Is the word "land" defined in the Adaptation of Enactments Act? Does the word "land" as so defined include a bog?
Turf Development Bill, 1945—Committee Stage.
Section 1 agreed to.
SECTION 2.
Question proposed: "That Section 2 stand part of the Bill."
I would have to look that up. I imagine it does.
It can be looked up between this and the Report Stage.
Question put and agreed to.
Sections 3 to 7, inclusive, agreed to.
SECTION 8.
I move amendment No. 1:—
In sub-section (1), line 19, to delete the words "and a managing director".
As I am the first Senator to speak on this Bill, I think it is right that I should refer in terms of welcome to the procedure that was adopted in regard to the members of this House yesterday.
Senators
Hear, hear!
Physical contact is a thing that helps people very much to learn to understand what they are talking about, to appreciate what has to be done and the difficulties that there have been in approaching the problem—and, indeed, also to see what might have been done. I do seriously commend the action of the board in regard to the offer that was made to enable members of this House to see Clonsast and to see the working of the hand-won turf scheme.
We appreciate it and we hope that some approach will be made by other boards towards catering in the same way for our comforts. Perhaps I might now get down to the amendment in question. The point of my amendment is very simple and with your permission, Sir, though amendment No. 2 is slightly different, I think we might discuss the two together.
I take it that there is no objection to considering amendments Nos. 1 and 2 together?
Agreed.
I want to avoid a situation in which we are going to be tied down for a long period. This is not a Bill for to-day or to-morrow. It will last for 30 years on the Minister's own estimate. It appears to me undesirable that there should be, for the whole of that period, a mandatory provision that the affairs of the board shall be managed by a managing director. It appears to me too great a limitation, too great a restriction and, to use a word which the Minister is very fond of, not to allow enough flexibility. The Minister will agree that he uses that word on many occasions when he comes in here and asks us to legislate in general terms and to give him power to deal with various matters by regulation or Order. He generally makes the point that he wants to have a certain amount of flexibility. My first amendment is designed towards that end. I want to have a position in which it is possible to appoint a managing director but in which it is not obligatory for the Government to make such an appointment. I think that it would be desirable to look ahead and perhaps also to look back. It is a little bit difficult in one way to discuss the terms of this amendment, without discussing the previous working of the existing board. In discussing them, I do want the Minister to understand that I am discussing the principle and that the fact that certain individuals happen to hold positions is entirely incidental and does not enter into the question.
The original scheme in regard to the Carlow Beet Sugar Factory and the Irish Sugar Company was that there would be a managing director such as the Minister himself has provided in this Bill. That was the position as initiated but there was trouble with the first managing director. I think the second managing director died. In consequence in the last six or nine months or thereabouts, when it came for the board of that company to make a new appointment, they, I understand, approached the Minister for Agriculture and suggested to him that it would be undesirable to have a managing director and they thought that what they should have for the sugar company was a general manager, with full powers of staff control and so forth, but a general manager working under the control of the board as a whole. That is one case where, if there had been a rigid obligation to appoint a managing director, it would have been very undesirable. The Minister for Agriculture apparently fell in with their wishes and the appointment was of a general manager, not of a managing director.
We have also the case of the Electricity Supply Board. In the Electricity Supply Board there is no managing director qua se. The chairman has certain powers but the board is built on a much broader base than Bord na Móna will be under the section as introduced. I would suggest to the Minister that he should consider the position of the board from that angle, and that he should consider it also from the angle that is introduced in the second of my amendments, namely, that the decision as to whether there is or there is not to be a managing director is a decision that should be made by the board itself. I am prepared, as the Minister will have noted from my second amendment, to go this far—that if the board decide that X shall be managing director, that appointment shall not be made without the prior consent of the Government. I should like to see the Minister placing on the board a greater responsibility.
