NI Water: So another one bites the dust… (updated)

Just picked up confirmation of Jamie Delargy’s report on UTVlive over an hour and a half ago that Laurence MacKenzie has resigned, stand by for the text of NI Water’s statement… Update: UTV is suggesting the pay off is in the region of 1/2 Million… Update 2: Here’s the first one, btw for anyone who’s not been following this story… Update 3 – at midnight NI Water Chief Executive and NI Water Board issued statements.

Laurence MacKenzie:

This is entirely my own decision. I believe firmly in the principles of responsibility and accountability; it is for that fundamental reason I have decided to pursue this course of action.

As I made clear early last week, my focus until now has been entirely on dealing with the major incident which affected too many of our customers in recent days. I am very glad to say that that situation has now been resolved. I do note that substantial water restrictions continue to be a fact of life for the Republic of Ireland and I wish colleagues elsewhere well in normalising that situation.

At this stage I wish to pay the highest possible tribute to all of NI Water’s staff who responded to the unprecedented situation which faced them over the Christmas and New Year holiday period. I have absolute confidence that any objective scrutiny of their performance would recognise the tremendous efforts that they made.

Equally, however, I readily accept and recognise that there were aspects of the way in which we handled the situation that could have been better. In particular our ability to communicate with our customers and let them know the reasons for and the times at which they were going to be taken off supply. This failing added to the considerable inconvenience experienced by our customers; for that I apologise sincerely both personally and on behalf of the organisation.

A fundamental part of the work I have been engaged in over recent days has been around setting up procedures to ensure that failing is not repeated.

I am delighted that my interim successor will be Trevor Haslett. I wish Trevor every success as he seeks to move the company forward over the coming months. His invaluable experience and knowledge of this organisation and the water industry as a whole will continue to be a major asset for the company.

I would also like to thank:
* The interim Chairman and non-executive Directors for their support and encouragement.
* The many dedicated people I have worked with over the past seventeen months in NI Water and to wish them well for the future.

The Board of NI Water have accepted my resignation as CEO and recommended to the Minister for Regional Development, Conor Murphy, MP, MLA, that he approves the settlement terms proposed by the Board.

The Board:

The Board of Northern Ireland Water has announced that the company’s Chief Executive, Laurence MacKenzie, on his own initiative, has tendered his resignation.

Following discussion, the Board has accepted his resignation as CEO and agreed terms of settlement consistent with his contractual entitlement.

Accordingly the Board is making a recommendation to the Minister for Regional Development, Conor Murphy, MP, MLA, that he approves the settlement terms proposed by the Board.

Subject to Ministerial approval, it is intended the resignation becomes effective from midnight on Friday 7 January.

Mr MacKenzie is also tendering his resignation to the Minister as a Director of NI Water.

The Board is recommending that Trevor Haslett, Director of Engineering Procurement, be appointed as acting CEO and Board Director of NI Water.

Once these arrangements are in place the Board will commence a full and open recruitment process to appoint a new CEO.

The Board wishes to acknowledge the significant contribution made by Mr MacKenzie to develop open and transparent governance arrangements within NI Water in line with public service obligations and the efficiencies achieved within price control demands.

The Board would like to take this opportunity to wish Mr. MacKenzie well in the future.

So Conor Murphy as Minister is being firmly woven into the acceptance of the settlement terms …

  • The Word

    All that talk of £500,000 opt-out package must have made him feel – what? –

    Why’d he do it? It’s just plain silly.

    I wouldn’t have let them push me out even if they offered a bag of (Northern Bank) notes. An ethical man?

  • Mark McGregor

    [cynic on]shredders, hard-drive wipes and incineratated phones an essential part of a mega ‘resignation’? [cynic off] – do not blame the Minister, pass Go, get £500k?

  • alan56

    If the pay-off package is around deemed to big then the spotlight should fall on those that negotiate these arrangements. I suppose its only 2 years pay!

  • Mick Fealty

    It would also be useful to have it confirmed whether that figure is beyond the original contractual terms.

  • Pink Lady

    Any sympathy for Mackenzies resignation would be misplaced through not knowing the facts.

    Despite Mackenzie having zip experience of the water industry before joining NIW he was soon battling with a Board that had over 60 years experienced. Chris Mellors Board wanted the pace of efficiency savings to consider staff morale and risks to customers. The Board wanted the rate of water mains replacement to match UK standards. Mackenzie stood against them all. [Text removed by request]

    But the cracks soon started to appear. Jamie Delargy of UTV soon realised he was not dealing with someone wedded to the truth. Led by Mick Fealty the Slugger O’Toole team joined in. The slayed Board told their version of events and demanded justice. The PAC began to dig and at the open PAC hearing in June MacKenzies character started to appear after some well aimed questions from John Dallat, Patsy Maglone, and Dawn Purvis. More damaging emails emerged. The Permanent Secretary Paul Priestly was suspended. The Information Commissioner launched an investigation into Mackenzies deletion of emails. The NI Consumer Council announced they no longer wanted to communicate with Mackenzie.

