Feargal O’Rourke is clinging to the lectern, speaking a mile a minute and losing his train of thought. Throughout his career, he had delivered hundreds of presentations to political and business leaders, and provided counsel to high-powered boards, government ministers and multinational bosses. As a child, the young O’Rourke had even delivered speeches after communion in his local church in Athlone.

On this occasion, however, O’Rourke is bristling with nerves. It is 2015, and the tax specialist is making his pitch to become the next managing partner of PwC, the professional services giant. He knows each of the 100 people in the room personally and held individual meetings with each in the build-up to the main hustings. He has 20 minutes to deliver his vision, and another 20 to answer questions.

His is one of three candidates in the race, but, by his own tally of the votes, the election is his to lose. As he stands at the top of the room, a voice in the back of his head keeps repeating: “What on earth are you doing up here?” O’Rourke pauses for breath, composes himself and delivers his speech.  

Shortly after, he wins the election on the first count. Later that night, while enjoying a drink with the two defeated candidates, he produces a sheet of paper from his wallet containing the number of votes he thought he thought he would receive. He was out by just one.

“I had knocked on enough doors when I was a younger to know what yes sounded like and what a no sounded like.”

Feargal O’Rourke

“I was one vote out, but I knew where it was,” O’Rourke says now, four years after winning the election. “The other two candidates thought they would win on the second count. I only counted people who told me they were voting for me, and then I had triangulated it with someone else.”

The ability to tally votes is hardly surprising. O’Rourke’s political links have been well aired over the years, but are significant nonetheless: his mother Mary served three terms as a government minister; his uncle, Brian Lenihan, held several cabinet positions and was Tánaiste to Taoiseach Charles Haughey; his cousin, the late Brian Lenihan junior, was Minister for Finance, and his other cousin Conor was a junior minister. Politics runs through the blood.

“The election was a really good experience. You had to talk to every single partner. I had two other candidates against me who were really good guys. I probably understood the human condition better than them without gilding the lily. I had knocked on enough doors when I was a younger to know what yes sounded like and what a no sounded like.”

Early this year, he was elected unopposed for a second term. There was 100 per cent turnout of the partners and he got 100 per cent support. “My mother was extremely suspicious, she thought it was like Kim Jong-un,” he says.

*****

Feargal O’Rourke’s corner office is modest in size, but the views are dazzling. PwC’s Dublin headquarters is in the heart of Dublin’s docklands, neighbouring the Convention Centre Dublin and overlooking the Liffey. O’Rourke’s glass front office has uninterrupted views of both, and much more besides.

The office is littered with pictures of O’Rourke and various luminaries: Bill Clinton, Mohammad Ali, Phillip Hammond, Gordon Brown. Tucked away on the corner is the original sign of Coopers & Lybrand, an earlier incarnation of what would become PwC. There is also a picture of his mother.

Unlike many other accountants, O’Rourke revels in public discourse – from radio appearances to Twitter debates. Take the case of the notorious double Irish. In 2013, he came out publicly to say it should be abolished.

It was a controversial move for a man who had spent his career advising multinationals on tax strategy, and who travels to the US once a quarter to meet his US clients. Indeed, he was seen as the architect of a number of tactics to reduce multinational tax payments and viewed as the voice of multinationals.

But he said it publicly and defended his position.

“I got people telling me that I can’t say that. But it was what I believed, and it is what I believed was right for Ireland,” he says. “I remember speaking to Michael Noonan, and he asked me was I sure? I said I was. He was also coming to the same view. Within six months, he had closed it off.”

“To be the leading professional services firm, you have to express a view on the issues of the day.  When you express opinions, you must recognise that not everyone will agree with them. But if you are cogent about them, you can explain where you are coming from. I don’t mind people disagreeing with me. I am happy to listen. It leads to a better debate.  As a firm, we are a bit more opinionated than we were.”

