge in the wrong direction, but its contents are widely anticipated’

severity and length of austerity programmes, and the concomitant recessions, play havoc with trying to find answers to the question everyone asks – when are things going to get better? Even to attempt an answer requires a definition of terms. Is ‘getting better’ the same as ‘not getting worse’? If so, the signs of stabilisation in the economy could mean the answer is that things are already getting better. This is probably not what the questioners mean. They are looking for forecasts of growth. Even so, the evidence that the Irish economy is now bumping along, rather than continuing to shrink, is important – not least because it may give some inkling as to the course of we can perhaps at least work on the assumption that events, even with the doubts over existing models. this is the timescale on which Ireland we must operate. The evidence of bottoming out has become pretty It is unconscionably long, and can be expected to be strong. A whole range of indicators, from the Live longer here than in Britain, but it leaves the thought Register to credit card spending, suggest that the peri- that the answer to that question – when will things actu- od of contraction has come to an end. The timing may be ally turn around – is that it may not be that much longer. of more significance than the actual numbers. It is just about four years from what one might date as Nudge theories the start of the crash. This would seem to be in line with Lars Frissell, the new chief economist at the Central historical experience that balance sheet recessions tend Bank, draws on his experience of the Scandinavian crash to last 10 years or more, from peak to peak. to point out that it does not have to be a dramatic turn I was intrigued by an analysis in the last review from to produce dramatic changes in feelings. Britain’s National Institute of Economic and Social Frissell may be a fan of the fashionable ‘nudge’ theo- Research called ‘Fiscal Consolidation During a ries, which look at how small changes can have big Depression’. That is just what one would like to know effects. His business lecture to the Institute of Certified more about. Accountants suggested that “one more nudge” might tip The UK economy is very different from Ireland’s. As Ireland from the vicious cycle of declines to one of well as that, the Irish collapse in national income is far increased confidence and investment, which starts the steeper, and the debt burden much higher (although the “virtuous circle” of growth in the economy. deficits are now much in the same league). So one could Nudges can work in both directions, of course, but not possibly extrapolate this research to the Irish case. require that tipping point to have major effects. The The authors of the report also note how sensitive the December Budget will undoubtedly be a nudge in the results are to any change in assumptions about liquidity wrong direction, but its contents are widely anticipated. constraints and wage behaviour. Nevertheless, they are, It will damage spending power and domestic demand, as I say, intriguing. but the lack of surprise may ensure its multiplier effect On their assumptions, budget correction while the beyond the actual nudge is limited. economy is below par – which has been British govern- A positive nudge, it would seem, can come only from ment policy – depresses output and raises unemploy- Europe. Even the prospect of being hanged at any time ment for six years. Things pick up after that, but it takes – probably without warning – has not persuaded the 10 years before activity is back to where it would have leaders of the eurozone to hang together. But they are been had none of this happened. nudging towards it. A decisive move might provide Four years on, and allowing for all the uncertainties, remarkable results to feed into those new models.

16 Irish Director Autumn 2012 Pfli ZfdgXep Zflc[ Y\e\Ôk ]ifd _Xmè^ jfd\ f] k_\ dfjk j\e`fi Xe[ \og\i`\eZ\[ Yljè\jj g\fgc\ è @i\cXe[ fe pfli YfXi[% Kf Ôe[ flk _fn n\ èm`k\ pfl kf ZfekXZk

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leaders. This is the class of 2012 and these CEOs are graduating. As Ireland begins to stave off its recession and return to moderate growth, despite export markets being effect- ed upon dramatically, we are churning out many top CEOs of the future. While the skill set of CEOs varies widely depending on the type of business they are in, there are two qualities that truly separate the top CEOs from the rest: leadership and strategic vision. In today’s Ireland, managing uncertainty is a daily part of any CEO’s workload. The role of the CEO is to take analysed risks that will steer the corporation through these uncertain times. The ability to identify threats and react in an appropriate manner is often what separates the top CEOs from the rest and makes the difference between sustained profitability and corporate deficit. The best CEOs are cognisant of the past, extremely focused on the present and constantly aware of how the future may unfold for his/her corporation. JOHN HARTY All great CEOs are great leaders. They have the ability to empower people so the decisions they make and the on the qualities essential to today’s CEO actions taken are in line with the overall values and strategy of the organisation. While these high calibre people are proven in their analytical and decision-mak- Business in Ireland has undergone a major transformation ing abilities, they understand the importance of setting over the past four years. We have seen a severe down- an example and inspiring the workforce to follow. Such turn become a series of lengthy uncertainties for corpo- skills help ensure maximum output from all elements of rations in plotting their path forward. These uncertain- the corporation as the autonomy flows down from the ties are often out of the control of these businesses – executive team, to directors, to managers and so on. external factors such as global economic difficulty, Corporations today must be prepared to cast their European financial crisis, equity market fluctuations, nets far and wide when plotting their succession plan- currency fluctuations and fluctuations in commodity ning and ultimately sourcing a new CEO. When assess- prices. ing these contenders’ suitability, the same principles However, there are positives to be taken from all of apply: effective leadership and strategic vision. this and here is what I will hypothesise: Ireland has become a breeding ground for world-class corporate John Harty is a director at executive search firm Harty International. ‘Ireland has become a breeding ground for world-class corporate leaders. This is the class of 2012 and these CEOs are graduating’

18 Irish Director Autumn 2012 in association with view from above

SEAMUS MCGARDLE on the road to business recovery

As the economy continues to remain soft in most developed economies, the owners of small businesses lose all discipline and focus they had when they created their successful companies. Instead of being more disciplined they tend to go after every potential opportunity. This is a major problem because they dilute their already limited resources and time by trying to do too much or be all things to all people. There are a number of underlying approaches or behaviours that could help the business. Successful business owners understand that the organisation they manage takes on the values and attitude of themselves or the be. You own the outcome because you are clear about senior team in the organisation, and they strive to ensure where you want to go and you take ownership for it. that their behaviours reflect this. With this, you know that if you are not getting your desired Be selfish. This means asking yourself how do you pro- results, you can take action and change the outcome. tect your time, energy, resources and money so you are Success is dependent on the team’s effectiveness. All only spending them on those things that will take you successful people understand that their success comes closer to your goals. This kind of selfishness allows a with, and through, other people. Successful people recog- small business owner to ensure their precious and dis- nise these individuals and appreciate them for their con- tinctive resources are only being spent on activities that tribution to the results. Understand who your best cus- benefit their company. They must stay focused on their tomers are and treat them like gold dust. Determine who strengths and therefore the types of customers they will help you (employees, referrals, partners, business want and need to attract. associates, your board etc), why they will help you and Be ruthlessly focused. If you are clear on the areas you how you can help them. will be selfish about, you generate a clear focus, a sense of Not all ideas are created equal. Most people have an purpose. There are two questions you must always ask abundance of ideas and this is the problem. Ideas are yourself: Is what I am doing taking me closer to my goal? easy while translating to a business goal is the challenge. If not, why am I wasting my time? Once they get selfish by focusing on one specific goal, Be disciplined. This means you will not abandon your they can generate ideas that allow them to implement approach or objectives. Discipline has taught you that their intelligent self-interest. Getting selfish is very business life is not smooth and there will be periods of important here. It is also important to understand that difficulty. Experience has taught you that by being disci- ideas typically come from others. Many people have a plined, you can get through the tough spots. great idea. They believe their idea will lead them to suc- Be persistent. If you are selfish, disciplined and focused, cess but they have no idea how to move forward. Or, they your persistence allows you to see any unplanned obsta- have so many ideas that they cannot make up their cles not as problems, but as opportunities. But not every- mind. Successful people know they need others to help one is aligned to your way of thinking. They see obstacles them implement their ideas. and stop. You, as a business owner, should see obstacles Define success as taking action. Success, in the original and opportunities. You need to keep your eyes clearly sense of the word, simply means to take action. When in fixed on your objectives and to try different things to doubt, do something – anything. Successful people under- overcome these obstacles. stand that they can always correct something that is not Take ownership. You cannot blame the market or the working. They also understand they cannot correct an economy or the Government or the EU or the IMF for action that is not taken. They are not success. Success, your problems. You must take ownership or you cannot simply defined, is taking action. When you take action take action to address the problem. Taking ownership is you can achieve the outcomes of success. about change – making the change necessary to move forward, changing behaviours that are not working and Seamus McGardle is managing director of SRI Executive Search dealing with the world as it is and not as you want it to and an IoD member.

Autumn 2012 Irish Director 19 view from above in association with

Over the past decade there has been a greater focus on the boardroom and increased pressure on board members. Crisis management, reputational risk and an increase in boardroom-shareholder engagement have made the role more demanding. These changes, alongside increased scrutiny from shareholders, regulators and other stakeholders, have made the job of the board also more challenging than ever. While many non-executive directors (NEDs) feel challenged by the complexity of the business and the demands associated with the increased involvement, influence and responsibility the role now brings, there is a downside. In particular, a recent PwC survey showed that the time commitment for NEDs has risen on average from 20 to 24 days per annum. This, however, has not been matched by a corresponding increase in fees; with those surveyed sug- gesting a 25pc increase would be appropriate. With less time and increasing reputational risk, NEDs are being more selective about roles they take on. The composition and selection of board members is also in a state of flux. Attention has shifted from purely focusing on the independence of NEDs to ensuring that the board has the appropriate range of experience, knowledge and skills. Best practice now places greater emphasis on appointing directors against objective criteria, taking into account the benefits of diversity when considering the composition and selection of new members of the board. Boards need the right combination of skills and experience – and to be alert to the fact that the right GERARD MCDONAGH combination changes over time. on the changing landscape for Given the heightened levels of trans- non-executive directors parency and scrutiny, NEDs now face an ever-evolving landscape, which will require them to focus on understanding the scope of their responsibilities and engaging in a considered process ‘Boards need the right to discharge those responsibilities combination of skills and thoughtfully and thoroughly. Gerard McDonagh is director, human experience’ resource services, PwC.

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*The prize is subject to availability and non-transferable

Lisloughrey Lodge, Cong, County Mayo. T: 094 954 5400 W: www.lisloughreylodge.com director profile

Alastair Campbell, Tony Blair’s former director of communications and strategy, shares his views on leadership and 10-point plan for success with Grainne Rothery

MASTERin communications

As press secretary and director of communications and lished during the summer – as well as being a regular strategy between 1994 and 2003, Alastair Campbell was speaker, consultant, journalist and charity fundraiser. In Tony Blair’s right-hand man and widely considered to be May, he took up a part-time role as a strategic consultant the second most powerful person in Britain for much of at PR firm Portland, his first in-house communications this time. He’s credited with being one of the main strate- job since 2003. gists behind the plan that brought ‘New Labour’ to power He is currently chairman of fundraising for Leukaemia in 1997 and kept the party in government for three terms. & Lymphoma Research and also works to raise awareness He’s also been a highly controversial figure over the of mental health issues. He has written about his own years. The former journalist had a combative – some- experience of depression, including what he has described times described as bullying – relationship with the media as a “pretty heavy nervous breakdown in 1986”. during his time as Blair’s spokesman. He resigned from He describes himself as passionate about sport and has his role in August 2003 during the Hutton Inquiry into written about various sports for a number of publications, the death of Ministry of Defence employee David Kelly, including The Irish Times. He was also communications who had been named as a source in reports that the advisor to the British and Irish Lions tour of New British government had “sexed up” a dossier on Saddam Zealand in 2005. Hussein’s weapons of mass destruction to strengthen the case for war against Iraq. Campbell said at the time that The 10-point plan his resignation was not related to the Hutton Inquiry and It was in his role as a speaker that he visited Dublin that he wanted to get a life back for himself and his family. recently to address an An Post breakfast briefing, during Responding to his departure, Blair said the picture which he outlined his 10-point plan for success. Campbell painted of Campbell by parts of the media had always has been carrying around a card in his pocket with this been a caricature. “The Alastair Campbell I know is an plan, or a variation of it, since the mid-1990s. “They change immensely able, fearless, loyal servant of the cause he a bit, but eight out 10 of these points have stayed the same,” believes in, who was dedicated not only to that cause, but he says. to his country. He is a strong character who can make The first of these he describes as OST – objective, strat- enemies, but those who know him best, like him best.” egy and tactics. To illustrate the point, he recalls Bill Blair said Campbell’s contribution to modernising the Clinton talking to Blair on the phone about Russia and the Labour Party and its electoral success had been enormous. Northern Ireland peace process on the day the Starr These days Campbell, who is a Cambridge graduate of Report was published. Campbell says he was hugely modern languages, is a writer – The Burden of Power,his impressed by Clinton’s ability to focus at such a difficult eighth book and the fourth volume of his diaries, was pub- time and asked him about this a few years later in a TV

22 Irish Director Autumn 2012 director profile

I’m happy I did it but I wasn’t happy a lot of the time’

Autumn 2012 Irish Director 23 director profile

Far left: Alastair Campbell with chef Domini Kemp

Left: Amie Peters, head of direct mail, An Post

interview. “And he said, ‘I had a very, very clear objective: His fourth point is YSTA – you set the agenda. Campbell surviving. The strategy was to get up every day, focus on claims that the ratio of positive to negative stories in those things that only I can do because I was the president, British newspapers changed from 3:1 in 1974 to 1:18 in and my tactics were to make sure that the American peo- 2003. The media has a pervasive culture of negativity, he ple knew what I was doing’. says. “You deal with this by seizing control of the agenda “Set the objective, then do the strategy and only then go yourself.” tactical,” says Campbell. “I think that’s the most important His fifth piece of advice is TLTP – the best team lead- thing for any organisation. When I was a journalist it was ers are the best team players. “Team work is fundamental different because you’re covering different things every to everything we do and the best team leaders are the best day and that’s what news in a sense is about. Politics and team players. I’m not interested in sport just because I like business are much more about how you set the medium to the spectacle. I didn’t go on the Lions tour just because I long-term objectives, then you define the strategy and only wantedtohangaroundwithaloadofrugbyplayers.It’s then do you go tactical.” amazing what you can learn from watching really effective Campbell’s next point on the list is BB – be bold. “Eleven sporting organisations and how you apply that to business days after the first election in 1997, Tony Blair arrived and to other walks of life.” down to his office and said, ‘I’ve worked out how to do Campbell runs through his final five points quickly: SCC Northern Ireland’, and we laughed. The truth is he had. – stay calm in a crisis; LBL – listen but lead; and GGOOB He’d worked out objective – peace, some kind of settle- – get good out of bad: “In other words, every setback is an ment; and strategy – we were going to start talks with opportunity”. Sinn Féin and with terrorist groupings without any pre- Number nine is HAP – get your head above the parapet conditions. and communicate in times of crisis. “The banks have been “One of the reasons we won three elections was because so bad at explaining, ‘Yes we were part of the problem, but of the boldness of New Labour and because of the boldness we’re a very big part of the solution and here’s how we’re of Bank of England independence, which governments had going to do it’. It’s not very difficult, but none of them in talked about for decades, and we did on the first day of my view are doing it.” government. It was the single most important decision for His final point is VTV – visualise the victory. “When signalling to the public that we had changed. We under- you’re engaged in a campaign think about how it feels at stood that economic credibility was the most important the end. If you don’t, you won’t have sense of where it’s thing that we had to try to build.” going to go.” Next up on his list is BA – be authentic. “A lot of what we did became known as spin. But I think what we were Leadership skills trying to do was strategic communications in this Unsurprisingly, Campbell describes the ability to communicate maelstrom of media change. I saw my job as trying to deliver as a vital attribute for leadership in the modern age. “Tony a message over time. Haywood of BP is probably a very good chief executive in “What I think is extraordinary about the new world of lots of ways, but when the crisis struck at Deepwater, it communications is that there’s been a breakdown in trust became apparent that communication wasn’t his thing of a lot of big institutions: politics – people don’t trust and every time he spoke he seemed to make it worse. politicians in the way that they used to and people don’t “You’ve also got to be able to build a team and that’s trust the media in the way they used to. So who do people about judgement of people and the ability to make people trust? The answer is people still trust each other. They work together when they might not want to. It’s having a trust family and they trust friends and colleagues. So I vision, knowing the difference between strategy and tac- think if you’re trying to deliver a message, that message is tics, being able to build a team, being able to explain what only going to work if there is a sense that there is a vaguely you’re doing in an inspiring way, and it’s being able to take authentic relationship between sender and recipient.” decisions and stick to them.”

24 Irish Director Autumn 2012 director profile

‘I think I did bring an understanding of the modern media and modern communication and help the Labour Party win three elections and help Tony Blair be a really good prime minister’

He lists Rupert Murdoch, Willie Walsh and Richard servants and soldiers, it’s about all those people. Branson among the business leaders he admires. “If you’re “It really saddens me that Bertie’s got this very negative talking about an example of charismatic, authoritative reputation in Ireland now because I thought he was great. leadership, you’d have to say Rupert Murdoch has that. I remember when my first book came out, he gave a little One of the reasons they haven’t dealt with this crisis very speech at the launch and said there were times when it well is because people never challenged him and they didn’t was the media operation that kept the show on the road want to take him bad news. He’d be an example of some- because we just had to find the narrative to give the lead- one who had real leadership skills and qualities but actu- ers the space and the time to do the difficult things they ally they’ve been his downfall. needed to do.” “I’m a bit of an admirer of Willie Walsh’s style of leader- And his biggest failure? “I think it has to be in this area ship, but lots of people would say he’s too abrasive. In cri- of how the whole spin thing got out of control,” says sis management, the launch of Terminal 5 was a disaster, Campbell. I think there must have been things that we but I thought he handled that really, really well. could have done differently. “In terms of communication and charisma, Richard “Apart from that, on the big picture, what were we try- Branson is someone who has built his organisation steadily, ing to do? We were trying to get elected. We were trying innovatively, always developing, and he’s very much part of to stay in power for longer than one term and the brand.” communications was a part of that. I think most of the At the other end of the scale, the bankers get another time we did a pretty good job.” mention. “These guys are very clever, on multimillion Campbell recently took part in a radio programme pound salaries and they can’t explain their way out of a where he was asked to pick his Road to Damascus paper bag. It just amazes me. How does that happen? You moment, when he felt his life changed forever. “The know when you see businesses that are suddenly in the moment I picked was when I was told John Smith was public eye, and you see them explaining and you wonder dead. One, because I can remember it so vividly. Two, how did that guy get where he is? But the truth is, he’s because I had this insight almost immediately: Tony Blair’s probably very good at what he does in his day job. But they the next leader of the Labour Party and I’ll work for him. think communication is somehow different. It should be We’d never talked about it but I had this feeling really part of what they do.” strongly.” When he was subsequently invited to be Blair’s press Achievements and failures secretary, he spent a month thinking about it, while his So what does he believe has been his biggest achievement partner Fiona Millar and their friends Neil and Glenys to date? “If you look at what people say about me, they Kinnock tried to persuade him not to take the job. His always talk about spin, which I think is overblown,” he decision to accept was influenced by two scenarios that replies. “But I think I did bring an understanding of the kept coming into his head, he says. “In one of them, John modern media and modern communication and help the Major is walking into Downing Street after the election Labour Party win three elections and help Tony Blair be a and I’m in the press pen wondering if I could have made a really good prime minister. But I don’t think I should over- difference. In the second, Tony Blair is walking in and I’m state that. Ultimately, being the prime minister, that’s the thinking I could have been part of that. person who really matters. “When I look back, I’m happy I did it but I wasn’t happy “But there are two areas where I think the communica- a lot of the time,” Campbell concludes. tions were central to the achievement: Northern Ireland is “To me happiness is not about how you feel in the one of them and Kosovo is the other one. I’m not saying moment; it’s about what your life is like over time. I can they’re my achievements, because they’re not. It’s about look back at that time and say it’s the best and most Tony Blair, it’s about Bertie Ahern, Bill Clinton, John important thing I did in my whole life and I’m really glad Major and Albert Reynolds before, it’s about all the civil I did it.”