    Meanwhile at NIW leaked surveys showed that staff morale had plummeted to uncharted depths. The interim Board demanded that Mackenzie stop playing with his Blackberry and get out and listen to staff. He did eventually get out but only to spend the time moaning to staff.

    To their massive credit in 2009 an organisation called UK Water recognised that MacKenzie knew little about how the water industry works to support each other in times of crisis. So they organised a meeting to brief Mackenzie. I learned today from a contact at NIW that Mackenzie cancelled this briefing by UK Water at short notice no less than 3 times before finally meeting them late last year. This must be why UK Water reacted so strongly when not asked for help in the Christmas water crisis.

    In December 2010 Mackenzie should have focused all of his efforts into the deep freeze predicted by the Met office. But instead he was still desperately trying to manipulate a NIAO report which started that MacKenzies poorly considered actions to remove those who had been involved in the Steria legal case (NIW Commercial Director David Gilmour and advisors Contracting Out) resulted in NIW being unable to evidence its claim, a key reason for needing to agree to a generous settlement. The NIAO confirmed that a decision to terminate its contract with Contracting out had not been subject to an appropriate risk analysis. A more considered action to employ forensic accountants alongside this existing team would have resulted in a much better outcome for NIW.

    Should Mackenzie be generously thanked for improving governance at NIW? No. The very same NIAO Report illustrates that most of the governance issues predate formation of NIW, and that Chris Mellors Board were making already making strides to improve governance, with many of the key governance improvements that the NIAO report commends having been initiated by the Mellors Board before MacKenzie joined NIW. Mackenzie merely helped implement them – just as Mellor had briefed him to from day 1.

    The whole world has learned through the Christmas water crisis that MacKenzies leadership style was to lead from the rear by mumbling into his Blackberry. Numerous professionals who attended meetings with him have told stories of how he played away on it.

    A member of NIW staff recently noted to me that he will be remembered as the penny prisoner but pound foolish CEO who had an eye for detail but the vision to lead nowhere.

    The NI Civil Service must now improve their recruitment processes so that never again does anyone with such a narrow range of skills get such a senior role. Mackenzie was an auditor accountant with some good skills sadly promoted way above his skill set and grade.

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  • The Word

    Wasn’t the argument that if he resigned he would get nothing? Hasn’t he to be sacked to get a payoff?

    Pink Lady

    And not a mention of Conor Murphy?

  • Obviously the board have got distracted and sat down to watch Raiders of the Lost Ark instead of cajoling MacKenzie’s lawyer into proofing the statement and settlement a bit faster.

    Either that or they’re waiting until 10.35pm when the UTV and BBC local news programmes will have finished.

  • andnowwhat

    Ok. Ity’s only January but Articles has to be up for the funniest post of the year.

    I’m off now to apply for a job, be really shit at it and demand a pay off after only a year.

  • alan56

    Of course the resignation story breaking late could take the focus off Stormont tomorrow?

  • The Word

    “the resignation story breaking late could take the focus off Stormont tomorrow”

    There’s a lot of focus being taken off Conor Murphy tonight on this thread. Funniest story indeed.

  • DC

    @UTV is suggesting the pay off is in the region of 1/2 Million…

    Some socialist party Sinn Fein are – this is just fat cats getting fatter!

    So Laurence, erm…who’s the one that’s (mis-)taking this public company for a private sector one now?

  • joeCanuck

    Pink Lady,

    Excellent first class posting.

  • Big Maggie

    Alan,

    “Obviously the board have got distracted and sat down to watch Raiders of the Lost Ark instead of cajoling MacKenzie’s lawyer into proofing the statement and settlement a bit faster.”

    And obviously few here recall Mackenzie’s Raiders.

  • Big Maggie

    Pink Lady,

    Sorry, that comment of mine went out too fast.

    Likewise my compliments on your excellent exposé!

  • If NIW do ever issue a statement, it should be published on this page on their website. See y’all in the morning.

  • Pink Lady

    The biggest criticism of NIW over the Christmas water crisis has been naff communications.

    My partner has just confirmed through a trusted friend that Mackenzie unilaterally reduced the NIW communications budget by over 65% in April 2010:- just after the Mellor Board was booted out.