I should like to see the Minister placing on that board the responsibility for the entire working of the new concern so that the board as such, would not be able to say hereafter to the Minister: "You appointed us but you appointed or designated so-and-so managing director and, in consequence, we"—when I say "we" I mean the members of the board other than the managing director—"have no responsibility for what has been done." I think it would be far better if responsibility were placed on the board and if they were made to face up to it so that the decision as to whether there should or should not be a managing director, will be the board's decision and that that decision will be taken, according as to whether there happens to be at any particular time a person suitable to be appointed. Whether it is desirable to appoint a person to-morrow as managing director does not at all enter into the question, but whether there may be a person suitable to be appointed ten years hence. Let us consider for a moment that X is appointed to-morrow. X is only human; he may not last too long, although we hope he will. It might conceivably happen that he will walk into a motor car in another week. I do not see that it should be obligatory to have a managing director unless there was a suitable person available. It appears to me, therefore, that this particular section is one above everything else in which there should be that flexibility of which the Minister has so often spoken in this House.
I do not know how one could argue this point. It is a matter, I suppose, of personal opinion. My personal opinion is that a company of this kind should have a managing director, both on the grounds of theory and experience. I should say there are very few public companies with which I have had contact that would not be better off by having a managing director. I do not know whether the analogy of the sugar company helps here. The first sugar company which managed the Carlow factory was formed under the Companies Acts and the present company has also private shareholders. When the sugar company was set up it had a managing director. It now has a general manager. Whether that is an improvement or not is a question I do not want to express any opinion on now.
The Electricity Supply Board, has in effect, a number of managing directors. The obligation of directing the enterprise is on the members of the board and they are whole-time executive officers exercising managerial powers. I should say that if this Bill had been introduced without provision for a managing director I would have expected the Seanad to insist on it. I feel that it is a better type of arrangement. The Government will stand in a somewhat different relationship to this company than it would to a company constituted under the Companies Acts.
Although the board of the company and its managing director will be given freedom from Ministerial supervision in the day to day management of the undertaking, the Government will, in fact, be held responsible for its success. It will be a matter upon which the Government can be questioned and criticised if the management of the undertaking is in any way unsatisfactory. If I could have seen in advance the lines on which Senator Sweetman's argument would proceed, I would have prepared a case in favour of managing directors as against general managers. I am somewhat at a loss to produce them promptly.
That is a new rôle for the Minister.
Years ago I came to the conclusion that the best type of company organisation includes a managing director, not merely responsible for management, but also responsible as a director, sitting with the other directors on the board, for policy as well as direct management. There were some companies operating public utilities, and other concerns, in this country in the success of which the Government had considerable interest and where I endeavoured by every possible pressure I could exercise to secure the appointment of a managing director, believing that it would be a better arrangement.
I did not succeed, except eventually by legislation in one case, but I feel strongly that an organisation of this kind, carrying on an enterprise of this nature, can be better run in its day to day affairs by a person who is not merely a competent manager but also a member of the board and familiar as such with the policy of the board and in a position to express an opinion on that policy. That is an important matter in relation to enterprises of this kind where questions of policy will very largely revolve around the methods of management to be employed. If there is to be a managing director, I think the Government should appoint him.
The special responsibility which the Government feels in regard to this development puts on it the onus of ensuring that the managing director is a man whom they regard as competent, and who will stand in that special relationship to them arising out of the fact that he is appointed by them rather than in the position of a director receiving his appointment from the board and removable by the board. I would be inclined to resist these amendments on the ground that it is desirable that the Government should appoint the manager.
I am in thorough agreement with what the Minister has said against the idea of a general manager. Anybody in business knows that the person in control of the business should have that degree of executive authority which is not vested in a general manager as a rule. While I am in agreement with the Minister on that, I am in doubt as to whether we should have a chairman and a managing director as well in a board such as this is going to be. Personally I think a good case could be made for combining the two positions if the board is to make a good job of that excellent work which we saw yesterday. The managing director will feel a greater degree of responsibility in his job if he is not subject to a further authority like a chairman who may not be as well versed on the technical side of the business as he is.
