IT'S a truism that the success or failure of any business is down, in the end, to having the right people involved. So it comes as no surprise when Arthur MacMillan, the 32-year-old group chief executive of Clyde Shipping, says: ''The key is having management teams we have total confidence in.''

MacMillan, who turned his back on a flourishing merchant banking career in the City to restore Clyde's fortunes as a leading Scottish-based group, has teamed up with finance director Nick Chalmers, 18 years his senior and a seasoned veteran of Terex and the buy-out of Walter Alexander, the Falkirk-based coachbuilders, to reorganise the venerable business (founded in 1815) and give it a fresh sense of focus and direction.

MacMillan's great-great-grandfather bought control of Clyde Shipping, the first commercial steam shipping company in the world, in the 1850s. He had nine children, two of whom married into the Swire dynasty. A third was Arthur MacMillan's great-grandmother.

Today, apart from a 22.6% stake held by John Swire & Sons and a 9.4% interest acquired by 3i in the 1980s, there are some 250 other shareholders, the vast majority loosely related to each other by marriage.

Until last year, when the group obtained a listing in the Ofex market, Clyde shareholders could only trade their shares with other Clyde shareholders.

So it remained a family affair with a deep attachment to things maritime. Its core was its tug operations, on the Clyde and the Tyne, and a coastal shipping operation, Glenlight, deploying the last of the West Coast puffers.

When I last wrote about it, in 1990, Clyde Shipping boasted other subsidiaries - notably Simpson Lawrence, acquired in 1979, manufacturers of yacht anchors and windlasses and distributors of marine equipment world-wide and the building materials Eglinton Group, founded in 1986 to exploit the output of a limestone quarry in Northern Ireland, acquired by way of a bad shipping debt in 1956.

Arthur MacMillan took charge at the very end of 1994. He was, like others in his family - the MacMillans of Finlaystone - a small shareholder in Clyde Shipping. But after reading law at Oxford and qualifying as an accountant, he had gone into the City and spent a spell in South Africa. ''But I was brought up here and I always wanted an opportunity to come back before I got trapped by the City lifestyle,'' he says now.

He persuaded the Swires to let him do some consultancy work on the options facing Clyde, made some - he says obvious - recommendations about how to drive the business forward and was invited to carry the changes through himself.

Clyde's management had always been kept in the family until Willie Cuthbert died, tragically young, in 1989. Then a long-serving staff member Len Paterson took over. Bringing the youthful MacMillan back in was, in that sense, a return to tradition. But as he points out: ''If that was all they wanted to do they could have chosen from one of 30 in my generation.''

He was put there to deliver change. ''They threw the book at me. They said: 'Come on board and do what you say can be done'.''

He spent the first year taking the hard decisions, selling the tug operations on the Clyde and the Tyne to Cory, part of the Ocean Group (and a joint venture partner with Clyde on an ongoing basis at Shetland Towage and Forth Tugs) and disposing of Glenlight. ''For shareholders it was a big break from the past. You don't sell these things lightly, but they had gone too far down the line. We had lost a lot of our experience in shipping and the businesses were losing money. We either had to invest significantly in them or get rid of them.''

It was, he freely admits, a difficult period. ''But I'm very comfortable with how it finished up.'' Even more apocalyptic options were considered, like breaking up the entire group. But, in the end, the board decided there was real value to be unlocked long term in the remaining businesses - by investing in technology, management disciplines and systems and through selective acquisition.

Nick Chalmers was recruited in February last year and both men invested in a personal stake in Clyde's future. The pair set about the positive phase of the changes. New senior management was recruited for Albann Windows, a small Irvine-based operation specialising in the commercial market, and for Eglinton, in the shape of Geoff Runcie, former chief executive of Glasgow Chamber of Commerce.

Eglinton, which sells its wall-cladding systems primarily into the public sector has suffered the effects of local government reorganisation and council budgets cuts. But, last September, it acquired Snowcem, the exterior paint specialist in a #2.8m deal. A further #8.5m is being invested in the limestone quarrying and milling business in Northern Ireland this year and next.

This February attention turned to the yacht chandlery side of Clyde, with the joint purchase, with 3i, of Munster Simms Engineering, a Northern Ireland based supplier of pumps for the marine and caravan markets.

MacMillan and Chalmers are comfortable with the charge that Clyde remains a mini-conglomerate at a time when such beasts are unfashionable. ''We shouldn't ever be unwilling to sell a business,'' says MacMillan. ''But mini-conglomerates do justify themselves when they share the central costs that can so easily go out of the window in a stand-alone business.''

He is planning a rights issue this summer to fund further investment and is opening up a dialogues with local financial institutions. Listing, for a group which made pre-tax profits of #1.87m on sales of #31.3m last year, is not on the immediate horizon. The objective, for now, is to restore the long-term fortunes of the group and to do it from a Scottish base.