BOARDROOM MATTERS. Stephen Kirkpatrick

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1 BOARDROOM MATTERS Stephen Kirkpatrick

2 ISSUE 4 Q&A Stephen Kirkpatrick has been CEO of Corbo Properties since Corbo is one of the largest property companies in Northern Ireland. Stephen previously spent fifteen years with Bank of Ireland having joined the Bank in 1995 from KPMG, where he had specialised in corporate finance. He held a number of senior roles at Bank of Ireland, culminating in his appointment in 2009 as head of retail credit with accountability for almost two-thirds of the Bank of Ireland Group s balance sheet lending. Stephen joined the Mutual Energy Board in 2010 as Non-Executive Director and Audit Committee Chair. In 2012, he was appointed as NED and Chair of the Audit Committee of UTV Media plc/wireless Group. Can you take us through your career to date? I started with KPMG in 1985, stayed there for eight years and then after a brief period with Ulster Bank spent fifteen fantastic years with Bank of Ireland. Initially I worked in corporate banking in Northern Ireland, before I was appointed as the Regional Managing Director of Business Banking in the UK, where my role was to oversee the bank s activities in the Midlands, North of England and Scotland. After that I was the CEO of Bank of Ireland NI before taking on the Head of Retail Credit role for the bank. In this role, I was responsible for almost 90 billion of business lending, mortgages and unsecured consumer loans, when the financial crisis was at its most acute. You may not appreciate it at the time, but you simply can t buy that experience. In 2010, I felt that I had to make a decision as to whether I would continue my career in Bank of Ireland or whether I would look at something different. In the end, I took on the role of CEO of Corbo Properties, which at the time was one of the biggest privately-owned property companies in the UK. The company has faced a challenging environment for the past six years, but having completed a major refinancing, I now find that I can take a less handson role in the company, more strategic, more focussed on managing and growing the business. How did you become a Non- Executive Director? I d been interested in developing a Non-Executive Director portfolio for a number of years. I joined the Council of Chartered Accountants Ireland in At the time I couldn t take on a commercial NED role, for fear of a conflict of interest arising while at Bank of Ireland. I enjoyed my time with the Institute, where I was on the Strategy Committee and chaired the Finance Board. That was the initial stepping stone. The focus of the CEO is to build a team.

3 BOARDROOM MATTERS If you undertake the right training, if you have a solid background in an industry, if you are committed and ambitious, the opportunity is out there. After leaving the bank I was free to take up an opportunity as a NED with Mutual Energy. I was attracted by the dynamics of the energy market and the quality of the Mutual Energy Board. Although the company is a mutual it complies fully with the Corporate Governance Combined Code as it has bonds that are listed on the London Stock Exchange. It has been an interesting journey and we have had to deal with a few curve balls along the way. As Audit Committee Chair for more than six years, I have also had to get my head around a number of extremely complex accounting issues, which has been extremely beneficial to my ongoing professional development. You achieved some very senior positions at quite a young age; to what would you attribute that success? There was an element of luck to it, together with hard work and determination. As opportunities presented themselves, I pursued them with real drive and enthusiasm. Opportunities can sometimes be more limited in Northern Ireland which is why the chance to develop my career in the UK and Ireland was very important. Corporate banking can help fast track your career, you get to experience a wide range of issues and develop deep relationships with the clients. The breadth of this role really equips you well for senior management. Are CEOs born or made? I belong to a school of thought that CEOs are made. Certainly there are inspirational characters, to whom the role seems to come naturally, and they have an obvious advantage. However, if you put in the hard work academically and professionally and continually seek to develop yourself, the right opportunity is out there. What characteristics does a CEO need most? It ultimately comes down to leadership, the ability to lead the organisation in a particular direction and to assemble a talented team to follow your lead. Sometimes companies concentrate too much on functional skills in finance or marketing, rather than focusing on the more abstract concept of leadership. I think that in the case of Corbo Properties, the organisation recognised that it was headed into a challenging period as a result of the banking crisis and identified me as somebody who had the strong leadership experience required for those circumstances. What is your leadership style? I am highly analytical but at the same time I believe I have an engaging and collaborative management style. I always try to lead by example. The focus of the CEO is to build a team. One of my proudest achievements is that I built a number of high performing teams throughout my banking career. I look at my former executive team at Bank of Ireland in Northern Ireland for example and I see outstanding people excelling in senior roles both inside and outside the bank. I like to think I played a part in that.

