It is an increasingly uncomfortable reality but the idea of corporate governance does not sit at ease with the traditional Irish way of getting things done.
That is not to suggest we are a nation unbound by laws or regulations but we tend to resist a little more than would be deemed acceptable in other places.
It was said to me by an old mentor on my return to Ireland after a spell working in the UK that the biggest difference between the two countries was that in Britain rules were there to be obeyed while in Ireland they were there to be interpreted.
This was brought into sharp focus in Committee Room 2 of the Houses of the Oireachtas yesterday when the Chairman and other members of the board of Horse Racing Ireland were grilled over the process of reappointment of Chief Executive Brian Kavanagh.
Joe Keeling opened his statement to the Committee for Agriculture and the Marine by apologising for “how the appointment process was conducted. It shouldn’t have happened and I take personal responsibility for this.”
At the end of nearly two and a half hours of robust questioning though, members of the Committee seemed uncertain as to whether the Board had learned the lessons needed or indeed understood in reality that the rules had been bent in unacceptable fashion.
Brian Kavanagh is a good man. He has overseen Racing’s recovery from dark days of recession and falling investment so that it has now emerged once more as a genuine world leader for Ireland.
Complex
As was referenced yesterday it is a complex task holding together the at times conflicting interests of multiple stakeholders to keep the ship sailing in the right direction.
He was originally appointed to the role as CEO of Horse Racing Ireland in 2001 having previously held similar senior roles within the industry.
He won the position following open competition and did so again in 2009 when reappointed, against government guidelines on the CEO’s of semi-state bodies, but accepted at the time as imperative given the stormy waters which then prevailed.
That formal reappointment did not happen until 2011 but the seven year term was still backdated to 2009 so that the end was to have come this year.
John Moloney, former CEO of Galway Racecourse and an influential Board member at Horse Racing Ireland through this period stated that the question was raised with former Chairman Denis Brosnan on ensuring that a succession plan for now was to have been implemented but it appears that there was little formal follow up on this.
Brosnan stepped down in 2013 after serving 11 years himself as Chairman and Joe Keeling, with a long successful career in business and racing was appointed to succeed him.
Right Man
Keeling told the committee yesterday that he believed Kavanagh was the right man for the job but wanted to see for himself as Chairman that this was still the case over the first “12 to 15 months in the job.”
The problem here can be easily defined as ‘drift’.
Kavanagh had already served five years over the initial seven by the time Keeling confirmed in his own mind that he was indeed the right man for the job. That was the time that Kavanagh was at the peak of his powers, securing a multi annual commitment from Minister for Finance Michael Noonan that would ultimately bring moneys received from the Horse and Greyhound racing Fund back to a record level.
The third instalment of that was announced in Tuesday’s budget causing delight in Racing circles and anger within other sports who felt they had been short changed by an effective freeze on other sports funding.
Result
Whether a similar result could have been achieved by somebody other than Kavanagh is like suggesting that Manchester United could only have achieved their success under Sir Alex Ferguson or Ireland in Italia 90′ because of Jack Charlton.
Questions for long nights but ultimately unanswerable with absolute certainty.
One of Horse racing Ireland’s other board members Eimear Mulhern, ironically given the setting for yesterday’s grilling the daughter of one Charles Haughey, wrote that the success in attracting funds put ‘everything else in perspective.’
That did not go down well with the Committee who wanted to see proof that an acceptance of wrong in the process would be corrected and its importance recognised.
Fianna Fáil TD Charlie McConalogue channelled his former leader Eamon De Valera who he reminded us had said that “When I want to know the thoughts of the Irish people I look inside my own heart.”
In essence that is what Joe Keeling did as Chairman of Horse Racing Ireland in determining that Kavanagh should serve another five years to oversee an important strategic plan. His understanding and intention was always to gain formal backing from the Board for this but it was more by “informal discussions at racecourses on Saturdays and Sundays” that the action was progressed.
Form and wording
To quote De Valera again he said in his famous resignation speech in 1922 that “It is only when I have got general agreement that I look after it from the point of view of form and wording.” That was in reference to the agreement that gave birth to independence.
Joe Keeling, whether knowingly or not, effectively paraphrased him by suggesting that he did not focus on the legalities of Kavanagh’s reappointment and that he came to seek and win Board approval after it was determined by Government to be possible.
Again it comes back to drift. The General election and the hiatus in Government action through the early part of 2016 meant everything was perhaps more rushed than it should have been.
The meeting ended yesterday with an undertaking to supply further documentation including a signed understanding that Kavanagh would not be appointed again beyond 2021 and of matters relating to the legal status of whether or not he had, or would apply as having, a contract of indefinite status, a legal construct which could pose liability issues were that to be the case.
Learn from mistakes
The importance of history is that we learn from mistakes and ensure that things are done better in future where there have been shortcoming in the past.
That is what the Committee sought yesterday and it may well be they will get that through a few more legal hoops and a likely independent review of corporate governance at the Board. That will eat up a little of the additional grant but is an important spend in terms of ensuring transparency.
Brian Kavanagh will remain in his position both here and internationally and it is likely that Joe Keeling will also remain in position as Chairman. He was in many ways a victim of timing, coming in mid way through the first extension and dealing with the second at a time of political change.
He accepted in his statement that he had been wrong to do what he did without the formal approval of the Board, but that there had been no intent towards wrongdoing.
The ‘Irish Way’
He did it in the ‘Irish way’ of informal discussion and tacit or implied agreement. That does get things done but again, it is beyond the confine of good corporate governance as written and followed elsewhere. It was the legally enshrined remit of the Board to appoint the CEO.
We are proud of playing an important role in a world where there is now more than ever a greater sense of collective responsibility for decision making. As a nation we need to live that though as well as accept it on paper.
There are other areas within sport where issues of governance, legality and long tenure not dissimilar to that at Horse Racing Ireland have and will give rise to discomfort within Government.
Sport as an industry, Ireland as a nation, and we as individuals we really do need to grasp the reality of good governance better than we have done to date.
Rob Hartnett is the Founder of Sport for Business a network of leaders and organisations within sport, business and society whose aim is to enable them work closer together and to better effect.
