In 2019, the Beacon Hospital in Sandyford in west Dublin generated revenues of €144 million and made a pre-tax profit of €1.8 million. The profit was a turnaround on reversal years, and reduced retained losses slightly to €113 million.

However, the group prefers to point towards its earnings figure before interest, tax, depreciation, and amortisation are taken into account. On that basis, it had an EBITDA figure in 2019 of €17 million. In the 12-month period leading up to the end of 2019, the hospital’s boards of directors had approved €69 million on an ongoing capital investment programme.

Now, as the controversy escalates over the private hospital’s decision to administer 20 leftover Covid-19 vaccines to a number of teachers at St Gerard’s School in Bray, it is worth reflecting on the role, composition, and compensation of that board.

This is particular important given the political pressure on Michael Cullen to resign as chief executive of the private hospital, calls that grew over the weekend following the government’s decision to suspend vaccine operations at the hospital.

The pressure escalated yesterday when The Sunday Times reported that Cullen travelled to the UK in October to compete in a car race, a period in time when Ireland was in level three restrictions and the advice for international travel was approved work and essential travel. In the rally, he drove a car owned by Niall McFadden, the businessman who founded Siteserv (a company that that is now owned by the owner of the Beacon Hospital, Denis O’Brien).

After all, boards earn their money in times of crisis. This is such a time. It will fall upon the board to determine the sanctions or otherwise for those involved, and to drive the response of the company.

It is easy to be on a board of a company in good times. However, it is what a board does to safeguard the business during a time of crisis that is far more important. The response – or otherwise – of the board will be telling, and, crucially, it must be public. Yes, it is a private company controlled though an offshore entity. But the vaccines are state assets, so there needs to be public accountability.

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The corporate structure of the hospital is complex, with number of related companies and overlapping directorships. It is majority owned by the businessman Denis O’Brien, but he is not a board member.

The company at the apex of the structure is Beacon Medical Group Sandyford. This company files the most detailed financial information of any group company, and also incorporates data for a number of subsidiaries. The most recent company filings for this entity sets out the composition of directors within the wider group – and points to their financial compensation also.

Barbara Cotter is listed as a director. A well-respected corporate lawyer who was previously a partner with the commercial law firm A&L Goodbody, Cotter is currently the chair of the Strategic Banking Corporation of Ireland, a state-owned lender that works to get credit to small and medium-sized businesses. She also sits on a number of other boards including PicMonkey International Limited, WeddingWire International Limited and UCITS Fund and Management Company.

Brian Cowen held many of the major political offices of state, including the role of Taoiseach, Tánaiste, Minister for Finance, Minister for Foreign Affairs and Minister for Health. He too is a director of the private hospital. Given his experience in the Department of Health, he will know the decision taken by the government over the weekend to suspend vaccine activities at the hospital.

Two co-founders of the hospital, the chief executive Michael Cullen and the cardiothoracic surgeon Mark Redmond, are also directors.

Niall Devereux, a former director with health insurer Bupa in China, Thailand and India, co-founded Bupa Ireland in 1996. He is listed as a board member. He has previously worked for fuel retailer Topaz, Ireland’s largest fuel retailer at a period in time when it was owned by Denis O’Brien.

Colm Doherty is a former managing director of AIB. He sits on a large number of Beacon related entities and is the non-executive chairman of the group. He was appointed in 2014 as part of an overhaul of the hospital’s board. More than most, he knows about running a business in a crisis given he was installed to the top job at AIB when his successor departed following the banking crash.

As a former Taoiseach, Cowen will understand this better than most. The hospital is facing a reputation crisis. And, in a time of crisis, all eyes turn to the board.

Brian FitzGerald was previously chief executive and finance director of St James’s Hospital in Dublin, one of the biggest public sector hospitals in Ireland. He now is the deputy CEO of the Beacon Hospital.

Another board member Suzanne Garvey is the Beacon’s director of hospital clinical operations. Dermot Hayes, who has worked with O’Brien on his personal investment portfolio, is a director, as is the Beacon’s chief financial officer Darragh Kavanagh.

The ownership of the hospital is held though a series of vehicles including Linkbey Investment Holdings, which is registered in St Helier on the Channel Island of Jersey.

It is by any standards a heavy hitting board consisting of executive and non-executive members. Indeed, not many boards of privately held Irish companies can boast a former Taoiseach, a former head of AIB as well as the current chair of a government owned lender.

Further reading from our archive

Ireland’s €1.2bn private hospital industry: The margins, the market share, the profits and the debts

In October 2020, as the private hospitals negotiated with government over Covid capacity, we went inside the sector. Mapping the sector through 13 datasets, we examined what the private hospitals are worth, how they make their money, and their debt burdens.

Stress fracture: Beacon Hospital exits private hospital alliance in wake of state takeover deal

Last June, we revealed that Beacon, owned by the millionaire businessman Denis O’Brien, was exiting the Private Hospital Association, stating it will negotiate any future deal with government independently. The Beacon made it clear to other members that it will no longer rely on the PHA when negotiating any future contracts with the state in relation to Covid-19 or any other matter. 

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Board fees and emoluments at the Beacon

Company filings give a sense of fees and payments made to the board in the four-year period to the end of 2019. The figures include payments made to staff member who sit on the board.

In 2019, directors’ fees totalled €365,000. For the same period, emoluments totalled €597,000. In total, directors’ remuneration for the year was €962,000.

In 2018, directors’ fees totalled €310,000 and emoluments totalled €616,000. In total, directors’ remuneration for the year was €926,000.

Filings for 2016 and 2017 only provide a figure for emoluments. In both years, the number came to €750,000.

As board members, each person has a fiduciary responsibility for financial oversight of the business and also governance. This includes potential risks to the business, such as reputational damage.

The decision to give unused vaccines to the private school where the chief executive’s children are educated is undoubtedly a boardroom issue. It has forced a strong rebuke from the government, and from the HSE, and damaged relations with both.

“Insiders” and “outsiders”

And it has generated significant public scorn. It is not so much the 20 vaccines themselves (although surely, they could have gone to patients or frontline workers). Instead, it once again feeds into an issue that defined the last general election: that, as a society, we are no longer defined by left versus right, but by insiders versus outsiders.

A private hospital giving vaccines to teachers at a private school fits neatly within that narrative. It gives rise to allegations of insider privilege, of a two-tier society defined by who you know and not what you do.

As a former Taoiseach, Cowen will understand this better than most. The hospital is facing a reputation crisis. And, in a time of crisis, all eyes turn to the board.