17th Jan 2011

AIB has a new CEO - how will he fare?

In November of 2011 AIB, one of Irelands dominant “big four” commercial banks, appointed Mr David Duffy as CEO after a yearlong effort to find a suitable candidate for the role. AIB, which was effectively nationalized in late 2010, began its search for a CEO when the Irish government overhauled the bank’s senior management. Since that time, Mr David Hodgkinson has filled the role of executive chairman on a temporary basis. 

Mr Hodgkinson, who stepped aside when Mr Duffy took the helm, has pledged to stay with AIB’s board as a non-executive officer for the first year of Mr Duffy’s tenure as CEO. In a statement quoted in the Financial Times he praised Mr Duffy’s record as an executive with several top international banks, saying he is “ideally suited to leading AIB’s extensive restructuring and delivering the performance that will best serve customers and return the bank to sustainable viability.”

Nobody would deny that Mr Duffy has a difficult road ahead of him. It’s hard to imagine a situation in which the legacy of a predecessor could exert a more baleful influence on the terms and indeed the whole character of a chief officer’s appointment.

Mr Duffy has this month presumably been familiarising himself with some dauntingly powerful stakeholders, namely the Irish government, which owns a 99.8% interest in his company, and, looming even larger in the background, their benefactors at the IMF. Mr Hodgkinson and the AIB board will also be taking a keen interest in the progress of their newest recruit.

The best way for him to reduce the negative influence wrought by his predecessors is to consciously set the terms of his own tenure as firmly as possible from the start. He needs to have a clear vision of the course that the restructuring of AIB should take. He needs to create friendly relationships with his stakeholders so that he will in future have a chance of communicating his ideas to them in the most effective way possible.

Mr Duffy is on a three-year contract with an option to renew, but in such a high-pressure – and highly complex – situation he is likely to feel he must prove his ability in a shorter span of time. He can certainly expect his performance to be critically evaluated a year from now.

Mr Duffy would do well to start with the end in mind and aim to make a strong impact, in an even shorter span of time than that. He can accomplish a lot in his first 100 days as CEO of AIB.

Hilda Goold

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