I am in hearty agreement with what the Minister said as to the necessity of having a managing director. I am also in agreement with the Minister that in a board of this kind it is necessary that the Government shall have the appointment of the managing director. I say that quite deliberately, but I do question the wisdom in the interests of the man who is to be the managing director, of his being subject to the authority of a chairman to whom he shall have to answer. The position of both chairman and managing director should be vested in one person. I happen to be chairman and managing director of more than one company, and I feel that it conduces to the success of the business if there is one man in charge.
I am very unhappy about this whole business. The Minister seems so satisfied and that makes me uneasy. It is a most difficult thing to be sure about. Senator Sweetman got nearer to the point when he said that the element in management is flexibility, and it is altogether wrong if you approach management from the standpoint of any principle and introduce rigidity like the statutory rigidity that is contemplated in this section. I do see, certainly, sense in Senator Summerfield's argument that you should practically hand this over to a dictator.
I think if you get the right man, one man, that would probably be the best way, but I do not know where you will get him. My friend says "No". In matters like Government and public policy there is nothing worse, but I could conceive the right man, if you got him, making a success of this business because, does the Minister realise he is embarking on an enterprise which has never yet proved an economic success? There have been thousands in capital lost by all sorts of optimistic people who went into turf development, and it has invariably been lost and I am not at all certain that it is going to succeed now.
I said on the Second Reading that this was justified as an insurance in the interest of the nation's fuel against the stoppage during the emergency, but beyond that I cannot persuade myself to go any further. I do feel that this question of management is going to be most difficult in the whole of the enterprise that this Bill contemplates. Personally, I should like to see flexibility, and I should like to see someone appointed with the responsibility of making this a success. I would not object to the Minister appointing the chairman, but beyond that the board should have a free hand. What essential difference is there between this and the Electricity Supply Board except that the Electricity Supply Board is dealing with established technique?
There is nothing new to be discovered in the technique of electrical generation, but there is entirely new and unexplored territory in the economic development of turf. I think it is a most disastrous thing to start this with the rigidity of control that this section contemplates. I do not like to mention parallels in this and other countries, but I think they should be considered for what they are worth. I would draw the Minister's attention to this, that in constituting the Coal Board under the nationalisation scheme in Great Britain, they went altogether outside the ordinary Civil Service and appointed people at commercial salaries with commercial experience. I do not say that the Minister acted hastily here, but I lean to that point of view. I should like to see commercial salaries paid to the very best people that we could get. I would not be concerned whether the chairman was a citizen of this State or not, provided he was the best man with the best brains we could get. I do not at all like this section which makes the managing director principle statutory. That principle cannot be changed except by an amending Act of Parliament. I think that is all wrong. I think the whole thing is an experiment and that flexibility should be a determining factor in the matter of management.
Senator Summerfield in referring to companies, was probably thinking of what I may call family concerns. I was very glad to hear that Senator Summerfield subscribes to the good old principle to which I also subscribe, namely, that the head of the family should be a complete and absolute patriarch dictator within that family. To be quite honest, I never expected that the Minister would accept the principle of this amendment. Nevertheless, I think the principle is correct. I think there is the gravest danger to the State structure as a whole in that the tendency is to set up various concerns to deal with vital matters and vital subjects relating to State industry— that in the case of each one the tendency should be to put one man virtually in control. That is the Minister's principle in regard to the Tourist Board and to C.I.E., and that is now his principle in regard to Bord na Móna. That is what he has decided. I think it is a wrong decision, and one that the Minister himself will find, before many years have passed, is not going to redound to a real conception of industry within the State. I am trying to avoid, in so far as I can, being in any way offensive, but it does appear to me that the only analogy I can see to this is national socialism, with a Gauleiter in control of each particular industry and responsible for working out that policy. If you are going to have the State intervening in industry, the socialist principle of having a broad structure at the top rather than at the base is the better principle. The Minister disagrees with me. He is in control, and, therefore, his will on this section will prevail. I want it to go on record that I do not agree with that view.
The principle of a managing director is associated with private enterprise.
Private family enterprise.
