Articles

Spotlight

Students and members share their thoughts on the crossover between Chartered Accountancy and elite sports. Dan Morrissey Hurler with the Limerick senior team and Chartered Accountant/Chartered Tax Adviser at Deloitte. How did you get involved in sport?My parents encouraged me to play all sports when I was young and I was playing in the local GAA club once I could walk. I played GAA, soccer, rugby and golf when I was growing up. Hurling was always my favourite sport and when I was 16, I decided to focus solely on hurling. I’m still a keen fan and keep a close eye on all sports. How do you balance your sporting and professional lives?I’ve been on the Limerick senior hurling team for the past six years and I’m very fortunate that my employers (Deloitte) allow me to find a great balance between work, study and sport. I’ve been completing my Chartered Accountancy exams over the last couple of years and there were times when I was very busy between work, trying to make training in the evening and going to lectures at weekends. I make a plan at the start of every week and month so I know exactly what I have planned for each day.How has sport influenced your career as a Chartered Accountant?The discipline you acquire from sport and the ability to pick yourself up and stay positive after a poor result are characteristics that have helped me in my career. I’ve also met so many business contacts through sport, which has been a great benefit to me. What are your proudest sporting and professional moments?Last August, I was wing back on the Limerick senior hurling team that won the All-Ireland championship for the first time in 45 years and I also won an All-Star award for my performances over the course of 2018. The celebrations of winning the All-Ireland had to be cut short, though, as I sat my FAE exams the week after beating Galway in the final (I passed, thankfully). Winning an All-Ireland and passing my final exams in such a short space of time was a very proud period for me. What are your future sporting and career goals?On the sporting front, I would love to win another All-Ireland medal and continue playing for Limerick for as long as I can. On the career front, I’m currently working in the taxation department in Deloitte’s Limerick office and I really enjoy the challenge. I hope to continue using both my ACA qualification and Chartered Tax qualification to progress further in my career.  Caitriona Jennings Olympian, long-distance runner and Head of Tax at Goshawk. How did you get involved in sport?I’ve been involved in sport from a very young age, as my parents encouraged myself and my two sisters to participate in all sorts of sporting activities. There was very little choice in my home growing up – my sister Sinead is also an Olympian and a former rowing world champion. How do you balance your sporting and professional lives?Organisation is key to striking the right balance. I plan for the week ahead at the weekend, determining when and how I will fit in my scheduled sessions. It’s also important to know when to ease off training when work is extremely busy, as not doing so will lead to injury. How has sport influenced your career as a Chartered Accountant?I have developed many traits through sport such as resilience, ambition, drive and passion. These have enabled me to take on challenges that might otherwise seem unachievable. It has also developed my sense of self-belief and I now know that hard work leads to success. What are your proudest sporting and professional moments?My proudest sporting moment was qualifying for the Olympic Games in London 2012 and representing my country in the marathon. It’s difficult to isolate one moment in my professional career, but key achievements include becoming a Chartered Accountant and a Chartered Tax Adviser. What are your future sporting and career goals?I’m keen to broaden my experience within the aircraft leasing industry. My sporting goals are currently secondary to my career goals, but I love running so I will continue to train and compete nationally and aim for another podium finish in the Dublin Marathon in 2019. Louise Coffey Irish golfer and Associate Director in Grant Thornton’s tax department. How did you get involved in sport?There are a few golfers in my family so my mum arranged for me to start golf lessons when I was 12. From the first lesson, I was hooked. How do you balance your sporting and professional lives?My firm (Grant Thornton) has been great. They have allowed me to alter my 37.5 hour weeks so I can play in the Tuesday morning competitions in my club or get another long practice session in mid-week. During the season, it all comes down to forward planning and anticipating upcoming deadlines so I can prioritise my work. How has sport influenced your career as a Chartered Accountant?Being a female golfer really helped raise my profile from the very start of my career. Senior staff tended to recognise me because of my golfing activities, so I was regularly picked for work tournaments. This gave me the chance to show my drive and determination and ultimately helped accelerate my career. What are your proudest sporting and professional moments?My highlight is representing Ireland in 2016 and 2018 – I worked hard not to sacrifice my career aspirations and in 2018, I was proud and delighted that those career aspirations were realised when I joined Grant Thornton, where I head up the corporation tax compliance service line.  What are your future sporting and career goals?I want to continue to be a high-performing Irish amateur golfer, but both my career and golf remain important from a personal perspective. As a golf4girls4life ambassador, having both helps me show young girls who are interested in the sport that they can have both a good career and achieve their sporting objectives.     Niamh Halton Cavan footballer and Senior Associate with PwC’s Business Service Recovery team. How did you get involved in sport?I come from a very small village in Cavan and to be honest, there isn’t a lot to do other than play GAA. My family is very involved in the local GAA club so I was always around the football pitch from a very young age. How do you balance your sporting and professional lives?I have my training schedule six weeks in advance so it’s really about discipline. Obviously, things get busy in work and study can get pretty intense around exam time but I make a study plan for each exam and try to work around my training commitments. How has sport influenced your career as a trainee Chartered Accountant?Sport takes a lot of commitment and dedication and for me, accountancy is the exact same. Sport has given me insights into working as part of a team; it has taught me to have patience and to always respect those around me. These traits can transfer into any profession, but especially accountancy. What are your proudest sporting and professional moments?My proudest professional moment was being selected to join the PwC graduate programme. Working in such an understanding and welcoming environment is the reason I’m able to continue playing sport while studying. My proudest sporting moment would probably be captaining my club team – these are women I grew up with and are my best friends, so to be selected as their captain was a huge honour. What are your future sporting and career goals?My sporting goal is to keep playing at the highest level and hopefully collect some silverware along the way. My main career goal is to pass my FAEs and become a Chartered Accountant. Who knows what life will have in store after that! Martin Quigley Former Wexford hurler and Partner at Martin Quigley & Co. Chartered Accountants. What are the key aspects of your sporting career?I played hurling for Rathnure and Wexford at all levels, winning 10 Wexford club championships and five Leinster club titles with Rathnure. With Wexford, I won a minor All-Ireland in 1968, three Leinster U21 and three Leinster senior titles. I received four All-Star awards in a row from 1973–1976. I also represented Wexford at football and won a minor Leinster football title in 1969.What is your proudest sporting moment?Wearing the purple and gold jersey for 20 years at senior level, winning my first All-Star award, playing in Croke Park on All-Ireland Sunday and winning 10 county championships with my club Rathnure were all very proud moments. How did sport influence your career as a Chartered Accountant?When I set up my own practice in the early 1980s, the profile I gained from my sporting career was certainly a help at that time. What was the best lesson you learned on the pitch?Some of the most important lessons I learned included discipline, work ethic and attention to detail. Without these traits, it’s impossible to succeed at a high level on the sports field or in business. Whose sporting leadership do you most admire and why?Former GAA president and Chartered Accountant, Peter Quinn, is someone I have admired for his leadership and vision in revamping Croke Park into the world-class stadium we have today. Paul Gleghorne Olympian, Irish international hockey player and Senior Manager, Corporate Finance at HNH Group. How did you get involved in sport?My parents and two brothers were heavily involved in sport, so I naturally followed suit and played a range of different sports at local clubs and at school. I loved playing sport, so most of the time I spent in the classroom was spent thinking about playing sport. How do you balance your sporting and professional lives?I compete with and against professional sportspeople who don’t work outside of their chosen sport, so it can be difficult to fit in the required training. It means lots of early mornings and late nights, but I have an amazing support network around me. My hockey commitments can sometimes mean extended time out of the office for training camps and tournaments, but I receive incredible support from my employers, HNH Group, which makes this possible. How has sport influenced your career as a trainee Chartered Accountant?I’ve learned so many skills through sport, from time management to teamwork and effective communication. I also believe that from a general well-being perspective, it’s very beneficial to have pursuits beyond your working life. What are your proudest sporting and professional moments?The Olympic Games is the pinnacle of my sport, so competing in the 2016 Olympic Games in Rio is something I look back on with pride. Working in corporate finance, every time a transaction is completed is also a very proud professional moment for me. What are your future sporting and career goals?My next major sporting goal is to qualify for and compete at the Tokyo 2020 Olympic Games. From a career viewpoint, my immediate goal is to get involved in more and more corporate finance transactions. Síonna Healy Current Irish champion in coastal rowing and Audit Senior at JPA Brenson Lawlor. How did you get involved in sport?I have been involved in sport all my life from Gaelic football to hockey and coastal rowing. I come from a sporting family, particularly my father, who was a huge influence while I was growing up. He was always heavily involved in playing and coaching over the years. How do you balance your sporting and professional lives?At the moment, I leave Arklow at 5.30am for a gym session in Dundrum. After work, I do a water session and a long rowing session on the weekends. At the weekend, whenever I don’t have class, I train. How has sport influenced your career as a trainee Chartered Accountant?Rowing rewards determination and effort, which has taught me to continue striving to do better. This has influenced my career to date as when challenges arise, I endeavour to overcome them. What are your proudest sporting and professional moments?Becoming the number one coastal rower in Ireland in the ladies singles was a proud moment, but my proudest was finishing eighth at last year’s World Rowing Coastal Championships. What are your future sporting and career goals?To retain my title as Irish champion, win the Welsh Open for the third year in a row and qualify for the World Rowing Coastal Championships in Hong Kong. In my professional life, I am focused on qualifying as a Chartered Accountant in the near future. Sean Cavanagh Former Tyrone footballer and Managing Director at Sean Cavanagh & Co. Chartered Accountants. How did you get involved in sport?My father was an avid sportsman and played Gaelic football and soccer, so I grew up watching him play and spending evenings on the side-line during trainings. Growing up in a family of three brothers, and with a healthy competition to everything, sport was the natural fit and still is to this day. How do you balance your sporting and professional lives?Time has always been sparse for me since I was a child – I played Gaelic football, basketball and soccer at quite high levels for local teams so there wasn’t an evening or weekend that I wasn’t doing something. So from an early age, I learned to be clinical with my time and I tend to squeeze a lot into my days through serious discipline.  How has sport influenced your career as a Chartered Accountant?The traits I’ve attained from sport have been invaluable to me both in doing exams and working as a Chartered Accountant. Team environments teach you that everyone has a unique set of skills and it’s vital that you take the time to assess whether those skills are being utilised in your current role. What are your proudest sporting and professional moments?My proudest sporting moment was winning an All-Ireland title with my home club, Moy Tír Na nÓg, in February 2018 at Croke Park surrounded by friends and family. Starting my own practice in February 2017 and watching it grow has been, and continues to be, my professional highlight. What are your future sporting and career goals?I’m the kind of person who always wants to improve and help others achieve while enjoying the journey. So far, I think that has been the case but I’m optimistic that the future will be even better. Chloe Watkins Irish international hockey player and trainee Chartered Accountant at Mazars Ireland. How did you get involved in sport?My family are very into sports – my sister plays and coaches hockey, my Dad and brother have both played hockey for Ireland and my Mum played badminton but is now a converted hockey expert! How do you balance your sporting and professional lives?I had to balance hockey throughout school and college, so I’m used to managing my time. I train in the early morning and late evening, so it never clashes with work. The main challenge this year will be balancing leave for the Olympic qualifiers with study leave. How has sport influenced your career as a trainee Chartered Accountant?I’m very much at the beginning of my accountancy career, but I’ve learnt a lot about working within a team and group dynamics from playing sport at a high level. I’ve also had to learn to push myself and deal with adversity. What are your proudest sporting and professional moments?At the World Cup in 2018, we won the silver medal and I earned my 200th international cap in the World Cup final. It was a massive achievement for us as a squad; we were competing against countries with professional programmes, so we played far beyond our ranking. Signing my training contract with Mazars and starting the Chartered Accountancy qualification was also a special moment for me as it’s something I’ve always wanted to pursue. What are your future sporting and career goals?I want to compete at the Tokyo Olympics in 2020 with the Irish team. I’ve been involved in two Olympic campaigns since 2010 and narrowly missed out in both, so hopefully it will be a case of third time lucky! I also hope to qualify as a Chartered Accountant in the future. Eddie Hoare Galway footballer and Corporate Finance Associate at DHKN Chartered Accountants. How did you get involved in sport?My involvement in Gaelic games began at a very young age through the Community Games. In 1993, our local parish competed at U10 level, winning the All-Ireland series. How do you balance your sporting and professional lives?Efficient time management and effective planning are key when juggling a busy professional and sporting life. I’ve also been very fortunate in that my employers, DHKN Chartered Accountants, have always afforded me the flexibility to do both. How has sport influenced your career as a Chartered Accountant?Competing at an elite level in any sport requires a high level of commitment and self-discipline. These traits have been fundamental for me in becoming, and now practicing as, a Chartered Accountant. What are your proudest sporting and professional moments?On the field, one of my proudest moments was representing my club in Croke Park in the All-Ireland Intermediate Club final. Unfortunately, we lost the game but it’s an occasion I will always cherish. Another notable moment was making my senior inter-county debut with Galway in 2008. On a professional level, my proudest moment was being inducted into Chartered Accountants Ireland as an Associate Member in 2012. What are your future sporting and career goals?In 2019, I will become a partner in Hoare Chartered Accountants. The firm is run by my mother, Mary Hoare FCA. On the pitch, I look forward to stepping into semi-retirement and getting involved in underage coaching with my local club. Donal Courtney Former international rugby referee and independent non-executive director. What are the key aspects of your sporting career?I played rugby with CBC Monkstown and Monkstown F.C. until injury struck in 1991. I then took up refereeing at the age of 27. What is your proudest sporting moment?My first time refereeing a Six Nations game, which was Wales and Scotland in the Millennium Stadium in Cardiff – a day I will never, ever forget.How did sport influence your career?Decision-making is key as a referee; the ability to make judgements in a short period of time under pressure. Another is how you deal with people; it’s important to have clarity in your messages to players and be able to deliver these messages in a non-confrontational way. What was the best lesson you learned on the pitch?The ability to communicate under pressure. The best communicator in world refereeing is Nigel Owens. He remains calm, knows what he’s going to say, how he’s going to say it, and he has empathy with players when he needs to, but also players understand where the line is. Whose leadership do you most admire?Munster’s Anthony Foley, who passed away a few years ago. I once appointed a young English referee to an important Heineken Cup game between Munster and Montauban. It was his first Heineken Cup game. Munster didn’t get the bonus point they needed but Anthony rang me and told me he was very impressed by the young referee. Anthony understood that, like him playing for Munster or Ireland, he had to be given his first game. That was the man that Anthony Foley was on and off the pitch – a true leader with empathy.