Autumn 2012 Irish Director 25 one to watch in association with

‘I had already done market research tapping the brains of farm managers and it looked like this product would be useful for them’

26 Irish Director Autumn 2012 in association with one to watch Equine

Developing a novel product for the multi-billion euro thoroughbred horse industry – and having the business plan to back it up – has resulted in Dr Barbara Murphy winning Enterprise Ireland’s 2012 One to Watch award

It’s less than two years since Dr Barbara Murphy, now the horses being in a healthier environment, it is head of equine science at University College Dublin estimated that the breeders can save around €1,400 a (UCD), began to develop her novel light therapy solu- season per animal on the costs associated with indoor tion, the Equilume light mask, designed to help max- maintenance, including labour, bedding and artificial imise the reproductive efficiency of thoroughbred mares. light. Since then, she’s managed to build a prototype, success- There’s a huge potential market: in Ireland alone, fully test the mask, secure substantial grant funding and 10,000 foals are born every year in the thoroughbred win Enterprise Ireland’s prestigious 2012 One to Watch industry, which is worth €1bn to the Irish economy. award. Other uses of the mask include reducing extended ges- Murphy is now working with that agency to build a tation lengths in mares due to foal early in the year, UCD spin-out company around the technology, which treating ‘horse jet lag’ and enabling competition horses will be called Equilume Ltd. to shed their winter coats earlier in time for the start of Her invention is used to advance the breeding season the show circuit. in thoroughbred mares so their foals are born as close as possible to their universal birthday of 1 January. This is Origins of the invention commercially important to breeders as foals born earli- Murphy traces the seeds of the idea for her invention er in the year usually command higher prices when they back to her PhD studies at the University of Kentucky. are sold on due to a size and age advantage over animals She joined a reproduction laboratory where her supervi- born later. sor was looking at mare seasonality and she started Mares, however, become reproductively active when focusing on daily rhythms in horses and melatonin. they are exposed to increased levels of light, ie during She was initially interested in the effect of melatonin the summer months, and with a gestation period of 11 on jet lag in horses. “If we can regulate melatonin we can months, will naturally foal between April and October. keep the animal in synch with the environment,” she The hormone melatonin is produced in the dark and explains. “That’s when it came to me – wouldn’t it be inhibits the animal’s reproductive activity during the cool to have lights on horses that were on a timer that winter. we could control.” Light limits melatonin levels and keeping mares When she finished her PhD, she moved to UCD and indoors under artificial lights until 11pm has long been began applying for grants to enable her to test her idea used to encourage them to breed earlier. of preventing jet lag in racehorses but was not success- Murphy’s technology will allow breeders to keep their ful in securing funding. mares outside in their natural environment while a spe- “Then I thought, well what else can we use light therapy cial light in the mask adjusts their cycle. In addition to for? Could a device such as this have more practical

Autumn 2012 Irish Director 27 one to watch in association with

Far left: Minister for Innovation Sean Sherlock TD with Dr Keith O'Neill, director of life sciences and food research commercialisation, Enterprise Ireland

Left: Dr Barbara Murphy

relevance in other aspects of the industry? Because I The research found no difference between the repro- had worked in the thoroughbred industry in Kentucky ductive activity of a group of mares wearing the light and in Ireland, I was very aware of the use of light ther- masks and a group that was kept inside under lights. “So apy to advance seasonality in the mare.” it had succeeded in advancing the breeding season,” says While she says she didn’t consider it to be a particu- Murphy. “That was really exciting.” larly great idea, she decided to give it a go anyway. “I In Ireland Murphy has been working Dermot joined the Campus Company Development Programme Cantillon, owner/manager of three stud farms, including [CCDP] at NovaUCD to see if it could be translated into Tinakill House in Co Laois, and highly respected in the a commercial application.” industry. Cantillon provided her with eight mares to test While on the programme, she focused on testing out out her theory that light therapy would also reduce the her theory and developing a business plan, which earned gestation length for pregnant animals. Mares have an her a runner up spot last November in the NovaUCD average 11-month pregnancy and to avoid having a later 2011 Start-Up Awards. foaling date the following year, farm managers have a one-month window to get them back in foal. According Testing, testing to Murphy, 20pc of all thoroughbred mares that foaled She explains that research into light therapy in the in 2010 went nearly to a year or longer. 1980s discovered that a mare’s cycle could be altered by “That’s major economic frustration for the breeder as putting it in a stall with enough light to read a newspa- the foals are being born a month later each year until per. “It worked and they didn’t do any more testing. I the breeder decides to rest the mare for a year. If you’ve wanted to know what is the minimum light intensity a means to keep that window tighter you’re going to required and whether you’d give light to one or two eyes.” have more live foals over the lifetime of the mare.” She began testing in April 2011 at UCD’s Lyons In the test on Cantillon’s mares, an average of 12 days Research Farm in Co Kildare. Early on, she discovered was knocked off their usual gestation length. she could inhibit melatonin by very low level light to one Cantillon himself believes the Equilume light mask eye. “That got me thinking that this could really work, has enormous potential for many breeds and categories because leaving mares outside with lights on both eyes of horses. “I have been excited since being introduced to probably wouldn’t be safe.” the concept and having used the masks during this She applied for a commercial case feasibility grant year’s breeding season, I am very confident that they from Enterprise Ireland and used the €15,000 to make will be a major worldwide commercial success.” prototypes. “I had already done market research tapping “Dermot has been great because he’s very important the brains of farm managers and it looked like this prod- in the industry and people listen to him,” says Murphy. uct would be useful for them.” She enlisted the help of the electrical engineering Enterprise Ireland grant department in UCD and made 80 light masks, each with Murphy recently received a commercialisation grant one LED blue light to one eye and operated on a timer. from Enterprise Ireland for €220,000 to carry out final “I needed to test them on non-pregnant mares but I testing and to make the prototype so the product can be also had a theory that they could be good for pregnant tested on a larger scale in the coming season. “The plan mares,” she says. Kentucky horse racing stable Castleton is that I’ll perfect the business plan and get people on Lyons, which is now managed by Shane Ryan, agreed to board so it’s investor ready by June next year, when we let her test the masks on a group of mares that weren’t hope to launch. Hopefully we should have our first sales scheduled to breed the next year. by next autumn.”

28 Irish Director Autumn 2012 in association with one to watch

‘Because I had worked in the thoroughbred industry in Kentucky and in Ireland, I was very aware of the use of light therapy to advance seasonality in the mare’

The intention is for the product to be maintenance story is “an inspiring example of how great ideas can be free. “Once you activate the lighting, every day it’ll come converted into valuable products with the potential to on at 4.30pm, just before dusk, and it’ll stay on until revolutionise an entire industry”. 11pm every night. When you activate it on 1 December, Dr Keith O’Neill, director of life sciences and food it’ll keep going until the end of the season. It will be research commercialisation at Enterprise Ireland, noted lithium battery operated for the moment. A light sensor that she had used the funding provided by the agency to will detect when light levels drops and it will come on demonstrate that her invention works, and to cultivate automatically. As the season progresses, it’ll be on for a contacts in the industry who can help her trial the tech- shorter time as the days get longer. So it will conserve nology. “Enterprise Ireland is continuing to work with energy that way. Dr Murphy to build a spin-out company to access an ini- “The idea business-wise – and I have to finesse this a tial total addressable market estimated to be in excess of lot more – is that it will be a service contract agreement, €60m,” he said. so it will be an annual fee for use, with replacement or Apart from spinning out the company, Murphy’s plan upgrade each year. The battery will only last for one sea- for the future is to continue carrying out research to son and will be only replaceable with us. It’s important increase the functionality of the mask. She wants man- that we stay in close contact initially with our clients in ufacturing of the mask to remain in Ireland and hopes the thoroughbred industry so we can provide feedback to employ 10 people within six years. and monitor the breeding efficiency in the initial years.” “And I’m actively seeking a potential CEO right now. I She anticipates that the annual fee will be up to €400. will remain in my position as head of equine science at Winning the Enterprise Ireland award was a big sur- UCD and continue to teach the programme here. But I prise, she says. “I didn’t even know I had been nominated. would like to have the scientific officer/technical officer It’s received a lot of publicity, which is really good. I’m position. getting emails from all over the world enquiring about it “And I’m going to go back to my jet lag theory. I have for different applications.” a grant application into Science Foundation Ireland and When she won the prize, she was congratulated by I’m really hoping that they fund it this time. Now we Minister for Innovation Sean Sherlock, who said her have the tool to actually test.”

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milestone As one of the prime platforms for generating services exports in Ireland, Constantin Gurgdiev looks back at 25 years of the IFSC

30 Irish Director Autumn 2012 financial services

Since the beginning of the Great Recession, the only consistent official economic policy aiming to achieve a recovery in Ireland has focused on promoting exports- oriented manufacturing and services. In the last four years, Ireland has delivered a reversal of the current account deficit to a modest surplus in the years since the onset of the crisis. This net positive is underpinned by three core drivers: a rapid and deep contraction in imports; a substantial growth in core MNC- dominated sectors, excluding pharmaceuticals and organ- ic chemicals; and a robust growth in services exports, heavily concentrated in ICT and international financial services. Amidst the ongoing euro area financial and debt crises heavily weighing on fiscal and banking balance sheets in Ireland, Cyprus, Spain, Italy, Austria, Belgium, the Netherlands and even Germany, this year’s 25th anniversary of the IFSC should be marked as a recognition of a real success story. This success is reflected not only in the CHART 1: Current accounts: merchandise, services ex-IFSC, IFSC, contrasting fortunes of the domestic financial services, credit, € millions. Source: CSO, 2012 and author’s own calculations but also in the fact that IFSC-style structures are currently being replicated in such diverse undertakings as green finance, data analytics and remote health services. In addition, the IFSC acts as a major conduit for investment into Ireland. On the direct investment side of the Economic contributor capital accounts, the IFSC experienced rather volatile Put simply, the IFSC is the prime platform for the Irish changes in recent years. Going into the crisis period, IFSC services exports generation, comparable in its importance companies’ direct investment in Ireland stood at €5.1bn in only to the booming ICT services sector. 2007, less than a quarter of the total investment in In 2011, the latest year for which data is available, the Ireland of €22.4bn. In 2010, IFSC-driven investment IFSC attracted twice the amount of Ucits funds as the accelerated to virtually match overall investment in rest of the euro area combined. In Q4 2011, as the rest of Ireland and in 2011 IFSC direct investment in Ireland the Irish economy was teetering on the brink of a double- reached €16.1bn, well ahead of all other direct investment, dip recession, inflow of funds into the IFSC was running which amounted to €9.43bn. at five times the level of the rest of the EA17 put together. Overall, some €62bn in Ucits funds were domiciled in Domiciling location Ireland in 2011 – almost €50bn more than the world’s sec- Analysis of the current IFSC-based activities clearly ond most attractive destination, the UK. shows both the continued strengths of the centre as a Last year, the IFSC services credit account rose to domiciling location for major banking and finance opera- €21.2bn from €20.4bn in 2010, and is now up nine-fold tions, and the changes in the sector since the onset of the compared to the levels attained in 1998, outstripping global financial crisis. cumulative increases in all other services sectors in In the banking sub-sector, Deutsche Bank AG current- Ireland. In comparison, since 1998, the merchandise cred- ly plays a dominant role in the IFSC with sales of €26.4bn it account rose only 96pc. in 2010 and declared profit before tax (PBT) of €326m. The IFSC remains a large net positive contributor to Second and third leading banking institutions are Depfa the Irish external balances: in 2010 and 2011, the cumu- Bank PLC (sales of €4.18bn and before tax loss of €680m lated IFSC external trade surplus (difference between due to ongoing restructuring operations in 2010) and exports and imports of services and current transfers Bankinter SA (sales of €3.036bn and profit of €346m in income) stood at €8.5bn. At the same time, our overall 2010). external surplus in 2010–2011 was less than €890m. This is the sector that is currently under sustained Between 1998 and 2011 our current account surplus fell global regulatory and operational pressures, which can 165pc, while the IFSC surplus rose by 208pc. serve as an opportunity for the IFSC. In particular, The importance of the IFSC over the years in driving shrinking global margins and continued pressure on our trade and income is hard to overestimate. Between funding models offer an opportunity for Ireland to devel- 1998 and 2011, the IFSC delivered a cumulative surplus of op ICT-intensive analytics and other back-office opera- €55.9bn to the Irish economy, against a cumulative cur- tions, and to attract new functions and institutions to rent account deficit for all sectors combined of €37.9bn domicile in Dublin. (see charts 1 and 2). The core threat to this is the possibility of

Autumn 2012 Irish Director 31 financial services

‘The importance of the IFSC over the years in driving our trade and income is hard to overestimate’

over-extending the regulatory and supervisory tightening that is required for the functioning of the domestic banking system to the IFSC facilities. Another threat is the emergence of severe shortages of qualified personnel and rising cost of attracting key personnel into IFSC. The latter pressures have been ameliorated, to some extent, by Budget 2012 provisions for tax relief to key foreign personnel. However, more is required for Ireland to capture emerging opportunities in the area. In particular, there is an acute need to revise excessively bureaucratic and restrictive practices in granting work permits to younger, highly skilled graduates in the areas where Ireland lacks competencies. There is also a need to rebal- ance the existing personal income taxation system to reduce disincentives to human capital-endowed employees from locating to Ireland. In the reinsurance sub-sector, the dominant IFSC play- er is Scor International Reinsurance Ireland, with sales of €1.77bn in 2010 and PBT of €340.06m. It is ranked fourth overall within the IFSC. Canada Life International Re, CHART 2: Current accounts: net surpluses/deficits, IFSC v totals, ranked fifth in the overall IFSC rankings, is the second € millions. Source: author’s own calculations based on CSO, 2012 largest reinsurance provider with sales of €1.63bn and PBT of €199.21m in 2010. The third largest reinsurance operation present in the IFSC with sales of €462.2m in company is Hannover Life Reassurance (IRL) with sales 2010 and PBT of €98.55m, is 11th in the overall IFSC of €479.5m and PBT of €8.01m in 2008. rankings by sales. Securitas Treasury, Ireland (sales of Insurance sector representation in the IFSC is led by €87.03m and PBT of €80.24m) and Porsche International De Lage Landen Ireland with sales of €914.64m in 2010 Financing plc (sales of €57.4m and profit of €50m in 2010) and PBT of €95.25m, followed by Eureko Captive are the second and third largest treasury operations, Management Services with sales of €849.93m and PBT of respectively. €130,000 in 2010. Cattolica Life Ltd is the third largest The fund management segment of the IFSC is led by insurance undertaking present in the IFSC with sales of Citibank Europe PLC with sales of €21.32bn in 2010 and €135.96m and PBT of €4.13m in 2010, and is ranked as the PBT of €556.79m and a ranking of sixth overall amongst 22nd company in the overall IFSC rankings. IFSC companies. Baring International Fund Managers is The insurance and reinsurance sub-sectors remain ranked No 2 in the segment, with sales of €163.49m and strong players in the IFSC and preserving their position, PBT of €2.69m in 2010, while Prime Edge Capital PLC is as well as allowing for future growth, should be a priority third with sales of €86.95m in 2010. to the policy-makers. As with the banking sector, the Currently, the IFSC is the top ranked destination growing importance of data analytics in cost manage- worldwide for servicing of specialist Ucits and hedge funds ment, risk analytics and pricing, and new product devel- with some 40pc of global hedge funds serviced out of opment means that the insurance and reinsurance sub- Ireland, and the second largest general Ucits servicing sectors of the IFSC can benefit from enhanced incentives location after Luxembourg. Activities in the funds sector to domicile into Ireland these emerging core functions. are growing across all core sectors, including equity, fixed Monte Paschi Ireland Ltd is the largest treasury income and money markets.

32 Irish Director Autumn 2012 financial services

According to Lipper’s Ireland Fund Encyclopaedia, by social partnership into the model of sectoral governance mid-2011 the number of funds serviced in the IFSC rose and oversight. to 6,412, from 6,116 the previous year. At the end of May In the US, the upcoming implementation of the Foreign 2012, the IFSC-based funds sector has reached a mile- Account Tax Compliance Act (FATCA) represents a huge stone with funds under servicing rising to over €2trn, challenge for many international operators. Addressing based on data from the Irish Funds Industry Association. this will require more than a simple compliance with the The demand for IFSC funds domiciling is rising on the US codes, but a proactive approach in strengthening foot of the global trends of on-shoring and parallel listing Ireland’s IFSC as a tax-compliant and low-cost reporting of funds. centre. The continued euro area debt crisis, of which Ireland Strengths and threats was one of the first victims, is likely to present new chal- The IFSC’s success in these areas is based on a number of lenges to the IFSC’s excessive focus on the European mar- factors. Perhaps surprisingly, given the current state of kets. It is imperative for the IFSC and Irish exporters the domestic financial services, the Irish regulatory model overall to aggressively expand their footholds in new and remained robust with regard to the IFSC operations. In often non-traditional geographies of Asia-Pacific and addition, the presence of a common law legal system and Latin America in order to reflect the ongoing re-orienta- the clustering effect of having industries operating from tion of trade and capital flows away from the traditional the IFSC base for 25 years all contribute positively to the north-south-north ones towards rapid expansion of activ- centre’s strength. ities within the middle income and emerging economies. Another core strength of the IFSC is continued support Already present and continued restrictions on some from the regulatory and policy co-ordination that is trading and investment activities – most notably relating established under the informal structure of the IFSC to shorting of securities that act to reduce efficiency of Clearing House Group (CHG), under the co-ordination of price discovery and liquidity in the markets – are likely to the Department of the Taoiseach. hinder further development of advanced, product-related This, and other trends, can support the Government trading and analytics activities in IFSC. 2011 Strategy for the International Financial Services The proposals to introduce a harmonised and transac- Industry, which aims to increase IFSC employment levels tionally restrictive financial services transaction tax by 10,000 by 2016. across the euro area member states represent a major As the IFSC marks its 25th anniversary, global financial threat to both the volumes of current activity in the IFSC services are undergoing dramatic regulatory and supervi- and to future investment in the area of professional serv- sory changes. Increased emphasis on transparency, ices exports in Ireland. accountability and proper financial and risk-prudential Continued outward migration of back-office operations governance and systems, as well as data reporting, stress- from the IFSC to lower cost locations in India, China and testing and monitoring, and a number of other more sub- elsewhere in Asia is currently impacting adversely on sectoral level reforms are welcome and will undoubtedly funds accounting and auditing functions. strengthen the sector. They will also present new oppor- Finally, emerging shortages of key talent and the rising tunities for growing the IFSC-based activities and inward cost of sourcing such talent into Ireland represent per- investment into Ireland. haps the greatest immediate threat to the IFSC growth However, some core threats to the IFSC’s competitive- and development in years to come. ness are currently emerging. These include the well- intentioned, but mal-informed desire to extend the social economy model to the specialist sector, such as Dr Constantin Gurdgiev is adjunct professor of international finance, by introducing elements of the finance at Trinity College Dublin.