I also want it to go on the record that I did not use the word "dictator," nor did I infer a dictatorship. I said that, as against the suggestion of a general manager, I was convinced—I remain convinced even after what Senator Sweetman has said—that the method of having a managing director is the better one, and that he should also combine the duty of chairman with that of managing director. There is to be a board on which there will be a number of people. The managing director will have to give an account of his stewardship to the members of the board. I feel that the essential success of the undertaking that we are discussing is that some one man should be in control. I am sure that he is going to be a competent man. I want to pay that tribute to the Minister's intelligence— that he is going to pick a man whom he is reasonably convinced is fit for the job of managing director. There will be a number of other men of competence and intelligence on the board, and they are not going to be mere pawns. The board will hold meetings at stated periods, and the managing director will have to account to the members of it. In between the meetings the managing director will be in supreme charge of the undertaking. I personally feel that that is essential if this State-backed enterprise is to have a chance of success at all. I simply got up to make that point clear.
There are many different types of management, according to the business carried on, and no one type can be said to be the right type. The right type is the type that works. We are now providing by law certain conditions which would prevent the method that Senator Summerfield indicates being brought into effect. I think there is a good deal to be said for what Senator Summerfield wants to do. I do not say that it is the only way of doing it, but it is a far more logical way than the Minister's way. He would place the general management in the hands of the chairman. Many analogies can be quoted for that. It is the way that some banks are run. It is a method in banking to make the chairman a whole-time director. He has the general management and the general control in his hands, subject, of course, to the board. He has managers under him. He is what one may call the general manager. I think that way might work quite well. I do not say that it is the only way, but I do say that it is a far better way than the method envisaged in this Bill. We are setting up here a barrier between the managing director and the board. The managing director is to be appointed by the State, and if he does not get on with the members of the board he can say to them that he does not owe any allegiance to them but rather to the Minister who has appointed him. There is no definition of duties as between the managing director and the board, so that you have every possibility of friction. There will be the greatest difficulty in overcoming that friction. I think the thing is thoroughly bad, and if there is a division on this principle I shall be prepared to support it.
Before a division is taken, I should like to express a point of view. It is a fundamental principle of commercial life that a manager who knows his business will look for full and complete discretion when taking over a position. That is a fundamental principle of commercial life as I know it.
Subject to the board.
Subject to major policy as regards finance and other matters, as laid down by the board. If a manager does not look for that discretion, I always have the feeling that he wants to get hold of the job and that he is not particularly mindful of the responsibilities which he is about to assume. A good manager who is sure of himself will look for that discretionary power. If a managing director of this business is to fulfil the responsibilities allotted to him by the State, the State should be primarily responsible for his appointment. The fact that they do that does not mean that he will be antagonistic to the board or that the board will differ with him. If the directors differ with the managing director, then it will be his obvious duty to say: "I do not agree with the way you are conducting your business and I shall resign". If he does so, any difference that exists will be brought to light. In any event, I do not think there should be any serious objection to what is proposed in the Bill. The man with complete discretionary power will have to accept complete responsibility. The responsibility is nailed on him and I think it is far better to put the responsibility on him than to put it on a number of people, as it would be put if laid on the whole board.
I should like clearly to understand what we are discussing in this respect. From what or whom will the managing director derive his power? Where will the limiting line of his power be? Will it be power deputed to him by the Minister or will it be power deputed to him by the board?
The Senator should refer to Section 16.
I have read Section 16. Senator O'Dea is always anxious to show that nobody else has read Bills. I took the precaution of reading this Bill. That section is merely an enabling section so that an outsider could not come along and say: "I will not accept that contract because it is signed only by the managing director." I want to be quite clear as to who will be responsible for determining the limit of the managing director's powers and functions. Will he, as Senator Summerfield suggested, merely sit in at board meetings and deal with urgent matters that may arise from one board meeting to another or will he be a person—we have had such managing directors in the past—who will come to the board meeting and say: "Since last meeting, I have done this and this; good-bye"? That happened in the case of one concern, as I think some members of the House are aware.