Apr 01, 2019
Information Technology

The Property Services Regulatory Authority (PSRA) writes: The Property Services Regulatory Authority (PSRA) licences and regulates Auctioneers, Estate Agents, Management Agents and Letting Agents (licensees). The PSRA works to protect the interests of the public by ensuring that high standards are maintained in the delivery of property services by licensees. The PSRA considers the opinion of the Reporting Accountant, and the work leading to that opinion, on whether client moneys are managed in accordance with PSRA Client Moneys Regulations by a licensee as paramount in their assessment of licence renewal applications. In this regard, a licence renewal application must be accompanied by a signed accountant’s report relevant to the licence(s) held. The PSRA acknowledges the vital work undertaken by accountants in completing these reports effectively.   Accountants are required to review the books of account and records of the licensee and give an opinion on whether the licence holder has complied with the PSRA Client Moneys Regulations and to report where breaches of the Regulations have occurred. While the vast majority of reports received do not require the PSRA to request additional information, in some instances the PSRA is required to query the licensee’s application, including the content of the accountant’s report. By way of information, common issues encountered by the PSRA while reviewing licensees’ applications and accountant’s reports include: The most recent updated specified accountant’s report is not completed. Specified accountants reports are available at http://www.psr.ie/en/psra/pages/accountant’s_report Accountants fail to complete Section 4 of Part I of the relevant renewal accountant’s report expressing an opinion as to whether the regulations have been complied with by the licensee. Incorrect calculation of the balance on the Balancing Statement. The name of the Client Account(s) does not match exactly with the name on the relevant bank statement. A client account must be in the name of the licensee and contain the word “client” in the title. Issues of greater concern to PSRA identified in 2018 include: Liabilities to clients reduced on the balancing statement (Appendix 3A of PSRA/S35 – Renewal ABC) by deducting moneys owed in, which were intended for clients, but had not yet been received or placed in the client account. An example includes: where a licensee pays money out of the client account to a landlord in advance of receipt of rent by the licensee from the tenant. In a small number of instances this transaction is not shown as a liability on the client account by the licensee when completing the balancing statement. Before giving an opinion, the accountant should be satisfied in respect of the statement in section 3.3 of the report, namely “I have obtained the client account balancing statement(s) prepared by the Licensee as set out in Appendix 3A and checked that the information therein is in agreement with the books of account and records of the Licensee”. Liabilities to clients are not reported on the balancing statement (Appendix 3A of PSRA/S35 – Renewal ABC). Before giving an opinion, the accountant should be satisfied in respect of the statement in section 3.3 of the report as noted above. Licensee using one account for all client and business transactions. This is a breach of the Client Moneys Regulations and is required to be included by the accountant at Appendix 2 of the accountant’s report. Instances where a deficit/surplus on the client account has been identified but not addressed by the licensee, despite confirmation in Appendix 3B that funds have been paid into/withdrawn from (as appropriate) the client account by the licensee and the signed accountant’s report being submitted as part of the licence renewal application. In these instances, the PSRA has by way of follow up confirmed that in such cases outstanding monies owed have not been repaid to the client account. The PSRA encourages that you consider whether there is evidence of any of the above issues arising when completing the accountant’s reports on behalf of licensees. The PSRA acknowledges the engagement of accountants with licensees and the cooperation extended to the PSRA in addressing queries. More information regarding accountant’s reports and the PSRA in general can be found on www.psr.ie. The PSRA may be contacted on 046 9033800 or by email at info@psr.ie in relation to any query you may have when completing PSRA Accountant’s Reports. Members should refer to Technical Release (TR) 03/2018 ‘Licence applications under the Property Services (Regulation) Act 2011 and the Property Services (Regulation) Act (Client Moneys) Regulations 2012’ issued in June 2018.  

Apr 01, 2019
Feature Interview

Niall Anderton FCA, CEO at Circle K, talks about life at the wheel of one of Ireland’s most visible brands. Always be open to change, because things will change around you anyway. That’s the key lesson Circle K Chief Executive, Niall Anderton, has learnt during his career to date. “Be open to changing your career because things will change whether it’s consumers, the industry or the ownership of your business,” he says. “There’s no point getting worried about what’s going to happen next because it will happen irrespective of what you do. Don’t be afraid of change, look for it.” And he has lived that philosophy since setting out on his career as a Chartered Accountant with KPMG in the mid-nineties. “I love fast-paced and dynamic business environments that are constantly changing.” The son of an IBM engineer, Anderton had no history of accountancy in his family but he knew from a relatively early age that it would be the career for him. “I’ve always liked working with numbers and I was very good at maths at school,” he recalls. “I really enjoyed the structure to accounting; what I liked most about it was the ability to balance things.” Having considered investment banking and becoming an actuary, he chose accountancy for its more defined career path. But that thirst for change led him to move on from auditing and into industry. “I learnt an awful lot in practice in KPMG when I was there, but I felt that I was going in a bit of a cycle. I was there for nearly five years and you were seeing the same customers, clients and challenges but you really weren’t making any helpful decisions in terms of turning the business around or driving it in a certain direction.” Niall worked with a number of retail-focused clients before deciding to make the move into that sector. “I was always aiming for the retail business because my preference would have always been to work in an industry that I could relate to,” he explains. His first role was Financial Controller with Brown Thomas subsidiary, A-Wear. “I did the Brown Thomas audit when I was in KPMG and they had a role as Financial Controller for A-Wear, and I went in there.” It was far from an easy option. “Retailing is tough,” he says. “Whether it’s in finance, operations or buying, what might look glamorous at the front in terms of the models and fashion is very hard work behind the scenes. That’s probably one of the things I learnt from going into the A-Wear business. A-Wear was at a size that meant I learnt a lot from working with the operations guys and the buying guys and I got a lot of exposure to a range of stuff. I was in there doing a negotiation on the leases, walking the streets with the operations guys, going out to China to see how the buying was done, so I got huge exposure to how the business was run and was able to influence decisions. You don’t always get the broad experience that I was very lucky to get.” He moved on from A-Wear to logistics firm, Target Express, before being asked to join telecoms company O2. “The Finance Director of Brown Thomas went into O2 and he asked me to come across because there was an opportunity to look after their retail business and bring it forward. I spent three years in a non-finance role, which was very interesting. You’re promoting a product which is a commodity at the end of the day, so you have to put a lot of marketing behind it. I got lots of really good experience and it was very enjoyable as well.” From there he moved to Primark as Finance Director just as the business was making the change to becoming the slick multinational operation it is today. “Primark is a brilliant business, I really enjoyed it. The cultural change from when I went in was huge in terms of moving from a very old-fashioned, typical retail business into a multinational fast-paced business was incredible. Huge credit to what they’ve done in there.” But then Topaz came calling with the missing piece of the jigsaw. The one thing he hadn’t done so far in his relatively short but highly varied career was mergers and acquisitions.  And what timing. Topaz was just about to acquire the Esso business in Ireland and within 10 months, had itself been acquired by Canadian firm Alimentation Couche-Tard. “I gained invaluable M&A experience within 10 months of joining.” Incredible and a little fraught. Topaz had to deal with the Irish Competition Authority in obtaining approval for the Esso deal on one side while at the same time, negotiating the sale of the enlarged company to Couche-Tard. “We eventually got clearances for the Esso business on 1 December and we agreed to sign everything on 2 December. It was incredible. You can imagine the late night we had on 1 December when we were still negotiating with the guys in Canada and were just closing the deal with the Esso guys in Europe.” Within months, he had become CEO of Topaz, which was about to rebrand its retail operations as Circle K. He is very modest when it comes to that appointment. “I had the experience and the finance background as well, I was probably seen as the safer pair of hands initially.”  The transition from CFO to CEO allowed Niall to develop a more wide- ranging role encompassing all areas of the business across retail, brand, strategy, strategic HR, understanding changing consumer demand and crucially, organisational change by preparing to lead the organisation through an impending and significant period of change. Two years of groundwork went into the Circle K rebrand. “The first two years were spent getting the systems lined up. We had to change our ERP systems, we had to change our structures, our reporting line, basically everything had to change. That was a lot of hard work in terms of alignment and understanding it from a people point of view, understanding how the business works and the cultural changes and so on. That all had to be done in the background. “We started on the rebrand last April and that’s been very quick – we’re doing eight a week – but that’s the last piece if that makes sense. That’s when the consumers see it, but there was an awful lot of work to get us to that position in the first place. I am very grateful for the support I received along the way from my colleagues on our exceptional and energetic young leadership team, and for the hard work and dedication of our wider team at head office and across our network of sites nationwide.” The filling stations are just part of the business. There is also the aviation fuel side, the terminal business in Dublin Port, and the commercial business supplying fuel oil distributors and so on. But Niall is keenly aware of the challenges facing a traditionally low-margin business in the fossil fuels sector. “The fuel business is traditionally a very low-margin, high-volume business,” he notes. We are very dependent on getting customers in as it is a very competitive industry. We have tried to diversify our offering over the past number of years to a more food-based offering whether that’s coffee, food or car wash.” That has seen a €50 million capital investment in the brand and the add-on consumer offers. “I see the business as being much wider than forecourts and it’s all about getting the person to buy the coffee from us rather than making it at home.” Brexit is a challenge in the short-term in terms of its potential impact on consumer spending, but Niall is looking further than that. He mentions a speech by Minister for Energy, Richard Bruton, where he stated that all energy must be from renewables by 2050. “It will be very interesting to see how we get there. The growth of electric vehicles is both an opportunity and a risk so we’re looking firstly at how we meet that demand – there are Tesla and other chargers on our sites, and we have the biggest network in the country. We’re also looking at how we work with other electricity providers to potentially ‘white label’ our products into people’s homes. “Obviously, the challenge for us is to really replace the main footfall driver because people today go to forecourts to buy their fuel and then buy products in the stores. We now need to turn it on its head so that they buy products, and then they get fuel, so we become much more of a retailer than a fuel provider. And as electrification becomes more prevalent, you’ll be charging your car at home or at the office and what does that mean for our business? We need to stay relevant, but the one good thing is that we’re thinking about it now and you won’t really see the impact of this for another five or six years in Ireland. We have time on our side, which is good.” And his own future? “We continue to make Ireland more relevant for the global Circle K business, which is really important,” he says. “I think for us to continue holding the market position we have, developing new offers and so on. In my capacity as CEO of Circle K, I’ve joined the National Council of IBEC which is important for me in the context of the wider business environment Circle K is operating in and as a business, we have much to contribute both from the point of view of our experience in recent years as well as our plans for the future and the opportunities we see.”

Apr 01, 2019
Spotlight

Tony Óg Regan ACA, a performance psychologist and former inter-county hurler, outlines the key lessons you can glean from top athletes and teams. Develop the person first, employee second Personal purpose What difference do I want to make in the world? How do I add value to my relationships, community and organisation? Such questions are tough to answer, but purpose fuels our drive and energy and gives us clear direction and meaning in life. A purpose is your big ‘why’ and provides meaning about why you do what you do, why you make the choices you make and why you appreciate what you have. When we have big decisions to make, be it personal or professional, asking yourself ‘Why I am doing this?’ is a great place to start. Personal values What is my internal compass for making decisions? How do I judge what is right or wrong? What behaviours are important to me? And how do I want to demonstrate them? The top sportspeople and leaders have a very strong sense of who they are and what they stand for. They are true to themselves, regardless of the situation. A value that is very strong in most leaders is honesty. They speak openly about what was done well and what wasn’t delivered on, and why. Sometimes we can get caught up in making plans, to-do lists and goals, but we shouldn’t overlook the question: who do I want to become? Personal strengths and skills  Awareness is vital in identifying your main skills and strengths. In sport, we look at individual and team goals and behaviours. What are the key performance indicators in your role and what are the key behaviours you strive to demonstrate every day to make these happen? It is important to have a clearly defined measure of success for people, as we thrive on making progress and working towards a goal. Self-reflection on our skills and behaviours is also critical while feedback from respected peers crystallises the learning. Personal goals  Having a goal and making progress towards goals is what fulfil is us; it stops us stagnating. We need to continually adapt and improve, but the challenge is to simultaneously meet the needs of clients, customers and the organisation. Setting out specific goals in our personal and professional life will mean that we consistently grow and add value. Many sportspeople perform on a Sunday, but they know the importance of preparation and practice to enable their best performance. As the Spartan saying goes, “Sweat more in practice, bleed less in battle”. What practices or routines do you have to improve your work performance? Personal energy  Self-awareness is critical for any leader. Knowing yourself, the impact your behaviours have on others and recognising the emotional moods/needs of others is a fundamental skill all top leaders possess. The energy you bring or don’t bring into the team affects the team’s performance and people’s trust in you. Leaders must expand and renew their four dimensions of energy – physical, mental, emotional and spiritual – so that they can perform at their best and make the right decisions. There will always be challenges, but our attitude and how we respond to adversity will define our results.   Developing high-trust teams The framework I use when building high-performance teams consists of these components: Right compass – vision, values, strategy, goals, roles and responsibilities; Right people – capability, character and capacity; and Right cohesion – how we work together, social and task cohesion (i.e. team dynamics). Team purpose In Viktor Frankl’s book, Man’s Search for Meaning, he states that “he who has a strong enough ‘why’ can bear any ‘how’”. He survived eight concentration camps by focusing on his ‘why’ every day. He tapped into his humanity and by helping others, he redefined his purpose. So, what difference do you wish to create? Team values Core values are the fundamental principles or beliefs of a person or organisation; their views of what is important. Our values affect our decisions, goals and behaviours. They are standards that guide our judgements, actions and attitudes. These guiding principles dictate behaviour and can help people differentiate between what is acceptable and unacceptable behaviour. Regardless of the situation or the scoreboard, the team should live these values, the non-negotiable behaviours we expect from each other. What we do when no one else is watching doesn’t guarantee a win, but it does give us a better chance of winning. A team that has a strong value system, in my experience, is more connected, committed and accountable. Team goals In working with elite sports teams, I break down the route to success into task-focused and training-focused goals during the week, and process-focused and performance-focused goals for match day. When we get these pillars right, the score takes care of itself. In business, we set daily, weekly, monthly, quarterly and yearly goals. What we can learn from sport is to review these more regularly. When I played for Galway, every Monday we reviewed our key performance indicators against our targets. We identified what we did well, and we were honest when we underperformed and took responsibility in practice to improve on this. In business, however, we sometimes do only yearly reviews with staff. It has been shown that feedback improves performance by up to 50%, so why not tell your staff more often what you appreciate about them, what they can do more of and why? Team cohesion A key element of successful teams is strong, honest and trusting relationships among team members. When an individual comes under pressure, he or she relies heavily on teammates to support, encourage or challenge him or her to higher effort and performance. The best teams don’t leave each other isolated at any stage; they are aware when someone is down or struggling. They recognise that when someone is struggling, the team struggles. When someone is frustrated, the team is frustrated. Creating an environment where people feel valued, trusted, connected and respected is how we will get the best out of each other. Leaders must strive to make people feel this way. High-trust teams are comfortable displaying their fears and vulnerabilities; they aren’t concerned about the judgement of others. They communicate openly and positively challenge each other to do better. Above all, they care for the people they work with. Honesty and accountability In sports teams, we are constantly under the microscope. 82,000 people attend the All-Ireland final each year with millions of viewers worldwide. After each game, we review our performance on video. If you were videoed for a week in work, what would people see? Would you be proud of the effort you put in, how you communicated with colleagues, and the skills and behaviours you demonstrated? Sports stars are not afraid to ask hard questions of themselves and their teammates. When we underperformed, we got help from our coaches to improve our skill deficit. Does your organisation provide adequate coaching to staff if there is a skills deficit? Summary Developing individuals and teams requires a holistic approach. As individuals, it is important to identify key strengths, skills and development areas. It is not enough to be good technically; that is only 20% of your role. The 80% that we must continue to review and develop is our people skills, learning and behaviours. Having a strong culture of feedback in your organisation is vital to raise responsibility in people. Building high-performance teams takes effort but by putting the key pillars in place (right coordinates, right people and right team dynamics), you can create repeatable sustained performance and success year-on-year.   Tony Óg Regan ACA is a performance psychologist and has played at the highest sporting levels with the Galway senior hurlers.

