The Review Group was appointed in mid-January 2001 to make recommendations regarding the improvement, in an accelerated manner in Iarnrod Eireann, the organisation and management of the company to deliver a higher quality of focused service and value for money for the taxpayer.
As a priority, a new dynamic must be created, a virtuous circle where the Shareholder sets broad objectives, the Board and management achieve these objectives, and the Shareholder can confidently leave them to get on with the job.
The scale of the operational and strategic challenges facing IE are sufficiently distinct and extensive to merit the creation of a separate company.
The Review Group recommends that Irish Rail be separated from the CIE Group and established as a separate company with its own Board, which would report to the Shareholder directly. The Board should have a strong, independent Chairperson and be composed of individuals who have skills that will enable them to make a real contribution to the achievement of the objectives of IE. Specifically, at least two people with a substantial reputation in rail operations abroad should be on the Board.
We recommend that the necessary legislation to effect these changes be enacted urgently and that in the meantime an interim, non-statutory, Board should be appointed.
We recommend that the Shareholder should set out specific objectives to be achieved by the company over a number of years. This kind of clear mandate is about to be given to the board of Luas and precisely the same clarity should apply in the case of Irish Rail. It is extremely important in this context that the new Board and management of IE be fully in charge of achieving these strategic objectives.
The performance indicators targets would cover the whole spectrum, i.e. the areas of availability requirement, reliability requirement, end-to-end running requirement and service quality requirement. Under each of these major dimensions there should be detailed, quantified standards for everything from punctuality and revenue protection to the handling of lost property and customer information.
Furthermore and this is especially important in the case of IE which is facing into a huge programme of organisation development, in addition to the operational targets just mentioned there should be a set of specific milestones laid out for this development work. The scope of this work should include the execution of the recommendations of this Report, together with the completion of other initiatives already included in managements plans; for example, to improve organisation structures, communications, management cultures, customer service and employee relations.
The role of the Board and the management must be to realise the objectives set out by the Shareholder and the Shareholders role in this process should be to monitor and benchmark developments on a quarterly basis through the use of key performance indicators. We cannot emphasise strongly enough that the Shareholder should not become involved in the day-to-day operations of IE. The role of the Shareholder should be to support the company in its efforts to succeed commercially and take any remedial action necessary following the periodic reviews recommended above. The principle behind our recommendations here is one of subsidiarity, devolution and delegation and involves the acceptance by the Board and Management of responsibility and accountability for the achievements of specific tasks, and the consequent rewards or sanctions for success or failure.
These principles should also apply generally to the organisation of the company below board level, with the creation of a managerial culture of accountability for business performance on all the key dimensions of safety, finance, customer services and employee relations.