Obituary: The Earl of Iveagh

Arthur Francis Benjamin Guinness, businessman, born 20 May 1937, styled Viscount Elveden 1945-67, Director Guinness 1958-92, Assistant Managing Director 1960-62, Chairman 1962-86, President Guinness plc 1986-92, succeeded 1967 as 3rd Earl of Iveagh, Member Seanad Eireann 1973-77, married 1936 Miranda Smiley (two sons, two daughters; marriage dissolved 1984), died London 18 June 1992.

AS FAR as the business world is concerned, the Earl of Iveagh will be remembered chiefly as the man who recruited Ernest Saunders to Guinness.

His own business career was at best undistinguished and at times positively disastrous. By the early 1980s, Guinness's need for a dynamic new chief executive was desperate. With every day that passed, the Guinness family fortune seemed to slip further into the sea as the company's stock price plummeted new depths. The City was clamouring for management changes.

It was in these circumstances that Saunders, head-hunted from a top marketing job with Nestle in Switzerland, went to Ireland to be interviewed at Iveagh's house, Farmleigh, in Phoenix Park on the outskirts of Dublin.

Iveagh's undoing was probably in being appointed chairman of Guinness at too young an age - a mere 25. His reign was marked first by a phase of unbridled diversification away from the core brewing business and then a prolonged period of debilitating decline. By the time Saunders had his first meeting with him, Guinness was engaged in, among other things, snake-farming, orchid-growing, and the manufacture of babies' plastic potties.

Saunders remembers Farmleigh as a cold, empty, lonely sort of place with 'an enormous entrance hall lined with dozens and dozens of wellington boots'. In his son's book Nightmare, Saunders paints a picture of aristocratic decay - lunch at a tiny table in the middle of a huge draughty dining- room punctuated by the sound of a butler padding down forgotten corridors. At one point a cat jumps up on the table and tiptoes through the butter.

Saunders believed that he was seen by Iveagh and the rest of the Guinness family as a kind of gamekeeper. He still tells the story of how at a family wedding he was put below the salt on the servants' table during the reception. He believes that the Guinnesses, as much as anyone else, made him into a scapegoat for what later occurred.

In truth Iveagh was the perfect chairman for a thrusting, dynamic and unscrupulous chief executive such as Saunders. From the beginning Iveagh abdicated all responsibility and power to Saunders. Often away from London at his home in Dublin, he became like an absentee landlord. At the same time he became a highly useful foil to Saunders, who would use Iveagh to bolster his management decisions. 'I have spoken to Lord Iveagh and he is entirely in agreement,' Saunders would say, often falsely.

Indeed, when Saunders was put on trial over the Distillers takeover, there were some famous and bitter recriminations between the two. Time and again, what Saunders said happened was at odds with Iveagh's account. The sadness of it all was that by the time Iveagh gave evidence, Saunders's claim that what was being heard was the rambling, confused and muddled account of a befuddled alcoholic suffering from some form of amnesia was all too believable. It was plain to all who witnessed Iveagh on the stand, that by giving Saunders and his henchmen such a free hand, Iveagh had failed in his duties as chairman, and indeed to that extent could be held accountable for the financial scandal that followed.

(Photograph omitted)