Autumn 2012 Irish Director 33 new frontiers

Security systems company Netwatch is pursuing a strategy of international expansion and a continued focus on R&D to achieve ambitious growth targets, writes Sorcha Corcoran Safety

netThe presence of former Boston police commissioner Kathleen O’Toole on its board along with An Taoiseach Enda Kenny TD speaking at the opening of its Boston office last February have added “incredible layers of credibility” for Netwatch in the US market, according to co-founder David Walsh. The first female police commissioner of Boston, O’Toole moved to Ireland in 2006 and recently completed a six-year term as chief inspector of An Garda Síochána Inspectorate. “In that role Kathleen had been looking at ideas to modernise the force and make it more efficient,” says Walsh. “A mutual friend put us in touch with her and she came down to look at our operation in Carlow. She loved the culture and the accountability of what we do and found our investment in research and development unique for a services provider. “Kathleen has experience of different police forces and security councils around the world and has worked as a consultant to the Qatar government. The fact that she has joined our board has really raised our profile in the US and her experience is invaluable.” When Walsh founded Netwatch with Niall Kelly in 2003, their vision included targeting the US market one day and this became reality two years ago. “The hardest part about entering the US market is the first flight. Once we got on the ground we made progress. Winning business is very similar to our experience in Ireland. It involved knocking on doors, contacting clients in the motor industry, factories, farming – essentially starting from scratch,” explains Walsh. “We opened our Boston office last February employing 12 people. The Taoiseach came to speak at the launch simply because we wrote to him. It meant that all the top business people in Boston came, as well as the mayor and chief of police. We now have over 45 clients in the US and I expect this to be 70 live clients by the end of the year.”

34 Irish Director Autumn 2012 new frontiers

‘The hardest part about entering the US market is the first flight. Once we got on the ground we made progress’

Autumn 2012 Irish Director 35 new frontiers

In the beginning market they’re in, we carry out a detailed risk Netwatch was the first company in Ireland to combine assessment, design and specify a system for them, and specialist video transmission technologies with satellite install, maintain and monitor it. This is a unique busi- communications to provide protection solutions for ness model in the US. As in other markets, we work with clients. The catalyst for establishing the company arose clients with multiple sites and then roll the solution out from a personal experience. When a mutual friend of to all of them. The system is managed remotely from Kelly and Walsh responded to an alarm call at his busi- Carlow with engineering and sales support on the ness, he was attacked by intruders who hadn’t left the ground.” premises and, says Walsh, was lucky to escape with his While entering the US market was more of a strate- life. gic decision for Netwatch, involving a €2m investment, According to Walsh, the incident highlighted the the company previously expanded in other markets as a shortcomings of traditional security systems and in 2002 result of customer requests or approaches from individuals. the two decided to research the possibility of devising a “At first we tended to be asked to go international by proactive security system, using new video transmission customers in Ireland who had depots in the UK or were technology. expanding there. The business got so big in the UK that Ten years later Netwatch has reached an annual in 2006 we created a meaningful presence there and turnover of €11m and is employing a total of 122 people, opened an office in Oxford. We now have 500 customers mostly based at its Carlow hub. Walsh wants to double in the UK,” says Walsh. the company’s size over the next three years, pursuing a “Elsewhere, we have done some work in holiday homes strategy of international expansion and a continued in France and Spain. A barrister in Johannesburg was focus on R&D. broken into and approached an Israeli operator, which “From the beginning we aimed to be ‘rule makers put him in touch with us, and that led to a contract in rather than rule takers’. We leapfrogged the traditional South Africa. And we opened an office this year in use of PR and marketing and targeted our offering to Jordan to monitor sites in the oil and gas industry in CEOs, rather than installers. Saudi Arabia. “Netwatch is a high value proposition with the core “The technology is moving so fast that we could have principle of accountability. We have found that CEOs in a situation before long where an audio warning comes the US market love that we offer a one-stop shop serv- out on site in foreign languages, but still all managed ice so they can trust the entire supply chain. They also from our hub in Carlow.” like the managed services aspect of the offering, which eliminates high up-front costs. R&D commitment “When taking on a new customer, regardless of the Netwatch has invested around €500,000 in its R&D

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‘From the beginning we aimed to be “rule makers rather than rule takers”’

capability since it was established, including the started out. They would have the resources to develop development of a new surveillance technology this year, technology like we did but they wouldn’t have the right which can distinguish whether an alarm has been trig- people. If one of our competitors got hold of our strate- gered by human activity. gic document they couldn’t implement it because they The company partnered with a team of researchers don’t have the people we have,” he says. from Clarity: Centre for Sensor Web Technologies at “We started to look at our culture a few years ago, Dublin City University to develop the new alarm reduc- thinking about how we wanted to do business here and tion system, which uses applied imaging technologies to what we wanted to stand for. We came to the conclusion decipher the alarm images received at the Netwatch this meant developing a customer service culture within communications hub. the organisation. Further analysis showed that in order The real-time technology, developed under the to create this, the employee experience needed to match Enterprise Ireland Innovation Partnership programme, the customer experience.” analyses images for human characteristics such as Two years ago, the management team carried out an shape, size and movement, ensuring that when an alarm anonymous survey to establish how appreciated staff is triggered, intervention specialists can be sure it is an members felt and then held workshops where employees intruder and not a wild cat or urban fox. had input into company strategy. “In the early days, we took products off the shelf, but “We asked people to come up with two things we we realised seven or eight years ago that this wasn’t good always do and two things we never do at Netwatch,” enough and we should develop our own system,” says explains Walsh. Walsh. “The consensus was that the two things we always do “We had to be unique because the market wouldn’t are put the customer first and always work as a team. continue to pay sufficiently for the service we were pro- And the two things we never do are disrespect another viding as it was. We look back now and wonder how we person or hide. This is our culture, and part of it is to got away with using products off the shelf as the tech- regularly recognise and reward individuals that go nology is so advanced now.” beyond the call of duty within that framework.” Netwatch set up a dedicated R&D division, which “During the workshops it was refreshing to see how Enterprise Ireland has been particularly helpful in sup- much employees knew about our company strategy and porting, he continues. It employs eight people and Niall how their creativity and knowledge feeds into it. If you Dorr was appointed as innovation manager 16 months look at all great companies, they have a good product ago. Walsh is convinced that Netwatch’s people are its and strategy, but it’s the culture that makes it happen. unique selling point in the current market. Someone once said if you don’t stand for something, “A lot of huge guns have moved into our space since we you’ll fall for anything.”

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&Žƌ Ă ůŝŵŝƚĞĚ ƟŵĞ < ĂŶŬ /ƌĞůĂŶĚ ŝƐ ŽīĞƌŝŶŐ ŽƵƌ ƵƐŝŶĞƐƐ ĞƉŽƐŝƚ ƵƐƚŽŵĞƌƐ Ă ŐƌĞĂƚ ƌĂƚĞ ŽŶ ŶĞǁ ĨƵŶĚƐ ŝŶ ĂŶ ĂĐĐŽƵŶƚ ƚŚĂƚ ĂůůŽǁƐ Ă ǁŝƚŚĚƌĂǁĂů Ăƚ ĂŶǇ ƟŵĞ ƐƵďũĞĐƚ ƚŽ ϯϭ ĚĂǇƐ ŶŽƟĐĞ͘ tĞ ĂƌĞ ŽǁŶĞĚ ďǇ < ĂŶŬ E͘s͘ Ͳ ŚŽŵĞ ƚŽ ŽǀĞƌ ϭϮ ŵŝůůŝŽŶ ĐƵƐƚŽŵĞƌƐ ǁŽƌůĚǁŝĚĞ ĂŶĚ ƉƌŝĚĞ ŽƵƌƐĞůǀĞƐ ŝŶ ŽīĞƌŝŶŐ ĞǆĐĞůůĞŶƚ ƐĞƌǀŝĐĞ͘ dŽ ĮŶĚ ŽƵƚ ŵŽƌĞ ĂďŽƵƚ ŽƵƌ ƵƐŝŶĞƐƐ ĞƉŽƐŝƚ ĐĐŽƵŶƚ ŽƉƟŽŶƐ ĐĂůů ƵƐ ƚŽĚĂǇ͘

ΦϭϬϬ͕ϬϬϬ DŝŶŝŵƵŵ Φϱ͕ϬϬϬ͕ϬϬϬ DĂǆŝŵƵŵ dĞƌŵƐ ĂŶĚ ŽŶĚŝƟŽŶƐ ĂƉƉůǇ͘ Z ŵĞĂŶƐ ĂŶŶƵĂů ĞƋƵŝǀĂůĞŶƚ ƌĂƚĞ͘ /ŶƚĞƌĞƐƚ ƐƵďũĞĐƚ ƚŽ ĞƉŽƐŝƚ /ŶƚĞƌĞƐƚ ZĞƚĞŶƟŽŶ dĂǆ͘ /ŶĨŽƌŵĂƟŽŶ ĐŽƌƌĞĐƚ ĂƐ Ăƚ ϭϮͬϬϵͬϭϮ͘ < ĂŶŬ /ƌĞůĂŶĚ ƉůĐ ŝƐ ƌĞŐƵůĂƚĞĚ ďǇ ƚŚĞ ĞŶƚƌĂů ĂŶŬ ŽĨ /ƌĞůĂŶĚ͘ strategy in association with

Issues such as corporate social responsibility and sustainability are increasingly relevant in business. But how is performance in these areas measured? Grainne Rothery spoke to Business in the Community’s Tina Roche MARK OF RESPON 38 Irish Director Autumn 2012 in association with strategy

‘Sustainability and non-financial reporting are becoming increasingly important in today’s marketplace as a means of driving value’

Reflecting increasing interest from stakeholders in cor- customers and employees are expecting organisations to porate environmental, social and ethical performance, meet standards of social, environmental and economic organisations have become ever more focused in recent performance, the so-called triple bottom line.” years on the non-financial aspects of their businesses, but The survey showed that just 28pc of CFOs report on many are struggling to measure their activities and non-financial measures such as social and environmental results in these areas. impacts as part of their reporting cycle. Of those who In a study carried out by Business in the Community indicated their company does report on non-financial Ireland (BITCI) and Ipsos MRBI in 2010, nearly two- measures, 31pc said it was integrated throughout compa- thirds of Irish CEOs surveyed said they believe corporate ny reporting. A further 31pc said they produced separate responsibility gives them a competitive advantage. sustainability and CSR reports. However, 60pc admitted they did not have any specific “This research shows categorically that CFOs believe metrics in place to measure their corporate responsibility that there is a direct link between sustainability and activities. business performance, yet less than 30pc of companies A more recent Deloitte survey (Deloitte Q2 2012 CFO report on it in their annual reports,” says Tina Roche, Survey – September 2012), meanwhile, confirms the CEO of BITC. “This may be due to lack of measurement increasing value attached to corporate responsibility, or the lack of understanding in the power of openness with nine out of 10 CFOs who took part indicating that and transparency. This has to change if we are to restore they believe there is a direct link between sustainability trust in business, drive competitiveness and make Ireland programmes and business performance. In the research, a great place to do business.” which again was carried out in association with BITCI, Irish CFOs identified sustainability as having the Measuring success strongest impact on long-term value creation, compli- One factor that may contribute to such a change over the ance, risk management and building trust. This was fol- coming years is a new independently audited corporate lowed by cost control, revenue generation and investor responsibility standard developed by BITCI. The stan- relations. dard is designed to enable companies to benchmark their “Sustainability and non-financial reporting are becom- sustainable policies against other organisations. ing increasingly important in today’s marketplace as a When BITCI started 12 years ago, one of its objectives means of driving value,” said Ciaran O’Brien, partner, was to determine what constitutes best in class business Deloitte, who noted that the EU is currently progressing for companies that are trying to be responsible, says legislation that will require non-financial reporting by Roche. “Three years ago, some of the companies we’ve CFOs. been working with for the last 10 years started to ask “Whereas traditionally many companies believed that about a framework around this. So we worked for two sustainability issues fell within the remit of various func- years with companies and standards experts.” tions including HR, marketing or investor relations, Irish The culmination of this effort was the launch in March CFOs are now aware of the benefits of driving these pro- 2011 of the Business Working Responsibly Mark, which is grammes. Increasingly, stakeholders such as investors, independently audited by the National Standards SIBILITY Autumn 2012 Irish Director 39 strategy in association with

‘If you want to be a sustainable company you have to be able to measure the whole chain, from cradle to grave, of your products’

Authority of Ireland (NSAI) and certifies excellence in the process as we go along and engage the entire work- responsible and sustainable business practices across force,” said Brendan Cannon, corporate affairs manager, company operations. Intel Ireland. To achieve the standard, companies must complete an At the moment, application for the mark is open to all online questionnaire with over 290 questions analysing large companies – 250 employees or more – in Ireland, over 26 different indicators. This is then assessed by a regardless of whether or not they are members of BITCI. BITCI expert who will decide if the company reaches the There is an €8,000 fee for non-BITCI member companies standard to apply for third-party verification. Companies to undergo evaluation. Standard members of BITCI pay a that don't reach the qualifying standard are given a com- fee of €4,000 for evaluation, while that part of the process prehensive feedback report to help them plan a frame- is free of charge for lead members. All companies that opt work around their sustainable and responsible business to go forward for audit verification must pay a €1,100 fee strategy. to NSAI. The certification lasts for two years, after which com- There are plans to broaden the remit of the mark. panies need to reapply to retain the standing. “We’re starting with major companies and then we’re “The standard covers all aspects of workplace practices, bringing out a mark for SMEs and we’ll probably look at marketplace, environment and community, and your that next year,” Roche explains. “We want to be sure that measurement reporting,” says Roche. “So you’ll have we have all of the bases covered and we’d like to have gone looked at all those disparate parts of the organisation that through one full year and then start looking at making it are fundamental to your business and yet aren’t reported accessible for SMEs as well.” on in your financial statements. “Sustainability, customer relations, supply chain man- Changed perception agement, workplace, community and environment are According to Roche, corporate responsibility has devel- some of the areas assessed by the certification,” she says. oped over the last decade or so from a company’s com- “Having the mark will allow companies to benchmark munity investment and charity work to encompass all the their responsible practices against others and finally gives non-financial aspects of a company. a concrete definition to what excellence is in responsible “It’s quite complex because you’re dealing with every- and sustainable business.” thing from resource depletion, talent management and So far, four companies have attained the mark. supply chain to customer service and really trying to get Microsoft Ireland was the first company to be certified, the best teams you can. I think people have been strug- having completed the process in early August last year, gling to look at the intrinsic values that are there and to and was followed by ESB, CRH and Intel respectively. report that.” According to Roche, another 20 or so are currently going She believes organisations need to focus more on strat- through the process. egy, forecasts and plans in their annual reports. Paul Rellis, managing director of Microsoft Ireland, has “Everything is backward looking at the moment, where described the certification as the premier mark for the really what’s important is how you are going forward.” company to benchmark itself against its peers. “The mark Everything contained in a company’s strategic plan means a lot to our company and to our people as it means needs to be measured, she notes. “If it’s in your strategic we are in the right league,” he said after achieving certi- plan to have a talented, diverse workforce, you have to be fication last year. “Microsoft fully supports the initiative able to measure that and to put data sets around that. If, and believes in its goal to help companies in Ireland be for example, you employ 2,000 people, you need to record recognised at a global level for the work they are doing.” the gender balance, the age profile, the languages they “The Business Working Responsibly Mark allows us to speak and their educational background. If your company put in place a measurement system whereby we can is pushing knowledge and involved in innovation, people manage the process of corporate responsibility, improve will want that information. After that, what are the

40 Irish Director Autumn 2012 in association with strategy

BUILDING PERFORMANCE AND GROWTH THROUGH RESPONSIBLE LEADERSHIP

CRH Ireland was one of the first four companies to be accredited with the Business Working Responsibly Mark in 2011. Internationally, the building materials company has received a workplace practices that will attract and retain that number of awards relating to its corporate responsibility. staff? Talent management is probably one of the biggest Earlier this year, for example, it was one of just two Irish- issues in Ireland today.” heaquartered companies (Accenture was the other one) to make And it’s vital, she says, that companies are measuring it onto Ethisphere’s World’s Most Ethical Companies 2012 rank- and articulating their requirements for the future. “It’s ing. In its September 2011 review, CRH was included in the Dow important for the Government, for planning, for invest- Jones World and STOXX indices. The rating was carried out on ment, for recruiters and for people at school. If Microsoft behalf of DJSI by Sustainability Asset Management (SAM), based was to specify what they’re going to need over the next on completion of a detailed questionnaire by CRH on gover- five years, that would be so helpful for nearly everyone nance, environmental and social performance. The company has interested in having a career and for the Government also been included in the FTSE4GoodIndex on several occasions. and for trainers and the education system. That’s “As a company that takes pride in our sustainable and thought through, visible and it’s transparent and it’s responsible practices, we were keen to be one of the first com- future planning and future proofing.” panies to be certified with the Business Working Responsibly Roche also stresses the importance of being able to Mark,” says group environmental officer Naomi Cooper. pass on information and achievements in areas like waste “Working through the questionnaire gave us an opportunity to management to stakeholders. break down all the elements of our sustainability programme “Every company that starts to manage waste immedi- and establish key areas that could help the development of sus- ately gets savings to the bottom line. If you want to be a tainability on other sites. It also provided an in-depth analysis of sustainable company you have to be able to measure the our current sustainability strategy and highlighted changes or whole chain, from cradle to grave, of your products and improvements that we could make in this area. see where you can reduce on what you’re producing, use “It provided endorsement of our commitment to sustainability fewer resources and put zero to landfill. If you’re doing and provided a means for us to assess how we were doing in that and it’s a big part of your work, why wouldn’t you be comparison with other companies. It makes a significant differ- reporting it? To do this, you have to measure it. ence to be finally able to measure the effectiveness of our sus- “Trust is what this is all about. It’s about trying to build tainability strategy and to also get accredited for the work we trust and a relationship with people and it’s open and have done to date.” meaningful dialogue.”