Apr 01, 2019
Spotlight

Peter Greene reflects on the  special elements that have helped the Chartered Accountants Ireland Golf Society thrive over such a long period of time. Golf is undoubtedly the ideal sport for a professional body such as Chartered Accountants Ireland to benefit from for member engagement because it almost uniquely transcends age, gender and abilities. Over the years, there has been a significant tradition of Irish Chartered Accountants linking together through golf for sporting association and social interaction. The first known record of a golf event organised under the auspices of Chartered Accountants Ireland took place in June 1913 at Fortwilliam Golf Club, Belfast to compete for The Institute of Chartered Accountants Golf Challenge Cup. The fabulous trophy (pictured left with the Quin Cup and members in 1924) continues to be competed for annually by members of the Ulster Society, 106 years after its inauguration. Seven years later, in 1920, as the Belfast Newsletter archive press cutting below records, the first meeting of the newly-formed Chartered Accountants Ireland Golf Society was held at Royal County Down Golf Club where “keen rivalry was in evidence between the representatives of Dublin and Belfast”. The society eagerly anticipates the opportunity in September of next year to commemorate its 2020 centenary by returning to that same venue in the very week the first event took place for a special one-off outing. There are 12 regular golf events in the Chartered Accountants Ireland calendar (visit www.charteredaccountants.ie/golf for the 2019 diary) including the Leinster Society outing for The Old Students’ Cup, which started in the 1930s, and the annual Chartered Accountants Ireland Golf Society weekend meeting for members, which takes place in May of each year at Rosses Point, Sligo. Early daysThere are few records of the society before the 1950s, but we do know that the society held an annual meeting at different venues around the country from press cuttings and from Pat Bryan, who recalls first playing in 1935 at Royal County Down and also at Greenore, Portmarnock and Baltray before the break for the war. Additionally, the Quin Cup, which dates to 1920, and the Smylie Cup, which dates back to 1927, have the winners’ names recorded on the silver trophies which are still competed for annually. It was in the early 1950s that an inspired decision was taken to move the event “permanently” to the west of Ireland as a deliberate strategy to encourage members to stay over for the weekend to engage in social association, which established the society’s long-standing connection with County Sligo Golf Club at Rosses Point. Rosses PointThe annual meeting has now taken place at Rosses Point for 66 years in a row. Regular participants note that there is something special about the venue and the culture of the weekend that has enabled the society to survive and thrive over such a long period of time. The outing comprises two days of competitive golf for a range of silver perpetual trophies in various categories of competition (some are pictured with the 2017 winners above), which have been presented or donated over many years by our own members, past presidents or named in honour of renowned members of the society. Golf might be the connection through which members are first introduced to the society, but many lifelong friendships have been made over the years and companionship through the sport of golf still brings everyone back to Rosses Point each year. As you might imagine with an event that has been held in the same place for so many years, traditions have become firmly established. It begins on Thursday evening when the steady stream of members arrive from all over Ireland and overseas at Austie’s Pub in the village for a few drinks to renew old friendships from the previous year. At dinner on Friday in a local restaurant, the gathering welcomes the Institute President, who has the onerous responsibility of selecting (and paying for) the wine, following which we are regaled with expert singing from ‘Bayly the Bard’ (Jonny), our resident baritone and a call to action for the following day’s golf by the inspirational words of the ‘Lorimer’ team captains. After golf on Saturday, it is customary for the putting competition finalists to be heckled relentlessly for any poor putts by the spectators gathered to watch from the clubhouse veranda until the winner of this final trophy is decided and the prize-giving can proceed. The golf competitions are keenly contested, but the appeal of the annual pilgrimage to Rosses Point stretches beyond the excellent golf on a beautiful links golf course. Members constantly refer to the enduring personal friendships and professional relationships they have developed over many years, and the craic and companionship enjoyed on each visit. The sense that once you crest the hill on the road to Sligo, with the dramatic views of Ben Bulben and Knocknarea on either side, you are drawn into the magic of the place and the enthral of the characters whose company you encounter. The charactersWe cannot do justice to the many personalities that participate in the golf events of the Institute’s golf society in a short article. The captain’s board is a ‘who’s who’ of the society dating back to 1953, many of whom are immortalised by the trophy they presented. Harold Winter from Belfast famously played in the Rosses Point outing for over 50 years in a row, without missing one. The trophy that bears his name is given to the player with the best score by a first-time attendee each year. Harold had an unrivalled competitive nature, as shown by his headwear of choice on the course – a cap emblazoned with the initials PIG which, he explained to innocent newcomers, was like his breakfast where the hen has only a passing interest, while he was like the pig – total commitment. Harold’s longevity is by no means an exception. In 2018, several players had been playing at Rosses Point for over 50 years. John Bourke (1982) is our oldest regular past captain still participating, while Barry Roughan won the Oakes Cup in 2018, an incredible 55 years after he first won the Quin Cup in 1963. Henry Bell, an obviously competitive past captain, donated a trophy for putting – which he promptly won the first year it was played, so he took it home again. The ‘John Sedgewick’ is a bronze sculpture of a small wizened golfer with his legs, arms and driver twisted twice around his body, not unlike how we remember John in real life. There are fewer characters bigger than Shane O’Mahony, who first came to Rosses Point in the 1970s as a student member, hitch-hiking from Galway with his clubs over his shoulder. Shane doesn’t recall his golf scores from that first visit, but he does remember that the then President, Cornelius Smith, kept him well-supplied with beer all weekend and that he spent Saturday evening dancing with the local members’ wives at the golf club dance. Shane (Connacht), along with Bill Miscampbell (Ulster) and Hilary Haydon (Leinster) are notorious for their banter over the Lorimer Shield provincial competition. Shane has little reserve when describing certain cultural characteristics of his cousins from the north (Ulster) and those from the big city (Dublin). It is an enduring fact that the “keen rivalry between the representatives” from the different parts of Ireland, which was noted in the newspaper article reporting that first meeting in 1920 and was revived through the introduction of the Desmond Lorimer salver by the then-President in 1968, remains a defining feature of the annual weekend. International matchesGolf is now an international affair for Irish Chartered Accountants, with annual ‘friendly’ matches against the English Institute for the Celtic Rose Jug, against a French team for the Freire Cup, and – from 2019 onwards – against the Scottish Chartered Accountants for the McCormack Manson Trophy, kindly donated by Feargal McCormack during his presidential year. Simon Hopper, who is one of the regular Chartered Accountants Ireland heavy-hitters on the international front, notes that he has played at 15 Ryder Cup and European Tour venues over the last 10 years and reflects how this all started when he first ventured to Rosses Point as a newly qualified member in 2007. The matches alternate between home and away, with the Irish team of 12 or 14 playing in a Ryder Cup format, selected from participants at the Rosses Point outing. Get involvedMembership of the golf society is open to all Chartered Accountants regardless of age and gender, and you are cordially invited to join in the fun by coming to Rosses Point in May and/or participating in your local District Society golf outings during the season.Further information about the society, the calendar of events andthe entry form for Rosses Point are all available online at www.charteredaccountants.ie/golf. Contact us by email at caigolfsociety@gmail.com and follow us on Twitter @ChrtAccGolf. Please feel free to contact Aisling Parker, our 2019 Captain, or our Secretary, Ger Byrne. There were 20 first-timers at the 2018 event and 10 lady golfers. There are prizes for all manner of categories over the two days – nett and gross, and a nine-hole competition over the Bomore links for less (or more) experienced golfers. The society will be 100 years old in 2020 and it is looking to the future by reaching out to younger members – those based in Dublin and further south – all of whom are under-represented at the present time. Enter this year online using the contact details above and come along on Friday 24 and Saturday 25 May and become part of the second century of Irish golfing Chartered Accountants.

Apr 01, 2019
Management

Blockchain might be the trend du jour, but it is just one part of the distributed ledger  technology revolution. I am going to be completely honest: I am not a blockchain expert. But I do have a strong interest in how blockchain technology is going to change our profession. In 2017, I joined a MeetUp group – Blockchain for Finance – to learn more about blockchain. This group hosts regular networking events throughout the year with speakers from various companies using distributed ledger technology (DLT) to create solutions for the problems and inefficiencies facing businesses today. As part of my research for this article, I spoke with two blockchain company founders to find out more about their respective companies and better understand DLT’s practical applications for businesses. QPQ QPQ is a company creating a 21st century digital financial network which, according to founder Greg Chew, promises to reduce transactional costs by automating and digitalising the transaction processes with proprietary smart legal contracts. Greg, a barrister by profession, explained that for true automation of a transaction, one must be able to govern what it does and how it does it. The ability to govern a transaction is central to what QPQ aspires to create and the company has developed its own operating governing code engine (OGCE), which will enable it to create reg-tech smart legal contracts (SLC). The OGCE will convert a contractual document into operating code (i.e. the SLC). It will also include any other items that impact on an entity’s dealings such as regulations, tax, logistics and customs, for example. Having these additional items embedded in the operating code ensures compliance throughout the transaction. Greg outlined the following example to illustrate how logistics could work using QPQ’s financial network (logistics being only part of the contractual document informing the SLC). Logistics example Imagine your company orders 100 barrels of mango concentrate from India, to be shipped to the UK. While the ship is at sea, a storm destroys 20 barrels. Using Internet of Things (IoT) technology, a signal will be broadcast to QPQ’s OGCE to inform the SLC in real-time of the accident. Before the ship arrives in the UK, at which point the accident would ordinarily be discovered, the SLC will already have determined that the following actions be taken: Contact the supplier to inform them of the accident and re-order 20 more barrels; and Instruct the shipping company to return the 20 destroyed barrels before entering the UK, thereby avoiding paying unnecessary customs duty. In this example, the additional transactional administration was removed and unnecessary costs were avoided. QPQ is conducting extensive research with accountants to ensure that its development process considers the specific requirements of different industries, sectors, geographies and regulations. To read more, visit www.qpq.io Piprate Piprate is an Irish insurtech start-up using blockchain to solve the insurance industry’s fundamental data-sharing problems. I met with Stanislav Nazarenko, co-founder and CEO, to find out more about Piprate’s plans to revolutionise the insurance industry. Stanislav, who worked in the insurance industry for several years, explained that the industry has a lack of trust between parties due to the manner in which data is shared. As a result, a significant number of processes are inefficient. For example, roughly half of a loss adjuster’s time is spent confirming the facts of an insurance claim. Piprate uses DLT to create a platform for the insurance industry, which allows all parties involved to share data in a more efficient, transparent and trustworthy way. Stanislav added that creating such a platform comes with many challenges, which DLT helps them overcome. Data will be spread around a single network (in data wallets), so no one party will have access to the entire system. In fact, parties will only have access to the data they need to perform their function (your home insurance broker doesn’t need to know if you have penalty points, for example).By having one definitive and reliable source of truth, Stanislav explained, you will enable efficiencies and as a result, insurance could become value-add for businesses and individuals alike. Consider the following examples: Insurance renewal: instead of businesses filling in various renewal forms, which are labour intensive and inefficient, Piprate’s platform will share data with multiple parties simultaneously to provide a quote much quicker; and Preventative measures: if you have a cybersecurity insurance policy and install various software programmes to mitigate the threat, this data could be shared to reduce your premium. I asked Stanislav if Piprate’s platform could lead to cheaper insurance premiums in the future. He informed me that the platform will create efficiencies and reduce operating costs – whether these savings will be passed on to customers remains to be seen. Conclusion Blockchain, or DLT, promises to make Chartered Accountants more efficient by removing the significant amount of time currently spent verifying the information provided to us. As a result, we will be able to reinvest this time to work on value-add activities for the clients and organisations we serve. Five things you need to know about blockchain It is not a cryptocurrency, it is a type of DLT The common misconception is that blockchain is a cryptocurrency. Blockchain is distributed ledger technology – the underlying technology that enables cryptocurrency to exist. There are various types of distributed ledger technology and blockchain is just one example. It gives you control of your data and has enhanced security The average consumer isn’t aware that GDPR has made them the owner of their personal data. DLT will give consumers even more control of their information and allow them to manage who has access to it. Your data will be more secure as information is stored across a network of computers instead of on one single server, making it very difficult for hackers to compromise the transaction data. In any industry where protecting sensitive data is crucial, DLT can change how critical information is shared by helping to prevent fraud and unauthorised activity. It increases efficiency and reduces costs DLT data is more reliable because the record-keeping is completed using a single digital ledger that is shared among participants. You don’t have to reconcile multiple ledgers, which enables transactions to be completed faster and more efficiently. It is more transparent and trustworthy DLT provides a verifiable and auditable history of all information stored on a dataset. All network participants share the same documentation as opposed to individual copies. That shared version can only be updated through consensus. In addition, DLT removes the need to trust third parties because now, you can trust the data. Accounting for crypto-assets Blockchain and DLT have enabled the creation of new crypto-assets (such as cryptocurrency, tokens, coins and so on), which is a constantly evolving and fast-growing area. As such, there are no specific accounting standards in place to deal with crypto-assets. This will provide a challenge for anyone preparing accounts for entities that hold crypto-assets. Michael J Walls is the Founder and CEO of Dappr and the 2018 Young Chartered Star.

Apr 01, 2019
Management

While anyone can present themselves as an expert on share valuations, integrity is the hallmark of the professional. A Picasso painting may be valued at €50 million; your house valued at €1 million. These valuations have no underlying measurement, save the willingness – through supply and demand – of interested parties to own the asset. The valuation of shares is different, however, in that there are underlying practice and measurement norms. Valuation permeates all aspects of business. It is the measure of capital value on stock markets across the world; the mainspring of wealth and its creation; and the store of value for the economic well-being of a nation. It’s your pension fund. In 2010, Chartered Accountants Ireland published The Valuation of Businesses and Shares by the author of this article. A second edition followed in 2016. Since publication, readers have enquired as to numerous aspects of valuation. This article is a stock-take of these enquiries. The hallmark of the professional valuer A major category of enquiry is share valuation related to legal wrangling of one kind or another. This includes shareholders disputes, marital separations, acquisitions or investments gone wrong, the interpretation of share rights and entitlements, and so on. Some are complicated or have poor paperwork. In my experience, the accepted practice in share valuations is poorly understood. In all circumstances – without exception – integrity (meaning objectivity, independence and impartiality) is the hallmark of the professional valuer. Regrettably, I have seen numerous instances of ‘hired gun’ valuations where the intention is to please the client by presenting an unjustifiably high or low valuation to suit the circumstances. Happily, in my experience the valuer in these circumstances has rarely been a Chartered Accountant. There are no statutory guidelines or restrictions as to presenting oneself as an expert on share valuations. Quite a few individuals and organisations present themselves as experts. Some are competent; many are not. The financial crash starkly illustrated how few investment advisers understood valuation. The nonsensical role of EBITDA Another category of enquiry relates to earnings before interest, tax, depreciation and amortisation (EBITDA). A consistent misnomer, commonly misunderstood or misdirected, is the use of EBITDA in valuations whereby valuations are based on a multiple of EBITDA. The use of EBITDA in valuations is often presented as some form of sophisticated expertise. It is, in fact, nonsensical. Please refer to my article on EBITDA in the August 2017 edition of Accountancy Ireland. For the sake of good order, should any reader feel aggrieved as to my dismissal of EBITDA, please write to me quoting even one textbook approval of EBITDA, any academic study supporting it, or indeed any evidence at all as to the validity of EBITDA as a method of valuation. I will publish it. Valuing different classes of shares A regular category of enquiry – probably the most common – relates to the valuation of different classes of shares. There are many disagreements as to which shares have what value in companies with several classes of shares. There may be different entitlements as to dividends, voting rights and/or assets on a winding up. There may be share options or loan conversion rights which, if exercised, would alter or diminish the rights of existing shareholders. Sometimes, because of restricted rights, a particular class of share is valueless or heavily discounted. The ensuing row is that this likely outcome was not understood by the investor at the outset; leading to allegations of misrepresentation. The allocation of a company’s value across different classes of shares is usually a difficult exercise. It would be better if this aspect was given proper consideration through simpler share structures in the first place. The ‘grievance’ valuation The final issue that regularly appears is the ‘grievance valuation’. An aggrieved shareholder demands that the valuation is set at an unjustifiably high level to including compensation or punishment for the alleged grievance. One or both parties in a dispute may be difficult personalities, with rational thought and reasonable behaviour proving remote in the circumstances. Familiar refrains, as expressed to the writer, include: “I have worked there for X years and you say my shares are only worth X euro”; “This was my father’s business and you are insulting him (or his memory) with this valuation”; and “John Doe is a crook and your valuation is letting him away with it.” One can only explain patiently that the valuation and the value of the grievance, if any, are separate matters. A willingness to listen and explain confirms the hallmark of the professional valuer – back to what was said about integrity at the outset of this article. Des Peelo is author of The Valuation of Businesses and Shares, 2nd edition, published by Chartered Accountants Ireland.