Six years on, tax remains on the agenda. The OECD is developing new rules for multinationals, and even the Irish government is preparing to shift from its hard-line position. Meanwhile, the role of multinationals in our economy continues to grow to the point that many are worried about an overconcentration on corporation tax, with many arguing the state needs to do more to boost indigenous Irish companies.

We begin our interview, however, on the topic of the Irish economy.

Ian Kehoe (IK): Depending on who you talk to, the economy is either on the cusp of overheating, or at risk of a Brexit-induced systemic shock. Where do you sit on this debate?

Feargal O’Rourke (FOR): I am probably an optimist by nature. I don’t think we are at the sort of 2007 level yet in terms of overheating. But there is a recognition that we can’t buck the economic trends that are out there with the rest of the world. I sit on the PwC European leadership team. At our last meeting, there as a sense of a softening throughout Europe.

What I am hearing reflects the general economic conditions. We have Germany heading technically into recession. The UK for the last quarter was negative. I don’t think we can continue on with this level of growth in the economy we have had in recent years. I am hoping for, and I almost hesitate to say the words, a soft landing at some point. I think the odds of a seismic shock, à la the global financial crisis a decade ago, are less. You don’t get a sense we are as heavily leveraged as we were then. It is a different economy; things are not as frothy as they were then.

Dublin Port are a good bellwether for how things are going. Six months before the crash they were talking about the throughput through the pot dropping off a cliff – be it white goods or cars. They are still saying hat throughput is strong. Business leaders are worried about the general economic climate, but they are positive about their own organisations.

IK: So, the underlying sentiment is strong?

FOR: When you have been around long enough, you do realise that sentiment is a massively important thing. We can talk ourselves into a recession if we want. If people hold back on spending decisions or get negative on investment, that has a knock-on effect. When the economy turned about five or six years ago, it turned very quickly because once people were confident, it all came streaming back. 2020 will be a more unsettled time, but I would still be positive about the economy.

IK: What are you hearing from your clients in terms of sentiment – are they bullish or bearish?

FOR: Our clients break into four categories. You have financial services and that probably breaks down into domestic financial services and international financial services. The banking system and the sector has taken longer to get back to “normal” than any one of us would have thought. The fact that ten years on we are still talking about legacy issues is not a good thing for the economy. International financial services are doing very well, and Ireland has got its slightly unfair share out of Brexit, which is good.

Then you have the rest of the economy. You have US multinationals, where Ireland is simply the base and it is not really their marketplace. They are all booming. The IDA will tell you that two thirds of the expansion that comes in Ireland comes from existing companies here. What Irish management are very good at is developing connections with HQ and are very good at understanding what the roadmap is, and they then position themselves to get that mandate.

If you are an Irish only business, you are doing well. The recovery was slow to take place in certain parts of the country, but it is there now. The last elections, where the outgoing government’s mantra was ‘Keep the recovery going’, well, that message failed to resonate the further west you went. In the past four or five years, the recovery has pushed out to other parts of the country.

Then you have companies which are Irish by nature but expansionary. They are beginning to feel the cold winds. The UK is quietening down. They will feel it. It is a mixed bag depending on what sector of the economy you are in.

Taxing times?

IK: Do you think we are over-reliant on multinationals now? We keep on seeing warnings about corporation tax take and the vagaries of it.

FOR: In a perfect world you would probably like a more balanced economy. You would like a greater indigenous economy. But I don’t think it is an either or. It is not a zero-sum game, when we have the next election, I think the multinational sector have been well looked after. I don’t think they have any great asks – obviously they want to make sure Ireland fights its corner in the global tax debate at the moment.

Kissinger had a phrase famously: when I want to talk to Europe, who do I call? When the multinational sector wants to talk, they do so through the American Chamber of Commerce. You get a single unified view of the what the multinational sector wants.  If I move that to the indigenous sector, do I talk to Ibec, Enterprise Ireland, the SFA?

In the next election, I think there is a constituency for appealing to domestic Irish business and they have a myriad of issues that they want. They need to focus on three or four and try to deliver them.