Sub-section (3) of Section 9 is the appropriate sub-section in this connection. That sub-section states:
"Each member of the board shall hold office on such terms (other than the payment of remuneration and allowances for expenses) as shall be fixed by the Government at the time of his appointment."
The Government will appoint the managing director and, presumably, will indicate, in general terms, the powers which the managing director is to exercise, as such. There will not be specific delegation of powers by the board to the managing director. The Act which established the Electricity Supply Board did not provide for such delegation. The Electricity Supply Board has no power to delegate specific functions to its members, although it can delegate specific functions to its officers. A number of whole-time members exercise on behalf of the board certain functions of management. My feeling in this regard is that, while there would be attractions, from my point of view, in having the Bill so framed as to provide for flexibility, the Oireachtas would prefer, in the case of a corporation of this kind, set up in the manner proposed—not as a company under the Companies Acts but as a statutory corporation—that the precise nature of the organisation should be defined and that the element of discretion should be kept at a minimum. We are providing for a board which cannot be more than seven in number. It can, in certain cases, be less than seven. It is desirable that there should be that degree of flexibility, because it is not always convenient to fill a vacancy on a board of this kind when it arises. The person who, you may think, would be best may not be immediately free to accept appointment or there may be nobody with the precise qualifications possessed by the member whose death or removal caused the vacancy. I think that it is desirable there should be a managing director. There may be enterprises in which a managing director is not an essential officer. This enterprise will involve a number of works all over the country, a large amount of employment, a very considerable amount of day-to-day administration—the taking of decisions immediately to ensure that the work will be expedited.
Therefore, in the case of this enterprise, I think it is desirable that the management should be in the hands of a member of the board and not of a person subordinate to the board and possessing only the limited authority which a general manager would have. While there are other types of enterprise in which that form of organisation might not be best, I am satisfied that it is the best form of organisation in the case of this enterprise.
I appeal to the Minister to reconsider this matter, appoint the board and let them be responsible for the concern. Give them unfettered discretion.
The picture which Senator McEllin conveys to my mind is one of the managing director as an all-powerful authority. It makes me feel that if I were offered membership of the board—which is very unlikely—I should refuse it. I have been listening to this discussion with an open mind. Senator Summerfield seemed to me to be right—that, on the Minister's showing, the managing director ought to be chairman. That seems to me to follow from the whole discussion. When I hear Senator McEllin laying down certain commercial principles, on which I do not profess to be an authority, it seems to me to make that case stronger. The Minister says that the Government will define the powers of the managing director. They will not be defined in the Bill and we do not know exactly what the definition will be.
What I do not know is what the powers of the board will be. In the case of the Electricity Supply Board, you had selected people each one of whom could perform a certain function. In the case of this board, apparently, you need not have any such thing. You can combine all the functions in the managing director. I fail to see exactly what the functions of the board are to be or how, in any circumstances, the board can disagree with the managing director. The word "dictator" is an unpleasant word but, as the Bill stands and as the argument on behalf of the Bill has been put, it seems to be quite clear that the managing director will be all-powerful and that the members of the board will tend to be ciphers. I do not know what else they could be in the circumstances. We all want the board to work in the best possible way. From the discussion so far and from the Minister's insistence, we know that he thinks that a person with drive should be appointed managing director and should have a place on the board. But what the other members of the board are to do is not clear to me. I do not think they will have any functions.
Several functions.
I do not know very much about the particular function of the managing director as a member of the board but I agree with Senator Summerfield's view about the powers of the managing director and the check on these powers by the members of the board to whom he would have to render an account of his stewardship. I would like to know what degree of qualification would be looked for in appointing members of the board. If they are, as Senator Hayes has suggested, a board of ciphers, what check would such a board have on a managing director? If he had to render an account of his stewardship to them and if they did not know anything about the business, what check would they have on him? If the board was composed of men who could not visualise the difficulties and pitfalls that would beset the company, who could not anticipate matters and give guidance to the managing director on them, who had not the necessary ability or qualifications to supervise his work, what check would they have on his functions? If they could not find out whether the managing director was capable of doing his work or not, what check would there be? That is what is puzzling me in the matter. If I had the assurance that the members of this board had the technical qualifications to act on such a board and to supervise the work of the managing director, I would be quite satisfied in having him appointed in the circumstances.
