PAT DINEEN found some things he was not happy with when he moved into the chairman's office at Bord na Mona last November. A month later, at the December meeting, he told the company board things were to change.
The issues at stake do not relate to the core financial performance, which has improved substantially in recent years. Rather, they concern the way the company was run and managed, how its executives were paid and the controls that were in place.
The new chairman first told the board, according to the minutes of the meeting, that certain in house company practices had come to his attention, the continuance of which, in his view, was not essential or desirable for the conduct of the business.
Among such practices were the purchase of wine for the use of the company and the purchase of a time share arrangement" in Portugal - apparently for eight weeks a year - which was used "to reward executive performance". The amounts of money involved would not have been large in relation to the company's business - its management says the wine purchases amounted to £2,000 - but clearly Mr Dineen did not approve.
The chairman briefed the board about the Revenue Commissioners' audit, which had seen the Revenue object to some of the payment methods and had resulted in a payment of £240,000. Management argued that this is not a large amount in an annual £35 million wage bill. However, the Revenue were not happy with payments, including round sum car allowances, relocation expenses, unvouched for expenses, membership sub scriptions and innovation awards.
It is not clear how many of Bord na Mona's staff were involved in payments. Much of the payments would have gone to senior staff about £15,000 was paid as a settlement for expenses paid to chief executive Dr Eddie O'Connor, according to the company. But car allowances and the innovation awards were paid to large numbers of staff.
The whole affair must have been the source of tension between the new chairman and the company management. More recently, Mr Dineen asked the company's auditors, Price Waterhouse, to tabulate all aspects of Dr O'Connor's remuneration package.
Dr O'Connor has said Mr Dineen wanted to arrange his package differently than had been agreed with the former chairman, Mr Brendan Halligan. He was "unhappy with the manner of its execution", he said on Sunday, while insisting the review initiated by Mr Dineen was " absolutely routine".
The affair in its entirety is unfortunate for Bord na Mona. The company is hoping to soon receive the first tranche of an equity injection from the State and under Dr O'Connor's management team its financial performance has improved dramatically. Results for last year, due to be published shortly, are expected to show continued improvement.
Mr Dineen, an experienced businessman, no doubt applauds the management for the improving financial trends. But he has felt strongly enough to insist on changes in internal procedures.
Attracting senior staff is a difficult business for semi state companies, which generally adhere to centrally set pay guidelines and offer few of the add ons available in the private sector. Management in the public sector feel, with some justification, that their counterparts in private business are rewarded much more handsomely through devices such as share options and bonuses, and some semi states are moving towards special contracts for senior executives.
But the highest standards of practice are still expected and Mr Dineen obviously felt he needed to act to change management practices in Bord na Mona.