IK: Do you think the proliferation of multinationals is hampering the indigenous sector?

FOR: A good example is the medical devices areas in  the west of Ireland. A lot of people have left the likes of Boston Scientific and set up their own business. They set it up for 18 or 24 months, and Boston Scientific or someone comes along and buys them out. In other countries, they decided to float or hang on. In Ireland, the ability of an owner or an investor in an indigenous business to take out money that is not taxed at 50-odd per cent is limited.

You have left your job. You have set up a business for a year or two. You have a mortgage and a few kids, someone comes along and offers you a cheque for five million, you are going to pay capital gains tax, do you make the choice to keep growing or pay off all of your debts? It is not the norm to hold on. This is about the tax structure and our culture.

That is why when you look at a Kerry or a CRH or a Flutter or an Ardagh, they have become a global player. At some point, someone must have run the rule over them and offered to buy. But they did not sell, they are exceptions and the more we can generate, the better. A lot of people get taken out at an early stage.

IK: You mentioned tax reform. It is big on the agenda. The government appears to be refining its position as part of this ongoing debate, with Paschal Donohoe leading the move here. What is your view on this? Is it inevitable?

FOR: There is a philosophical debate. For 100 years, the global tax rules said that you paid your tax where you had boots on the ground. If you did not have boots on the ground, you did not pay tax, but your ability to penetrate the market would be limited. That worked pretty well for almost all of the 20th century.

Then the internet model came in. People realised they had never met anyone from Apple music, but they had downloaded a hell of a lot of tracks. The 20th century rules meant you did not pay tax because of lack of boots on the ground. The philosophical debate in the last number of years has been about profits where sales take place.

When Paschal Donohoe gave his speech a few months back, I tweeted it was the most important tax speech given by a minister in thirty years. He recognised the way the world was moving and that he was going to cooperate. What he was really saying was that we are better inside the tent than outside it. The world is changing. As Oscar Wilde said: we have agreed the principle, now let’s haggle over the price. We are good at building alliances, and there is a sense that if the US ok this, we will ok it also.

But with Trump, it’s uncertain. Everything is uncertain.

IK: Do you think the tax changes will have a big impact on Ireland? When do you expect a resolution?

FOR: It will drag on for another four or five years. This journey started in 2013, when Pascal Saint-Amans and people thought it would be awful for Ireland. But if what he is trying to do is make sure that you must have profits where substance is, and you can’t have profits offshore in a sandy beach tax haven, then this is good news for Ireland because we have got the substance here.

There have always been three piles of tax historically for multinationals. The first is taxed at zero. The second, Ireland, at 12.5 per cent., the third at the point of a  sale, but you don’t pay any tax because the 20th century rules don’t catch you. Essentially, my perception is that the non-taxed profits will have to come onshore and what better place for this to happen than Ireland. Some of these profits will have to go into the country of consumption. But net/net, we should win.

“Even though it relates to a legacy regime that no longer exists, people always say: Apple, Ireland, tax haven.”

Feargal O’Rourke

IK: So, you are just eroding Bermuda or Vanuatu as a jurisdiction?

FOR: Absolutely, at the cost of us being partially eroded by the country of consumption. Net/net, I always felt that would be positive for Ireland, and we are starting to see it in the last 18 months in tax corporation tax receipts.

IK: You don’t believe that the corporate tax surge is one-off or exceptional?

FOR: No. But it is not something you can ever declare the mission accomplished. When Trump and Congress passed the Tax Cuts and Jobs Act 2018, that was designed to make the US more competitive for investment decisions. I have noticed it. When I travelled to the US three or four years ago, companies would want to get intellectual property out of the US as quickly as possible. Now, some are saying there is no rush. The one thing working in our favour at the moment is that the new laws are still bedding down, and the Democrats might get into power. One thing Ireland has going for it is that it has always done what it said on the tin. We have always flagged when we are going to make changes. The 12.5 per cent in itself is kind of irrelevant but the fact that we have stuck to it in good times and bad has become an avatar for Ireland’s consistency.