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© 2012 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. The KPMG name, logo and “cutting through complexity” are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. innovation FROM THE OUTSIDE IN Bringing external input into the innovation process is crucial for any business that wants to stay on top of its game, according to author and strategic advisor Stefan Lindegaard. Grainne Rothery reports

Whether it’s labelled open innovation, crowd-sourcing or ready to not only get external input into the organisation, co-creation, bringing some kind of external input into the but more importantly, make that input work as part of the innovation process is vital for organisations that aspire to innovation process, and go from ideas and projects to cre- be in leadership positions in their sectors. So says ate real products and services.” Copenhagen-based author and strategic advisor Stefan The real challenge, he says, is to implement this through- Lindegaard, an expert in open innovation, intrapreneur- out the whole organisation and to not just have a few peo- ship and identifying and developing those who drive inno- ple in the innovation department having total responsibili- vation. ty for driving innovation through external input. “How do According to Lindegaard, companies are learning that you get this throughout the entire company? That’s a real they must embrace this paradigm shift in the innovation challenge and it requires a mindset change that starts from process to keep up with the competition. Those that are the top and needs support all the way down.” lagging behind, he says, will find themselves in big trouble in the coming years. Importance of communication Lindegaard favours the term ‘external input’ over open Certain things can be learned from change management in innovation. “I work with companies to make them under- this regard, he says. “Communication is extremely impor- stand it’s more about the mindset they need to embrace. tant. And communication in terms of corporate innovation It’s okay to use open innovation as a term but the real one capability is something that’s been overlooked. It used to be would actually be more something like external input. How that communication when it came to innovation was all do you bring external input to your innovation process? about the products and services, but now it’s also very “Some of the main elements would be crowd-sourcing much about the capabilities. and then open innovation, where you have more defined “This communication is both internal and external. So partnerships between companies, or between companies companies need to build excellent communication strate- and academics and entrepreneurs in which you work gies on what the goals are with the innovation efforts and together on the innovation process. People tend to put this how they’re going to approach these goals and what their in the same category and that can lead to some confusion.” expected outcomes are.” He says that open innovation, or external input, is no Lindegaard also stresses the value of starting the process longer really about the ‘why’. “Executives, open innovation with projects that will allow the organisation to learn leaders and employers kind of get it that they need to open through experimentation and sometimes even failure. It’s up their innovation efforts. Now it’s much more about the vital to pick these projects carefully, he says. “Go in and ‘how’. find some fairly small projects that allow you to get some “Something you learn is that it’s easy enough to set up a quick wins, but also allow you to learn and experiment portal where you source external input, whether it’s crowd- without risking losses that are too big.” sourcing or more idea partners; the real work happens These losses are not only financial, he says. “You can behind the scenes. That means that you are consistently really be set back if you set up a high-profile project from

42 Irish Director Autumn 2012 innovation

‘All of the successful projects out there are very dependent on one or two key people making this happen’

Autumn 2012 Irish Director 43 innovation

‘Innovation today doesn’t really happen just at the innovation unit. It has to happen at the business unit level’

the beginning and it fails, because then you’re going to have to do change management, both within the company but lots of people internally saying, ‘Well I told you this is not also around the ecosystem of partners. Even though they’re going to work in our company or in our industry’. visionary, they’re also people who can get things done and “So you need to tread a little bit carefully and make sure they can get things done through other people. You need the project you start off with can give you some good learn- strong leadership skills here; you need someone who can be ings and some successes. What you do not want in the early followed by others. You need someone who’s willing to phases is that you give good ammunition to the sceptics – experiment and is not prepared to sustain the status quo.” and there are lots of sceptics within a corporation as to whether you should open up or not. Dealing with failure “They might get it that they need to open up the innova- Lindegaard says there are two approaches organisations tion process in theory, but doing so in practice which means can take to perceived failure around implementing open different ways of working and bringing other people in to innovation. The first of these is to give up after a year when areas that normally you kept very secret, it’s going to take it doesn’t bring results. “Doing this is one of the biggest some time for employees to understand this.” mistakes you can make. It takes two to four years at least As a sector, the fast moving consumer goods industry has when it’s done successfully to go in and start having this been doing this quite well for as long as 12 years, says open innovation mindset and having some internal Lindegaard. “Procter & Gamble started out quite strong processes that begin to work and produce results. with the Connect + Develop programme, but that’s actual- “If you start this and you have some early obstacles and ly falling a bit behind. Another company that’s doing quite roadblocks and you say ‘Well then we just conclude, this is well and has also won some prizes within the industry is not something for us’, that means you’re stopping the General Mills. They have a very good dedicated team that’s progress you need. been working on this for five to seven years now. You also “You need to take the other approach which is, ‘This have Psion, which I like.” doesn’t really work but this is very much about organisa- An element that is common to all of these initiatives is tional innovation. We need to change some of the ways that they are headed up by very competent people, he says. we’re organised around this. We need to change how our “All of the successful projects out there are very dependent organisation views innovation in general. How can we on one or two key people making this happen. change things, how can we experiment with the set up we “One of the key elements is communication in a broad have in order to make open innovation work?’. sense. They know how to work with internal stakeholders. “Companies that take the option of quitting altogether Innovation today doesn’t really happen just at the innova- will start seeing that some of their competitors are sud- tion unit. It has to happen at the business unit level. So, if denly cranking out better products and services faster and you want to bring open innovation external inputs into a that they are starting to do this on a continuing basis. company, you need to have a good relationship with the They’ve opened up their innovation efforts and now they business units that are about to get this input and create have much more opportunity to innovate faster together new products and services based on this. with their partners, together with their ecosystems. “These people are very good at going in to build consen- “And now these companies start scratching their heads, sus around an idea and helping to change the mindset. saying we actually we tried this two or three years ago and They’ve spent lots of time managing internal stakeholders it didn’t work. Maybe we can try again. But at this time, and they realise that managing the internal elements is they’re already two to four years behind their competitors. more important than reaching out to external partners. It “If you make the mistake of quitting altogether when you doesn’t really matter when you reach out to lots of exter- have some early failures, you are very much in a position nal partners if your own people are not ready for it when where you will not get that important innovation leader- you bring their contribution into the company. These lead- ship position. The term we use in the open innovation com- ers understand this and they spend lots of time on building munity is about becoming the preferred partner of choice this internal understanding of how this works, how it’s within a given innovation ecosystem. And you lose that if going to happen and play out. you decide to shut down your efforts early because of some “They need to be fairly visionary because they are about early mistakes or failure.”

44 Irish Director Autumn 2012 advertorial Analyticsintheboardroom - from ‘gut feel’ to certainty

Ithaslongbeensaidthatcorporateboardsexisttoaskthequestionsexecutivesmay have overlooked. For board members, the opportunity to pose hard questions to the leaders of the business – and expect precise answers in return – will grow as organisations increasingly become data-driven, writes IBM’s Mike Baker

TWO recent New Intelligent Enterprise studies by IBM and the MIT Sloan Management Review revealed that the number of organisations using analytics to create a competitive advantage has surged57pcinjustoneyear,tothepointwhere nearly six out of 10 organisations are now differen- tiating themselves through analytics. It also highlighted that those organisations that are slow to embrace analytics are falling behind their more determined peers. Analyticscanhelpyouturnthemountainof information, both in your organisation, and about yourorganisation,intorealinsight. Software tools exist today that can help you understand and improve customer satisfaction, retain your most profitable customers and reveal new opportunities. They can also bring a level of continuous operational efficiency to your organisation by automat- ing financial processes, identifying and minimising risk, detecting and preventing fraud and improving compliance management. All of which will help you grow and outperform your competition. It’sneverbeeneasiertoreplacegutfeelandintu- ition with real-time facts to get a clear picture of where you are today, and where you might find yourself tomorrow.

Formorevisithttp://ibm.co/Lx5CqQ or contact Michael Baker at [email protected]. marketing in association with

Why reputation

rulesReputation is an increasingly important issue for organisations, but many companies fail to manage it in a structured way, writes Niamh Boyle

If the 1990s were the ‘golden age of innovation’, and the trustworthy and has a positive impact on our community.” 2000s was the ‘risk decade’, then the 2010s are all about In a year that over three-quarters of the firms meas- the reputation economy, where corporations are under ured and just about all industry sectors surveyed in the ever increasing scrutiny. Nowadays, people care more study saw their reputation scores fall, Kerry Group’s rep- about what a company stands for and how it conducts its utation increased by nearly 10 percentage points, putting business than what it sells. it in second place in Ireland. The results of the recently published Ireland RepTrak In addition, and unsurprisingly considering the vital 2012 study, which measures 100 of the largest and most part it is playing in Ireland’s robust exports, the food visible organisations in Ireland and is based on responses manufacturing industry’s reputation rose and is now seen from 3,720 members of the general public, reveal that the as the most trusted, respected and admired sector in rules of engagement have changed and that stakeholders Ireland. watch everything that companies do, from the way they Again unsurprisingly, the financial services/banking treat their staff, to their ethical behaviour and support for sector in Ireland was once more placed at the bottom of good causes, vision for the future and growth prospects. the industry scoreboard. This may not sound like partic- Stakeholders are savvy and expect companies to deliver ularly bad or startling news, but when you look at the on wider issues. The ‘corporate’ dimensions are where the global and UK banking industry scores, Ireland’s banking greatest gains are to be made in improving positive sup- sector is 13 points lower, a clear warning that much work port: governance, citizenship, workplace, leadership and needs to be done at industry level in Ireland towards performance. However, many Irish firms tend to score regaining public trust and confidence. lowest on these dimensions, in particular in citizenship and in leadership. Role of leadership For the third year in a row, Google was named the most One of the key dimensions of reputation is leadership. The reputable organisation in Ireland. Employing over 2,000 Global RepTrak 2012 study, which was published in June, people at its EMEA headquarters in Dublin, Google has highlighted the power of leadership at organisations such been operating in Ireland since 2005 and enjoys a reputa- as Apple, Microsoft, Google, BMW and Walt Disney. tion as one of Ireland’s premier employers, a key driver in Steve Jobs’ legacy continued as Apple took the top posi- building a strong corporate reputation. tion for leadership both globally and in Ireland, while Bill This reputation doesn’t just happen by accident. Year Gates, co-founder of Microsoft, took second place in both after year, Google outperforms other firms across each of studies. the seven dimensions of reputation. On receiving the When making a judgement on the reputation of an award for the most reputable organisation, John Herlihy, organisation, stakeholders looking in, and at, an organisa- who heads up the company in Ireland, said: “We work hard tion will take a view as to whether that entity has an to maintain our good reputation and each and every appealing leader, appears to be well organised, has an Google Ireland employee has played a part in this achieve- excellent team of managers in place and has a clear vision ment. Google strives to be a company that is innovative, for the organisation’s future.

46 Irish Director Autumn 2012 in association with marketing

‘Heads of state act as ambassadors with the power to build or destroy their countries’ reputations’

Interestingly in Ireland, while embarrassing, demonstrates how a Hewlett-Packard was placed in solid reputation can provide a the top 15 corporate reputa- cushion of support during times tions, the managing director of crisis. The company’s social of the company’s Irish oper- media strategy limited its repu- ation, Martin Murphy, was tational damage. However, placed among the top 10 the recent Ulster Bank cri- leaders, and recognised sis, in an industry that had for the leadership role he already lost this important has taken in strongly cushion of support, did far advocating for Ireland’s more long-lasting damage competitiveness. Conversely, to its reputation. Michael O’Leary’s abrasive and straight-talking manage- Managing reputation ment style also placed him in At a time when the public has the top 10 leaders in Ireland, lost faith in so many institu- despite the low reputational scores tions – the Government, the Ryanair received in the study. People church, media and major corpora- are clear on O’Leary’s vision for the tions – organisations must learn to organisation and with this clarity comes navigate their way around the challeng- respect. ing new world order of the reputation econ- The same is as true for nations as it is for com- omy. panies. Heads of state act as ambassadors with the power A recent global survey of 350 global corporate reputa- to build or destroy their countries’ reputations. We can tion officers (CROs) by the Reputation Institute suggests contrast Brian Cowen’s infamous Morning Ireland inter- that although most company executives now agree that view and the global concern this caused for the country, reputation is crucial to business success, only a minority with the unswerving role of the German chancellor have actually learned how to manage their organisation’s Angela Merkel, who is described as one of the world’s reputation in a structured way. most powerful leaders. Once a leader’s reputation is tar- While most respondents agreed that we live in a repu- nished, it can bring down companies and governments, if tation economy, defined as a market in which the overall not countries. In Ireland, Enda Kenny’s new leadership standing of the company matters more than the quality of style has helped to boost the country’s reputation from its product or service, few companies are ready to meet 17th place to 15th place in the latest global Country that challenge. In a world where eBay traders monitor RepTrak 2012 study. their reputation anxiously, knowing that their next sale depends upon it, many of the world’s largest enterprises Link between reputation and support are not nearly as self aware. In fact, only 31pc of respon- The Irish study indicates a very powerful link between dents even monitor reputation as a key performance indi- reputation and supportive behaviours among the general cator. public for an organisation. The 10 least reputable firms in Reputation management skills are largely undeveloped. the study are 12 times more likely to receive a negative When asked to place themselves somewhere on the response than the 10 most reputable. Those with a top 10 Reputation Institute’s five-stage reputation management reputation are four times more likely to be recommended journey, 70pc of CROs report themselves to be in the first than those at the bottom. three stages with 30pc placing their company in phases O2’s 24-hour blackout in the UK in July, while four or five.

Autumn 2012 Irish Director 47 marketing in association with

‘Our experience shows that the vast majority of organisations are, in fact, at an early stage in the way they approach managing their reputation’

However, our experience shows that the vast majority of organisations are, in fact, at an early stage in the way they The Reputation Journey approach managing their reputation. We estimate that LEVEL 5 fewer than 15pc are in phases four or five, and 85pc are in LEVEL 4 Reputation phases one to three. LEVEL 2 LEVEL 3 Reputation is is integrated At most companies, few formal reputation management LEVEL 1 Reputation Reputation a key business in strategy, processes exist. For early phase companies, CROs say Reputation is becoming is linked to driver operation their three biggest structural challenges are: management an business integrated and value ■ The company lacks a structured process for incorpo- is a new enterprise- impact across all creation rating reputation thinking into business planning. discipline wide priority shareholders ■ Actions are not aligned across departments, with different stakeholder owners doing their own thing. ■ There’s a failure to leverage existing knowledge in a way that would be relevant to each stakeholder. decisions are made and these recommendations tend to be Companies with solid reputation strategies communi- implemented by the CEO more often. cate more intensively with stakeholders than early phase Companies must take an organised approach to succeed companies, prioritising their company website (92.6pc), in the reputation economy by breaking down functional annual report (81.5pc), stakeholder events (74.1pc), silos and creating ‘reputation councils’ to help the CEO CSR/sustainability reports (66.7pc), conference sponsor- define and implement strategy; and embedding stake- ships/speaking opportunities (59.3pc) and social media holder expectations into action planning – taking a sys- tools (55.6pc) in particular. tematic and common approach to understanding the CRO status and confidence rises as their company’s expectations of all stakeholders. sophistication in reputation management improves. In early phase companies, CROs often struggle to gain the Niamh Boyle is managing director of Corporate stature they need to serve as a true guardian of their Reputations, the Irish associate of the Reputation firm’s reputation. Among the more mature companies, Institute. The Ireland RepTrak 2012 study was over 80pc say they are “fully trusted by the CEO”. Their undertaken by Corporate Reputations and the CEO is more likely to ask their opinion when strategic Reputation Institute. commercial profile

Safety net for directors

Under Irish and EU legislation, company directors are personally responsible for the actions and decisions they take on behalf of their businesses and employees from a health and safety point of view, and their own private assets are at risk if those choices are tested in the courts

UNDERSTANDING the obligations and putting in programme in place to rectify any problems and the place a safe management system is vital for all directors Effective Software system is in place. and companies, whether it’s from a moral, legal or “With RiskSafetyNet product, the big advantage for financial perspective. directors is knowing that they’re protected and compli- “As a director you’re personally liable under section ant, and of course the financial savings. But we’re also 80 of the Health and Safety at Work Act,” explains rolling in directors’ and executive officers’ liability Siobhan Kinsella, operations manager of Nifast, which insurance to protect the exposure of the individual has collaborated with Effective Software, O’Leary directors with respect to their personal exposure. It’s a Insurances and QBE to develop the RiskSafetyNet very comprehensive package to protect the risk that insurance and risk management solution. directors are exposed to and it offers much more finan- Whileitisnotpossibletoinsureagainst cial benefit and peace of mind than it will ever cost.” fines/penalties imposed as a result of a breach of health According to Kinsella, companies and directors will and safety legislation, insurance cover can be secured see the financial benefit almost from the word go. “It’s for defence costs attaching to such actions. The core not like a clawback scenario. The Nifast Gap analysis is method of protecting company owners/directors and €500 per day and we can do most of the work in a day. seniorpersonnelisbywayofensuringthatthereisa “And the Effective Software is extremely affordable. comprehensive safety management system in place, You only pay for administrative licence and you can says Kinsella, adding that a number of directors in have as many people as you wish in your organisation Ireland have already received suspended sentences logging onto to report accidents or incidents at no extra becauseofhealthandsafetyviolations. cost.So,evenifyou’reaverylargecompany,youmight “The RiskSafetyNet system uses Effective Software only be looking at €1,500 for the software system and and a cloud-based system and provides real-time trans- thatwillprovideyouwithdashboardstyletransparency parencythateverythingisuptodatefromahealthand of your entire safety system, covering your training, safetypointofview,”saysKinsella. yourcontractors,yourplantandyourcars–youcanput “Nifastdoesthesanitycheckonittomakesureit’s absolutely everything onto it.” not just ‘garbage in, garbage out’, that it is actually a safe The alternatives are potentially devastating, says system of work, so you have confidence as a director. Kinsella. “Under Section 80 of the Safety, Health and And with it in place, you know you’re fulfilling your Welfare at Work Act 2005, anyone with budgetary con- legal obligations and your moral obligations to your trol or decision-making capability is personally respon- workforce. sible for the health and safety of the workforce. “Any organisation that can clearly demonstrate a Ignorance is not a defence. And you’ll find that in con- comprehensive safety management system, a positive struction companies or waste management companies attitude and a positive safety culture should be reward- that suspended sentences have been handed down. ed from an insurance premium perspective and such We’re just short of custodial sentences in Ireland. organisations are perfectly positioned to secure the “And any research in an international context will interest from the insurance market,” says Kinsella. also suggest that a safe system of work will also deliver Under the RiskSafetyNet system, QBE is offering more efficient work practices. It gives a better employee preferential commercial insurance rates once it is satis- culture, greater active engagement, more participation fied that Nifast has carried out a Gap analysis on the and employees feeling more valued in the working envi- company’s safety management system, that there is a ronment. So it’s win-win on multiple fronts.” IoD member profile

Banking on change Christine Moran is an executive director and head of recovery at KBC Bank Ireland and has been a member of the IoD since February 2012

50 Irish Director Autumn 2012 IoD member profile

‘Always look to get involved in new and different projects or change your role within an organisation. This will challenge you, but also broaden your perspective’

Tell us about your role a director. Thirdly, recognise the importance of It involves responsibility for the direction and building a team, which can be made up of people management of the retail and commercial portfolios with different skills, backgrounds and personalities. facing financial stress at the present time. On the This can take a lot of time and effort but is neces- retail side, this currently involves implementing our sary and rewarding. And finally, work at something long-term mortgage arrears resolution strategy for you enjoy. our home loan portfolio, working with customers on a case-by-case basis. We are applying a similar approach to our commercial portfolio, although the What has been your biggest career or resolutions are different given the commercial business success? nature of the original investment. I have worked with some of Ireland’s leading projects such as the public-private partnerships and major What about your career background? financings for some of the country’s leading corpo- I studied commerce in University College Dublin rates. At the other end of the spectrum, I have and then completed the diploma in professional worked with some amazing indigenous entrepre- accounting. I went on to train with neurs who have built some fantastic local enterpris- PricewaterhouseCoopers (PwC), where I was es and have proved so resourceful in the current fortunate enough to be sent on secondments to market circumstances. Belgium and New York. I think accountancy is an excellent training as it allows you to diversify into so Can you define your leadership style? many fields and gives you a job passport to travel. I I think my leadership style has changed over time. joined KBC when it was Irish Intercontinental Bank In the past, I was very task-focused, whereas now I (IIB) and was appointed an executive director in take a much more strategic approach. I think there 2008. are fundamentals that always apply such as hard work and integrity, but ultimately it comes down to having good people around you and working as a How have the challenges of your role team. changed over the past five years? I was previously responsible for treasury and What are the challenges for directors in developing our corporate portfolio, particularly Ireland at this time? working with Irish corporates operating in Europe. The global markets continue to be uncertain and as Since the current economic crisis commenced, my a small open economy we are vulnerable to such responsibilities have been redirected towards external markets and factors. That adds to the chal- managing the bank’s wholesale funding and loan lenges of managing or overseeing a company at the portfolios. present time. The risk and compliance requirements have increased significantly and will likely continue to do so, which is welcome, but that does require a What has been your biggest lesson in director to continuously up-skill. business? I have learned many lessons: firstly, the importance Who or what are your biggest influences? of networking. It is vital to have contact points in I learned a huge amount in PwC and got fantastic other organisations, whether for business referrals training that has stood to me over time. I learned a or for sharing information and ideas. Secondly, lot from the management teams in the companies I always look to get involved in new and different worked with in terms of focus, discipline and projects or change your role within an organisation. dynamism. And my husband Paul has his own busi- This will challenge you, but also broaden your ness so he understands the challenges I face and is perspective, which is critical in terms of your role as very supportive.

