Richie Boucher

Richie Boucher (aged 50 in 2009)[1] is the current chief executive officer (CEO) of the Bank of Ireland, Ireland's largest bank. He took over on 25 February 2009 from Brian Goggin, who resigned following the injection of Irish Government funds and the guarantee of deposits. His 2012 pay was €843,000.[2][3]

Career and education

Richie Boucher was chief executive of Bank of Ireland's Irish Retail Division since January 2006 where he oversaw the company's land bank and development loans growing to €7.1 billion. He was appointed as a Director of the Group in October 2006. He joined Bank of Ireland in December 2003 as chief executive, Corporate Banking from the Royal Bank of Scotland where he had been Regional managing director – Corporate Banking, London and South East England and previously held a number of prominent roles with the Ulster Bank Group and also worked in ICC Bank.

Born in (Northern Rhodesia) Zambia, he was primarily educated at St George's College, Harare, a private boarding school in (Rhodesia) Zimbabwe, for his last year in Rockwell College, Co Tipperary, and Trinity College Dublin, where he graduated with a degree in business before pursuing a career in banking. He has never lost his distinctive Rhodesian/Southern African accent though he did spend his first seventeen years in Africa.

Evidence to Oireachtas

On 2 July 2008 he told the Oireachtas Finance Committee "unequivocally, we do not think there is a Northern Rock in Ireland," and the Central Bank here has stricter rules for how much ready cash banks must hold than any other country where the group does business.[4] "We do not believe that we have capital problems. The issues that we face are more down to liquidity rather than capital,” and added there were no arrears on his bank's portfolio of 100% mortgages.[5]

In January 2011, he admitted that information supplied to the Dáil on bank staff bonuses was both misleading and incorrect. Boucher accepted that Bank of Ireland was responsible for Minister for Finance Brian Lenihan putting '‘erroneous information'’ on the Dáil record to the effect that no performance-related bonuses were paid to staff.[6] The next month a top civil servant accused Boucher of "hiding behind" words and misleading the government during a blazing row over the bonuses.[7]

There were heated exchanges at a November 2012 Oireachtas finance committee meeting as Boucher would not answer repeated questions, including how much debt the bank had written off on unsustainable mortgages. Independent TD Stephen Donnelly accused Boucher of treating the committee with contempt by not answering questions. Fine Gael TD Kieran O Donnell said his refusal to answer questions showed a "lack of moral compass" and that "nothing had changed". Chairman Labour TD Ciarán Lynch said he was being "minimalist" in his answers and added it was totally unacceptable for Mr Boucher or any banker to hide behind some "opaque notion of commercial confidentiality.What the Irish public demand is nothing short of full disclosure. Far from the impression that the committee was a witch hunt, we were entitled to get the information we asked for," Another committee member said the performance of Boucher was the epitome of arrogance, and likened his lack of engagement to a "McCarthy-ite trial response .[8][9] Following his appearance, the Sunday Independent said that "He is a hard bastard with a hide like a rhino" and is the "embodiment of all that is bad in Irish banking".[10] Subsequently Labour TD Arthur Spring told Finance Minister Michael Noonan that he should seek the resignation of Boucher because his behaviour "could be damaging to the Bank of Ireland brand". Mr Spring, a former Bank of Ireland official, also told Mr Noonan, whose Government maintains a 15 per cent stake in Bank of Ireland, that he should canvass and build "alliances" with other investors on this issue.[11]

Relationship with Property Developers

He advised property developer Seán Dunne on his acquisition of the iconic Jury's hotel site in Ballsbridge.Speaking to Marian Finucane on RTÉ, Dunne recalled the days immediately after he agreed to purchase the Jury's site for €275m, which he planned to turn into the Knightsbridge of Ireland (a reference to the leading retail property in London). He said he was holidaying in Thailand with his wife and his young son in late July 2005 with just seven days to secure financing before signing the purchase contract for Ballsbridge. "I phoned up a very good friend of mine, Richie Boucher. He's now deputy head of Bank of Ireland," Dunne remembered. "And, after about Wednesday, Richie said, 'Seán,' he said, 'if I was trying to borrow the money you're trying to borrow, I wouldn't stay in Thailand. I'd come back to Dublin.' So I thought that was good advice, even though I wanted to stay in Thailand with my wife and son." .