Apr 01, 2019
Management

If your company is considering expanding overseas, there are three critical issues to address. Expansion can be an attractive strategic option for businesses, whether mature or start-up, and there is significant motivation for both investors and businesses that are willing to accept the capital opportunities that exist. This willingness must include openness to the impact the investors can have on the business and the drive that investors may have to expand internationally, with all the change that can impose – both positive and negative. The opportunity for this strategic option is significant as, according to the Irish Venture Capital Association, over €600 million was invested by foreign venture capital firms in Irish start-ups in 2017 alone. With foreign equity capital, there is added pressure to expand into foreign markets. This can be driven by investors’ ambition to achieve economies of scale in production and sales by accessing foreign markets. It can also be driven, however, by the need and/or want of the management team to be physically closer to the new foreign investor. In selecting a start-up or business in which to deploy its capital, the foreign investor will go through the due diligence process. They will inspect the health of the business and determine the company’s projected growth, and compare it with their desired investment returns. The promises made at this point can determine whether the company should pursue international expansion to deliver the forecasted revenue growth. To deliver the anticipated capital investment returns and avoid being one of the seven-in-ten start-ups that fail due to premature scaling, according to Forbes, companies must focus on three key issues. They are: product-market fit, which is too often assumed; office expansion, which must be tied to key strategic initiatives; and cultural and operational considerations, which concern the environment and what people do in it. Product-market fit A primary consideration for a company is the identification of a market for its product or service. According to Business Leader, however, 42% of small businesses fail because there is no market for their product or service. For a business to thrive, it must first identify a problem it is uniquely positioned to solve. Product-market fit can be easy to define, but harder to physically identify. One can identify success in product-market fit when the product is delivering its value proposition to those first few customers; when the customers are promoting the product and encouraging further purchases through word-of-mouth; and when the product is selling faster than it can be distributed or shipped. As venture capitalist, Marc Andreesen, once said: “product-market fit is the only thing that matters”. Having completed the product-market fit phase, the next step is to explore, research and frame markets that appear similar to the existing customer profile. Identifying markets with similar behaviours to the existing market will contribute significantly to – or even determine – the success or failure of the expansion. It is obvious, but critical, that thorough due diligence and research into a similar market space is completed prior to any significant investment of time and capital in international expansion. Expanding teams and offices For any international expansion to be effective, there must be clarity in the strategic reasoning such as product-market fit or strategic fit, specifically in relation to human resources. The lure of acquiring new talent is very attractive and the prospect of gaining comparative advantage by leveraging skills in other markets through expansion is often a strong strategic objective. This is why Ireland remains an attractive destination for US companies seeking to expand and establish a European presence.  Indeed, Ireland is the European headquarters for some of the world’s largest technology companies including Hubspot, LogMeIn, Facebook and Google. The country’s educated and technologically perceptive labour force can facilitate growth – and that’s before you factor in the country’s effective tax laws and ready access to the single European market. Irish businesses, on the other hand, often look westward to drive increased revenue through access to the large US market, which is currently very attractive for enterprise and consumer software businesses. To facilitate the market fit, the fulfilment of factor and/or the resource needs, start-ups must focus on the people contribution. They must therefore obtain the right skills; establish a support team in the new country; and develop a centre of excellence in that area. Skills gaps in the areas of manufacturing and mass production are easier to satiate by outsourcing, in particular in non-high-tech or non-high-precision products. The aforementioned support-team approach suits companies that require a customer relationship presence without duplicating all services, and with a focus on local customer and marketing support. Customers generally prefer companies to establish a local presence as this provides the customer with clear access to the product or service provider. The third approach is to establish centres of excellence in cities with particularly strong labour forces, in order to drive the company’s research and development initiatives. Edinburgh, for example, is a burgeoning hub for artificial intelligence (AI) talent thanks in large part to the ongoing efforts of universities such as Heriot-Watt University. Scalable company culture  As a company expands its physical footprint, the day-to-day running of the organisation must evolve. The business structure will have various teams in different locations and different time zones, with potentially different perspectives on the organisation. As growing a business involves a group of people coming together to achieve a shared vision of how a product or service will impact on a market, conflict may arise in terms of people, processes, systems and structures. While trying to achieve the best product-market fit, management must also create a culture that can evolve while maintaining the organisation’s core values and purpose. For people to effectively execute their function in a growing business, individuals must have complete clarity on the reporting structure. Keeping people in specific silos can often be counter-productive when it comes to solving the hardest problems, but management must ensure that individuals are not working on too many teams simultaneously or getting stretched too thin. Likewise, the inverse is also true. Management must be alive to the prospect of redundancy between teams, leading to unclear roles and despondent employees. Communication is the key to striking the right balance, and this involves more listening than talking. Even the virtual experience of presence – using live digital feeds, for example – can connect people different locations in a meaningful way. Technology offered by Slack, Skype and others have made it easier than ever before for colleagues in different countries and time zones to communicate effectively, and thereby enabling a company to scale. Invision, for example, has a completely remote workforce. This intangible work environment and culture is built around technology and transparency, which facilitates communication and collaboration. As good as these collaborative and communication tools are, there is no real replacement for being face-to-face with a colleague or – more importantly – a customer for building relationships. 70% of communication is said to be non-verbal and a lot can get lost in translation, as technology cannot give the feel of the environment and always creates a sense of distance unless the relationship is long-term and very well-established. Businesses must therefore balance the need to combine the capitalist fact of return on investment with feeling in satisfying the needs and wants of clients and customers. It is imperative that a company with teams in different time zones works to create an environment or culture that promotes collaboration, thereby avoiding a ‘them and us’ culture. Intercom provides a good example. In the early days of expansion, Intercom installed a camera in its San Francisco office and transmitted live footage to a screen in its Dublin office to help colleagues in both locations seem that bit closer. This approach has privacy and GDPR issues attached, of course, but it can create a perception of continuous presence and connection. Ensuring that project teams, or ideally the entire company, meet regularly is key to building strong relationships that endure. It is important to budget for these off-site gatherings and while they may appear in the financial statements as a cost, the positive impact may be seen in the retention of a key client or the improved delivery of a project, for example. Alternatively, colleagues may develop a joined-up approach to land a new account while working from different sides of the world. What would that say to a prospective client about the company’s cohesion and approach to integration? Conclusion International expansion requires a thoughtful and strategic approach, ensuring that expansion is commenced for the right reasons – be it to expand the sales efforts in a different market or to capture key talent in order to gain a competitive advantage. For any expansion to be successful, the company’s structures and processes must chime with the company’s overall culture. The key to solving most expansion-related issues is the company’s mission and vision – everything should stem from this. David Andreasson is Director of Finance and Operations at Voysis. Fearghal McHugh is a Lecturer in Business Leadership and Governance at Chartered Accountants Ireland and GMIT. 

Apr 01, 2019
Ethics and Governance

Board leadership requires decisiveness and emotional intelligence, particularly when the company in question is in the eye of a storm. There has never been a greater focus on boards and the critical role the board plays in the stewardship of an organisation and ensuring a sustainable future for its shareholders and stakeholders. The launch in the UK in December 2018 of The Wates Corporate Governance Principles for Large Private Companies is a seminal moment for corporate governance in the UK and Ireland, as it represents the first major step in raising the bar for corporate governance and board effectiveness in private companies. A key focus of these new guidelines is the leadership role of the board chair, which can be summarised as follows: “the chair leads the board and is responsible for its overall effectiveness, promoting open debate and facilitating constructive discussion. The chair should ensure a balanced, diverse board where all directors have appropriate information and sufficient time is made available for meaningful discussion”. Key responsibilities In working with boards across Ireland and the UK, I strongly believe that the board chair’s leadership has the biggest impact on the board’s effectiveness and performance. The expectations of a modern board chair have increased significantly over the years and in particular, a progressive board chair needs exceptional levels of emotional intelligence, leadership skills and business judgement to discharge their key responsibilities, which include: Overall leadership of the board team; Creating the conditions for overall board and individual director effectiveness; Demonstrating the highest standards of integrity and probity; Setting clear expectations concerning the organisation’s culture, values and behaviours; Setting clear expectations concerning the style and tone of board discussions; Managing board dynamics, engagement and conflicts; Leading the composition of the board, ensuring a vibrant and diverse mix of board members across gender, age, professional background, sector expertise and thinking styles; Overall communication to shareholders and stakeholders; Building and maintaining a healthy, constructive and balanced relationship with the CEO; and Assessing the performance of the board, individual directors and the CEO. Make a strong start While serving on boards over the last 20 years as a chair, non-executive director, CEO and executive director, I have seen first-hand the pressure for a board chair to integrate a complex mix of executive and non-executive board members. They are also tasks with creating a cohesive and hard-working team that is comfortable with high levels of robust challenge and debate, with every board member genuinely contributing and bringing their A-game to help the board excel on behalf of its shareholders. The board chair can be a lonely role as you strive to steer the board to arrive at a consensus position and optimise the decision-making of the team, particularly in times of significant stress on the organisation and serious conflict within the board. Serious crises require decisive and courageous leadership by the board chair in driving the board to face up to the challenges, establish viable options to address crises and make key decisions. In many cases, board chairs are promoted from within the board and have served a considerable period of time on the board as a non-executive director. While this has a lot of advantages in terms of understanding the board and the organisation, it can be a little unsettling initially to move into a formal leadership position and take on the significant additional responsibilities that come with it. I would always advocate that a board member who takes on the board chair role makes a strong start in terms of demonstrating to all the board members that while they fully respect the relationships built up over the years, the core responsibility of the board chair is to lead the board in a fair and balanced manner, thus enabling the team to excel on behalf of the shareholders and stakeholders. Performance culture One of the most pronounced changes to the responsibilities of a board chair in recent years is the focus on optimising the “performance culture” of the board. Traditionally, many boards did not have a genuine performance culture and this resulted in ineffective boards with a poor work ethic where board members were happy to show up, drift along and add little to no value to the executive team and the organisation. Board evaluations are one of the primary tools that boards utilise to help understand the current level of board effectiveness and performance. These vary from internal evaluations to independent external board evaluations. When board evaluations were first introduced for stock market-listed companies, they were seen very much as a compliance exercise. Now, board teams are looking at board evaluations in a far more progressive way and using an externally-led evaluation to help the board understand where the team is currently at in terms of its effectiveness and performance while identifying the areas and approaches that will help the board drive a sustainable step-change in performance. The board chair has a critical role in championing the value of either a board evaluation or other initiatives to help the board improve its performance. One of the characteristics of high-performing boards is that they want to continually improve. Average and dysfunctional teams shy away from initiatives that hold a mirror up to the board, challenge the value the board adds, and question whether the board is genuinely excelling on behalf of its shareholders and stakeholders. Times of crisis Another critical area is the leadership of the board chair in times of crisis. Examples of crises include: Liquidity problems; A loss of market share due to increased competition and pricing pressure; An under-performing CEO, which results in a major judgement call for the board in terms of whether to replace the CEO; A dispute with major shareholders and/or the executive team; and A major cybersecurity breach. In crises like these, the company’s board and shareholders look to the board chair to demonstrate strong leadership, a cool head and high-quality judgement to steer the organisation through the crisis. One of the most challenging crises is where you have a major disagreement between shareholders who have nominee directors on the board and, in some cases, a major disagreement with the executive team, which could also have significant shareholders in its ranks. As an independent board chair tasked with the responsibility of focusing the board on what represents the best and most sensible course of action for shareholders as a whole, disputes of this nature can be very complex and fraught with emotion. In many cases, they can also cause severe tensions within the board team. Steer the ship All boards face significant challenges in their respective environments. Company boards face an unrelenting wave of challenges including business model disruption, the impact of technology, a ferociously competitive landscape and geo-political challenges such as Brexit. Charity and not-for-profit boards are dealing with unprecedented funding challenges and a whole new era of corporate governance and transparency requirements. As the captain of the ship, a great responsibility is entrusted to the board chair to steer the board ship through the icebergs and on to the bright blue waters of sustainable success for the organisation. Kieran Moynihan is Managing Partner at Board Excellence.

