The catalytic asymmetric hydrogenation of ketones reflect an important way to prepare valuable chiral alcohols. Understanding how transition metals promote these reactions is key to the rational design of more active, selective and sustainable catalysts. A highly unusual mechanism for the asymmetric hydrogenation of benzophenone, catalysed by an anionic IrIII hydride system with a strong counterion dependence on catalyst activity, is explored and rationalised here. The active catalyst, generated in situ from [IrCl(COD)]2 and a bidentate P,SR ligand under H2 in the presence of a strong base (M+iPrO- in isopropanol, M = Li, Na, K), is the solvated M+[Ir(H)4(P,SR)]- salt (P,SR = CpFe[1,2-C5H3(PPh2)(CH2SR)], with R = iPr, Ph, Bz and Cy). Catalyst activity increases, for all the R derivatives as the counterion is varied in the order Li < Na < K. For the most active K system, the addition of 18-crown-6 drastically reduces the activity. While the cation proves to strongly affect catalyst activity, it does not significantly influence the enantioselectivity. DFT calculations are used to explore these effects in detail, and show that the solvation model used in the calculations is critical. Only by using a hybrid implicit/explicit solvent model, including sufficient explicit solvent molecules to properly describe the first solvation shell of the cation, are the experimental observations reproduced. This model reveals the fundamental importance of the alkali-metal cations coordination sphere in understanding the counterion effects. The turnover-determining step in the catalytic cycle involves outer-sphere hydride transfer to the substrate. This step leads to coordination of the alkoxide product to the alkali-metal cation, and proceeds with significant rearrangement of the coordination sphere of M, whereas there is little change in the geometrical parameters around iridium or the alkoxide. The DFT calculations also pinpointed the major enantio-discriminating interactions, and rationalise the insensitivity of enantioselectivity to alkali metal cation placement.