On 3 October 2007, the planning department in Dublin City Council received a letter from Boucher, giving his address as the office of chief executive of Bank of Ireland Group's retail financial services at head office in Lower Baggot Street. it was headed "Jurys/Berkeley Court Site". He wrote: "Dear Sir, I refer to the above and write to confirm my strong support for this landmark proposal which I believe will significantly benefit the city of Dublin and its citizens through helping enhance the concept of a living city and providing buildings of significant architectural merit befitting Ireland of the 21st century. Yours faithfully, Richie Boucher, chief executive, Retail Financial Services Ireland."[12]

Personality and appointment as chief executive

He is generally regarded as having a ruthless streak and is "direct and feisty". Long meetings are not to his taste, but he does prefer to deal with people face to face. Stocky and greying, Boucher is no gentlemen banker and looks like a man who would flourish in the bear pit of a Wall Street trading floor. A former colleague said of him that, "he is one of the most aggressive guys and ruthless in the bank. He would be the epitome of the Anglo Irish Bank way of doing things, not Bank of Ireland. This was probably true in the lending to businesses, however, in the lending to developers it was clear that he was well behind the largesse of Anglo Irish Bank, Irish Nationwide, Allied Irish Bank, Ulster Bank and Bank of Scotland otherwise Bank of Ireland would almost certainly be in Government ownership like all the others. One of his senior colleagues at BoI said that he commands loyalty from the management team, and that '‘you can't sit on the fence with him. That is not the normal Bank of Ireland style going back many years, but that is Richie. He's very focused on achieving goals – if someone tells him they will have five things done in a month's time he expects that to happen.'‘He's seen as a decisive, no-bullshit kind of manager. He can be seen as gruff, and that is not helped by his accent. But he will always push for action and for a decision." A banking analyst who has dealt with Boucher, and has observed BoI's changing fortunes over the past couple of years, said Boucher has '‘a very strong personality. In that way he would be a very different fish to his predecessor Brian Goggin. But he's a very personable guy outside work. Prem Watsa, chief executive of Fairfax, told Reuters the BoI boss was '‘very disciplined, focused, very commercial".[13] Bank of Ireland chairman Pat Molly, has social skills that the taciturn Boucher lacks. He admits himself that he is not especially " clubbable" but it is known that his wide circle of friends and close family are fiercely loyal and speak of discrete kindness and generosity.[14]

Mr Boucher came up against Des Crowley, the head of Bank of Ireland's UK business for the CEO's job. He was the board's unanimous choice to be chief executive and for his "expertise, determination and pragmatism after an exhaustive process in Ireland and internationally, involving internal and external candidates."[15]

Accepting the appointment, Mr Boucher said he was "very conscious of the current state of the financial services industry, the low opinion which the general public has of banks and the very difficult economic conditions that we face". He said he fully accepted "that we have an uphill battle as we work towards restoring the trust and confidence of our customers, stockholders and the general public. It is my commitment that I will work relentlessly with my colleagues in Bank of Ireland to win this confidence".[16]

In August 2011,Mr Boucher retained the services of an US consultancy firm to help him prepare his submission for the Central Bank's review of whether legacy directors of bailed-out banks contributed to their institutions' demise and, if so, whether they are "fit and proper" to continue in their roles.[17] 11 months later the Central Bank of Ireland issued a statement saying Boucher could continue in his role after passing the "Fitness and Probity" review.[18][19]

Reactions to appointment

Mr Dermot Desmond, the billionaire businessman, who was a substantial shareholder in the bank, wrote to all members of the board expressing his "dismay" at Mr Boucher appointment.He said Mr Boucher was one of the most senior bankers in the organisation, as a director, chief executive of retail financial services, a member of the group risk policy committee and of the group investment committee.“There has to be a direct correlation between Mr Boucher's appointment to these senior positions and the excess lending policies of the bank.“How did Mr Boucher and others within the bank view the warnings of the Central Bank of Ireland in 2004 concerning the overheated residential property market?” Mr Desmond said the appointment of Mr Boucher sent out "completely and utterly the wrong message. People who invested their pensions and savings in Bank of Ireland shares have been put under extreme financial pressure through absolutely no fault of their own. People are quite rightly angry.“Credibility and confidence need to be restored. This will not be achieved by promoting existing management further up the chain.“A clean break is needed. The people who got the bank into the mess are not the people to get the bank out of the mess.”Mr Desmond said the bank's directors were obviously seriously out of touch with market perception and the sentiments of shareholders, accountholders and the market generally if they thought otherwise. "Therefore [he] must have been responsible for fatal errors of judgment, including advancing loans to developers on the strength of overstated land values and insufficient security.He said he had nothing personal against Mr Boucher but perception was important if public confidence and the external reputation of the Irish banking system were to be restored".[20]

Former Bank of Ireland chief executive and current member of the Central Bank Commission, Michael Soden, insisted that banks bosses associated with the crisis in Allied Irish Banks and Bank of Ireland should leave. "Anybody who overseas the destruction of 99 per cent of the value of the two great banks in Ireland and says 'We're not accountable, we're not responsible'-get off the bus right now."

The Labour party said the decision to appoint an internal candidate as chief executive is "most disappointing". "I am not in any way casting any aspersions on Mr Boucher's ability or integrity, but this is a missed opportunity to signal a new beginning in Irish banking," said spokeswoman on Finance, Joan Burton.