4 ISSUE 4 How do you allocate your time among all of the boards on which you sit? When Corbo was in full-flow, it was a challenge to balance my responsibilities to the various boards. At one stage, I had three NED roles which was close to breaking point. This is why I stepped back from my role at Chartered Accountants Ireland. Being a board member is a very important responsibility. It s a genuine privilege to sit on someone else s board and it is essential that you put in the preparation time so that you can maximise your value added. When you have fewer commitments you have more time to reflect and I believe it contributes to better decision-making. Did your role in the Institute of Chartered Accountants give you a particular strategic insight into industry regulation, or corporate governance? Certainly the Institute was doing a reasonable amount in the area of corporate governance but there was a debate as to whether we should have been doing even more. I subscribe to the view that the Institute should take more of a thought leadership role, seeking to influence policy and corporate culture. The banking sector has been transformed by technology and the adoption of a digital way of life. Are you seeing equivalent transformations in other industries? Digital adoption is definitely moving at a fast pace in the media industry. The specific challenge for the media business is to monetise your offering. In the real estate sector, the whole nature of retailing has been turned upside down with the growth of the internet. At Corbo, we have had to make sure that we keep pace with the move towards multi-channel retailing. I will shortly be joining the UK Board of a listed US technology group which no doubt will expand my horizons yet further as to the power of digital technology. Many boards are comprised of people from an older pre-digital generation. Is bringing a new person onto the board the best approach? You could seek to bring a young technology entrepreneur onto the board. However, many of the issues discussed at the board level governance and risk management, for example may not suit their skill-set. Further I still tend to believe that there is no substitute for experience. At the Wireless Group, we have used the annual strategy session to focus on digital technology and how it is transforming our industry. We bring in outside consultants to challenge our thinking and encourage us to focus long term. In the plc world of the next quarter s earnings, this is a great discipline. Is it difficult to switch between Executive and Non-Executive roles? It certainly was challenging back in 2010, when I took on my first commercial NED role. There is always that initial temptation to dive in too deeply. You need to train yourself to be a good NED and the experience I have gained with both Mutual Energy and Wireless Group has been invaluable. Operating within a listed company environment has been particularly rewarding. How important is it for NEDs to balance their oversight role against the need to support the people who run the company day-to-day. Good quality management teams want autonomy and space and as a rule the NEDs should facilitate that. It is important to be as supportive as possible while also of course providing an appropriate challenge function. My philosophy is that if you disagree with a decision then you speak out. If you disagree with how the CEO and the executive team are implementing an agreed action, then perhaps it is better to keep quiet. Suck eggs and all that.

5 BOARDROOM MATTERS I think that there needs to be a greater focus on the creation of new ideas and new technologies in Ireland. Is the preparation for a board meeting more straightforward for a CEO than for a NED? I think it is more difficult as a NED because there is more information to go through in a shorter period of time. CEOs have all the detail to hand and know the business inside out. NEDs therefore need to be highly analytical. It s a very different decision-making process. What career advice would you give to someone looking to take on a role as a NED? The transition from a hands-on executive role to a non-executive role can be difficult. It needs a lot of planning and thought. How do you make that first step? Effective boards generally want individuals with proven NED experience but how do you then get that experience? For me the Institute was that initial stepping stone. What challenges do you see for CEOs on the island of Ireland? The global economy remains extremely volatile in my view albeit at face value many of the main economic indicators appear to be fine. Given the scale of quantitative easing worldwide we are in unchartered waters. How and when we wean ourselves off this life support remains unclear. Brexit has only added to that uncertainty. CEOs in Ireland need to be cognisant of this broader economic and market context but yet not get distracted by factors which are ultimately outside of their control. What do you see as the barriers to business success in Ireland? I think that there needs to be a greater focus on the creation of new ideas and new technologies in Ireland and in the North in particular. We have a pool of incredibly bright young people, yet many choose to go down the traditional professional route as opposed to say digital technology to use an earlier example. In my opinion, universities and colleges need to be more tuned in to the rapidly changing needs of business. In addition, while I am encouraged at the trend towards stronger corporate governance in Ireland, I would like to see more private companies embrace truly Independent Directors. How do you switch off and relax? Family time is important to me and I like to think that I have got the work life balance about right along the way. Hopefully with a little more time on my hands I will travel more which is a genuine passion of mine. Will I ever get to the point of turning off the phone while I m away, maybe not just yet... Interviewed by Roisin Shanks, Senior Manager, Transaction Support, Transaction Advisory Services, EY

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