Autumn 2012 Irish Director 51 wealth management

TIMEto be early Conservative Irish investors with a focus on cash-based products will need to rethink their options going forward, writes Declan Maher

52 Irish Director Autumn 2012 wealth management

‘For the last five years, Irish investors have benefited from higher than normal deposit rates on the high street and from many specialist providers’

Right now Irish people are understandably conservative risk in recent years, I’m now having conversations with when it comes to investing their money, with a strong many whose concern is the negative real returns they are preference among many for cash-based products with low seeing on ‘low risk’ overseas holdings. or no risk to capital. So when it comes to your wider portfolio, it may be the However, some of the current conditions in the mar- time to be an ‘early adopter’ and consider your alterna- ketplace would indicate that many investors are going to tives. This may not be to take your money out of your have to reconsider their options sooner rather than later, deposit accounts, but to consider constructing a more as cash may no longer deliver the returns it has in recent diversified portfolio of cash products to help manage this years. dimension of your longer term financial ambitions. Those who are successful in life and business are often Equally it may be time to begin to reconsider the longer described as ‘early adopters’ – that is, taking a new idea term dimensions of your portfolio. and implementing it early in a cycle. However, being an early adopter is never an easy approach to take: it The alternatives for cash management are numerous, requires commitment, foresight and often judgement in but broadly fit into the following categories. terms of the timing of making a change. For the last five years, Irish investors have benefited 1. Cash deposits: Yes, I’m starting with cash deposits. from higher than normal deposit rates on the high street Every portfolio should probably start with a deposit. and from many specialist providers. This ‘dash to cash’ Simply put, cash deposits should be seen as the liquid- has been very understandable in often uncertain times. ity in your portfolio allowing you to access cash when Irish investors have been looking for certainty with their and where you need it. No one knows when they will capital. As institutions have sought depositors often at need access to their cash. Today, the early adopter is inflated prices, the Irish investor has been able to gain looking at how much of their portfolio is in cash. higher returns for little or no risk. You may say to me it’s a ‘win win’ for the investor. I 2. Structured deposits: These are typically market- would say maybe it’s a short-term win, but perhaps those based investments that provide investors with the investors are storing up a longer term predicament, as it potential for higher returns than cash deposits. At now seems unlikely that such returns will continue. A their most simple they provide either full, partial or glance at the ultra low interest rate policies of the conditional capital protection with returns linked to a European Central Bank (ECB) and the Fed (and the variety of different assets. Bank of Japan before that), all 0–1pc, point to the trajec- tory that high street deposit rates will head towards. These products have been particularly popular among private clients in recent years as a way of enhancing Falling rates the return on conventional (cash) deposits. There is a The evidence is becoming clear. Deposit offers that were significant variation in the quality of structured typically paying 4pc to 5pc 12 months ago are now paying deposits on offer in the market and the best designed 2pc to 3pc. Why might this be happening? Think of it this continue to offer compelling value for money. way – a bank’s profitability depends on the difference However, in common with their conventional cash between its cost of raw materials (mostly deposit rates) deposit cousins, return potential is falling and this and its income (mostly lending rates). With greater con- trend may continue for some time. fidence in the Irish economy, as evidenced by Irish bond yields, and ECB actions helping to lower the cost of raw 3. Low risk investment funds: Increasingly, low risk materials for banks, the catalysts for a more normal envi- funds that focus on cash and bonds, with sometimes ronment are beginning to emerge, and that in turn will modest weightings to the stock market, are being con- mean lower deposit rates. sidered as part of portfolios. Such funds will tend to Ironically, for those who felt Ireland was too much of a offer marginally better return prospects for the longer

Autumn 2012 Irish Director 53 wealth management

‘When it comes to your wider portfolio, it may be the time to be an “early adopter” and consider your alternatives’

term investor faced with the potential for falling number of ‘early adopters’ adding more risk to their interest rates in conventional deposits. However they portfolios as they look for strong returns. come with risks that need careful evaluation and understanding. d. Guarantees and capital protection: Protecting cash has become a consideration in recent times. With cash Assessing cash-based products deposits, protection comes through sovereign guaran- From conversations with private clients, the first sign of tees on the variety of providers in the marketplace. a fall in high street interest rates is creating a dilemma, The Irish Government currently guarantees deposits perhaps for the first time in a number of years. With high over €100,000 through the ELG (Eligible Liabilities interest rates, caution looked well rewarded. With more Guarantee) in addition to the Irish Deposit Guarantee and more deposit interest rates beginning with a two as Scheme for those under €100,000. opposed to a four or even five, it has certainly prompted a rethink among many clients. We are now also seeing a number of institutions begin- The early adopters I spoke about earlier on are already ning to offer non-ELG deposit products, often with a onto this, but the mood is one of change in how portfolios premium price. As mentioned earlier, investors in will be constructed as the falling interest rate trend gath- structured deposits products, capital protection comes ers pace. In considering a strategy for managing your in varieties of full, partial or conditional protection cash, investors might consider the following areas: depending on the product being invested in. a. Liquidity: For many Irish investors access to funds e. Attitude to risk: Finally, the Irish are understandably can be a key consideration. The experience of Irish conservative investors at the moment. The ‘early investors with illiquid assets has been a very painful adopters’ are looking at the performance of invest- one in recent years and the lesson that liquidity has an ment markets recently and see that there is value intrinsic value has been learned at great expense. there. There is opportunity and markets will rally over Ideally, investors should have enough liquidity that the longer term. However, often emotions outweigh they can deal with planned and unforeseen events the rational thought and analysis of investing. People while maintaining lifestyle. can make mistakes such as investing too early or often too late. b. Time frame: Many investors in recent times have had an understandably short horizon. Perhaps this is a To better manage your cash it’s wise to get a good advi- new reality, but longer time frames need to be recon- sor who has the expertise to guide you and give you access sidered as part of everyone’s financial ambitions and to a complete range of options and solutions. Also, consid- goals. Some clients we speak with like to construct er the returns. At present we are seeing a decline in cash portfolios with pools of wealth that deliver on their deposit interest rates. What impact will that have on you objectives over short, medium and longer time frames and your return expectations? Finally, consider a number based on their liquidity requirements. of time frames in the construction of your portfolio to match your ambitions and financial objectives. c. Returns: As with any investment, making a return is a key consideration. As cash rates fall, it may now be Declan Maher is associate director of business appropriate for investors to consider market-based development at Bank of Ireland Private Banking investments as part of portfolios. We are seeing a Limited.

54 Irish Director Autumn 2012

knowledge centre RESEARCH & REPORTS We take a look at just some of the latest reports from our partners on the Business & Leadership Report Centre

Leading across borders Inclusive thinking in an interconnected world (Ernst & Young) The new C-suite leadership agenda: three things for leaders to do now. If Google were a person, what kind of person would it be? Business psychologist Douglas LaBier has an interesting take on that question. Google displays “the model of a psychologically healthy adult in today’s world”, LaBier wrote in an article in The Washington Post. “Its corporate culture and management practices depend upon qualities like transparency, flexibility and collaboration with diverse people; non- defensiveness, informality, a creative mindset and nimbleness, all aimed at aggressively competing for clear goal within a constantly evolving environment.”

Taxes and Incentives for Renewable Energy (KPMG) This report describes the 2012 taxes and incentives provided by 23 countries around the world to promote renewable energy from wind, solar, biomass, geothermal and hydropower. Content includes an introduction on global trends in renewables, a summary of renewable energy production in the top five countries and a brief outline of renewable energy promotion policies in the 23 countries.

Millennials at work Reshaping the workplace (PwC) The millennial generation, born between 1980 and 2000 now entering employment in vast numbers, will shape the world of work for years to come. Attracting the best of these millennial workers is critical to the future of your business. Their career aspirations, attitudes about work and knowledge of new technologies will define the culture of the 21st century workplace. Millennials matter because they are not only different from those that have gone before, they are also more numerous than any since the soon-to-retire baby boomer generation – millennials already form 25pc of the workforce in the US and account for over half the population in India.

Predictive Threat and Risk Management: Meeting the Challenges of a Smarter Planet (IBM) A smarter planet creates new possibilities, as well as new complexities and risks. Thanks to recent technological advancements, including mobile devices, cloud computing and social media, we have created an interconnected, instrumented and intelligent world in which there is virtually infinite access to information. While this has opened the door to new and exciting possibilities, it also provides an opening for new threats and vulnerabilities. From external factors such as national security and the economy – to internal factors such as insider fraud, financial risk and information management – organisations face a multitude of threats every day. These threats are increasing in number and severity, and can cost organisations millions, even billions, in losses.

Reinventing a business at risk (Accenture) Plummeting profitability, tightening regulation, increasingly informed and demanding consumers, and new and nimble competitors – a perfect storm is hammering France’s big insurers. France’s big insurers are not alone. Throughout Europe, relevance in this industry will require radical restructuring. If the situation in France is any indication, the party’s over for the European insurance industry. Recent Accenture research in Europe’s second-biggest insurance market shows that after 10 years of double-digit returns on equity and annual growth rates three times higher than GDP, a combination of powerful regulatory, demographic and competitive forces will make the next decade considerably tougher for France’s big insurers.

To download these and other reports please go to the Report Centre at www.businessandleadership.com/reports

56 Irish Director Autumn 2012 TOP 250 EXPORTERS Irish Director Report

IN ASSOCIATION WITH SPONSORED BY FOREWORD

This special report covers trends emerging from the Irish Exporters Association’s Top 250 Exporters report published in July. The listing demonstrates the strength of Irish exports overall and provides faith in Ireland’s export-led economic recovery. The continued success in attracting to 60 OVERVIEW 66 FDI AND Ireland the ‘born on the Internet’ companies Newly elected president of the ENTREPRENEURSHIP is clearly evident in the Top 250 report, with Irish Exporters Association How to make Ireland a Google expanding its sales by over 50pc and Colin Lawlor shares his hotspot for entrepreneurship Facebook entering the Top 250 for the first insights into the Top 250 list and exporting, according to time with export sales of €229m. HP Ireland MD Martin Murphy PayPal Services Europe also features for the 62 FDI first time with exports of €92m. The internet Latest data from IDA Ireland 68 LIFE SCIENCES companies are one of the drivers of the fast reflects the strength of multi- Multinationals are making growing services export sector, which last nationals in the Top 250 list major investments in Ireland year accounted for €79bn in exports and 46pc as the sector goes through a of total Irish exports. 63 ACHIEVEMENTS global transition The Top 250 publication also brings into Enterprise Ireland client focus the continued shift from dependence on companies are growing in all 70 FOOD AND DRINK the domestic market to international markets sectors and markets How Bord Bia expects its new by indigenous Irish companies, with the top Origin Green programme to five indigenous companies — Smurfit, Kerry 64 ICT drive exports and Diageo’s Group, Glanbia, Glen Dimplex and Irish Dairy Director SMB sales at Google investment in St James’s Gate Board — showing international sales of David Geraghty on why Ireland €17.3bn, but with less than 50pc of the sales appeals to technology being directly generated in Ireland. companies The Top 250 Exporters was based on the most recent available turnover figures provided by Stubbs Gazette for the IEA. Editor: Sorcha Corcoran. Production editor: Karina Corbett. Art director: Michelle Gregan. For all advertising and marketing queries, contact Sam Hobbs on +353 1 6251425 or email [email protected]

John Whelan, Irish Director is published by Business and Leadership Ltd. Tel: +353 1 6251400. Chief executive, Email: [email protected]. Address: Top Floor, Block 43B,Yeats Way, Park West Business Park, Nangor Road, Dublin 12. © Business and Leadership Ltd 2012 Irish Exporters Association

58 Irish Director Report Top 250 Exporters Autumn 2012 In the future, new trade corridors will be the norm not the novelty.

Over the next 15 years, it is forecast that exports from Brazil to China will increase by approximately 125%.* And this kind of direct trade between emerging economies is growing much faster than the global average.

HSBCTrade and Supply Chain teams are on the ground in the major and emerging trading economies speaking the languages, knowing the people and getting business done.

We can help you see both the impact and the opportunities brought about by shifting trade patterns.

For more information visit www.hsbc.ie or speak to HSBC Corporate directly at 01-635 6000.

*Varies by sector. Source: Delta Economics 2011.

Issued by HSBC Bank plc. AC22830 HSBC Bank plc, trading as HSBC Corporate & HSBC Corporate Banking Ireland, is authorised and regulated by the Financial Services Authority in the UK and is regulated by the Central Bank of Ireland for conduct of business rules. HSBC Bank plc is registered in England No. 14259. Registered Ofﬁ ce: 8 Canada Square,London, E14 5HQ, United Kingdom.The Irish branch is registered in Ireland. Registered Ofﬁ ce: 1 Grand Canal Square, Grand Canal Harbour, Dublin 2. Registration number 904230. OVERVIEW

The Top 250 Exporters list this year is a strong indication of how Ireland’s economic future can be bright, the Irish Exporters Association’s new president Colin Lawlor tells Sorcha Corcoran

Outwardsupwards and

COMPANY NAME €M SALES €M EXPORTS LOCATION CONTACT WEBPAGE LINE OF BUSINESS

1. GOOGLE IRELAND LTD 10098.00 10098.00 Dublin 01 4361000 www.google.ie Search engine 2. MICROSOFT LTD 10025.00 10025.00 Dublin 01 2953826 www.microsoft.com Software manufacturers and designers 3. JOHNSON & JOHNSON 9800.00 9800.00 Cork 021 4978500 www.janssen.com Pharmaceutical preparations 4. DELL PRODUCTS 8738.46 8738.46 Limerick 061 486036 www.dell.ie PC manufacturers 5. PFIZER GLOBAL SUPPLY 6826.50 6826.50 Cork 021 4510200 www.pfizer.com Pharmaceutical preparations 6. SMURFIT PACKAGING CORPORATION LTD 6057.00 6057.00 Dublin 01 2027000 www.smurfit.com Packaging and paper 7. STRYKER 5490.00 5490.00 Limerick 061 498500 www.stryker.com Medical equipment manufacturers 8. INTEL IRELAND LTD 5107.00 5107.00 Leixlip 01 6067000 www.intel.ie Microchip manufacturers 9. KERRY GROUP PLC 5302.20 5000.00 Tralee 066 7182000 www.kerrygroup.com Food ingredients 10. ORACLE EMEA LTD 4325.00 4325.00 Dublin 01 8031000 www.oracle.com Pre-packaged software

60 Irish Director Report Top 250 Exporters Autumn 2012 OVERVIEW

‘For Irish companies, to trade in new markets they need to look at setting up subsidiaries and operations to help them to do that’

Colin Lawlor, president, Irish Exporters Association

THE LEVEL OF growth being achieved by some of the companies in progress with new investments being made by the likes of Allergan, the Top 250 Exporters list this year is phenomenal and the trends Mylan and Cook Medical. The sector continues to rejuvenate itself.” emerging from the report are extremely encouraging, according to One of Lawlor’s priorities in his new role as IEA president is to focus newly elected president of the Irish Exporters Association (IEA) Colin on driving a realignment of exports into the higher growth markets Lawlor, commercial director for ResMed Sensor Technologies. such as India, China, Brazil and Russia. Formerly known as BiancaMed and a recent winner of the “We continue to be over-dependent on the traditional trading mar- Innovation of the Year award, ResMed is the company behind the kets of the US and Europe and need to continue to focus our export- world’s first wire-free sensor for measuring sleep and breathing in the ing efforts on higher growth markets,” he says. home. “Overall last year, key Asian markets only accounted for 4pc of Irish “Looking at the Top 250 list, the development in the services sector exports and we know that by 2030 these markets will represent about overall is very positive – at €79bn in 2011, it accounts for 46pc of total 50pc of world trade – 90pc of the growth over the next number of exports. Within that there is huge growth in a number of sectors, such years will come from high growth markets so we have to push much as financial services, but what is particularly encouraging is the ‘born harder to drive the Irish presence in these countries.” on the internet’ category, with companies such as Google and PayPal Lawlor was on a private sector-led business mission to India in coming into the numbers in a significant way,” says Lawlor. September where 40 Irish companies got to meet 70 Indian compa- “We should also be encouraged by the strong progress being made nies as well as state bodies. “The aim of the mission was to highlight by the top five indigenous exporters – Smurfit, Kerry Group, Glanbia, the opportunity that exists for Ireland. India’s total exports to the EU Glen Dimplex and the Irish Dairy Board – whose exports amount to a amounted to €39bn in 2011 and the EU is its No 1 trading partner. total of €17.3bn. Less than half of their business is now in Ireland, mak- Ireland’s exports to the EU are €95bn. ing them all truly international exporters.” “The message we want to get across to India is ‘We know how to The emerging trend of outward direct investment evident among the open European markets for you and should be the location of choice Top 250 Exporters is very important, according to Lawlor. for you’. The reality is that EU exports to India were €40bn last year, “For Irish companies, to trade in new markets they need to look at while our trade to the market was only €765m – to put it into perspec- setting up subsidiaries and operations to help them to do that. Total tive we do more trade with the Czech Republic. outward investment amounted to €261bn in 2011 versus foreign direct “We have a huge amount to bring to the table in markets such as investment of €185bn, which shows that Irish companies are moving India and China, but they don’t know enough about us and there aren’t forward in this way,” he notes. enough companies pushing ahead there. This will continue to be a “The report shows strong progress in all key sectors in Ireland. Irish theme for the next couple of years. Don’t be fooled either by the short- companies continue to progress in the agri-food sector and the ICT term reduction in growth levels, which are tailing off in China and India sector is showing strength even though it was hit for a period of time lately. In the long-term they will still outpace growth in the developed because of a decline in computer hardware manufacturing. Sales were world.” back up last year and software continues to drive that growth. He points out that the Government-led trade mission to India in “While issues around some drugs going off patent recently have had 2011 was the first one in five years and believes Ireland needs more some impact on the life sciences sector, it is still showing strong resources on the ground.