Apr 01, 2019
Spotlight

Many leaders struggle to adjust and align in knotty situations, but it is possible to lead with clarity in a VUCA world.   We are in a VUCA world: volatile, uncertain, complex and ambiguous. Technologically, economically, politically, environmentally and socially, the sands are shifting beneath our feet. Change is now no longer confined to organisations: it is system wide, interconnected and discontinuous. Wherever we look, leaders are challenged as they struggle to adjust and align to situations of increasing complexity. Navigating in a context such as this requires different skills, attributes and abilities. Through my work as an academic and advisor, I have been fortunate to closely observe and assist organisations facing and managing change in the most extreme environments. From that work, a number of key lessons surface: areas of reflection that will help you and your organisation develop your vision and align to an environment in flux. Mental space The first involves thinking about how you frame your leadership. Leaders are ‘pathfinders’ within organisations. At their best, they articulate a shared vision, understand strategy as a dynamic process, and ‘sense make’ from confusing environments and mixed messages from stakeholders. Having external sounding boards can help leaders untangle conflicting information and allow them perspective amidst frantic activity. An analogy that may be helpful comes from studies of emergency medicine. When a patient is in difficulty, they often have a number of skilled physicians working on them at the same time. But the consultant – the leader – is standing back, often behind and watching. They can’t just look at blood pressure, or respiration, or bleeding – they need to see it all and how it connects. When I work with leaders dealing with extreme volatility, they identify the cultivation of this mental ‘space’ as a way to manage complexity and confusion. Alignment The second is the need to reflect on your organisation and what you think it is currently established to do. This may seem like a strange question but think of it in this context – Harvard academics Heifetz and Linsky have observed that “there is no such thing as a dysfunctional organisation, because every organisation is perfectly aligned to get the results it currently gets”. So, asking what your organisation is actually aligned to do is useful, even if it is sometimes uncomfortable for leaders to identify hidden areas of dysfunction.  Enacted leadership The third is your own conceptualisation of what leadership actually is. We have traditionally tended to see leaders as having some significant attributes that were usually positional (at the top), gender-based (male) and heroic (superhuman). Thankfully, we now recognise that leadership appears at all organisational levels and often looks very different from the stereotype. Recognising enacted leadership when we see it is crucial. Rewarding and protecting those leadership behaviours you want within your organisation is just as vital. Retired US General, Stanley McCrystal, reflects on this in his recent book on iconic leadership. He comments that leaders are just humans surrounded by those who enable and find meaning in their activities. Leadership is all about context and is an organisational process, as well as an individual one. Timing and trust Sometimes timing is everything. One of the things that my research has illustrated is that common guidance on managing change doesn’t work in all contexts. Indeed, when an organisation is under stress, introducing what is often called ‘a sense of urgency’ can be actively unhelpful. Instead, a paced and inductive approach is more useful. I saw this most critically in the newly established Police Service of Northern Ireland, which embarked on radical, rapid change in a highly volatile environment. Ensuring that the organisation had a period to prepare was important, even though it drew criticism at the time. Thinking about how you time and pace big decisions and their implementation allows you to be in a better position for psychological and structural transition to be successful. Leaders often talk about trust and empowerment, but it takes real courage to turn talk into active practice. One leader I spoke to was keen to redistribute authority quite radically down his organisation but admitted that when staff started acting on this and taking decisions, he was momentarily horrified. He realised that he had a choice to make: to roll back into his comfort zone or move ahead and, in doing so, really trust (and back up) staff who were nervous themselves. He chose the latter and reaped the rewards. The ratcheting of risk Resilience is a real buzz word at the moment. We tend to think about it in terms of our own personal ability to recover from setbacks. However, resilience is also an organisational attribute and all leaders need to consider how equipped their organisation and people are to cope with a shock to the system. In my work with leadership teams, I often ask them one question: what three things would need to happen in close succession for your organisation to be in real trouble? When potential threat is conceptualised in this way, it’s much easier (and also scarier) for leaders to see environmental factors that could force them off track or worse, lead to catastrophe. Having identified not just single factors, but the ratcheting of risk, they can then prepare more appropriately. The duty of hope One of the most significant personal challenges for any leader is managing through periods of stress and instability. Continuing to demonstrate positive behaviours in negative environments is difficult to sustain but vital to those who are looking for direction. During the Northern Ireland peace process, senior officials in the Irish Department of Foreign Affairs coined a phrase for periods of difficulty – they saw it as having a ‘duty of hope’. Essentially, this spoke to two aspects of the challenge that faced them: their professional duty and their personal emotional response. As such, it was a powerful and accessible idea to hold on to in the darkest of times. Past and present Shakespeare famously wrote that “the past is prologue” and this is never truer than in an organisation under pressure. Understanding the history and legacy of your organisation will tell you a great deal about why it behaves the way it does. It is possible to identify where the past impacts upon the present just by paying close attention to organisational myths. Think about the stories that your organisation members tell, especially to new people. Who are the heroes in these stories and who are the villains? This will tell you a lot about your culture and assist in managing diverse internal interests and perspectives.  Conclusion Leading in complexity is tough; having time to reflect even when (or especially when) volatility is at its most disruptive is critical. Barack Obama and John McCain were both running for the presidency of the United States of America when the financial crisis hit. McCain suspended his campaign and suggested that the first presidential debate be postponed. Obama refused, commenting that “a president needs to be able to focus on more than one thing, at one time”. It was an inflection point in the campaign and McCain never regained momentum. Obama had hit upon a fundamental truth of managing in extreme turbulence: the need to at least attempt the management of environmental complexity. These lessons – the cultivation of mental space, an awareness of aspects of dysfunction, leadership as a whole organisation process, the timing and sequencing of change implementation, empowerment as an enacted reality, what the past tells you about the present, and personal and organisational resilience – should act as a guide for implementing your vision in challenging times. We are in a VUCA world. Dr Joanne Murphy is a Senior Lecturer and Interim Director at the William J. Clinton Leadership Institute, Queen’s University Management School.

Feb 11, 2019
Spotlight

The apparent ineffectiveness of leadership development programmes is a key concern for organisations worldwide.   $50 billion is spent globally each year on leadership development according to a recent UK Corporate Research Forum (CRF) report entitled Leadership Development – Is It Fit for Purpose? This accounts for almost 40% of the $130 billion which Deloitte estimates is spent annually on global learning and development. US companies alone reportedly spend almost $14 billion annually on leadership development but despite this substantial investment in leadership development, the CRF’s and Deloitte’s latest Global Human Capital Trends reports highlight a growing gap in CEOs’ confidence in the ability of their organisational leadership to build organisations for the future. Executive leadership programmes are therefore being challenged and re-evaluated, particularly in light of more cost-effective and transformative learning technologies now available to organisations. From a business perspective, the obvious questions are: why continue to invest in leadership development? And if we do, is it possible to ensure a return on this investment? At this juncture, it is important to note the difference between leader development, which is directed at an individual level, and leadership development, which is defined as “the expansion of the organisation’s capacity to enact the basic leadership tasks needed for collective work: setting direction, creating alignment, and maintaining commitment”. The philosophy of leadership at UCD Smurfit Executive Development is firmly on the latter, leadership development, based on the view that leadership is a contact sport and requires a more holistic focus. However, the continued level of spend indicates that leadership development programmes remain a priority within organisations. Furthermore, participants’ satisfaction levels with their programmes demonstrate evidence of their positive impact, at least at the individual executive level. The 2017 Financial Times Corporate Learning Pulse Survey reported that 94% of senior executives indicated that undertaking such programmes had improved their business knowledge, competencies and confidence, while 85% acknowledged that the programmes had enhanced their ability to perform more effectively in their roles. So if executives report a positive impact from undertaking leadership programmes, why is this not being leveraged within organisations? If we are to ensure that investment in leadership development yields tangible results, a number of important factors must be addressed at the outset. The re-entry phase is a significant determinant of enhanced performance  The re-entry phase relates to the first 12 months after completing a programme. It is the period when the executive is most likely to demonstrate enhanced performance in terms of actions performed in the executive’s role that result in achieving the organisation’s goals. While enhanced performance is not limited to this period, this re-entry phase is critical because it corresponds with the executive’s return to the organisation as a re-energised, more confident, self-assured individual seeking to make a meaningful contribution beyond her or his role. The likelihood of the executive achieving enhanced performance increases where there is alignment of vision, values and purpose between the executive, those in interconnecting roles, the wider organisation and the environment in which the organisation operates. Successful re-entry is only partly determined by the executive  This is a common misgiving within organisations; particularly where the “fix it” mentality exists and very little regard is given to how the executive will be enabled on her or his return to apply their learnings. It is only common sense that the executive must be enabled to apply her or his learnings on return to the role they occupy. However, it is often the case that significant focus is placed at the outset on the decision to invest in a particular programme, but very little attention is given to how the organisation can support the executive’s return on completion of the programme. Equally, the environment in which the organisation operates plays a key role – particularly in the public sector and civil service – impacting emerging opportunities and, in ideal circumstances, supporting new directions being taken. Alignment of motivations and expectations is crucial  Hidden motivations play a pivotal role in managing the expectations of executives when they complete the programme. This becomes challenging, for example, when the motivations for the programme were unclear at organisation level. Conflicting expectations also occur where little guidance is given to the executive before her or his completion of a programme.  Some organisations, for example, have poor nomination and selection processes, creating resentment for those who are not selected and a sense of confusion for the selected executive who is unsure as to the basis for their selection. At times, organisations fail to communicate adequately during the onboarding phase of the programme – that is, the time in the lead-up to the commencement of the programme. A typical example of this is where an executive may be selected to undertake a leadership development programme as a high-potential employee. If the organisation has not thought clearly about the potential to promote this executive on her or his return, it can lead to immense frustration on the part of the executive and unfortunately, in some cases, a decision to exit the organisation. Pre- and post-programme phases are inextricably linked Successful return to the organisation cannot be disconnected from the pre-entry stage. Therefore, responsibility for this pre-entry stage rests largely with the organisation. The ways in which the programme is conceived, designed, developed and communicated, and the executive selection/nomination process are all key determinants of a successful re-entry phase. Lack of organisational communication in the pre-programme phase with other people working closely with the executive can cause tension on the executive’s return. Where there was a lack of clarity on the executive selection process, feelings of neglect, being forgotten or excluded can emerge at peer level, making it difficult for the executive to be open about their experience. Therefore, the importance of fair process is essential and impacts the level at which the executive can share her or his learnings and insights with peers in particular. Shared understanding of the organisation’s goals is key It may appear obvious that developing leaders requires a change in the habitual way of doing things and putting new thinking into practice within organisations. However, the importance of the role of the organisation in this respect is sometimes underestimated. Where the organisation is culturally open to change and collectively embraces the value of learning, the executive is afforded opportunities beyond her or his role to play a transformative role within the wider organisation. Key to this is that the senior leadership team is invested in the learning opportunity provided by the leadership development programme. Those who work closely with the transformed executive are drawn positively to become part of what he or she aspires to achieve within the organisation’s mission. Positive transformation naturally leads to the search for new purpose  Leadership development programmes play an important role in the transformation process. The transformed executive emerges with an enthusiasm to share her or his learnings in seeking new purpose and meaning beyond themselves. The point at which this opportunity is not provided coincides with frustration on the part of the executive, whose natural inclination is to feel trapped with the desire to become unstuck. This inevitably results in the executive questioning her or his future, which is detrimental to retention of talent. Conclusion Organisations must be mindful of several factors before embarking on a leadership development process. The programme’s starting and end points should not coincide with the actual programme schedule itself; rather, from the design phase right through to facilitating the executive’s return to the organisation and enabling the application of her or his learnings within their teams and the wider structure. Organisations need to understand that the returning executive will have new expectations of what he or she can achieve at a wider organisation level. These expectations have the capacity to play a transformative role within the organisation if the decision-makers are open and have considered this in advance as part of the programme planning. Helen Brophy is a Director at UCD Smurfit Executive Development.

Feb 11, 2019
Spotlight

Despite much public debate, gender inequality persists. It is now time for leaders to make good on their words and act. As a classic armchair tennis fan who engages typically around the grand slam cycle, I couldn’t help but reflect on some of the coverage that followed Andy Murray’s recent emotional announcement of his probable imminent retirement. What was remarkable to me was the almost equal balance between Murray as the ‘tough as teak’ competitor who followed his dream from Dunblane in Scotland to become a multiple grand slam winner and that of Murray as a champion of gender equality. His role in championing female athletes, by forcefully arguing for parity of tennis purses, chiding the authorities at Wimbledon for not playing more women’s matches on centre court and, memorably, for hiring a female coach, Amelie Mauresmo, at the height of his career. Or maybe what is, in fact, remarkable is that such acts or statement of equality appear to be so rare in the sporting arena. The business case In language perhaps more familiar to us as accountants, the business case for gender balance has never been clearer. INSEAD research shows that diverse businesses benefit from higher levels of creativity and innovation, greater customer satisfaction, more informed investment decisions and increased performance. But despite all the talk around gender equality in the workplace, women remain under-represented at all levels of management across all industries. Everyday discrimination continues to be a reality. McKinsey data from 2018 is very stark in this respect. Women have to provide more evidence of their competence than men while having their judgement questioned in their area of expertise. Women are also twice as likely as men to have been mistaken for someone in a more junior position. Being the only woman in the room is still a common experience and, consequently, women are heavily scrutinised and held to higher performance standards. There is no silver bullet that will achieve greater gender diversity. Good intentions are great, but companies must show concrete actions. It is clear from INSEAD’s research that achieving true gender balance requires more than just adding women to your workforce. Companies must increase their total talent pool by actively embracing female return-to-work programmes. Organisations must also acknowledge that there will be varying levels of motivation internally to achieve gender balance. Seeking to engage not just the advocates, but those sitting in the middle is crucial to effective staff engagement. Personal experience All of this might have been something I was vaguely aware of until it became part of my professional life. I am proud of having been part of the diversity and inclusion journey across the Canada Life and Irish Life Groups in Ireland and the UK and, more recently, as part of this Institute’s Diversity & Inclusion Committee. While my initial motivation to step up was probably driven by a personal commitment to ensure a strong leadership voice for LGBTQ+ issues, my learning journey across the wider diversity and inclusion agenda has been profound. We know we are early on our diversity and inclusion journey, but that comes with the advantages of learning from those who are further along the path. Some of the work we are doing in my organisation at a group level include:   The formation of a ‘Women in Leadership Group’ early in 2018 to support and promote existing and aspiring female leaders within the business, running focused development workshops for some of our pipeline of female talent which aims to advance opportunities for women into leadership roles; The overhaul of recruitment policies and practices through a diversity lens; The expansion of maternity and paternity policies to encourage full take-up; and The introduction of unconscious bias training across all management tiers. At board level, diversity is now a key part of the debate related to culture. In my own experience, it drives a much deeper awareness of – and focus on – the people aspect of business strategy. It also drives accountability at executive level; setting targets and measuring progress can be challenging, but it does drive activity. And yet we know we have so much still to do. And sometimes you are pushed into action, as we have seen with legislation across the European Union (EU). In the United Kingdom (UK), the Gender Pay Gap Report was published in April 2018 and momentum has continued around this to address the challenges it highlighted, albeit the data shows the gap only gradually closing between 2012 to 2018 at a national level. Canada Life UK is a signatory to the UK Women in Finance Charter and has committed to having 30% of senior management positions occupied by women by the end of 2020 and 35% of senior management positions occupied by women by the end of 2023. Similar reporting will follow shortly in this country and companies need to prepare for it, but there is an opportunity for some to embrace and lead on the challenge. Turning intentions into reality So, what can leaders do within their own organisations to advance change? Consider some of the actions below: Be a vocal and visible sponsor and advocate for women; Undertake a ‘root and branch’ review of your systems and processes to identify biases; Challenge yourself and your recruitment partners to plan ahead and build a strong pipeline of diverse talent for your business; Invest in the development of your workforce equally with tailored programmes to meet different diverse needs; and Set an objective for senior leaders to keep gender diversity on everyone’s agenda. Good intentions are great, but they are no substitute for on-the-ground activity. As accountants, we are respected voices within our businesses and we have a perspective that can lead or push gender balance as a business priority. With all the momentum around gender diversity, now is the time get off the fence and show your support for this positive wave of change. John McNamara is Managing Director of Canada Life International (Assurance) Ireland and sits on the Institute’s Diversity & Inclusion Committee.

