Profile: The former head of AIB may get more headaches than he bargained for when he steps into the breach at the HSE, writes Siobhan Creaton, Finance Correspondent.
When Kevin Kelly decided to call it a day as one of the top men at AIB more than three years ago he was looking forward to enjoying his free time. A few more rounds of golf, time to travel and to pursue his interest in art and photography was high on his agenda. He also had to decide just how active he would remain in the business world.
As a successful and highly regarded member of Ireland's business elite he is part of the golden circle who provide the pool of talent for Irish boardrooms. Indeed, in the months before he left AIB headquarters, the invitations from various companies and organisations seeking his expertise had come thick and fast. Some of his retired friends who had faced similar dilemmas advised him to be careful about the type of commitments he took on and to ensure they didn't curtail his flexibility to enjoy his new-found freedom.
In 2001 Kelly said he was looking forward to being able to dictate the pace of his life. "The attraction will be not having any routine," he explained.
This week, one person who knows him joked that Kelly will be lucky to find any free time in the months ahead.
Instead of spending more time in Kerry with his wife Mary and their three adult children, or visiting their apartment in Marbella in Spain, 63-year-old Kelly finds himself as the central figure charged with implementing wide-ranging and controversial reforms designed to cure the Republic's chronically ill health service.
Earlier this year he agreed to act as chairman of the Government's newly established Health Service Executive and gave a three-year commitment to overseeing the transformation of Irish hospitals and community care systems.
One of his first priorities was to recruit a chief executive to manage the day-to-day running of the health service and its 100,000 employees and it was regarded as something of a coup when Britain's deputy chief medical officer, Prof Aidan Halligan, was willing to take the job. But then last week Halligan had a change of heart and decided to stay in the UK, citing family reasons. Some seasoned observers have suggested Halligan was being polite and had perhaps foreseen potentially insurmountable difficulties with the task at hand, although Kelly publicly dismissed such speculation.
Whatever his reasons, it was a huge blow for the HSE and for Kelly who decided to step into the breach and take on the full-time chief executive's role until a replacement can be found. It is a demanding and difficult role and the Government will be pleased to have someone of his calibre to steady the ship for now. He is believed to enjoy a very good working relationship with Tánaiste and Minister for Health, Mary Harney.
One source at AIB says becoming chief executive would not have been Kelly's choice and is more an indication of his sense of commitment to whatever he is doing. "If he gives a commitment he will follow it through. He doesn't need this at all, but it is immensely important and a challenge".
KELLY IS FUNDAMENTALLY a highly skilled company doctor who comes to the health service with a track record for patching up and rehabilitating troubled businesses. Naturally, his arrival sparked fears among the trade unions that he will prescribe the conventional medicine applied in the corporate world to distressed companies, namely job cuts and streamlining of functions.
He is a chartered accountant but had wanted to be a sports journalist. "My parents were horrified at the time. I was passionate about all sports. I played everything badly. But there were no opportunities and when accountancy was suggested, I did it. And it turned out fine," he said in an interview. He qualified as an accountant in 1966 and went to work for Price Waterhouse in Rome. Later he transferred to The Netherlands, where he was involved in auditing companies and undertook investigations into various businesses.
Kelly's next move was to London and to another accountancy firm, Coopers and Lybrand, where his focus changed to setting up a management development and training unit and he established similar programmes in Kenya, Uganda and Tanzania.
In 1972 he returned to Ireland to establish the Coopers and Lybrand office in Cork, the city he feels most closely associated with. (Kelly was born in Castlebar, Co Mayo, but moved to Cork at the age of five and attended primary and secondary schools there before the family moved to Dublin.) Three years later he transferred to the firm's Dublin office and got involved in corporate finance, investigations and insolvency work. In 1982 he emerged as the firm's managing partner, much to the surprise of some of his more senior colleagues. A year later he came to public prominence when the government appointed him to handle the administration of the PMPA Insurance Group, the biggest motor insurer in the State, which was in financial difficulty. Kelly thought his work there would take a year at most, but six years later he was still ferrying between PMPA and Coopers and Lybrand. During his time there he slashed the PMPA workforce from 2,300 to around 800 and restored it to profitability.
In his early 50s he switched to the food sector, responding to an invitation from Friedhelm Danz of the Agra meat and food distribution group to become chief executive of his Irish operation. Danz wanted to create the equivalent of the Kerrygold brand for Irish premium quality meat.
After about 18 months Kelly decided the project would take far longer and require more investment than had been initially anticipated and began to look for another job.
This time he became a banker and took over as finance director at the Republic's biggest bank, AIB. Within a couple of years he took charge of AIB's retail bank in Ireland overseeing its branches and staff. A bitter dispute in 1992 had fuelled tensions between the bank's management and staff, and Kelly played a central role in calming the troops. Three years later he was involved in brokering a partnership agreement with the Irish Bank Officials Association and this is something he has mentioned as one of his achievements while at AIB. Sources at the bank say Kelly was viewed as being amongst the "doves" rather than the "hawks".
He is described as shy but tough. "He comes across as being very reasonable but he is a hard man. Intellectually, he is very sound. He has very good financial acumen. He tends to give the soft message and will have tough guys around him to implement his decisions on the ground," according to one source. When some of AIB's most senior former executives were revealed to have "tax issues" arising out of offshore accounts earlier this year, Kelly was the first person from their ranks to state publicly that he was not involved.
Kelly's friends say he never underestimated the scale of the challenge facing him at the HSE and will give it his all. One person who has already encountered Kelly in his new role and does not endorse the remedies he is seeking to administer to the health service, believes this company doctor is committed to making a difference. "He is well intentioned," he says, "but it may cause him more headaches than he had bargained for."