    The RDC should ask for this to be confirmed at their hearing tomorrow.

  • Is anybody thinking what i’m thinking?

    How many men are in that room?

  • Dewi

    There cannot be a contractual obligation for a pay off for resignation – that’s absolute nonsense. Keep digging Mick – this could be the biggest scandal of all.

  • Pigeon Toes

    “There cannot be a contractual obligation for a pay off for resignation ”
    Agreed, and why I thought all the games were being played between the Board and MacKenzie over the past few days…

    Pink Lady
    Excellent post. I might even understand it all a wee bit more clearly now 😀

  • Pigeon Toes

    Funny though the last time that Laurence tendered his resignation it was all kept so quiet.

    And if it is ultimately up to the Minister whether the resignation is accepted, does it not rather put to bed the notion that the Minister was completely out of the loop,when all those manoeuvres were being made last year, to protect Laurence’s position?

    It’s a pity the Board were so quiet then, since they also accepted his resignation.

  • malairt

    If he resigns without a compromise agreement, he gets nothing.
    If he resigns and an agreement is in place, he gets whatever the agreement specifies.
    That’s why there was such a delay last night: the agreement had to be settled before he could resign. His resignation will be conditional on the terms of the agreement being honoured.
    So if Murphy says no, MacKenzie will withdraw his resignation.

    He can only go if he resigns, is made redundant or is sacked. He can’t be made redundant as the post will still exist. If he resigns without an agreement on compensation he gets zip. If he’s sacked then he’ll go to court for at least his contractual rights. So it’ll be a resignation with a compromise agreement

  • Dewi

    http://www.bbc.co.uk/news/uk-northern-ireland-12125850

    More like £100k rom Murphy – still £100k too much.

  • Pigeon Toes

    Mal

    But sure MacKenzie has stated “This is entirely my own decision. I believe firmly in the principles of responsibility and accountability; it is for that fundamental reason I have decided to pursue this course of action”.

    The fact that he may be negotiating compromise agreements doesn’t quite tally with the above really 🙁

  • malairt

    It is his decision as otherwise he would have to be sacked. But do you really think that he would resign without negotiating a pay-off?

  • Pigeon Toes

    Nope, and I imagine that’s what all the very public games of denial have been about.

    Plus he could do a lot of damage and a gagging agreement would be in the best interests of DRD as well.

  • William Markfelt

    ‘It is his decision as otherwise he would have to be sacked. But do you really think that he would resign without negotiating a pay-off?’

    It depends on his reasons for resigning. In this instance he hasn’t got an enormous amount of leverage. He took the top job on the basis that the buck stopped there, and now the chickens have come home to roost.

    And given the track record both within NIW since the moment he arrived, and NIE previously, he just looks like ineffective and bumbling, so I imagine that he has been given that ‘consider your options’ scenario behind closed doors. To be sacked, wouldn’t it make him virtually unemployable? To resign, he’ll pull that ‘matter of honour’ stroke on his CV, bluster up ‘off the record issues’ in an interview and some bunch of twats will take him on. Hopefully not in NI.

    I’m very pleased to see him go. Management of public bodies is, in the main, riven by dickheads full of their own piss and importance, and it’s a delight to see any of them fall as a result of bullying (usually dressed up as ‘strong leadership’) or incompetence. There are several other people in several other agencies who also need to be taken down a peg or two, several of them associated closely or peripherally with NIW’s key players.

  • malairt

    I think he is pretty well unemployable in NI after this debacle. Wonder what his wife will think having to move to the Mainland?

    What a great week! MacKenzie gone, my 2010 review positively glowing, and still a day to go! Maybe I should buy a lottery ticket.

  • Pigeon Toes

    “What a great week! MacKenzie gone, my 2010 review positively glowing, and still a day to go! Maybe I should buy a lottery ticket.”

    Sorry, I need that lottery ticket Mal after “having to move to the Mainland” ;-D

    It’s funny though that a lot of bods that DRD felt were “surplus to requirements” have had similar glowing reviews…

  • Pigeon Toes

    http://www.newsletter.co.uk/news/Water-boss-in-line-for.6682639.jp
    “Last night Mr MacKenzie hit back, saying that he had not attended because Conor Murphy has not yet agreed to the terms of his departure.

    In a statement, Mr MacKenzie said: “I wanted to be clear before meeting the committee that my resignation had been accepted, including a compromise agreement.

    “I would be happy to meet the committee at a later stage once it has been made clear that my resignation has been accepted.”

    While Mr MacKenzie’s resignation, effective from today, has been accepted by his board, Mr Murphy, as regional development minister, has to sign off on his payoff and has not yet done so.”