Feb 11, 2019
Communications

Welcome to the February edition of Accountancy Ireland. This is the first edition in 2019, a year which could be momentous in terms of framing a new relationship between Ireland, the UK and the EU. Fittingly, this edition will bring a particular focus on the issue of leadership, a key factor if the changing relationship between these islands is to be managed successfully.  Brexit draws near At the time of writing, the UK and EU appear to be reaching the endgame in terms of withdrawal. There is little evidence that the Brexit Withdrawal Agreement, which would avoid a hard Brexit, will be agreed. We can only hope that all will be clear before 29 March. What is certain is that our members, as business leaders and financial advisers, will be at the forefront of dealing with new trading obligations. Preparations As an Institute, we must ensure that our members, their firms and their clients are ready to meet the challenge of Brexit. Be assured that as the specifics unfold, we will offer support, detailed information and resources to help members deal with the new arrangements, whatever they may be. Please note that the Institute, in partnership with ICAEW, has developed a free customs guide, Taking the Lead: Chartered Accountants and Brexit, which is available on our website. The UK Government has also released a partnership pack, which covers information on how to prepare for changes at the UK border in the event of a no-deal Brexit. We are also engaging with the relevant regulatory bodies, the FRC and IAASA, to ensure continued cross-border recognition of members’ qualifications and auditing rights across the island of Ireland after Brexit. Call for delay on VAT Deal or no deal, after the UK leaves the EU, Irish traders will have to pay VAT upfront on imports from the UK. This, in addition to new customs duties, could mean a stark cash flow burden for business.    Given that over €30 billion of goods are exchanged between the two jurisdictions every year, this major change will cause significant upheaval to every business involved in imports. The Consultative Committee of Accountancy Bodies Ireland (CCAB-I) is calling for the introduction of rules to allow Irish traders extra time to pay the VAT due on goods arriving from the UK. The postponed method of accounting for import VAT would mean that Irish importers would not have to pay VAT until several weeks later. Your professional development For many, New Year’s resolutions may have already come and gone, but for Chartered Accountants, personal and professional development remains a constant. Members should be aware that our Professional Development brochures (for both the Republic of Ireland and Northern Ireland) are available to download at our website. This year’s new courses and specialist qualifications are ready to book. We have endeavoured to bring together a varied programme of high-quality content designed to help our members fully develop their career. Barry Dempsey Chief Executive  

Feb 11, 2019
Feature Interview

Tadhg Young, State Street’s Global Services Country Manager, reflects on his career, the crisis and his positivity for the future.   When State Street Global Services country manager, Tadhg Young, looks out from the company’s office on Dublin’s Sir John Rogerson’s Quay, he can see the Central Bank headquarters across the river, a growing number of new apartments and commercial developments, and the original IFSC up-river. “We have a growing community here and it’s great to be part of that,” he says. Young has been part of that community for more than two decades, having worked in both Dresdner Bank and Allianz Global Services before joining State Street in 2007. He began his career with PwC in the 1980s and moved into industry to gain wider experience. “I had specialised early and young in tax,” he recalls. “I was just 21 or 22 years of age and I felt that it was too early. I wanted to see what else was out there. I probably took the first job that came up and that was in W&R Jacob, the biscuit manufacturer. I was never going to stay there for long, but I enjoyed it. I left to join Dresdner after just over a year.” After several years with Dresdner and Allianz, he joined IBT Ireland as Head of Trustee, Custody and Middle Office Servicing. That company was acquired by State Street in 2007. “Any person who gets acquired with a company has to go through a period when the new organisation gets to know them,” he notes. “I had the fortunate experience of moving from being a client to a competitor to an employee of State Street within 24 months. We knew each other quite well already so it made the transition quite easy when I joined.” The financial crisis That aspect of the change might have been easy, but the onset of the global financial crisis was about to change everything. “It was a bit different for us here,” he points out. “While almost everyone was preoccupied with the domestic situation, we were preoccupied with the international situation. You learned more than you ever thought you were going to learn. Everything that was tried and trusted had to be questioned – liquidity risk, counter-party risk, everything. All these things we had relied on had to be questioned from the ground up. State Street had a group of risk management experts to manage our way through that, in Ireland and globally. “By 2010, the worst was behind us and we started growing in Ireland again,” he adds. “They were a very intense few years, having to deal with the challenges of the acquisition and the crisis. In hindsight, they were great learning opportunities.” Winning trust Young’s modesty becomes apparent when he is asked to describe his career journey in State Street. “Since 2010, we won a number of significant mandates here in Ireland. I was put in charge of on-boarding one of them, then I got another. I got more and more challenging work to do. I ran a group, then a bigger group, then became COO, then became country manager. It was a question of showing what you are capable of and winning the trust of management and staff.” That matter-of-fact recollection belies the scale of projects he undertook, which included on-boarding the largest exchange traded fund (ETF) platform in Europe at the time. “That was a hugely significant transaction for State Street in Ireland,” he says. “ETFs have different characteristics to other funds. They are traded on the stock market, so the level of precision required for valuations and so on is very high. I got to understand State Street from end-to-end and got exposure to senior management and investment managers.” He quickly shifts the focus back to State Street. “In Ireland, we offer depositary, transfer agency and fund administration services,” he explains. This sees the company hold trillions of dollars worth of assets for clients across the world and value them every day.  “That’s why we have about 2,000 people in Ireland,” he continues. “We do business across every kind of investment product including ETFs, tax transparent funds, hedge funds, alternative funds and so on. Ireland has built an industry here over the past 25 years, which allows investors across the world to invest in products that are domiciled and administered in Ireland but managed globally.” State Street has a 38% share of the global investment funds market here in Ireland. “We service some of the world’s largest and most successful fund managers,” he says. “It’s been very intense and rewarding work. It’s a great way to develop your skills in areas like project management. You also develop inter-personal and technical skills.” But it isn’t all about business. “We have a social purpose as well. A large proportion of our business is servicing people’s retirement savings. That’s very important.” Positive outlook Looking ahead, Tadhg believes State Street is set to continue to grow on the base of the solid platform it has built. “At present, investment funds regulated by the CBI (Central Bank of Ireland) total $2.8 trillion and State Street services over $1.1 trillion of that. I am really convinced that we have the best workforce in the sector in Europe and globally. The team here services complex investment funds as well as anyone on the planet.” He is also positive about Ireland. “It’s fantastic to see how Ireland responded to the crisis,” he says. “I have three children and it’s great to see them grow up in a country with so much to offer compared to the mid-1980s. IBEC has done some fantastic work on projections around housing, education and so on. Social capital is what’s going to drive Ireland and help the country to continue to grow in a reasonable way.” Tadhg is also quite open in his admiration for the Central Bank and the work it is doing. “It goes back to what this business is about – managing other people’s money. That requires regulation. You have to give credit to the Central Bank for developing the sector in the first place. For example, Ireland hosts 54% of the assets held in exchange traded funds across Europe. Internationally, the Central Bank has taken thought leadership positions in many forums and it is widely respected for that. It hasn’t been a passive supervisor. It is very active in the space and is committed to being a forward-thinking regulator. Of course, there will be times when we think regulation might be too constraining but ultimately, these things find equilibrium.” The role of the Central Bank will become even more significant in the wake of Brexit, he believes. “It will be the only English language regulator in Europe. It’s very important to recognise that. The roles that individuals from the CBI have filled in ESMA (European Securities and Markets Authority) and other bodies will also be very important.” On tax, he points out that the 12.5% rate is of secondary importance to the funds industry. “Tax certainty is key,” he contends. “State Street is in Ireland because international investment managers decided to domicile funds here. They didn’t come here for the 12.5% rate; they came here for the ability to passport funds to the EU and globally. We came here to service clients. The investment funds themselves are tax neutral and operate in a tax environment that is clear, transparent and compliant with OECD practice and EU law.” Inclusion and diversity Inclusion and diversity are topics close to Tadhg’s heart and he describes the organisation’s commitment to them as “one of the most attractive parts of working for State Street.” Under the wider banner of global inclusion, State Street offers programmes such as flexible work, which allows five possible options: flexible place (remote working), flex time, compressed schedules, reduced schedules or job-sharing; a global mentoring programme; a wide variety of employee networks and affinity groups; sponsorships of external events and organisations focused on diversity and inclusion; a formal work/life programme to help balance professional life and personal responsibilities; a recognition programme for employees who display best-practice inclusion behaviour; inclusion-focused leadership initiatives, with a 30-member global working group; performance goals focused on inclusion-related behaviour; a Global Employee Engagement Survey; and a ‘Voices of Inclusion’ programme and other opportunities to share feedback. “We don’t want to blow our own trumpet,” he adds. “Lots of companies are doing things. But it’s not about ticking a box. This is something we want to do, not something we think we must do. You have to work really hard at it. It’s a very complex topic. You have to be sensitive about it. If you are well-intentioned and work at it, you will get a better outcome.” Future leaders When asked for his thoughts on leadership, Young’s self-deprecating nature is in evidence once again. “I am not the most self-reflective of people,” he says. “For anyone who wants to be a leader, if you plan things out, you have a better chance of success. You need to grasp opportunities and take an element of risk. Don’t go for perfection; 80% is probably as good as 100% in terms of the information you need to make a decision. Make the decision based on facts, but trust your instincts as well. You also have to explain why you are making decisions; if you have good people, they will come with you. You also have to be self-aware and know what you can’t do.” And he has no concerns about the next generation of leaders in State Street. “I was at a management update with 50 of our vice-presidents recently and I saw five or six people in the room with the ability to do my job in five or six years’ time.” Tadhg Young is Global Services Country Manager at State Street.

Feb 11, 2019
Innovation

Michael J. Walls explains why cyber-security should be a priority for the year ahead. Did you make a New Year’s resolution? I have to admit, I usually don’t bother. As cyber-criminals are utilising increasingly sophisticated techniques, however, digital business owners such as myself need to keep up-to-date with cybersecurity to prevent cyber-criminals hacking sensitive information or falling victim to fraud. Thanks to the advances in cloud computing in recent years, companies and accountancy practices alike have increased their online operations. This comes with many risks and organisations should ensure that robust processes are in place to mitigate the associated risks. There were numerous high-profile cyber-attacks in 2018 involving T-Mobile, Cathay Pacific and MyFitnessPal. These attacks resulted in users’ personal information, including credit card details in some cases, being obtained and exposed to the public. To kick off 2019, I therefore decided to update readers of Accountancy Ireland on the latest cyber-criminal techniques and outline the steps you can take to mitigate the risks to your business. Spear phishing and whaling Chartered Accountants working in a finance function may have encountered an email that appears to be from an organisation’s executive or director requesting a payment. In fact, the email originated from a hacker impersonating the executive or director in question. Hackers have also been spoofing email addresses of employees within organisations to target finance teams with change of bank details requests for payroll purposes. If overlooked, organisations could end up making payments for wages, goods or services to fraudulent bank accounts. So, what should you do? Finance teams should have robust processes and controls in place for change requests relating to bank accounts, and particularly for requests received via email. The simplest and most effective process involves a follow-up call to the supplier or employee in question to verify the change. Should your business fall victim to such a fraud and payment is made to a fraudulent bank account, you should contact your bank immediately to report the transaction and ensure that it is escalated to the bank’s fraud team. This is your best chance of getting the money back, as the bank may be able to freeze the payee’s account before the funds are withdrawn and moved offshore. Credential stuffing In this scenario, log-in credentials obtained from a previously compromised website will be used by hackers in a ‘brute force’ attempt to access a range of other sites or systems. Hackers will automate log-in attempts to various sites using the known log-in credentials and may gain access to your user accounts. If this is a business critical system, the hacker could hold your business to ransom.   So, what should you do? Businesses must ensure that strong password policies that require the use of a unique password for each site or system are in place. To check if your email address has been compromised in a data breach, visit this website:  https://haveibeenpwned.com. If your email address has been subject to a breach, you will see details of the site or sites where your data has been potentially exposed to hackers. If you haven’t already changed your log-in credentials for those sites, you should do so immediately or close the account if it is no longer in use. Invoice fraud Many organisations now send invoices via email but this trend has opened up a whole new field for hackers, who intercept emails containing invoices and change the bank details on the invoice. The invoice is then sent to the customer requesting payment to the new bank account. Customers may then make a payment to the fraudulent account in the false belief that they are paying the invoice correctly. Once the payment has been made, hackers use a money mule (see below) to move the funds offshore. So, what should you do? Ask your customers to verify ‘change of account’ requests by phone or in person, should they ever receive an invoice containing new bank details. Money mules Money mules is a term used to describe innocent victims who have been tricked (or possibly groomed over a long period of time) by fraudsters into laundering stolen or illegal money via their bank account. The money is deposited into the money mule’s account and they must then transfer the money to a foreign account via a financial services company. This is a critical issue for businesses as money mules may become the target of criminal investigation given the fact that they are laundering the proceeds of crime. So, what should you do? As a Chartered Accountant, you should always be mindful of your reporting requirements subject to the relevant anti-money laundering legislation. You should also advise your clients and employees to keep their bank details private unless they are absolutely certain that the details are required for a legitimate purpose. Remain sceptical When it comes to operating a business online and keeping the cyber-criminals at bay, the important thing is to remain sceptical when it comes to emails requesting payment or changes to bank details. Always follow-up with a phone-call and ensure that your customers give you the same courtesy. When it comes to log-in credentials, always have a strong unique password for each service or system you use, especially for business critical systems, and ensure that two-factor authentication is enabled wherever possible.  Top Five Cybersecurity Tips Passwords: It is important to ensure that you have a strong unique password for each online service or system you use. Password managers such as LastPass or 1Password can help generate strong unique passwords and store these in a password vault, so you don’t have to rely on your memory. Two-factor authentication: Nowadays, having a strong password isn’t sufficient to protect sensitive or confidential information, but combining a password with a token that generates a one-time code will provide an extra layer of security. Where a service offers two-factor authentication, this should be enabled. You can then use a SMS text message or Google Authenticator to complete your log-in verification. Lock desktop: Would you leave sensitive documents lying around in the open for anyone to read? Failing to lock the desktop of an unattended laptop or mobile device is a major risk, especially if the device contains sensitive client information. Get in the habit of locking your unattended devices if you want to avoid a potential GDPR breach. Lock the device, or pay the price. Mobile device security: Do you have client information on your mobile device? If so, you should ensure that you have a PIN with more than four digits and that you are able to wipe the device remotely in the event of loss or theft. Privacy screens: If you work in an open plan office with sensitive or client-confidential data, invest in privacy screens to ensure that the data remains confidential. Michael J. Walls is the Founder and CEO of Dappr and the 2018 Young Chartered Star.