Autumn 2012 Irish Director Report Top 250 Exporters 61 FDI

Foreign direct investment is playing an important part in Ireland’s recovery, and all the signs point to this trend continuing Investing in our future

OVER 5,000 JOBS were announced by IDA client companies in the No 1 in the world for skilled labour. first six months of this year, continuing the strong flow of foreign direct IDA’s 2011 annual report shows there are now almost 146,000 peo- investment (FDI) recorded in 2011. ple working directly in over 1,000 IDA client companies. Last year saw The jobs are in a range of sectors including IT, life sciences, digital the creation of over 13,000 new jobs with the best net jobs increase media and international financial services. PayPal, Apple and Mylan since 2002 of over 6,000. were among the largest projects announced. Many multinationals are continuing to recruit in a range of areas There has been a notable increase in capital intensive projects in including IT, languages and sales and marketing. recent times, especially in the pharmaceutical and ICT areas. A num- Commenting on the outlook for the second half of the year and ber of recent investments have commenced or will shortly commence, beyond, IDA CEO Barry O’Leary says: “There are challenging head- leading to the construction of over 1,500,000 sq ft of new buildings, winds facing IDA and Ireland with little growth in European demand, giving a much needed boost to the construction industry. moderate growth in the US and a slowdown in the economies of China Despite the global challenge of patent expiry in the pharmaceutical and India. Due to a lack of domestic demand and budget deficits many sector, Ireland continues to perform strongly in the sector, targeting countries are ramping up their attempts to attract inward investment. both the pharmaceutical and the bio-pharmaceutical segments in par- “However, IDA remains optimistic that Ireland can continue to win ticular. Recent announcements have included Eli Lilly, Amgen, Allergan significant FDI, building on our strong track record. and Abbott. “IDA targets a number of sectors that will continue to grow even in Improvements in competitiveness in areas such as office rents, con- a globally challenging environment. These include IT, digital media and struction costs, unit labour costs and business services in recent years life sciences. Even in areas of low or no growth, opportunities will arise have helped boost Ireland’s FDI performance. in sectors such as the consolidation of technology and operations Ireland continues to rank strongly in the availability of skilled staff hubs in global financial institutions and consolidation of operations in with the 2012 IMD World Competitiveness Yearbook placing Ireland a number of other sectors.”

‘IDA remains optimistic that Ireland can continue to win significant FDI, building on our strong track record’ Barry O’Leary, CEO, IDA

62 Irish Director Report Top 250 Exporters Autumn 2012 ACHIEVEMENTS

‘One of the most interesting things about Enterprise Ireland client company exports is that traditional sectors, which have come through a tough time in terms of Julie Sinnamon, executive director of global business competitiveness issues, are doing well again’ development, Enterprise Ireland Globally winning Despite the downturn, Enterprise Ireland client companies are reporting exports in excess of pre-recession level, says Julie Sinnamon, executive director of global business development at the organisation

EXPORTS BY ENTERPRISE Ireland client companies showed growth “The engineering sector achieved 30pc growth in export sales, in all sectors and markets in 2011, and there is a higher level of con- higher than in the domestic market. Food had another good year in fidence among Irish companies about entering new markets, accord- 2011, with growth of over 10pc and this is continuing into this year.” ing to Julie Sinnamon, executive director of global business develop- Sinnamon was speaking during International Markets Week ment at Enterprise Ireland. (September 17–21), which is billed as Enterprise Ireland’s “single The agency’s annual report published in June shows that exports largest client event and a significant part of Enterprise Ireland’s strat- reported by Enterprise Ireland client companies, at €15.2bn for 2011, egy to drive Irish exports to support business growth and jobs in exceed the pre-recession record levels of 2008. Ireland”. The report also shows employment levels in client companies sta- “Held each year in the RDS, the week involves bringing back bilised in 2011 with full-time employment reaching 141,228 – a simi- Enterprise Ireland staff from our 31 overseas offices. It is a great lar number to 2010. opportunity for companies to efficiently gain insights without having The positive trend is set to continue as an Enterprise Ireland client to fly to markets such as Brazil, China, India and the Gulf,” Sinnamon survey released this month shows that almost 90pc of respondents explains. believe they will increase their exports in 2012 and over 75pc say they “Companies can hold individual meetings with staff members or we will increase their employment over 2012. can arrange a meeting with a number of representatives so they can “Emerging markets are growing faster than others at the moment. compare and contrast the relative attractiveness of markets. It is like Brazil, for example, recorded 60pc growth for client companies, a speed dating event, where the bell goes every 15 minutes.” although this is from a low base. We are definitely seeing a higher level This year over 600 Irish companies are having over 2,000 separate of confidence in these markets than a year ago,” says Sinnamon. meetings. “There is a great buzz from the companies at the event and “Irish companies realise that they are not for a quick buck, that they the feedback from meetings is very positive so far. We are noticing a need to be committed and if they have the right innovative products much higher level of confidence in exporting compared to last year.” the potential is there. Enterprise Ireland says that so far this year it has arranged for over “One of the most interesting things about Enterprise Ireland client 560 international buyers to travel to Ireland to meet Irish companies company exports is that traditional sectors, which have come through and assisted Irish companies in winning over 510 new customers a tough time in terms of competitiveness issues, are doing well again. across 46 countries.

Autumn 2012 Irish Director Report Top 250 Exporters 63 David Geraghty, ICT director SMB sales, Google Google’sFollowing lead A new breed of ‘born on the internet companies’ are growing from Ireland and Google is the No 1 exporter from here in the Top 250 list. Director SMB sales at Google David Geraghty talks to Sorcha Corcoran

THE SUCCESS OF Ireland as an information and communications headquarters in Ireland in 2003 with 100 staff and we now employ over technology (ICT) exporter is its ability to recognise how the industry is 2,000 people here in sales, engineering, legal, finance and human developing and to attract global players at each stage of the industry’s resources,” says Geraghty. development here, according to David Geraghty, director SMB sales, “We operate the largest in-country sales operation, supporting cus- Google. tomers in over 45 countries across the globe. We help businesses – “Ireland is fast developing a reputation as the internet capital of small and large – to take advantage of the internet and grow their busi- Europe. If you look at the companies that have followed Google’s lead nesses using Google products such as AdWords and AdSense. in establishing operations in Ireland it is clear to see why,” he says. “Consumers are moving online in their millions and businesses must “Facebook, Zynga, Gilt, LinkedIn, eBay and PayPal all have opera- follow their customers if they are to succeed and grow. Many busi- tions in Dublin, while Apple and Amazon are based in Cork. This is a nesses are seeing the direct benefit of an online presence – their prod- great reputation to have and is one which Ireland can continue to cap- ucts are on sale 24/7 to customers far beyond their physical location.” italise on. The cluster of these global companies located in Ireland will Ireland has been a successful location for Google, according to also help the indigenous digital economy to grow.” Geraghty. “Many of our employees are young and international as we According to the Irish Exporters Association annual report, the ICT need native language speakers in our sales operation. Dublin is a pop- sector is one of the most vibrant in terms of exports and now accounts ular and vibrant city, which enables us to attract the skilled employees for 8.5pc of manufacturing exports. we need to work with us.” In the 1980s a lot of hardware manufacturers located here and they Google’s export turnover from Ireland increased by 55pc from were followed by software manufacturers, notes Geraghty. €6.5bn in last year’s Top 250 listing to €10.1bn in the current year. “In the late 1990s into 2000, internet-based companies were target- “Google continues to invest in Ireland and as our chairman Eric ed by IDA Ireland and the Government to invest here. Having a strong Schmidt said previously, as Google grows, Ireland will also benefit. base of global companies gives Ireland an edge when new technolo- Last year we completed the acquisition of our two EMEA headquarter gies emerge. We have seen this most recently with cloud computing.” buildings on Barrow Street and acquired Google Docks, the tallest Since Google’s establishment here it has grown the number of mar- commercial building in Dublin, also on Barrow Street. kets it supports from Ireland and now helps businesses in more than “Other investment included €75m in our new data centre, which is 45 countries across the globe to grow their business online. nearing completion. All of these investments support our business “Google established its European Middle East and Africa (EMEA) here and will support any new growth opportunities which emerge.”

64 Irish Director Report Top 250 Exporters Autumn 2012 ICT A DECADE OF EVOLUTION

In the Top 250 Exporters report published in July, chief executive of the Irish Exporters Association John Whelan noted how the ICT sector in Ireland had changed dramatically in the past 10 years. “Ten years ago ICT exports from Ireland were made up mainly of hardware products from Dell, IBM and Apple, and a much lower level of export sales of software products,” he said. In 2002, the Central Statistics Office statistics showed exports of hardware totalled €30.2bn and software exports €10bn. However, in the decade computer hardware manufacturing has been reduced very substantially, with companies such as Dell, IBM and Apple changing over their Irish operations to software production centres. At the same time, we also have the rapid growth of internet companies globally and the significant success of IDA Ireland in attracting these companies to Ireland. In 2011 ICT exports from Ireland were again at €40. 2bn, but this time made up of €8bn hardware exports and €30.2 billion software export sales. “It is striking to see that our largest exporter is now Google, with exports from Ireland of €10.1bn, just beating COMPANY NAME €M SALES €M EXPORTS YEAR END the exceptional Microsoft export performance,” said 1. GOOGLE IRELAND LTD 10,098 10,098 31/12/2010 Whelan. 2. MICROSOFT LTD 10,025 10,025 30/06/2011 “But there is now a new breed of fast-growing ICT 3. DELL PRODUCTS 8,738 8,738 29/01/2011 companies such as Facebook, EA Games, LinkedIn, Gilt 4. INTEL IRELAND LTD 5,107 5,107 31/12/2011 Groupe, Big Fish Games, Quest Software, Marketo and 5. ORACLE EMEA LTD 4,325 4,325 31/05/2011 ZeniMax operating from Ireland, all adding to the sector’s 6. KINGSTON TECHNOLOGY INTL LTD 3,291 3,291 31/12/2010 export growth.” 7. SANDISK INTERNATIONAL LTD 2,517 2,517 02/01/2011 These companies, alongside investments from existing 8. IBM IRELAND LTD 2,512 2,512 31/12/2011 companies based in Ireland such as Dell, EMC, HP and 9. APPLE COMPUTER LTD 1,900 1,900 30/09/2011 Microsoft in the cloud computing area, have secured the 10. ANALOG DEVICES 1,795 1,795 31/10/2011 long-term stability of the sector, Whelan believes. 11. ADOBE SYSTEMS SOFTWARE IRELAND 1,536 1,536 31/11/2010 “It is a very positive indication of the attractiveness of 12. LUCENT TECHNOLOGIES INTL SALES LTD 1,500 1,500 31/12/2011 Ireland for the sector when we learn that Facebook CEO 13. SYMANTEC LTD 1,436 1,436 01/04/2011 Sheryl Sandberg’s experience of Dublin, while growing 14. VMWARE INTERNATIONAL LTD 1,052 1,052 31/12/2010 Google’s global footprint, encouraged her to opt for the 15. AVAYA INTERNATIONAL SALES LTD 806 806 31/12/2010 city again when she was expanding Facebook,” he added.

Source: StubbsGazette and based on latest Companies Office returns of annual accounts

‘Google continues to invest in Ireland and as our chairman Eric Schmidt said previously, as Google grows, Ireland will also benefit’

Autumn 2012 Irish Director Report Top 250 Exporters 65 FDI AND ENTREPRENEURSHIP

Entrepreneurial renaissance A combination of foreign direct investment and indigenous enterprise is the key to driving Ireland’s economy, according to HP Ireland chief executive Martin Murphy

AFTER THE FARMLEIGH II conference last year HP Ireland managing improves but there is need for further improvements. Ireland is by no director Martin Murphy initiated a piece of internal analysis that means the lowest cost location, but certainly is in the mid quartile,” benchmarked the Republic of Ireland against five potential competi- notes Murphy. tor investment destinations – Northern Ireland, Poland, Singapore, Regarding infrastructure, Murphy says an effective and efficient Texas and Costa Rica. transportation system is important to HP so employees in the greater Looking at Ireland across the four criteria of labour quality, labour Dublin area can commute to and from work easily. cost, infrastructure and stability, he says that the results were “infor- He adds that the National Broadband Plan announced recently, mative if not surprising”. promising to facilitate the provision of high-speed broadband to Murphy presented his findings in a speech he made recently at a every home and business in Ireland, is essential. Dublin Chamber of Commerce event under the title ‘Winning invest- “To be a leader, our infrastructure must outpace international ment – making Ireland a global hotspot for exporting and entrepre- developments. We have engineers in Ireland collaborating on neurship’. research and development [R&D] with colleagues in the US. It’s Starting with labour quality, Murphy says Ireland scored well in the essential that broadband infrastructure is to the highest possible analysis with a top 25pc rating on most categories, including the standard as it means we can develop solutions in a virtual environ- quality of the educational system, quality of management schools, ment. The quality of broadband is relevant to any company conduct- quality of science and maths, and our capacity for innovation. ing R&D here.” “I make no apology for continually seeking to have our educational Taking a broader view, Murphy sees the discussion around R&D system reformed in areas like maths and languages because these and the package of offerings will possibly be as important as corpo- features feed into the way in which Ireland is ranked.” ration tax into the future in terms of attracting foreign direct invest- When it comes to labour costs, HP found Ireland had seen a sig- ment (FDI). nificant reduction in the cost of new hires in recent years. “This is a “Ireland scores well across the headings of corporation tax rates, very positive development. It is imperative that wage competitiveness R&D supports, labour relations, security and risk management. The

66 Irish Director Report Top 250 Exporters Autumn 2012 FDI AND ENTREPRENEURSHIP

‘Ireland is as good as, if not better than, the competition as an investment location’

Martin Murphy, managing director, HP Ireland

fact that Ireland ratified the fiscal treaty with Europe also sends a “With the traditional business model, companies tend to establish positive message back to the corporate world,” he says. in geographical areas close to target customers. The cloud offers a “In summing up the outcome we found that Ireland’s overall pack- huge opportunity to Ireland, as it means companies don’t have to be age compares well – but the reality check here is that competition for close to customers. FDI is very, very finely balanced, and should never be taken for grant- “It allows them to export their product or service from an Irish ed. base. This means we can build companies here that service global “Ireland is as good as, if not better than, the competition as an customers. The challenge is to understand customer behaviour and investment location. The product needs to be constantly looked at know more about customers we’ve never met. There is a huge mar- and improved – anything that sets any of these dials back must be ket for data analytics and Irish companies could leverage the cloud robustly resisted and anything that gives Ireland the extra edge to take advantage of that.” should be strongly supported.” Against this backdrop, Murphy has some ideas on how we could While Ireland has created what Murphy describes as “a fantastic really activate the entrepreneurial ethos around the FDI platform. FDI environment”, we are missing an opportunity to leverage that in Although Ireland has improved competitiveness by a factor of terms of start-ups and spin-offs flowing from this. “FDI is a tremen- 10–15pc in recent years, it needs to achieve the same again in the dous platform from which to drive indigenous growth. The combina- next two years, he says. “We simply have to hold the line on com- tion of FDI and indigenous enterprise is the Holy Grail and the key to petitiveness – the cost of doing business has to come down.” job creation and future prosperity. I am in no doubt that Ireland needs Innovation is a common denominator in the OECD top 10 an ‘entrepreneurial renaissance’ to drive our economy going for- economies and, in Murphy’s mind, a leading indicator for an econo- ward.” my on a successful path. Young companies, he believes, have a strong capacity to drive “Ireland simply has to learn to commercialise innovation outcomes new jobs. In Ireland less than 6pc of new jobs are created by com- and translate them into jobs. In the Government’s Jobs Strategy I panies less than five years old, whereas in the US, companies rang- would set a target of a single start-up/spin-off for every three FDI ing from one to five years old account for more than 60pc of new players in Ireland annually,” he says. jobs created in the economy. “Industry partnerships are key to drive innovation at all levels of “There is real potential to close this gap that we’re simply not cap- education. I think we should also recast transition year into an ‘entre- italising on. Part of this Government’s strategy is that ‘by 2016 preneurship/enterprise’ year and immerse pupils at this level with the Ireland will be the best small country to do business in’. I’m suggest- entrepreneurship ethos.” ing we stretch that so that by 2016 Ireland will be the best small This year, HP and NUI Galway launched the first master’s of sci- country in which to build a business,” argues Murphy. ence degree in cloud research in Ireland. Murphy says those that Another Government ambition is to leverage new technology complete this course will be “industry ready”, regardless of whether trends in the sector HP is operating in, such as cloud computing. they come to work in HP or set up on their own. “We have got to develop and drive that. Cloud computing is a When it comes to venture and innovation funding, Murphy says wave. What’s critical is that we’re not just saying we want to build a Ireland has made good progress in seed capital options, but there is cloud capital, but rather that we really understand what that means. a huge gap in terms of larger investments. The cloud is a platform, like the internet, around which business will “Enterprise Ireland has been the dominant ‘investor’ in the market form and innovate. We should be spawning myriad small businesses for too long. The game changer here will be to move venture and from this platform. innovation funding into the private sector.”

