Spotlight

Here are the 14 ways Chartered Accountants and the wider profession are likely to evolve into the future. In 1996, chess grandmaster Garry Kasparov was famously beaten by IBM’s supercomputer, ‘Deep Blue’. This event was heralded as the real dawn of the age of artificial intelligence (AI) and the beginning of the eclipse of human intelligence. Kasparov sees it differently. He believes that while the rise of AI heralds a change, this change will not see human intelligence becoming redundant. Instead, AI will “help us to release human creativity. Humans won’t be redundant or replaced; they’ll be promoted.” Kasparov’s vision is one where machines and humans work together to create smarter tools, and where human work will evolve and adapt to open up new careers and industries in fields that are yet to be invented. Although machines won’t replace humans, the impact of technology on the accountancy profession will be significant. Many reports have trumpeted the imminent arrival of new and powerful learning machines that will replace accountants. While accountancy remains one of the occupations liable to disruption, the future is less dramatic with a transformation of the role and impact of accountants more likely than wholesale replacement. Here are some of the changes we can predict. 1. The gig economy The concept of the ‘job’ is fundamentally changing with professional service firms increasingly utilising flexible resources such as contingent workers and freelancers. Platforms such as Upwork.com allow professionals to sell their services to a global audience. According to Forbes, there were 53 million freelancers in the US in 2016. By 2020, this will rise to 50% of workers (this does not mean they will be full-time freelancers, however). 2. No-code AI  Software engineers and data scientist are expensive and in demand, but a new generation of technology is emerging. No-code AI will remove the need for engineers, making AI far more accessible. Some tools, such as Lobe.ai, use simple ‘drag and drop’ interfaces while others require no more technical ability than that needed to create a simple macro. These tools will enable skilled but not specialist users such as accountants to develop fully automated scripts with no coding know-how required.   3. The end of reconciliations  The good news is that the end of reconciliations is in sight with the rise of distributed ledger technology. Blockchain is one such technology and is probably most associated with cryptocurrency. One of blockchain’s most exciting aspects is that it is immutable, meaning a blockchain ledger will be permanent with an unalterable but transparent history of all transactions. Each verified transaction is timestamped and embedded into a ‘block’ of information, cryptographically secured and joined to the chain as the next chronological update. Blockchain’s applications potentially include decentralised digital, secure identity systems; the verification of qualifications through personal ‘skills wallets’ and reliable records of property ownership. Another new application already happening in real estate is tokenisation, which, as the name suggests, is the representation of an asset or equity in token form, which can be fractionally divided and held. A tokenised property would be similar to a real estate investment trust (REIT), but more flexible and low-cost due to the reduction in intermediary fees. 4. No more late night month-ends As processes are automated and systems post data from several sources, consolidate and reconcile it, month-end cycles will become far quicker and more accurate. 5. The end of sample auditing Audits will become more efficient and accurate as the audit of 100% of companies’ financial transactions becomes possible instead of a sample. AI will provide unique insights and a complete view of the financial health of the company, uncover fraud, highlight inefficiencies and provide further value from the audit. 6. Drones and robots  Amazon is already embracing using robots in its warehouses and testing drones for customer deliveries. Power utilities use drones to survey their lines while surveyors use them for mapping terrain. Just this year, PwC used drones during the audit of RWE, a German energy company, to measure stock, including coal reserves at a power station in Wales. 7. From compliance to insight Technology will simplify many processes and augment our human capabilities. Over the next 20 years, there will be less focus on technical skills alone and a higher requirement for critical thinkers and those who can provide insights. Clients will likely prefer to deal with a human over a robot, and Chartered Accountants will have the opportunity to become a financial storyteller by bridging the gap between computers and the business. 8. Real-time, self-service data Cloud technology has made accounting software accessible to non-specialists on any device and in any location. Information is available in a format that most business owners can finally understand. As this becomes the norm, the role of the accountant will be to give peace of mind, to provide reassurance, and to act as a sounding board. He or she will also be someone who understands the capabilities of the technology, can ask the right questions, and can find the right solutions. 9. Lifelong learning will become an imperative Speaking at this year’s Influence conference, Ravin Jesuthasan, a thought leader on the future of work and automation, spoke about the impending changes to work. He said that while “we don’t know what is coming, we need to keep retooling ourselves”. We must change our mindset, he said, as the old model of ‘learn, do, retire’ is replaced by ‘learn, do, learn, do – repeat’. In this situation, lifelong learning is no longer optional; it will be necessary to remain relevant and employable.  10. The pyramid is collapsing  The familiar pyramid-shaped organisational structure will change. Traditional entry-level roles are unlikely to be needed in the same volume as routine tasks become automated. Conversely, the requirement for qualified staff is likely to increase. The challenge for organisations will be balancing these needs: how to train and develop individuals to the required level with fewer entry-level positions. The question for educators and those entering the workforce is how to bridge this gap effectively. 11. Thinking differently  While technical skills will remain crucial, a premium will be placed on soft skills, which are the skills that differentiate us from robots. Emotional intelligence, presentation skills and critical thinking will become even more valuable in the years ahead. 12. Chatbots and decision-making Instead of diving into CHARIOT for technical information, accountants may have a unit on their desk – think Alexa or Google Assistant – which will be there to answer questions instantly. We could also see AI take a role in the review of complex documents so that, rather than spend hours poring over a 500-page contract, a machine will scan a document in seconds and determine whether it contains compliance and risk issues, for example. 13. Planning cycles will contract Speaking at the Influence conference, Valerie Daunt, Human Capital Partner at Deloitte, said: “Long-term plans are gone”. Instead, organisations must be able to change course quickly. To underline this point, Standards and Poor’s recently reported that the average lifecycle of companies is shrinking, with the average lifecycle of companies on the S&P 500 expected to be just 12 years by 2027 – down from 33 years in 1964. 14. The changing nature of the workforce The workforce is fast becoming more diverse, more international and with different values. Today, over 20% of the Irish population was not born in Ireland, and this rises to 33% of the working-age population in Dublin. Attitudes are changing too – one recently published survey found that 60% of workers are willing to take a pay cut to work in an empathetic company, while 35% said they would consider taking a reduction in salary in exchange for more annual leave. It was also reported that 50% of millennials would take a pay cut to work for a company that matches their values and that this cohort values “experiences over stuff”. Joe Carroll is Head of Professional Development at Chartered Accountants Ireland.