Feb 11, 2019
Innovation

How can organisations position themselves to transform a potentially serious business problem into an opportunity? People often ask what white collar crime is, but no single definition of white collar crime exists in Irish law. Indeed, we often hear or see the words “economic crime”, “fraud”, “corporate crime” and “white collar crime” used interchangeably. Taken together, they cover illegal acts committed by an individual or a group of individuals to obtain a financial or professional advantage. Examples include asset misappropriation, bribery and corruption, money laundering, business misconduct fraud, cyber-crime, accounting and tax fraud, false accounting, insider trading, procurement fraud and consumer fraud. Regulatory framework Earlier this year, the Minister for Justice and Equality, Charlie Flanagan TD, received Cabinet approval for the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2019 in order to comply with Ireland’s obligation to implement the EU Anti-Money Laundering Directive (AMLD) into our legal system before the end of 2019. The Minister stated that it will help with Ireland’s plans to build a “very robust legal framework” to tackle white collar crime, building on other measures recently introduced as part of the Irish Government’s ongoing response to the 2008 financial crisis. These measures included the faster-than-anticipated commencement of the Criminal Justice (Corruption Offences) Act 2018 in July 2018, the publication of a report by the Law Reform Commission in November 2018 on Regulatory Powers and Corporate Offences, and the announcement of the Corporate Enforcement Bill in December 2018. In 2019, we are also likely to see the re-naming of the Office of the Director of Corporate Enforcement (ODCE) as the Corporate Enforcement Authority and its establishment as an independent statutory agency to investigate increasingly complex breaches of company law. Management beware For readers, perhaps the most significant provision introduced by the Corruption Offences Act was the introduction of criminal liability for corporate bodies and senior management for offences under the Act. A director, manager, secretary or other company officer who consents to the commission of an offence may be guilty of an offence; and the same office holders may also be guilty of an offence if proved that the offence on the part of the company was attributable to any wilful neglect on the office holder’s part. It is worth nothing that it is not necessary for the body corporate to be convicted of the offence in order for the company officer to be prosecuted. Criminal sanctions include, on conviction on indictment, unlimited fines and/or up to 10 years imprisonment. Irish Economic Crime Survey This demonstrates an increased political focus on ensuring that regulatory and enforcement authorities have fit-for-purpose tool-kits at their disposal. And it is easy to understand why. The PwC 2018 Irish Economic Crime Survey found that white collar crime is now a major business issue. Gone are the days when it was viewed as an isolated incident of bad behaviour, a costly nuisance or a mere compliance issue. That’s because the scale and impact of white collar crime has grown so significantly in today’s digitally enabled world. Indeed, managing its threat can now almost be seen as a business in its own right – one that is tech-enabled, innovative, opportunistic and pervasive. Think of it as the biggest competitor you didn’t know you had. So what did the survey tell us? Reported economic crime and fraud in Ireland has increased significantly. Half of Irish respondents in the survey reported that they were victims of economic crime in the last two years, up from one third of respondents in 2016. This rise can be explained not only because more economic crimes are being detected, but also because more fraud and economic crime is happening. The average financial loss suffered by respondents increased from €1.7 million to €3.1 million in the last two years, with 11% of respondents losing in excess of €4 million (3% in 2016). The survey results also indicated that the non-financial costs (reputation, share price, employee morale, as well as business and regulator relationships) are underestimated by Irish companies. Though many organisations still feel that Ireland is not a target for economic crime, these statistics clearly tell another story. It is worrying that nearly one-fifth of Irish respondents admitted to either not knowing how much the economic crime and fraud had cost them, or said the financial loss was immeasurable. Unsurprisingly, cyber-crime has taken over from asset misappropriation as the most prevalent economic crime. In fact, the incidence of cyber-crime (61%) in Ireland was double that experienced by global companies (31%). Within the last two years, over half of Irish respondents have fallen victim to cyber-crime despite an increased level of awareness and more resources being spent on addressing the risks. This is a concern for Ireland’s digital economy and for investors looking at Ireland as a business destination. Role of technology As companies come to view fraud as first and foremost a business problem that could seriously hamper growth, many will continue to make a strategic shift in their approach to technology. Technology opens up major opportunities to tackle fraud more effectively and efficiently, and growing numbers of Irish organisations are using – and finding value in – technologies like artificial intelligence (AI) and advanced analytics as part of their efforts to combat and monitor fraud. The first step for any organisation in this strategic shift is to access the end-to-end fraud prevention and detection programme that already exists with a view to increasing automation by utilising emerging technologies. Key activities in this assessment may include: The analysis of key fraud performance metrics and the identification of areas for improvement from a client experience, operational efficiency and risk perspective; The review of documentation, listening to calls and conducting interviews to assess the current fraud programme and to identify opportunities for lower friction, efficiency and risk reduction, including the assessment of policies and procedures; the assessment of technology controls; and performing data analytics and data quality assessments, which utilise a recognised fraud analytics framework; The identification of gaps in the existing fraud prevention and detection processes; The review of emerging technologies (AI, advanced analytics etc.) to ensure they are appropriate to the business and address the identified gaps; and Presenting recommendations to executives/senior management to address the identified gaps. Companies need to ensure that they are business-focused and have a threat-based perspective when assessing and designing the implementation of technology solutions to enhance their fraud prevention and detection controls. Where to from here? It isn’t hard to see how we got here. On the one hand, technology has advanced in leaps and bounds, helping fraudsters become more strategic in their goals and more sophisticated in their methods. On the other, the regulatory regime is becoming far more robust with enforcement intensifying, often in cross-border cooperation. Moreover, in the face of well-publicised corruption and other corporate scandals, public expectations are converging around common standards of transparency and accountability. In this era of unparalleled public scrutiny, today’s organisations face a perfect storm of fraud-related risks – internal, external, regulatory and reputational. Not only has the threat of economic crime intensified in recent years, the rules and expectations of all stakeholders – from regulators and the public to social media and employees – have also changed irrevocably. Today, transparency and adherence to the rule of law are more critical than they have ever been. But our survey indicates that many companies are under-prepared to face fraud and that too few companies are fully aware of the fraud risks they face. Perhaps the value proposition of an up-to-date fraud programme can be hard to quantify, making it sometimes difficult to secure the investments needed. But the opportunity cost – financial, legal, regulatory and reputational – of failing to establish a culture of compliance and transparency is likely to be far greater. So, the important question is not: is your organisation the victim of fraud? Rather, it is: are you aware of how fraud is touching your organisation? Are you fighting it blindfolded, or with eyes wide open? Role of the accounting profession The accounting profession will play a crucial role in this fight against fraud. For professionals in practice, clients will require support in complying with more robust regulatory requirements, embedding anti-fraud operating models, investigating fraud and adopting new analytical tools and technologies in the areas of detection, monitoring and investigation of fraud. Ongoing assurance is also likely to be required to ensure that anti-fraud programmes remain fit for purpose. For those members of our profession in industry, they are likely to be leading or supporting initiatives within their businesses. These initiatives can be expected to include the introduction of appropriate policies and controls, awareness and education programmes, fraud risk assessments and fraud and cyber incident response programmes. They should also involve board-level support and oversight. It will not be a ‘one size fits all’ approach; the complexity and size of a business, and the partners with whom (as well as the locations from which) it conducts its business will influence the approach. In any event, a systematic approach is required, one that removes silos in functions like compliance, ethics, risk management, internal audit, information security and legal; and enables a culture that is more positive, cohesive and resilient. The imperatives are clear: place transparency at the heart of organisations; use it to unite strategy, governance, risk management, information security and compliance; and find yourself better-positioned to transform a potentially serious business problem into an opportunity to emerge stronger and more resilient as an organisation. William O'Brien is a Director in the PwC Forensics team, specialising in forensic technology.

Feb 11, 2019
Ethics and Governance

A new research project has uncovered the extent to which professional accountants are exposed to unethical activity.   The question of ethical or moral awareness of professionals is an important one, given that such awareness opens the door to ethical decision-making. Decisions made by accountants and other professionals are frequently made on a morally blind basis as the decision-maker is not aware that the choice harbours an inherent moral judgement. High standards of integrity are expected of professionals, who are also presumed to apply their specialised knowledge for the public good and to follow a code of ethics. The significance of moral awareness is among the matters that prompted our research into the ethical world of professional accountants in Ireland. In this article, we will discuss the significance and challenges around ethical awareness. We will then describe our research and findings on the subject and conclude with some proposals for optimising ethical awareness, which can subsequently lead to more ethical decisions and actions. What is moral awareness? A morally or ethically aware individual recognises the moral nature of an ethically ambiguous situation, that his/her potential decision or action may conflict with one or more ethical standards or values. An interpretative process by the person to incoming information determines whether they have factored in and recognised the moral values dimension to the dilemma they must address. This is important because moral awareness represents a first step, which ultimately leads to moral action. What leads to ethical awareness? There are various causes of awareness. One is context, the organisational culture in which the individual finds him or herself, with its moral values and reward systems. Another is individual differences. For example, research has found that accountants’ ethical orientation – idealism with a focus on principles, duties, obligations and personal integrity versus relativism, which eschews any absolute moral principles – influences ethical sensitivity in favour of the former. The other factor that promotes ethical awareness is the moral intensity of a given situation. This encompasses the magnitude of consequences from an ethical violation, social consensus on right and wrong, the temporal immediacy of consequences, the probability and proximity of beneficial or especially damaging effects on the public or the victim, and the concentration of effect. Why is moral awareness so difficult to establish? The nature of everyday routine in contemporary business organisations can foster insensitivity to the ethical aspect of decisions. The bureaucratic principle by which modern corporations are organised espouses impersonality in decision-making. It can lead to automaton-like behaviour, devoid of ethical considerations. We have routines of behaviour or scripts to follow in given situations, founded on unquestioned assumptions (for example, a script of how to prepare financial statements so we hardly think about it while doing it). Information inconsistent with the plot of the script may be filtered out (i.e. ethical considerations in the interests of efficiency). Overview of the ethics research Our research was part of a broad project examining ethical awareness, challenges and concerns of professional accountants with a view to creating guiding recommendations in support of ethical practice. Having conducted secondary research as background to steer the primary research, an online survey was completed by 2,137 members of Chartered Accountants Ireland and CPA Ireland in proportion to their membership numbers. This was followed by one-to-one interviews and focus groups to try to understand the thinking behind the survey responses. Online survey In the survey, respondents were asked to evaluate the extent to which they consider the need for ethical conduct in business decisions. Their responses were: 54% stated a “very large extent”; 34% stated a “large extent”; and 12% stated “some or small extent or not at all”. Respondents were asked how frequently, if at all, they observed or encountered particular categories of unethical behaviour (unethical HR practice, undue pressure or influence, dishonesty, bullying and harassment, misrepresentation and/or manipulation of information) in their career. 90% of respondents have “observed or encountered” a range of unethical conduct during their professional career, although this does not mean that they have partaken in such wrongdoing. Rather, it can illustrate circumstances where an individual has clear awareness of what constitutes unethical conduct. Accountants in business generally observe or encounter more unethical conduct than their colleagues in practice. Specifically, accountants in business are twice as likely as accountants in practice to have observed or encountered bullying and harassment. Conversely, 42% of accountants in practice have never observed or encountered bullying/harassment compared with only 23% in business. A partial explanation for this finding may be the fact that almost one third (32%) of respondents within the ‘accountants in practice’ cohort are sole practitioners, 46% of whom have never encountered or observed this behaviour. Further analysis of the online survey shows that at 23%, accountants in business are more likely than accountants in practices with more than 20 partners (11%) to have observed or encountered inappropriate responses to conflicts of interest. An explanation for this difference may be that accountants in practice have a regulatory obligation to formally address conflicts of interests before undertaking audit work with new clients and in reviewing long-standing relationships with existing clients. Accountants in business are more likely to have observed or encountered dishonesty (saying things that are not true). Also, 27% of accountants in practice have never observed or encountered dishonesty, compared with 21% of accountants in business. Again, the explanation may be the greater regulatory oversight over accountants in practice. Accountants in practices with more than 20 partners are one third more likely than accountants in practice generally to have observed or encountered manipulation of information. Such differences may be explained by the fact that accountants in practice, as auditors, are more exposed to clear examples of manipulation – for example, the overstatement of accruals. Furthermore, 32% of accountants in business and 27% of accountants in practice report that they have never encountered or experienced manipulation of information. This phenomenon of never having encountered this type of unethical conduct could be a factor of length of career, given that 51% of respondents’ with five years or less experience report having never experienced or encountered manipulation of information. The survey shows that 32% of accountants in business and 26% of accountants in practice report that they encountered or experienced misrepresentation of information either often or occasionally. Conversely, accountants in business at 29%, and those in practice at 32%, report that they have never encountered this type of misconduct. Again, this could be a factor of length of career as 50% of respondents with five years or less experience report having never experienced or encountered misrepresentation of information. Likewise, accountants in business (43%) are twice as likely as accountants in practice (22%) to have observed or encountered unethical human resources (HR) practice. Of the accountants in practice, 47% have never observed or encountered unethical HR practice, compared with only 23% of accountants in business. Accountants in business are likelier to have observed or encountered unethical HR practice (such as lack of transparency in selection and promotions), since their career and promotional paths may be less formalised or structured when compared with their colleagues in practice.  Interviews and focus groups Focus group participants suggested that there is greater awareness of ethical issues in the accounting profession, perhaps as a reaction to reported high-profile wrongdoing by professional bodies and regulators in the media. However, this is as yet insufficient to guarantee ethical behaviour. One interviewee in practice emphasised that ethics is fundamental, inherently doing the right thing – not just in response to professional regulations. Behaviour should be based on the correct values. This view was echoed in focus groups where there was a belief that behaviour should be based on principles rather than compliance. The concept of culture came up again and again, that ethics needs to be part-and-parcel of the everyday life of an organisation. This is consistent with culture as an antecedent of awareness in the ethics literature. The focus groups stressed that there should be an awareness of the accountant’s obligation to society, especially in larger firms which are involved with public interest entities and many stakeholders. There was general agreement that ethics should be an intrinsic part of organisational culture in both business and practice. In particular, partners in practice have a huge responsibility to do the right thing and lead by example. One interviewee made the point that being a qualified accountant is a very privileged position, as it is difficult to achieve and the examinations are not easy. So, why would you want to jeopardise that with misbehaviour? In similar vein, personal pride and safeguarding one’s own reputation was emphasised in the recently qualified accountants’ focus group. The difference between regulatory compliance and ethics, meaning ‘doing the right thing’, was discussed in focus groups. A particular issue in this regard is tax planning, where participants voiced their unease about highly sophisticated tax avoidance schemes. Accountants in business are more isolated with respect to their professional obligations and ethics than those in practice, where professional duties as an accountant are foremost in their jobs. This is even more apparent in smaller organisations, as larger organisations usually have guidelines or code of ethics. Overall, when questioned in person about the notion of acting in the public interest as part of being a professional, the study participants found it a nebulous concept. When it comes to decision-making, “you act for your client”. The recently qualified accountants we interviewed were of the view that more recently qualified accountants may be more ‘switched on’ about ethics compared to those who have been in the profession longer. They took the view that more experienced professional accountants are more influenced by loyalty and familiarity to the client and this may take precedence in decision-making. They believe that recently qualified accountants are more conscious of accountability for their actions and the consequences of wrongdoing. Enhancing ethical awareness Among the study’s participants, there was a high level of awareness about ethical issues and challenges in business and practice alike. Moreover, conducting this research in itself engaged professional accountants with the essential and relevant subject matter of professional and business ethics. Interview and focus group participants expressed an appetite for more such activity. This suggests that ethics education and training based on real-life issues and dilemmas and in-depth discussions should form a key part of both initial formation and continuing professional development (CPD) of professional accountants to create and advance ethical awareness, embracing principles. Where this is not practical, online discussion groups should be considered. The professional bodies are well-placed to play a significant role in making available such practical supports, training and CPD to their members. Cognisance of moral intensity factors such as magnitude of consequences for society of wrongdoing should form part of the discussion. A more principled ethical orientation of individuals who are relativists can itself be cultivated through such discussions. The challenge for us all is to create more ethically aware organisations. There is an opportunity for professional accountants in business and in practice to take a leadership role in fostering a positive ethical culture in their organisations. Such an approach could produce a virtuous process between culture, awareness and ethical action. Full details of the recent ethics research, which was carried out with the support of Chartered Accountants Ireland Education Trust, is available online from Chartered Accountants Ireland Ethics Resource Centre. To view the report, visit CharteredAccountants.ie/ethics. Dr Eleanor O'Higgins is Adjunct Associate Professor at UCD Smurfit Graduate Business School. Matt Kavanagh is a human resources consultant and part-time lecturer at the Centre for Corporate Governance in UCD.