As we have gone on to the question of the board as a whole in connection with this amendment—I had intended to deal with it on the section, at a later stage—I want to make it quite clear that, so far as I am concerned, I hope we will get a board in which not the only drive will be with the managing director. I hope we will get a board all of whom will be capable of putting their shoulders to the wheel and, in addition, who will be so placed that they can do it—so placed in two regards— first of all, vis-a-vis the managing director, and secondly, that they will be paid reasonable salaries for their work. It appears to me to be grossly unfair to appoint persons to a board and to pay them very small fees, commercially compared, and then to expect them to be anything more than ciphers. If we adopt that principle, then, unless the persons concerned have what I might call a real love for production or do it as a matter of national duty, it is obvious they are going to be nothing except ciphers. They could not possibly do it. I sincerely hope that we will have a board that is comprised of the very best material that can be obtained and that we will enable them to carry out their duties by making certain that they are given real powers of direction, real powers of helping, real powers of control vis-a-vis the managing director and, also, that we will, so to speak, physically enable them to do their job by paying fees that are proper commercial fees and having proper commercial people appointed.
It would appear to me to be the height of folly in regard to this scheme to try to cheesepare in regard to the fees paid to the board because, if we do cheesepare in that matter, with this long-term view in our mind, we will not get the right type of person as a director. I sincerely hope we will get the right type and it is because I want to see the right type there and with all the possibilities of utilising their ability that I want to ensure that the managing director would be the lead, but only the lead and not the whole machine.
I agree that that should be so and I would not accept Senator Summerfield's suggestion that the chairman and managing director should be the same person. I think there is a tremendous advantage, even from the point of view of the managing director, who is dealing every day with details of administration and gets so close to the whole scheme of things that he cannot always see it as a whole, that he should have to meet a board of directors every week and discuss general policy and general administration with them.
There are one or two provisions of this Bill about which I should like to be made wise. There is sub-section (2) of Section 14.
We have not come to that yet. We are still dealing with the amendment.
It is really on the amendment because Section 16 provides that the board shall conduct its business through its managing director.
It may.
It may, yes. This is a company established by Statute. It is not the same as a limited company that has rules and regulations either prescribed in their articles of association or in Table A of the Act. I should like to know what are the rules that the board is going to make under that Act. Will it be made part of the Act or will power be given to the board to revoke any order that they may make? That would be an important consideration. I do not know if there is an inherent power in every board to revoke any power they have given by resolution. There is, I know, in the case of limited companies and others but in the case of a statutory board I should like to be certain that all their powers are clearly set out for fear there would be any mistake about it.
It depends on the rules of procedure they would make for themselves.
Are not we on the amendment now?
It would be better to finish with the amendment before we deal with that question.
There is a type of organisation based on a board that I feel might be supported by a great body of managing experience, and I think it is most unfortunate that we should by Statute preclude it from being adopted, that is to say, a board of four or five, all whole-time, with a big commercial salary paid to the chairman, who has no special technical qualifications but who has long experience in production management and, working under him, a financial director, a personnel director and a technical director. That is a board that I feel would stand up to a good deal of criticism and that it would be difficult, in principle, to argue against. We are precluding that type of organisation from coming about. Has the Minister considered a set-up of that kind? It is not an uncommon set-up. Several companies work on that principle and it is most unfortunate that an organisation of that kind—I do not say should not be adopted—but should be precluded by Statute from being adopted.
May I point out that it is 10 o'clock?
Question put and declared negatived.
I take it that the decision on amendment No. 1 covers amendment No. 2.
Amendment No. 2 not moved.
I move amendment No. 3:
To delete sub-section (3).
Question put and declared negatived.
Progress reported; the Committee to sit again.
The Seanad adjourned at 10.5 p.m. until 3 p.m. on Thursday, 9th May, 1946.