  • malairt

    I apologise for my “Mainland” comment, ’twas not meant to cause offence. I never get the nomenclature right. I shouldn’t try really.

    The North, The North of Ireland, Northern Ireland, Norn Iron, the Province, Ulster, the 6 Counties, the South, the Republic, Eire, , the 26 Counties, the island, the Island of Ireland, UK, GB, the Mainland, across the water, England.

    All very difficult for an immigrant like myself.

  • Pigeon Toes

    Mal
    Don’t know who took offence, but we are now on the Mainland and unable to sell our home in Northern Ireland, and away from our family and friends. The absence of which has been felt rather keenly over the Christmas period.

    It’s rather cold where we now live, so a lottery win would kind of help just about now. 😀

  • “he hasn’t got an enormous amount of leverage”

    WM, he might be able to release a few skeletons from the cupboard. For example, he might have some emails that are not currently in the public domain which could embarrass senior civil servants, even the Ministerial office. Had it not been for MacKenzie we would not have known about that September 2, 2009 meeting which according to a DRD source wasn’t really a meeting 🙂

  • Consider the fate of Chris Mellor:

    Chris Mellor, who had been with the group for 24 years, was summoned to a board meeting in Huntingdon on Wednesday and dismissed because the board and AWG’s shareholders had lost confidence in his management of the company.

    Mr Mellor was on a one-year contract and will receive about £350,000 in compensation. In addition, he is entitled to a £150,000-a-year pension. The Independent, 2003

    Following his subsequent sacking from NIW he remained on the board of Monitor, a body which regulates health trusts.

  • Mick Fealty

    He might. But they are all unknown unknowns. Best to stick to what know, or what we know we don’t know.

    As Malairt notes, under normal circumstances, MacKenzie would not have been entitled to a penny. So why the payoff?

    Two known unknowns.

    – What do party colleagues like Carál ní Chuilín think after making it clear there would be no ‘golden handshake’.

    – It would also be very interesting/instructive to see how the Board voted on the golden handshake deal, since we have a Murphy/MacKenzie appointments and those who were there beforehand.

  • joeCanuck

    Malairt,

    There is absolutely no need to apologise. The other island is much bigger and has many times the population. It’s reasonable to call it the mainland. Don’t let members of the MOPE try to make yourself a victim too. Just ignore the mope.

  • Mick, the unknown unknown approach can be helpful too. Various folks have access to skeletons and raising such an issue can give them the courage to pass information to those who can use it. For example, I should imagine some MLAs on the Public Accounts Committee were more likely to receive such information than others.

  • “Wonder what his wife will think having to move to the Mainland?”

    malairt, if he has a wife/partner/significant other, she could always fall back on the Reggie Maudling observation: “For God’s sake bring me a large Scotch … what a bloody awful country”.

  • Lionel Hutz

    The truth of all that contractual stuff is that as a CEO, he is likely to have a very healthy entitlement to notice or pay in lieu of notice. It sounds like he has 6 months. The funny thing is that if he is entitled to that notice, so are NIW. They would be entitled to require him to work that notice period so theydont have to pay a replacement as well.

    The question is this – do the board consider McKenzie to be guilty of any major or gross misconduct. Only such a finding will allow NIW to summarily dismiss McKenzie without notice. A belief that he is simply incompetent would not suffice.

  • Pigeon Toes

    But Lionel he resigned. If he leaves without working out notice, then the Board surely have a case for his breach of the contract.

    Was he not still employed yesterday, when he failed to show up at the RDC meeting?

    Gross misconduct?

  • Lionel Hutz

    But Lionel he resigned. If he leaves without working out notice, then the Board surely have a case for his breach of the contract.

    ———————-

    Not if they agree for his resignation to have immediate effect. NIW would be entitled to have notice, just as you or I would ‘hand in our notice’ if we are leaving a job, which is usually one week for every year you have worked. I’ve only ever seen one contract with a ‘severance package.’ It was worked into the contract as pay in lieu. It may be different in McKenzie’s case but as I understand it, thats the common practice.

    ———————–
    Was he not still employed yesterday, when he failed to show up at the RDC meeting?

    Gross misconduct?
    ————————

    Apparently he was employed until this morning. Its a bit peculiar alright. The Board should have demanded that he attend. I guess they didn’t.

  • Pigeon Toes

    “Apparently he was employed until this morning. Its a bit peculiar alright. The Board should have demanded that he attend. I guess they didn’t”

    They could try it though. It seems to have worked elsewhere:-(
    http://www.belfasttelegraph.co.uk/news/local-national/data-supremo-sacked-after-leaks-to-press-14718063.html