Senator Shane Ross raised the appointment in the Senate and—while later admitting hyperbole—said "possibly the most disgraceful appointment in the business world in living memory."[21]

Family,hobbies and remuneration/loans from Bank of Ireland

He is married to Sandra Boucher, has two children, Katie and Keith and lives in Foxrock. He is a first cousin of Eamon Delaney (their mothers were sisters).[22] A rugby fan, he trains a children's rugby team. His basic salary is €690,000 (The Irish Government put a €500,000 salary cap on chief executives of state-guaranteed banks).[23] Additionally he has an annual car cash allowance of €34,000, and receives free tax advice in accordance with executive levels. Other benefits include health insurance and loans at preferential rates and has waived his entitlement to club membership fees.

A letter from chairman Pat Molloy to Boucher in the spring of 2010 reveals that executive bonuses will probably be back in 2011. Boucher will be entitled to a pension of two-thirds of his €690,000 salary when he reaches 60. His dependant is entitled to 100 per cent of this amount whether Boucher dies in service or afterwards. The employment contract includes a permanent gagging clause.[24]

As at 31 December 2009 he had €946,000 in loans from the Bank of Ireland, with €708,000 described as "other loans" and €235,000 in mortgage loans.[25]

In April 2010, following contact between the Taoiseach's department and the bank he waived his option to retire on pension at 55 and thus removed the need to top up his pension by €1.5m.[26]

References

  1. ↑ "We have to earn the public's trust again", Sunday Independent, 12 April 2009.
  2. ↑ Ross, Shane (1 July 2012). "Shane Ross: Remember, none of this catastrophe is the fault of bankers". Irish Independent.
  3. ↑ http://www.herald.ie/news/bank-boss-waives-67000-in-salary-but-he-still-has-843000-a-year-to-get-by-on-29143440.html
  4. ↑ Brennan, Joe (3 July 2008). "'No Northern Rock situation lurking in system' – banks". Irish Independent.
  5. ↑ http://archives.tcm.ie/irishexaminer/2008/07/03/story66438.asp
  6. ↑ http://www.sbpost.ie/news/boi-boss-admits-information-given-to-dail-was-wrong-53992.html
  7. ↑ Oliver, Emmet (2 July 2011). "Cardiff and Boucher in clash on BoI bonus denial". Irish Independent.
  8. ↑ The Irish Times http://www.irishtimes.com/newspaper/finance/2012/1102/1224326034260.html. Missing or empty |title= (help)
  9. ↑ "Noonan: 'I'm powerless to tackle bankers' pay & perks'". Irish Independent.
  10. ↑ "Shane Ross: Bruiser leaves us all bleeding". Irish Independent.
  11. ↑ "BoI Boucher should quit, says Spring". Irish Independent.
  12. ↑ http://www.tribune.ie/news/home-news/article/2009/mar/01/bank-of-ireland-chief-advised-sean-dunne-on-ballsb/
  13. ↑ http://www.sbpost.ie/post/pages/wholestory.aspx-qqqt=PROFILE-qqqs=profile-qqqsectionid=3-qqqc=7.0.0.0-qqqn=1-qqqx=1.asp
  14. ↑ Molloy, Thomas (16 June 2011). "Small shareholders vent their spleen at BoI AGM". Irish Independent.
  15. ↑ Murphy & Devlin, Banksters, Pages 226–232,Hachette Books Ireland 2009, ISBN 978-0-340-99482-5
  16. ↑ Brennan, Joe (26 February 2009). "BoI picks insider Boucher to replace outgoing CEO Goggin". Irish Independent.
  17. ↑ Noonan, Laura (2 February 2012). "EBS chief hires top US advisers as review nears". Irish Independent.
  18. ↑ O'Halloran, Barry (29 June 2012). The Irish Times http://www.irishtimes.com/newspaper/finance/2012/0629/1224318965307.html. Missing or empty |title= (help)
  19. ↑ Molloy, Thomas (29 June 2012). "Boucher and Murphy get 'all clear' in fitness probe by Central Bank". Irish Independent.
  20. ↑ "Desmond criticises Bank of Ireland over Boucher". The Irish Times. 3 March 2009.
  21. ↑ Ross Shane, The Bankers,Pages 228–230,Penguin Ireland 2009, ISBN 978-0-14-104444-6
  22. ↑ Gibbons, John (8 November 2010). "IMMA banks on creative approach to win the day". Daily Mail. Retrieved 4 May 2015.
  23. ↑ Brennan, Joe; Sheahan, Fionnan (17 April 2010). "Outrage at €1.5m pension top-up for bank boss". Irish Independent.
  24. ↑ Ross, Shane (23 May 2010). "Shane Ross: Boucher package includes €34,000 annual car perk". Irish Independent.
  25. ↑ "Directors at BoI hold loans of over €10m". Irish Independent. 16 June 2010.
  26. ↑ http://www.rte.ie/news/2010/0421/boi.html>

External links

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