IK: If you look at the changes around the double Irish, we have shored up the reputation.

FOR: The Apple case will continue to drag us back. Even though it relates to a legacy regime that no longer exists, people always say: Apple, Ireland, tax haven. Absent the Apple case, we have played what was a bad hand very well. We are in a great spot, other than the Apple case, which continues to pull us back.

Feargal O’Rourke on… the Irish recovery

“I was in the US quite a lot at that point in time. There was a sense that, unlike France or Greece where there were marching and rioting, Ireland recognised that it was going to have to clean up the house. While history will probably be unkind to that government on the emergence of the financial crisis, it will be kinder to their attempts to restore fiscal stability.

“When Michael Noonan was in office a year or two, he said he disagreed with the previous government’s approach to the banking sector, but he would highly commend what they did to stabilise our fiscal position. We are talking about things like the USC and others. They were painful blunt instruments, but they were radical steps to shore up the financial position.

“There is another point. A lot of the US multinationals that were here suddenly saw almost an internal devaluation. Rents became cheaper. Labour costs went down. Their broad global marketplace had suffered, but they invested in Ireland during that period. Be it a Facebook or a Google or an Intel, of whether it was in the property sector with investment funds, a lot of US multinationals sensed an opportunity.

“If you look back at that period, many companies instituted wage cuts or pay freezes. The multinationals increased pay and increased bonuses. There are times when people say that we are disproportionately reliant on foreign direct investment in Ireland. I think that period in 2009, 2010, 2011, we were lucky we were disproportionately reliant on US investment.

“We had a twin-track approach. The government took radical steps to stabilise the finances and US multinationals taking an opportunity. I would also give credit to Enda Kenny, who when he came in, brought this very simple mantra of positivity to the world. People underestimate how important that was. He was the right man for the right time.”

How to become a managing partner

IK: How do you become managing partner of a firm like this?

FOR: I did not join the firm wanting to be managing partner. When I joined first, I wanted to be Minister for Finance. You want to be the best you can be, you want to work your way through the system, I had great mentors in here. I became a partner at 32 after ten years. You spend the first ten years as a partner learning the  ropes and getting your reputation. Then you start getting jobs.

There are cycles here. It comes up every four years and you can only do two terms. The position became vacant in 2007. At the time, I had done various roles but had not run any divisions. Ronan Murphy was elected. When I started to run the tax practice, that put me on a shortlist. Then, traditionally, we had always had an auditor running the business. I was the first non-auditor.

When the job became vacant in 2015, three people put their hand up and I was one. In a way, it was really interesting because it was like a Seanad election. It is not a huge constituency. I was talking to 100 partners and I had to sit down with each one individually and explain why I felt I was the best person for the job and what my vision was. It is quite personal. At that stage I was a partner for 20 years, and you know some of them are not going to vote for you.

Given my family background, I understood that once you put your head above the parapet, you are fair game for criticism. You have to take the slings and arrows of the election.

IK: What is the role of the managing partner at PwC? And what is your own leadership style?

FOR: A partnership is a funny model. It is not like a command and control model. In terms of running a business, it has its drawbacks every now and again. But in terms of collegiality, it is fantastic. I have a brilliant leadership team around me. One of the real epiphanies I have had over the last four years has been about that. I don’t need to do everything myself. If I can turn the dial five to 10 per cent in people engagement and people loyalty, that will have a massive impact. My job is to put a flag on the hill and a vision for people.

IK: What else does the role entail?

FOR: There is no playbook that comes with the job. What do I like doing? I like engaging with our people. I like setting out a vision and a strategy for where we are going. I like meeting clients and being out in the marketplace. I like the operational side, but it does not really float my boat. I have a brilliant number two and COO, Paul Tuite, who is the deputy managing partner. He looks after the infrastructure, the finance and that sort of thing. I point the direction and then effect the strategy.