Autumn 2012 Irish Director Report Top 250 Exporters 67 LIFE SCIENCES

A life less ordinary Patent expiration is causing a realignment of the pharmaceutical sector worldwide, but the life sciences sector continues to perform well in Ireland

COMPANY NAME €M SALES €M EXPORTS YEAR END 1. JOHNSON & JOHNSON 9,800 9,800 31/12/2011 2. PFIZER GLOBAL SUPPLY 6,826.5 6,826.5 31/11/2011 3. STRYKER 5,490 5,490 31/12/2010 4. BOSTON SCIENTIFIC IRELAND LTD 3,945 3,945 31/12/2010 5. FOREST LABORATORIES IRELAND LTD 2,400 2,400 31/03/2011 6. GILEAD SCIENCES 2,067 2,067 31/12/2010 7. ASTELLAS IRELAND CO LTD 1,997 1,997 31/03/2011 8. SWORDS LABORATORIES 1,801 1,801 31/12/2011 9. BENEX LTD 1,059 1,059 30/09/2010 10. GENZYME IRELAND LTD 980 980 31/12/2010 Source: StubbsGazette and based on latest annual returns to Companies Office

68 Irish Director Report Top 250 Exporters Autumn 2012 LIFE SCIENCES

‘Ireland is important in terms of the manufacture of active pharmaceutical ingredients, but also finished products’

Dr Niall Stobie, head of the life sciences division, IEA

WHILE THE PHARMACEUTICAL sector in Ireland is going through a market launching of new medicines onto the market. This would tend to period of readjustment as patents expire on blockbuster drugs, multina- level the playing field between companies that develop the new drugs tionals are continuing to invest in their operations here and the life sci- and those that copy existing products, removing the cliff patent that is ences sector overall is still performing strongly. currently impacting the industry,” the IEA notes in its review. Dr Niall Stobie, head of the life sciences division at the Irish Exporters Nevertheless, all of the top 15 companies in the life sciences sector in Association (IEA), notes there have been significant investment Ireland have moved up the Top 250 Exporters rankings and a lot in the announcements this year from Allergan, Mylan, Amgen, Cook Medical, list have had a range of new drugs coming out. Abbott, Eli Lilly and Merit Medical. “Pfizer Global Supply is waiting on Federal Drugs Administration “Ireland is important in terms of the manufacture of active pharma- [FDA] approval on a selection of new drugs, such as tofacitinib for the ceutical ingredients, but also finished products. Both from a leading- treatment of arthritis, which could generate significant revenue moving edge and generic point of view there is still investment coming in, which forward and Gillead’s new HIV prevention drug got approval this year,” shows the faith multinationals have in the Irish economy. says Stobie. “Mylan, for example, is Ireland’s largest generics pharmaceutical man- Now with five sites in Ireland, MSD has repurposed its site in the ufacturer and is adding more than 500 new positions to its operations in Ballydine, Co Tipperary facility in the past five years to adapt to changes Dublin and Galway as part of an annual investment of up to €76m over the industry is facing. the next five years.” “We have moved away from conventional manufacturing and now In 2011 pharmaceutical exports were €56.7bn and medical devices operate in the research and manufacturing space, focusing on a new accounted for over €10bn in exports, according to the IEA. candidate products pipeline, which will be launched from this site,” “The sector has reached a plateau as it goes through a period of explains Ballydine’s general manager David O’Connell. adjustment and we have not seen significant growth in 2012. Our fore- “We have about 10 new candidate products under development with cast for the full year is €55bn for pharmaceutical exports,” says Stobie. products ranging from treatment for HIV, Hepatitis C, diabetes, urinary The IEA’s half-year review stated that many of the major Irish-based incontinence and insomnia to osteoporosis. exporters of pharmaceuticals and active chemical ingredients for the life “Our target is to be best in class in all of our franchises, providing sig- sciences industry are facing sustained price pressure, as patent pro- nificant patient impact for the world population. Considering that Merck tected markets are now open to generic manufacturers who are now worldwide has 20 candidate products in the late stage pipeline globally, free to compete without the overhead burdens of the original producers. we have a significant chunk here in Ballydine. This will have a major impact on total Irish exports values in the cur- “We are finalising the development of a breakthrough in insomnia rent year as the sector represents over 50pc of manufacturing export treatment, which we submitted for FDA approval last month.” sales from Ireland. Now employing 450 people, the Ballydine site is MSD’s largest single However, as patent protection is by market, the impact will vary investment outside the US, representing a gross book value investment according to the export country destination. Hence, in the half-year 2012 of €800m since it was established in 1976. figures, exports to the US were mostly impacted as the early patent reg- “From an investment point of view in Ireland, MSD is largely focused istrations were made there and hence the patent protection has come to on Ballydine, Brinny and Carlow in recent years,” says O’Connell. an end earliest there. “An Taoiseach Enda Kenny TD announced a €100m investment in the The pharmaceutical exports to the US fell by 30pc in the first half of R&D facility in Ballydine last September. Involving an investment of 2012, but exports to the EU continued their long-term trend growth of €220m, the Carlow site is brand new and still finalising its start-up phase, 6pc. with production expected next year. It will focus on the formulation and “The industry has been calling for more streamlined approval processes, filling of our sterile products. At Brinny €28.6m is currently being invested in particularly within the EU, to enable a lower cost in the development and the upgrading of technology and production facilities on the site.”

Autumn 2012 Irish Director Report Top 250 Exporters 69 FOOD AND DRINK

Back to our

Sorcha Corcoran speaksroots to Bord Bia’s chief executive Aidan Cotter about a new initiative that aims to make Ireland a world leader in sustainability

SOME 57 COMPANIES, accounting for over 50pc of total food and energy, waste management, water, animal welfare and community drink exports from Ireland, have already signed up to the Bord Bia involvement,” Cotter explains. Origin Green initiative launched in June, according to Bord Bia chief “The plans will be verified by an independent third party and executive Aidan Cotter. retained and monitored by Bord Bia on an annual basis. The pro- Origin Green is a new programme designed to capture what Irish gramme is designed to make Ireland a world leader in sustainability. food and drink stands for and what sets us apart in the international “Our goal is that by 2014, 75pc of food and drink exports will be marketplace, with a particular focus on sustainability. sourced from the Origin Green programme, reaching 100pc in 2016,” “Ireland enjoys a strong and enduring international reputation as a says Cotter. source of natural, high quality food, drink and ingredients,” says Cotter. At farm level the programme involves broadening out quality assur- “With the launch of Origin Green, the industry can now effectively ance schemes to include environmental measures. “Having started in begin to add proof and commitment to its sustainability claims, and 2011, at the end of this year we will have calculated the carbon foot- provide the evidence that retailers and foodservice providers around print of 30,000 beef farms and we will be in a position to roll out a sim- the world are looking for.” ilar programme for 18,000 dairy enterprises at the beginning of next At the heart of Origin Green is a sustainability charter that will com- year,” continues Cotter. mit participants to engage directly with the challenges of sustainabili- “We are also planning to roll out the programme across other types ty: reducing energy inputs, minimising their overall carbon footprint of farm enterprises and will be adding in measures around biodiversi- and lessening their impact on the environment. ty and water.” Companies sign up to developing and implementing an action plan. Cotter expects Origin Green to support and drive the continuing This will set out clear targets in the key action areas identified by the strong performance of Irish food and drink exports, as evidenced in company, which will then be required to commit to deliver a progress the Top 250 Exporters list published in July. report on an annual basis. “There is a strong presence of food and drink companies in the Top “We are asking all food and drink manufacturers to create a three to 250 list and the sector is very resilient, notwithstanding the challenges five-year sustainability plan covering key areas such as emissions, in the economic environment,” he says.

70 Irish Director Report Top 250 Exporters Autumn 2012 FOOD AND DRINK

“There is an underlying strong growth in demand for food around the world, which is supporting the growth of COMPANY NAME €M SALES €M EXPORTS YEAR END Irish food and drink exports. Commodity price increases 1. KERRY GROUP PLC 5302,2 5000 31/12/2011 eased off in the second half of 2011 and much of this 2. GLANBIA PLC 2671 2400 03/01/2011 year, although they still remain at relatively high levels, 3. THE IRISH DAIRY BOARD CO-OPERATIVE LTD 1978 1978 31/12/2011 particularly in areas such as grain, corn and soya 4. KELLOGG EUROPEAN GROUP 1402 1402 01/01/2011 beans.” 5. ARYTZA 1257 1000 31/07/2011 Last year Irish food and drink exports grew by 12pc 6. QUEALLY GROUP 1000 1000 31/12/2011 overall to reach revenues of €8.64bn. Breaking this 7. IRISH FOOD PROCESSORS LTD 950 950 31/03/2011 down, they climbed 16pc to continental Europe; 20pc to 8. ATLANTIC INDUSTRIES 800 800 31/12/2011 international markets outside Europe and 33pc to Asia. 9. PEPSI-COLA MANUFACTURING (IRELAND) 800 800 31/12/2011 “Irish food and drink exports to China went up by 10. DIAGEO 1580 770 31/12/2011 50pc last year. There was a clear trend of companies Source: StubbsGazette and based on latest annual returns to Companies Office reaching out into the global marketplace, while the UK, which is still by far our single largest market, showed an increase of 6pc,” notes Cotter. are following up with other healthy dairy products. The oat-based drink “The Irish food industry has always had a strong international orien- is part of the next wave.” tation with significant export reach, selling into more than 170 coun- Collum is on the steering committee for a new initiative led by the tries around the world. The indigenous companies in the Top 250 Irish Exporters Association, ‘Food Chains for Competitive Advantage’, Exporters list are in excellent condition.” which is using funding from Europe to help drive innovation within the Irish SME food sector. New product development Supported by Bord Bia, the programme provides a complete pack- A Bord Bia survey at the end of 2011 revealed that Irish food and drink age of assistance through delivery of tailored one-to-one mentoring companies are growing business through new product development, and workshops, which will lead to the development of new products in securing new markets/consumers and extending their customer mar- a range of Irish and Welsh SMEs. ket base. “It looks at how to unlock the barriers faced by Irish food SMEs and One of the companies in the Top 250, Glanbia, is a case in point. support the SME fraternity to grow. One of these is lack of leadership. Most of its exports are of bulk dairy ingredients, but its consumer prod- The CEO has to take innovation seriously, not treat it as something to ucts division is currently embarking on an exporting programme. be looked at on a Friday afternoon. It needs to wash through the whole “We are launching new products in October in the UK and Europe organisation,” says Collum. that tick the health and wellness box. One of these is a world-first oat- “It’s important to remember that most innovation fails – 90pc of new based drink. It has the same nutritional profile as porridge. We have products fail – so the odds are stacked against you. Some SMEs are presented the concept to consumers and the reaction has been posi- coming up with one product innovation a year and expecting that to tive,” says Joe Collum, international business development director for win. You need several work streams to help you to succeed better than Glanbia consumer products. your competitors.” “Our product innovations are all about the very indulgent or very The Food Chains for Competitive Advantage initiative is being show- healthy areas of dairy and food. We avoid the middle ground. We cased at the SHOP trade fair from 25–27 September at the RDS in launched WeightWatchers butter and spread into the UK last year and Dublin. ‘There is an underlying strong growth in demand for food around the world, which is supporting the growth of Irish food and drink exports’

Aidan Cotter, chief executive, Bord Bia

Autumn 2012 Irish Director Report Top 250 Exporters 71 FOOD AND DRINK

Arthur’s way From the agri-sector to the export and tourism markets, Diageo plays a huge role across the entire Irish economy. Sorcha Corcoran reports

an additional 19,000 jobs are supported indirectly.” Diageo also supports the rural economy, notes Armstrong, as it is the single biggest purchaser of barley in Ireland, using 13pc of what is grown here, mostly in the in the brewing of Guinness, but also in the distilling of whiskey. It uses the cream from 275 million litres of milk from Irish cows in the making of Baileys. “In total, Diageo spends €270m a year in the rural economy, which supports around 6,000 farming families,” notes Armstrong. The domestic market remains fundamentally important to Diageo as a necessary foundation to export from. IF YOU WERE to take all of the Guinness being exported from St “If you don’t have a strong domestic market, you don’t have a strong James’s Gate in Dublin in 2011 in terms of containers, and piled them platform from which to grow. Ireland is a big, but challenging, market one on top of the other, it would be four times the height of Mount for Diageo, having declined in total by 5pc last year in terms of rev- Everest. enue. But Guinness continues to be the best selling beer in Ireland, This is according to Paul Armstrong, supply chain director at Diageo maintaining a strong value share of 32pc of the on-trade market.” Europe Beer Supply, who says that Diageo’s global drinks brands, Diageo demonstrated its commitment to the Irish base in January, which include Guinness, Baileys and Bushmills, generate a total of with the announcement that it is investing €153m in the construction over €1bn in exports from Ireland. of a new brewing centre of excellence at St James’s Gate. The main export markets are the US, followed by Europe, with sig- “This is about sustaining the business into the future and securing a nificant growth coming from Africa and Asia Pacific. more competitive position; competing with the big brewers around the “Around 90pc of what Diageo produces in Ireland is exported and world,” says Armstrong. 70pc of the Guinness brewed at St James’s Gate goes abroad. Diageo This new brewery will have the capacity to produce one billion pints is a big contributor to Ireland’s export-led recovery, employing 1,500 a year – up to 300,000 pints of Guinness and 200,000 pints of other people directly. And if you take all of the products and services we buy, brands such as Carlsberg every two hours.

72 Irish Director Report Top 250 Exporters Autumn 2012 FOOD AND DRINK ‘Around 90pc of what Diageo produces in Ireland is exported and 70pc of the Guinness brewed at St James’s Gate goes abroad’

Paul Armstrong, supply chain director, Diageo

“With this development, Diageo is combining over 250 years of sales of 1.3 million cases a year in the US after one year. We expect brewing expertise with the latest technologies in order to continue to this to be a brand that will be sold around the world. produce the finest beers and export them all around the world. When “We know that a lot of consumers want to be associated with the finished, it will be one of the most energy efficient breweries in the Guinness brand and are very open to trying out new beers with unique world and will make St James’s Gate the fourth largest brewery in tastes. Guinness Black Lager allows them to drink a product from a Europe,” Armstrong explains. bottle that looks like Guinness but tastes like lager.” Diageo has also launched Smithwick’s Pale Ale, aimed at con- Sustainable focus sumers who like distinctive beers and Guinness Generous Ale in Diageo is already outstanding in terms of sustainability, having been America, which focuses on Diageo’s philanthropic history. recognised by the Carbon Disclosure Project as the best performing The Guinness name continues to be vitally important to Irish beverage company in the world for climate change disclosure in tourism, which goes hand in hand with Ireland’s exporting perform- September. ance. It published its 2012 Sustainability & Responsibility report on 5 Recording a 10pc increase in visitors last year to more than one September, which showed that it had reduced carbon emissions from million, the Guinness Storehouse is now Ireland’s No 1 tourist attrac- its operations by 9.4pc and improved water efficiency by 7.2pc. tion, taking over from Dublin Zoo. “We’ve reduced carbon and improved our water use despite increas- It is ranked the fourth largest branded visitor centre in the world ing production,” says Armstrong. after Hersheypark in Pennsylvania; Autostadt, the Audi/Volkswagen The report also showed that Diageo has supported 200 projects Centre in Wolfsburg, Germany; and the Coca-Cola Centre in Atlanta, since 2006 that provide access to safe drinking water for people in Georgia. Africa, with a goal of reaching eight million people by 2015, and since Around 92pc of all visitors to the Guinness Storehouse are from 2009 €7.4m has been invested globally in social entrepreneurs through overseas. Visitors from the US, Germany, the UK, Ireland and Italy the Arthur Guinness Fund and the Champions for Change programme were ranked as the top five visiting nations there last year with in Asia. Germany (up 17pc), the US (up 14pc), Ireland (up 14pc) and Italy (up Along with corporate social responsibility, innovation is a constant 5pc) showing significant increases compared to 2010. focus at Diageo and the global beer technical centre in Dublin sup- “Diageo is investing €10m in the Guinness Storehouse to reinvigo- ports beer innovation around the world. rate it and expand facilities. It is a strong symbol of Diageo’s continu- “Diageo has a strong pipeline in terms of innovations, having recently ing commitment to Ireland and export-led economic growth,” launched Guinness Black Lager in Ireland, which has already reached concludes Armstrong.

Autumn 2012 Irish Director Report Top 250 Exporters 73 patron news

Increase in demand for independent turnaround executives

InterIM Executives, the interim management wing of MERC Partners, has experienced a significant increase in demand lat- Pictured at the launch of the ‘I Love Dublin’ programme are terly for high calibre Ruairi Quinn TD, Minister for Education and Skills with interim restructuring, children from St Enda’s of Whitefriar Street, Dublin transformation and turnaround executives. According to John Matheson Ormsby Kelly, general manager of InterIM Executives, Prentice supports appointing an independent executive to lead ‘I Love Dublin’ children’s and execute a restructuring or turnaround education programme process brings a number of critical benefits to the The Little Museum of Dublin, in association with client company. John Kelly, general manager, Matheson Ormsby Prentice (MOP), has launched a “Our interim man- InterIM Executives new children’s education programme to promote a agers are individuals who greater awareness of Dublin’s rich heritage. have a track record of leading businesses through cri- Entitled ‘I Love Dublin’, the programme will give sis situations, have no agenda other than maximising school children the opportunity to learn about the the return to the owners and returning the business past and present of their city, and encourage them to a sustainable footing. In addition to business trans- to consider the capital anew. formation skills, interims bring specific industry MOP’s association with the ‘I Love Dublin’ initia- knowledge which may not be available within an in- tive is part of the MOP Giving Programme, which house bank recovery team or advisory practice,” he sees the firm work with a number of carefully cho- said. sen organisations, each of which is focused on help- The speed of the solution – interims are on the ground ing Irish children to fulfill their potential. These at short notice – and the capacity of the interim to iden- range from charities that aim to provide physical tify key actions necessary within the first few days of and mental safety for children to organisations that engagement and take effective action are critical for help high academic achievers to reach their full companies in crisis situations, he added. potential. An interim solution can make an impact at any “We are delighted to work with the Little stage of the restructuring and recovery cycle; directly Museum of Dublin to promote education, and to be for a business well in advance of any possible bank part of this new initiative to engage children with involvement and at either pre or post receiver their city’s history,” said Turlough Galvin, partner at appointment stage. MOP. However, according to Kelly, “in many instances The announcement of the new partnership with there is a particularly compelling case for banks to the Little Museum of Dublin follows the success of suggest to a client company that they consider previous MOP Giving initiatives during the summer. appointing an independent interim rather than the In July, as part of the Dublin City of Science 2012 bank directly placing an interim executive in the com- Festival, children from across Ireland attended a pany, as it eliminates any ‘shadow directorship’ expo- series of events in the firm’s Dublin office, including sure that the bank may have in the case of a direct a landmark presentation from head of NASA appointment”. Charles Bolden.

74 Irish Director Autumn 2012 patron news

Bank of Ireland Private Banking adds leading fund manager GMO to its investment platform

KPMG ranks No 1 on Bank of Ireland Private Banking recently added Grantham Mayo Van ‘The World's Best Otherloo (GMO) to its Private Banking Outsourcing Advisors Investment Selection (PBIS) investment plat- List’ form. PBIS is a multi- manager and multi- asset investment fund KPMG has moved up to the top spot in this year’s that has holdings across rankings of ‘The World’s Best Outsourcing Advisors’ by Europe, North America the International Association of Outsourcing and the Asia-Pacific Professionals (IAOP), a standards-setting and profes- region. sional advocacy organisation. Last year the firm GMO is an independ- ranked second on the IAOP list, which comprises 20 ent asset management advisory firms. group headquartered in Brian O’Rourke, head of multi “KPMG is delighted to be acknowledged for the work Boston managing manager and alternatives, we do for our clients – by the outsourcing industry’s US$106bn for a wide Bank of Ireland Private leading professional organisation,” said Paul Toner, range of both institu- Banking partner, KPMG in Ireland. “It is very gratifying when tional and private an independent organisation confirms that we are clients. Its strategist and delivering value to both our clients and the profession co-founder, Jeremy in this rapidly changing and complex environment.” Grantham, is one of the most followed and highly To make the list, companies that provide consulting regarded market strategists in the United States. and legal advice to outsourcing buyers and sellers sub- Commenting on the appointment, Brian O’Rourke, mitted applications covering various criteria, including head of multi manager and alternatives at Bank of customer satisfaction, size of revenues and global pres- Ireland Private Banking, said: “We are delighted to ence. The rankings were awarded by an independent add GMO to our investment platform. GMO’s invest- judging panel organised by the IAOP. ment approach is very focused on identifying long- “This is a significant accomplishment and is a result term value in asset classes which often leads them to of the strategic investments KPMG has been making to be going against the pack. We have invested in the further strengthen our global capabilities in the shared GMO Real Return strategy which was launched last services and outsourcing areas,” added Toner. “We are year. This fund adopts an absolute return style aim- honoured to be recognised for working with the world’s ing to generate strong real returns over a market leading organisations to create and protect the sus- cycle with a target of growing 5pc above the inflation tainable value of their business.” in the G7 countries. The strategy invests across sev- “In today’s economy, it is more important than ever eral different markets including equities, bonds, for outsourcing end users to be able to easily identify cash, and currencies.” and select the right company for their outsourcing The addition of GMO will complement the PBIS needs,” said IAOP chairman Michael Corbett. “‘The platform with other leading investment managers Global Outsourcing 100’ and ‘The World’s Best that have capability in niche markets such as Outsourcing Advisors’ lists are essential for companies PIMCO, Schroders, Martin Currie and Abbey that are looking for proven leaders and rising stars in Capital. the outsourcing industry.”

