CEO McDonagh’s mission to change corporate culture at BoI
BANK of Ireland’s new chief executive, Francesca McDonagh, has drafted in global consultancy firm AT Kearney to help overhaul the lender’s culture.
The new CEO is moving swiftly to set her own stamp on the organisation amid increasing competition and an escalating tracker mortgage scandal.
Over the past fortnight senior management have attended a string of “workshops” aimed at forging a new attitude within the bank after years of cost-cutting and restructuring.
Emails sent to staff, and seen by the Irish Independent, describe the sessions as part of a ‘Group Culture Journey’.
They are organised by Chicago-based AT Kearney, as well as the bank’s human resources department and members of its executive committee, which includes Liam McLoughlin, head of retail banking.
The meetings, according to sources who attended, emphasised that core principles revolve around customers, staff and communities.
In a sign that Ms McDonagh is reshaping the managerial style of predecessor Richie Boucher, the email to senior management characterises this culture shift as an “important strategic objective”.
Sources claimed executives are keen to embrace a more “inclusive” and “consultative” style now that the group has faced down the challenges generated by the financial crisis.
It is understood Ms McDonagh opted to enlist the services of AT Kearney – one of the best-known names in management consulting – as she had previously worked with the firm at HSBC.
Ms McDonagh was head of retail banking and wealth management for the UK and Europe at the global banking giant.
According to sources, AT Kearney also helped engineer Ms McDonagh’s meetings with Bank of Ireland’s top-level executives over the summer.
As reported by this newspaper, the informal gatherings were held in London, prior to Mr Boucher’s departure.
Yet news of the planned culture overhaul comes as Ms McDonagh grapples with the escalating tracker mortgage scandal that dates back almost a decade and now threatens to further dent the balance sheet.
So far the lender has set aside €45m in provisions to absorb the costs of the saga, although this figure is widely expected to increase when Ms McDonagh updates the market next month.
As this newspaper reported at the weekend, Bank of Ireland has so far owned up to 9,400 tracker cases and has pledged to pay redress and compensation to 4,300 customers.
But the lender has so far refused to return some 2,000 staff to trackers or refund them.
The bank now faces the prospect of an enforcement investigation by the Central Bank into its handling of the issue.
It follows criticism of the bank at last month’s Oireachtas finance committee hearing at which the lender, represented by Mr McLoughlin, Stephen Mason, group head of operations, and Pat Farrell, group head of communications.
The attempts to alter the workplace culture – broadly welcomed by staff, according to sources – also comes as the bank reportedly prepares to axe up to 1,000 jobs following a revamp of its technology system.
However these cuts were agreed prior to Ms McDonagh’s arrival. She is understood to be reviewing the technology programme, dubbed Project Omega.