“I genuinely believe I have the best job in town. I work with brilliant people and companies. I have travelled the world meeting exciting, interesting people. I am remarkably well paid for the work I do.”

Feargal O’Rourke

IK: Where have been the areas of growth?

FOR: We have three divisions. We have assurance, which is about 80 per cent statutory financial statement. We have tax advisory and we have advisory, consulting and deals. Even though it is a very mature business, audit is still growing at 6 or 7 per cent and it is still about 44 per cent of our business. Tax is growing at 15 per cent and advisory is growing at about 30 per cent. It is growing everywhere.

Where we have invested, and where it has paid off, is cyber, data analytics, technology implementation. But even if you take traditional areas like tax, we have had a good Brexit. We have done a lot of customs work, supply chains, our financial services practice has done well with companies moving from the UK.

Complexity and turbulence is our friend. The turbulence of recent years, allied to a relatively healthy economy, has been good to us. We are 50 per cent bigger than we were four years ago in terms of revenue. We were €233 million four years ago and we are €350 million to the end of June now.

I genuinely believe I have the best job in town. I work with brilliant people and companies. I have travelled the world meeting exciting, interesting people. I am remarkably well paid for the work I do.

IK: At the same time, it is a public job, you advise on controversial projects and get some stick.

FOR: One of the high-profile projects we have done recently was the National Children’s Hospital. That was a great piece of work. I have spoken to the minister who say it was a good piece of work. You always look at what could go wrong, but my approach is that if there are knotty, complex projects, we want to be the people that come in to get to solve it. You can’t back away from projects, you bring your best people to it and make sure you close off any risks as much as you can.

Work-life balance and the future

IK: What advice would you give people coming through in business?

FOR: The person of today probably does not believe in a job for life. They want multiple experiences. Even if they won’t want to be an accountant or a tax adviser, I would still say join a firm like PwC or another firm like that and at least spend a couple of formative years there. It gives you a good grounding and a good view of broad business.

The second thing I would say is find a mentor. I was fortunate that I had a couple of people here over the years who I would talk to about my career. There were two or three occasions in my career when I nearly left – twice before I was a partner and once when I was a partner. I got offered really good opportunities and I thought about them for a while. I took advice from mentors on it.

When I was 25, I nearly made the disastrous decision to go into politics. I was offered the chance to run as a sweeper candidate in a Dublin constituency. To his eternal credit, Tom Grace talked me out of it. I was heavily involved in politics, and I knew I would not get elected but it could put me on a path.  Brian Cowen was in at that stage. My cousins Brian and Conor were getting involved. Micheál Martin too. Tom said there was a fair chance I could run the country and there was a fair chance I could run PwC, but you can’t do both and I would have to pick one horse. He was right.

“The last thing the new person wants is the former managing partners sitting in the back bench. I will be 58 or 59 and will do something else.”

Feargal O’Rourke

IK: What about work life balance? Have you achieved this?

FOR: Talk to my wife and the kids. I would say I was not good earlier in my career. In fact, I was bad, certainly in my early years as a partner. In recent years I have gotten much better and I preach that now. During the week, when the alarm goes off on a Monday at 6.15 to when I come in the door at about 7.30 on a Friday night, it is usually fairly full on. I have something on most nights – chamber dinners, client dinners. But I am pretty good at keeping Friday nights free now, and once I close the door on a Friday, I try to keep Saturday and Sunday. You might have the odd thing, or check some stuff, but I try and keep it free.

Most clients want to know you are there. They don’t necessarily want to talk to you, but they like to know you are there. I think people are now much more conscious of having a work life balance than I was starting off.

IK: What does the future hold for you?

FOR: Foot to the floor for the next four years. We are on the way to becoming the most digital and technology-enabled professional services firm in the country. On June 30, 2023, I will hand over to a new man or woman.

IK: Will you stay?

FOR: No. Technically, I could stay for another two years. But the last thing the new person wants is the former managing partners sitting in the back bench. I will be 58 or 59 and will do something else. But I really want to put my foot down for the next four years.