Autumn 2012 Irish Director 75 senior appointments in association with CHANGING PLACES

1. Leslie Buckley, Ian Drennan has been appoint- Prince’s Trust Trading Limited. Ireland, including in corporate chairman, INM ed director of corporate finance, treasury, business enforcement by Minister for 4. Jane Lodge, non- banking, private/retail banking, Leslie Buckley has been Jobs, Enterprise and executive director, DCC as well as in KBC’s UK division. appointed chairman of the Innovation, Richard Bruton. He recently worked on assign- board of Independent News & Drennan replaces Paul Appleby DCC has appointed Jane Lodge ment with the Department of Media (INM). Buckley helped who has been director since the as a non-executive director and Finance and was also a manage the start up of Esat Office of the Director of member of its audit committee. member of the Nyberg Telecom Group and Esat Corporate Enforcement Lodge is a non-executive board Commission of Investigation Digifone with Denis O’Brien. (ODCE) was established in member of Devro and of into the Banking Sector during He was chief operations officer 2001. Drennan has been chief Costain Group. Until 2011, she 2010 and 2011, and a member of Esat Telecom in 1996 and executive officer of the Irish was a senior audit partner with of the Department of Finance 1997. He established his own Auditing & Accounting Deloitte, where she spent over (Cooney) Expert Group on consultancy business in 1990 Supervisory Authority for the 25 years advising global manu- Mortgage Arrears and Personal and has since been retained on past eight years. He qualified facturing companies. She was Debt during 2010. He is a non- key public and private sector as an accountant in 1992 and also the Deloitte partner in executive director of BPV projects, including the recon- then joined the Comptroller and charge of the firm’s UK manu- Finance (International) and struction of Waterford Crystal, Auditor General's office, where facturing industry sector. She Intesa SanPaolo Life. the reconstruction and sale of he spent seven years. He then served a term on the board of Irish Steel, the restructuring of moved to the Department of partners of Deloitte UK and Aer Lingus Group and consult- Finance where he was an audi- also co-chaired a global team ing work with Irish Rail. He is tor of European Structural of partners to review the strategy currently executive chairman Funds. In 2001, he was of the global Deloitte firm. of Saon Group; vice-chairman appointed to the ODCE to head of Digicel; chairman of its compliance function. 5. Michael Gladney, collec- Network Recovery; and chair- tor general, Office of the man of the Cork Science Revenue Commissioners Innovation & Technology Park (CSITP) Advisory Group. He is The Office of the Revenue on the board of Aer Lingus and Commissioners has appointed a director of Siteserv. In Michael Gladney as its new col- January 2009 Buckley estab- lector general. Gladney previ- lished Haiti house building ously headed up Revenue's 7. James Hatchley, co-CEO, charity, Haven. Limerick Tax District & South Avoca Capital Holdings West Region's large enterprise audit unit. He has spent over 18 Avoca Capital Holdings has years in the Office of the appointed James Hatchley as Revenue Commissioners. He co-chief executive officer. 3. Richard Huntingford, previously worked in the Hatchley joins from Freeman & chairman, UTV Media Valuation Office. Co, a financial services-focused M&A advisory and strategic UTV Media has appointed 6. Tom Foley, non- consulting firm, where he was Richard Huntingford as chair- executive director, AIB managing director and COO of man. Previously chief executive Freeman & Co Europe. A quali- of Chrysalis and executive Tom Foley has been appointed fied chartered accountant, he chairman of Virgin Radio, a non-executive director at AIB. began his banking career at Huntingford has also been a Foley is a former chief execu- Schroders in 1991. He joined non-executive director at KPMG tive of KBC Mortgage Bank in Greenhill & Co in 2000 and 2. Ian Drennan, director of for12years.Heiscurrently Ireland and held a variety of established Freeman & Co’s corporate enforcement, chairman at Boomerang Plus senior management and board European business in 2006. He ODCE and Creston and chairman of positions with KBC Bank in has worked closely with Avoca

76 Irish Director Autumn 2012 in association with senior appointments

on a range of strategic projects for the Coombe Women & 14. Johnny McElhinney, over the last four years. Infants University Hospital 12. Daniel Murray, partner, chairman, Chartered (CWIUH) for the period Deloitte Accountants Leinster 8. Herb Hribar, group chief 2013–2019. Sheehan, who is Society executive officer, Eircom the first woman to be elected Daniel Murray has been to the post, graduated in medi- appointed partner in Deloitte’s Johnny McElhinney has been Eircom has appointed Herb cine from University College consumer business and tech- appointed as chairman of the Hribar as group chief executive Dublin in 1998. Following nology practices. Murray Chartered Accountants officer. Hribar has extensive internship she went into joined Deloitte in 1999 and was Leinster Society for experience in the telecoms and obstetrics and gynaecology appointed a director in 2008. 2012–2013. McElhinney is a TV industries in Europe and training and has worked at all Murray has a business degree partner with Dublin-based the US. He moves to Eircom three Dublin maternity hospi- from Trinity College Dublin and accountancy firm, John from CENX, where he has been tals. While working at the a master’s degree in account- McElhinney & Company. He CEO since February 2011. He CWIUH as a research fellow, ing from University College was recently awarded the has also been president of she conducted a multicentre Dublin. He is also a member of Chartered Accountants Ireland Ameritech Wireless in the US, randomised controlled trial Chartered Accountants Ireland. diploma in forensic accounting, managing director of Kabel evaluating blood loss at passing with distinction. He Deutschland and COO of Caesarean section. Sheehan has served as a committee Cablecom in Switzerland. He was awarded a PhD from member of the Leinster was previously managing Trinity College Dublin in 2011 Society for the past four years, director wholesale/networks at for this research. After com- and has been a member of the Eircom from 2002 to 2004. pleting her specialty training in Education, Training and Life Ireland, she worked in Bristol Long Learning committee of 9. Richard Moat, group as a senior clinical fellow. She Chartered Accountants Ireland chief financial officer, returned to Ireland at the since 2009. He was also chair- Eircom beginning of this year and is man of the Young consultant obstetrician and Professionals Committee of Richard Moat has been gynaecologist and senior lec- the Institute of Chartered appointed group chief financial turer at the National Maternity Accountants in Ireland for officer at Eircom. Moat has Hospital, Holles Street and 2008–2009 and has served on more than 20 years of interna- Royal College of Surgeons in 13. John Warburton, CEO, the Members Services tional mobile experience, Ireland. She recently submit- DoneDeal Committee. An associate of the including leading T-Mobile UK ted her thesis for a master's in Institute of Chartered as its managing director, before healthcare management from DoneDeal has appointed John Accountants In Ireland, he is a becoming deputy chief execu- the Institute of Leadership, Warburton as chief executive fellow of the Institute of tive and chief financial officer of RCSI. She will take up her new officer. Warburton, who has Accounting Technicians in Everything Everywhere. post on 1 January 2013. over 20 years of experience in Ireland and a member of the information technology, busi- Institute of Bankers in Ireland. 11. JD Buckley, managing ness processes and project director, Sky, Republic of management, has been Ireland DoneDeal’s chief operating officer for the past two years. JD Buckley has been appointed Before joining DoneDeal, he managing director of Sky in held senior positions in a num- the Republic of Ireland. He ber of large companies, joins Sky from his own busi- including spending 10 years in ness consultancy where he's the USA working with Litton been working for the past four PRC. He has a number of busi- years. During this time he took ness and IT qualifications from on the interim role as chief institutions in the UK, USA and operating officer at Prontaprint Ireland. He is a founding mem- 10. Dr Sharon Sheehan, and Kall Kwik. Buckley also ber of the south-east branch of master designate, Coombe spent five years working for the Irish Internet Association 15. Fiona Sweeney, CEO, Women & Infants Irish-owned Digicel. He was and previously sat on the board Prescient Investment University Hospital CEO of the company’s Cayman of the Wexford Chamber of Managers (Ireland) Islands business before taking Commerce. Dr Sharon Sheehan has been responsibility for the North Fiona Sweeney has been elected as master designate Caribbean region. appointed chief executive

Autumn 2012 Irish Director 77 senior appointments in association with

officer of Prescient Investment Computer Corporation (Perkin Microsoft over the past 15 Compliance and Risks has Managers (Ireland) Limited Elmer). He is a chartered fellow years, including international appointed Joe Skulski as CEO. and a director of the company. of the Institute of Personnel assignments in Asia and North Prior to Compliance and Risks, Sweeney joined AIB and Development (CIPD) and America. A chartered account- Skulski was a business con- Investment Managers in holds an MBA from the Open ant, he has a track record in sultant at Element56. He also September 2000 as head of University Business School. strategic planning, operations worked for 13 years in a vari- pensions and was appointed and team leadership. ety of management roles at head of customer business conformity assessment and Ireland (CBI) in January 2010. certification services company, She joined AIBIM from Friends Bureau Veritas. He has First Asset Management, degrees in materials science where she was director of new and industrial technology as business development, and well as a master’s in business prior to that worked with Bank administration. of Ireland Asset Management. She holds a master's degree in economics from University College Dublin and is a member of CFA Institute. Prescient Ireland recently completed the acquisition of 17. Jane Lorigan, AIBIM, which was subsequent- managing director, 19. Terry O’Niadh,non- ly renamed Prescient Saongroup.com Europe executive director, VHI Investment Managers (Ireland) Healthcare Limited. Saongroup.com has appointed Jane Lorigan as managing Terry O’Niadh has been director of Saongroup.com appointed to the board of VHI Europe. Lorigan has been Healthcare by Minister for managing director of Health, Dr James Reilly TD for 21. Philip Brady, director- Saongroup.com Ireland since a period of three years to 18 head, Canon Ireland 2006. Lorigan joined July 2015. O’Niadh is currently Saongroup.com as marketing the chair of the Monitoring & Philip Brady has been appoint- director of IrishJobs.ie in 2005 Evaluation (Quality Assurance) ed director-head of Canon and was responsible for devel- Committee, Local Authority Ireland. Brady has worked for oping the brand as the company Services, National Training Canon Ireland since 2003, expanded internationally and Group and a part-time tutor when he joined to head up transitioned into with the Institute of Public finance and administration for Saongroup.com. She is a grad- Administration. He spent 10 Canon Business Solutions. In uate of University College years as North Tipperary coun- 2005, he was appointed head 16. Conor O’Brien, strate- Dublin, Chartered Institute of ty manager, six years as assis- of the CIG (consumer imaging gic human resource direc- Marketing and Irish tant county manager, Kildare group) team. Brady has previ- tor, PFH Technology Group Management Institute. County Council and eight years ously held management posi- as county secretary, Wicklow tions at Dell, Xerox and Air Conor O'Brien has joined PFH 18. Tim Higgins, chief County Council. He holds a Products. Technology Group as strategic executive, Tote Ireland master’s in public affairs and human resource director. political communications from 22. Maurizio Brusadelli, O'Brien has 22 years of experi- Horse Racing Ireland (HRI) has the Dublin Institute of president, Kraft Foods UK ence in international human appointed Tim Higgins as chief Technology, was a participant & Ireland resources management and executive of its pool-betting in a leadership programme joins PFH from Kerry Group subsidiary Tote Ireland. from Harvard University, Maurizio Brusadelli has been where he served as vice-presi- Higgins joins the Tote from Kennedy School of Business, appointed as president of Kraft dent of human resources for Microsoft Ireland where he and has a bachelor of arts Foods UK & Ireland. Brusadelli the EMEA region. Before Kerry most recently held the post of degree in public management. has been with Kraft, which Group, he worked with Seagate IT director for European opera- owns Cadbury, for 19 years in Technology, Europlan tions and development. He has 20. Joe Skulski, CEO, a number of roles. He was Recruitment, Kentz held a number of senior Compliance and Risks appointed president, gum and Engineering and Concurrent management positions with candy, Kraft Foods Europe at

78 Irish Director Autumn 2012 in association with senior appointments

the end of 2010 to lead the service. In 2007 she moved to also an economic consultant for banking and financial services European gum and candy busi- the company’s CRM depart- the United Nations in East representative body IBF since ness. Previously he spent two ment. Since 2009, she has Timor, and worked in media rela- January 2004. He is a member years in Madrid as general headed up the global CRM team tions for Oxfam in Indonesia and of the Department of An manager, Kraft Foods Iberia. from Dreieich. In recent months East Africa. He holds an MBA Taoiseach’s Clearing House He also spent four years as she also played an important from Insead, an MA in journalism Group and a member of the category director, Philadelphia role in opening up new markets from Dublin City University and a executive committee of the Europe. He began his career in India and Israel. In addition, BA in politics and economics European Banking Federation. with Kraft Foods Italy in 1993 she has represented Adtech on from Oxford University. as an assistant in the Milan- various working groups and 27. Allan Shouten, executive based marketing department. expert committees of the 25. Fin O’Driscoll, director, PM Group Born in Italy, Brusadelli has a German industry organisation managing director, Experian degree in business and eco- BVDW and the whole online Ireland PM Group has appointed Allan nomics from Bocconi marketing sector. Schouten as an executive direc- University, Milan. Fin O’Driscoll has been appoint- tor. Shouten, who joined PM ed managing director of Group in 1998, is the managing Experian Ireland. O’Driscoll director of the company’s Asia joined the company in May as operations, based in Singapore. director of sales and marketing. He has worked on a variety of Before that, he was interim complex food, pharmaceutical general manager of the Irish- and chemical projects in based subsidiary of Houghton Ireland, the US, Singapore, the Mifflin Harcourt. Other previous UK, the Netherlands, China and roles include CEO of Delphi India for clients including Technologies and general man- Genzyme, GlaxoSmithKline, Dr ager of retail software provider Reddys, Wyeth and Schering Torex. He has a degree in civil Plough. He is a chartered engineering from UCD, an MSc chemical engineer. 23. Suhela Gremmel, 24. Doug Keatinge, client in structural engineering from managing director, Adtech, director, Fleishman-Hillard Imperial College, London and 28. Aidan Brogan,CEO, UK and Ireland an MBA from Insead. Datalex Doug Keatinge has joined Adtech has appointed Suhela Fleishman-Hillard as a client 26. Pat Farrell, alternate Aidan Brogan has been Gremmel as managing director director on the corporate team. non-executive director, appointed CEO of Datalex after of its UK and Ireland operations. He was previously head of Irish Takeover Panel being named interim CEO in Gremmel began her career in investor relations and corporate June. He joined Datalex in 2001 in international customer development for Digicel Group. Pat Farrell has been appointed 1994 and, before becoming service at Adtech's company He is a former business jour- as alternate non-executive interim CEO, was the senior headquarters in Dreieich. In nalist for RTÉ and Bloomberg director of the Irish Takeover vice-president of sales. He was 2005, she transferred to the UK News and has worked as a Panel and as a non-executive previously the regional manag- office in London to take on the strategy consultant for LEK director of IFSC Ireland. Farrell er for Westinghouse management of global customer Consulting in London. He was has been chief executive of Corporation in Dubai. what’s on

HIGHLIGHTS AUTUMN 2012 Sidney Nolan, Constable Fitzpatrick and90.7 Kate x Kelly, 121.2 1946, cm, enamelGallery on of composition Australia, board, Gift National of Sunday Reed 1977 An overview of just some of the cultural events happening over the next couple of months

VISUAL ARTS Katherine Jenkins Le Roi Malgré Lui by Emmanuel Sidney Nolan’s Ned Kelly series Welsh mezzo-soprano Katherine Chabrier, sung in French, and A The Irish Museum of Modern Art Jenkins appears at Dublin’s The O2 Village Romeo and Juliet by Frederick presents the famous Ned Kelly series with an orchestra and a choir on 15 Delius, sung in English. of paintings by celebrated Australian December before performing at the www.wexfordopera.com artist Sidney Nolan from 2 Odyssey Arena in Belfast on 16 November 2012 to 27 January 2013. December. www.theo2.ie FESTIVALS www.imma.ie Belfast Festival at Queen’s André Rieu The 50th Ulster Bank Belfast Richard Hamilton: The Late Works Dutch superstar violinist, conductor Festival at Queen’s will include This highly personal exhibition by and composer, André Rieu returns to artists, authors and performers from one of Britain’s most influential Ireland to play The O2 on 8 and 9 across the world participating in 130 artists traces an intriguing path December. The maestro will conduct events between 19 October and 4 leading to his unfinished and unseen his 60-piece Johann Strauss November right across the city. Van final work Balzac (a) + (b) + (c). The Orchestra and play the violin, while Morrison, Ladysmith Black exhibition takes place in the National encouraging his audience to get out Mambazo, Ian Rankin, Ray Davies, Gallery in London and runs from 10 of their seats and waltz in the aisles. President Michael D Higgins, Lesley October to 13 January. www.theo2.ie Garret and Camilla Tilling are just www.nationalgallery.org.uk some of the diverse artists who will THEATRE be participating. MUSIC Dublin Theatre Festival www.belfastfestival.com Milos Karadaglic This year’s Dublin Theatre Festival As part of the Great Artists Series continues until 14 October at a range DANCE in The International Concert Series of venues around the capital. The The Nutcracker 2012/2013, Montenegro-born classical theme of the festival is ‘Your City, Ballet Ireland will present The guitarist Milos Karadaglic takes to Your Stories’. The programme Nutcracker in 22 venues across the stage in the National Concert includes 12 world premieres, 500 Ireland and the UK this autumn. Co Hallon10October.www.nch.ie performances across 32 productions Down native Melissa Hamilton, in 19 venues. soloist with the Royal Ballet, will Alison Balsom www.dublintheatrefestival.com dance the role of the Sugar Plum Trumpeter Alison Balsom, who was Fairy on the opening night in Dublin recently named ‘Female Artist of the OPERA and will be joined by fellow Royal Year’ for the second time at the Wexford Opera Festival Ballet star, Polish dancer Dawid Classic BRITs, will perform with the The rarely performed Italian opera, Trzensimiech. The run starts in Kammerorchester Basel on 8 L’Arlesiana by Francesco Cilèa will Letterkenny on 26 October and runs November at the National Concert open the 61st Wexford Festival until 22 December in Navan, and will Hall as part of its Great Artists Opera on Wednesday, 24 October. include a stint in the Gaiety Theatre Series in The International Concert The festival runs until 4 November Dublin from 20 to 24 November. Series 2012/2013. www.nch.ie and will also include performances of www.balletireland.ie

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