Feb 11, 2019
Ethics and Governance

While artificial intelligence will certainly play a part, the fundamentals of board management will be familiar.   It is a brisk October morning in 2025 as Julianna, board chair of Oaktree Limited, calls the board meeting to order. Julianna reminds everyone that at 11am precisely, the meeting will commence and Theodore, the artificial intelligence-powered corporate governance assistant, will begin recording the board meeting. The board members are still getting used to the new corporate governance requirement for a virtual assistant to not only record the board meeting, but to analyse the conversation and pick out key debates, challenges and decisions before producing a draft of the meeting for formal signoff at the end of the board meeting. As Julianna looks around the board team, which consists of five women and four men with an average age of 46, she feels very happy about how quickly the two new independent non-executive directors have settled in. It was a pity to lose Padraig and Lucy, but with a new directive stating that all non-executive directors must step down after two three-year terms, she welcomes the new blood coming into the board team. Julianna reminds everyone about the quarterly board evaluation that is due to happen this week and the importance of delivering on the commitment to shareholders of improving the board’s effectiveness and performance score to 90%. Just after 11am, two of the company’s largest shareholders join the live stream of the board meeting and the meeting begins… The board’s responsibility What will the boardroom of the future look like? And what will fundamentally change from today? There is an unprecedented focus globally on boards and how they can evolve to deliver outstanding performance for shareholders and stakeholders. This is to be achieved by embracing the highest levels of ethics and transparency while balancing exceptional levels of challenge, debate and oversight with the board’s capacity to add significant strategic value. From public limited companies to small- and medium-sized enterprises, boards increasingly recognise their responsibility to guide organisations through turbulent waters. Current challenges include significant market disruption stemming from technological and business model change and increasingly unpredictable macroeconomic and geopolitical risks. Progressive board teams are now positioning themselves to thrive in the years ahead with a particular focus on diversity, independence and culture. True diversity in the board team It has been a long and frustrating journey, but we are edging closer to genuine diversity in board teams in terms of gender, age, ethnic background, professional background and thinking styles. The day will come when board chairs will only think of getting the very best talented and diverse board members with a vibrant mix of skillsets, experience and thinking styles. The days of a traditional male-dominated board, selected because of their association to the CEO or board chair, will seem a distant memory. Boards will, as a rule, look for the very best talent to strengthen the team – irrespective of gender, age and professional background. Genuinely independent non-executive directors Shareholders and institutional investors globally are placing a growing emphasis on the number of diverse and highly skilled independent non-executive directors on board teams. Such members bring a mix of deep sector expertise and overall business experience and judgement. Up to now, many boards paid lip service to the critical value that high-calibre independent non-executive directors bring to the table. This has had a negative impact on boards’ performance. Performance culture of board teams Progressive high-performing board teams focus intently on the board’s effectiveness and performance. Utilising the simple principle that if you can’t measure it, you can’t improve it, the best board teams conduct meaningful annual evaluations to ensure that the board – both individually and collectively – is bringing its A-game with every single board member making a valuable contribution. In the UK, large private companies are being encouraged to adopt the public limited company requirement to conduct external board evaluations every three years followed by two internal board evaluations. This trend will likely extend to all serious boards in the years ahead as a means of ensuring that a genuine performance culture is embedded in board teams – irrespective of scale or sector. Shareholders and stakeholders deserve this level of commitment from their board team. Conclusion Shareholders and stakeholders are entrusting their boards with a fundamental responsibility to oversee, protect and enable their organisation to prosper while embracing the highest levels of accountability, ethics and corporate governance. Excellence is not the default position of a board of directors, irrespective of the stature and CVs of board members around the table. Outstanding boards are forged from a high-calibre chair setting the bar very high for board effectiveness and performance; superb and diverse independent non-executive directors bringing outstanding work ethic, challenge, oversight and strategic thinking to the board; a CEO and executive team engaging in an open and accountable manner; and all integrated into a genuine board team with a passionate commitment to excel on behalf of shareholders and stakeholders. The board teams of the future will focus on ensuring that board teams are enabled to excel on behalf of shareholders by delivering outstanding strategic value, embracing best-in-class risk management and adhering to the highest levels of ethical stewardship. Kieran Moynihan is Managing Partner at Board Excellence, which supports boards in Ireland, the UK and mainland Europe.

Dec 03, 2018
Management

Performance reviews are often thought of as an ordeal rather than opportunity. Dr Gerard McMahon outlines the actions to take before, during and after the review to ensure its success. For many people, the performance review process is a pain in the posterior. It is up there with a visit to the dentist in the popularity stakes. However, the wide-scale application of formal performance management or appraisal systems serves to underline an employee’s central role in the pursuit of a wide range of organisational objectives. Though performance management is ultimately an ongoing, every-day process, it normally comes to a head at the periodic review meeting. If approached with due consideration, it can prove to be an uplifting and invaluable experience for all.  Before the meeting Before you step into the meeting, reflect on its purpose. Most want to increase the employee’s motivation levels, to any extent, in the desired direction. Make sure that’s clear for yourself and your employee. It’s worth considering planning a provisional interview structure and strategy to ensure all relevant matters will be dealt with in an appropriate manner.  Set a mutually convenient time – a lot of it – and encourage the employee to prepare for the meeting. It is now common for employees to submit a self-assessment form to their manager prior to the meeting. This practice has considerable merit, as it encourages the employee to reflect on all of the important aspects of their performance and development.  The decision as to what venue to use for such a sensitive meeting is also worth considering. Though the norm is to convene it in the manager’s office, it may be preferable to locate in the employee’s office (if they have one) or to avail of a neutral venue. It helps to ensure that there will be no interruptions, wherever you go. Having agreed the time and venue, the room’s setting or layout should also be prepared. The manner in which a room is laid out conveys certain messages. For example, the manager can choose to avoid placing themselves behind a desk due to its (physical and psychological) ‘barrier’ connotations. You should also avoid sitting at a confrontational angle.  Next, it is important to review the employee’s job description and consider what their job entails in practice. You should also be familiar with the review forms from previous meetings, including the objectives agreed. It will be useful to have concrete examples to support the feedback that you intend to give. When forming an assessment of the employee’s performance, other views may be relevant.  It can also help to check what training/development has or can be provided to the employee.  Finally, the manager should be aware of the objectives of the organisation, department or division objectives for the next period and the potential role of the job-holder. During the meeting Once the meeting commences, it’s important to establish rapport. This entails nothing more complex than breaking the ice with simple questions and quips. After the initial niceties, the review’s objective and proposed agenda can be outlined. The practice of inviting an agenda input gives the employee joint ownership of the process. Of course, the better prepared the manager is, the less likely it is that issues that had not been anticipated will be introduced.  It is advisable to clear the (discreet) note-taking with the employee and to invite them to take notes if they wish.  Start the review by giving appropriate, positive feedback. This is the most important part of the review meeting, so don’t rush it. It is also good to encourage the employee to talk about what positives they think they bring to the role. It is a good idea to get the employee to self-review as much as possible. A good manager should spend up to 85% of the review meeting actively listening, so take your time and don’t be afraid to use silence if and when appropriate. Clarifying and reflecting are also useful techniques for getting the employee to open up and elaborate. It is advisable to avoid arguments and judgement before you’ve heard all of the evidence.  In a similar vein, an effective manager will focus on facts relating to job performance, not personality. This entails reviewing past performance and SMART (i.e. specific, measurable, agreed, realistic and time-bound) objectives, before setting new ones for the coming period.  As with any important meeting, summarise the key points at the end. However, it may prove enlightening to ask the interviewee to summarise first and then to focus on any important omissions. If it hasn’t been done during the meeting, complete the self-assessment form – or make appropriate arrangements with the interviewee for form completion Before closing, the manager should look for feedback on him or herself. Performance management reviews should be a two-way street, and if one is big enough to give feedback, one should be big enough to take it. Conclude the meeting on a positive note. After the meeting The manager and employee should be satisfied that the completed self-assessment review form is a fair and accurate reflection of the meeting. The draft form should be forwarded to the employee for approval, signature or comment on any appropriate revisions. Afterwards, both parties should endeavour to do what they agreed in the meeting and on the form, and make sure to schedule follow-up reviews or agreed actions. Finally, ensure that the employee and other authorised parties secure copies of the signed form or that the designated online computerised facility is appropriately utilised. Dr Gerard McMahon is the Managing Director at Productive Personnel Ltd. Performance review checklist Before Reflect on the meeting’s purpose: to motivate. Agree a mutually convenient time and place. Ask the interviewee to submit the self-assessment form in advance.  Plan a provisional interview structure and strategy.  Check the meeting venue to ensure an appropriate setting and layout.  Ensure that there will be no interruptions. Review the job holder’s job description and consider what the job entails in practice.  Study forms from previous meetings, including the objectives agreed, and look for concrete examples to support your feedback. Others’ views may be relevant.  Check what training or development has and can be provided.  Revisit the department’s objectives and the potential role of the job-holder. During Establish rapport. Confirm the interview’s objective and agree the agenda. Enable note-taking.  Give appropriate, positive feedback and encourage the reviewee to talk about their strengths. Actively listen as you allow the interviewee to self-review and self-prescribe. Take your time and don’t be afraid to use silence when appropriate.  Clarify and reflect to explore key issues. Don’t engage in arguments. Focus on facts relating to job performance, review past performance and SMART (i.e. specific, measurable, agreed, realistic and time-bound) objectives. Set SMART objectives for the coming period.  Ask the interviewee to summarise the meeting and then focus on any important omissions.  Look for feedback on yourself.  After Forward the draft form to the employee for approval and signature. Follow through on what was agreed in the meeting and on the self-assessment review form.  Fill in the diary in regard to follow-up reviews and agreed actions.  Ensure that the interviewee and other authorised parties get copies of the form. 

Dec 03, 2018
Spotlight

As the ‘future of work’ debate continues, leaders can take three practical steps to future-proof their business.   Every week brings new stories about how the world of work is changing. Driven by forces such as advances in technology, global inter-connectedness and growing consumer expectations, new disruptions and innovations are appearing across virtually every business sector at a faster pace than ever before. But surely the world of work has always undergone constant change? Indeed, authors such as Charles Handy have been writing about this ‘new’ world for many years. Haven’t we, as humans, always adapted and continued on our way? The general consensus seems to be that the digitally empowered period we are now moving into, labelled loosely as ‘the future of work’, will undergo as fundamental a transformation as was experienced after the first Industrial Revolution. While robots, automation and millennials continue to grab the headlines, there is a fundamental shift in the very nature and structure of the world of work – a shift that business leaders and policy makers need to address before they get left behind. So what does the ‘future of work’ really mean for those leading organisations today? Making sense of ‘the future of work’ Early adopters point to the need for organisations to be more strategically responsive and adaptable, more organisationally agile and also more comfortable in dealing with constant change. Organisations need to be responsive to fundamental changes in how work can now be delivered and organised, and to the emergence of a new employee and a multi-generational workforce with different (and sometimes not-so-different) expectations regarding work and the workplace. The ability to sense and respond to these challenges will be essential for long-term success. Commonly quoted essentials such as embracing new technology, dealing with continuous change and managing diversity are now accepted as ‘business as usual’ realities rather than anything new. But what should leaders do in the short-term to prepare for this new environment? 1. Set the right strategy Given the wide range of topics, from artificial intelligence and digital technology to gig working and the changing workforce, it can be hard to make sense of the challenges and opportunities at an organisational level. Filtering all the hype from the real and material issues for your own situation is an important first step. To assist in that process, we use a scenario planning tool called SCOPE (Figure 1), which guides leaders through the main considerations specific to them and their business. Different organisational scenarios are tested for the future, from incremental change to major disruption. Standing back to consider key themes – from strategic flexibility to how the organisation’s culture, structure and processes are aligned and the type of workforce it needs for the future – this quick diagnostic helps executives explore the key questions and likely scenarios to help them get a handle on how their business is strategically placed for the future of work. Organisational agility, for example, is a common theme that emerges from any review of strategy in the context of the future of work. Agility is well-established as a critical organisational competency that has helped organisations adapt to complex and rapidly changing business environments. For high-profile cases, just look at what Netflix and Amazon have done with their business models over the last 10 years. The compelling argument is that if business leaders can improve an organisation’s agility and build it into the organisational culture, structure and processes, they will have gone a long way in preparing their organisation for future challenges and opportunities. 2. Evolve your leadership style It may sound obvious, but reflecting on the role and appropriate approach of leaders is also critical in helping the wider organisation thrive in the future of work. Writers such as Lurie and Fisk suggest that the digital economy requires a new kind of leader from before – one who can lead people in a direction that involves an increasingly diverse set of customers, employees and stakeholders. The outlook of digital leaders must also reflect the characteristics of their business environment (i.e. open, fast-paced, connected, non-linear, virtual and technology enabled). These writers and others contend, for example, that organisational leaders must develop agility as a core leadership capability so that they can respond effectively and calmly to the uncertainty and ambiguity of the modern marketplace. As Martin Goldsmith, author of What Got You Here Won’t Get You There, puts it: “Leadership agility is probably the most important competency for leaders to have in today’s rapidly changing world”. But what is an agile leader? Most models of leadership and leadership development today point to a shift in emphasis from traditional ‘command-and-control’ leadership styles to more transformational, ‘servant-based’ and agile leadership approaches.  In their book, Leadership Agility, William Joiner and Stephen Josephs define the natural and progressive development stages of the ‘agile leader’. From the traditional, tactical and problem-solving orientation of the “expert leader” to the more strategic and outcome-oriented “achiever leader” and then the more visionary and facilitative/empowering “catalyst leader”, Joiner and Josephs describe the practical skills of progressively leading in a more agile way. This helps to call out typical leadership development stages through the lens and language of modern agile principles and practices. Self-awareness and clarity of language and behaviour is helpful for any organisation seeking to be more deliberate and mindful in developing such skills and the working culture associated with organisational agility.   These future of work nuances required for leadership today, combined with what we already know about the more age-old and enduring qualities of simply being a good leader of people, will help leaders thrive in the new landscape and will also allow others in their care to do the same. 3. Build your best team  Armed with a sense of the strategic direction required to face the future of work and being aware of the leadership approach required, leaders should also look at who they hire, promote and keep within their future organisation. No leader can succeed alone, so having the right talent at all levels is a critical theme for leaders as their organisations evolve and grow. New business and organisation models challenge many of our assumptions regarding traditional talent strategy and HR management. Many aspects of talent management will themselves require disruption and new thinking. For example, if an organisation is to be re-configured to take advantage of the business and cost benefits of a ‘blended’ mix of suppliers, outsourcing partners, free agents, automation and a core, full-time workforce, it follows that a new work design and workforce planning strategy will be needed to map out the organisation’s short-term and long-term talent needs. Indeed, the management of the non-core workforce will become a highly strategic function and consideration must be given to how the different parts of the organisation will work together to deliver optimum service to the customer. Once the work design and workforce planning aspects are worked through, the rest of the talent life-cycle processes need to kick in and align. For example, recruiting for the right skills also needs to account for likely and possible changes in skills requirements further down the line. Therefore, attracting people with the right attitude and a learning mindset could arguably be as important as their immediate skills. Training and development will need to be continuous and provided through a mix of mobile, online, on-the-job and formal methods that align with changing business needs as well as the different learning styles of a modern workforce on the move. Rewards will be more flexed and individual, with a “consumer standard” employment experience demanded by different generations of employees. Even how we exit employees is changing, with employers seeing their alumni network as a talent pool for the future as well as important social advocates for their organisation when they leave. Meanwhile, the physical (and virtual) workplace is changing to accommodate new ways of engaging staff working and collaboration. Central to this new talent management story is a clear picture of what the organisation’s desired culture must be. There is a risk that some employers will promise the earth to attract sought-after employees only to find that they cannot deliver on their promises as new work models and skill requirements change the employment prospects of employees and their jobs over time. These new talent management realities will present both challenges and opportunities. We therefore need to re-think what we demand from our leaders and front-line managers, and what qualities they need to succeed. These qualities are possibly quite different to what organisations have hired and trained for in the past. Where do we go from here? We may not have all the details about what our organisations will look like tomorrow, but the one thing we can do today is basic scenario planning that considers different prospects for our own organisations ranging from incremental change to radical disruption. We can then set about designing a talent management strategy that puts the right leaders and people in place to deal with the inevitable changes as they continue to emerge and develop. Kevin Empey is Founder of WorkMatters, a consulting firm that helps business leaders prepare for the future of work.

Dec 03, 2018

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