Jun 03, 2019
Spotlight

There is a crisis of trust in and about our profession, but it doesn’t have to be an existential crisis writes Lynda Carroll FCA. “It was the best of times; it was the worst of times…” So wrote Charles Dickens in his 1859 novel, A Tale of Two Cities. How apt a quote this is for the world in which we live today, and specifically for the audit and accountancy profession. Are we not in the best of times? Has there ever been a time when we appeared more omniscient and so integrated a part of commercial life, across so broad a spectrum? A time when scale and reach are valued (by us), when cutting-edge is where it’s at (according to ourselves), when ‘brand’ is everything (we convince ourselves) and when it’s cool to wield so much influence and have such a vast array of client opportunity. Everything from the statutory audit to tax to all forms of consultancy – management, organisational, strategic, merger and acquisition, people, procurement, cyber-risk, risk analytics, diversity and inclusion… the product offering suite seems endless; always expanding and intensely competitive. Yet, are we not also in the worst of times? There is a crisis, and it is proliferating; a crisis of trust and confidence in and about our profession. It is pervasive; it is not just something affecting practice, but it is in this area that it is most visible, public and controversial – it affects all in the profession, and it is corrosive. Even scary! Is this an existential crisis, or just another challenging phase? The answer to this big question is quite simple: it depends on which of these options we want it to be. What’s the problem? Let us reflect on some recent developments that have appeared large in the public domain. When an MP tells one of the Big 4 that “I wouldn’t trust you to audit the contents of my fridge”, as a profession, we have a problem. When we read on an almost daily basis about the failure of names like Carillion, Patisserie Valarie, BHS and see the integrity of their auditors called into question, we have a problem. When we see growing pressure from government and regulatory authorities in the UK to fundamentally restructure the accounting profession, to separate audit and consulting, to introduce meaningful competition and long-term changes to the regulation of audits, we have a problem. Why do we have a problem? I think it’s obvious, but let’s call it out. It’s a problem because it’s actually happening. It is of our own making; we have lost sight of the fundamental reason why we exist as a profession, what purpose and values we should have, and because it’s time to wake up. “Physician, heal thyself” or the cure imposed will be far more painful than one that is self- administered. The basis of trust In the ethical standards we have set for ourselves and our failure to meet them, we will find the basis for the current problem. IAASA’s Ethical Standards for Auditors sets out three overarching principles – integrity, objectivity and independence. These principles are the basis for user trust and confidence. Of these, independence is the bedrock upon which maintaining and demonstrating integrity and objectivity may perish. Who decides if the ethical outcomes required by those principles have been met? The answer – an objective, reasonable and informed third party. To this, in the 21st century, you may add the court of public opinion. Failure to demonstrate integrity, objectivity and independence in a clear and unambiguous manner is at the heart of the palpable erosion of trust and public confidence in the profession. How did we get here and why are we not ahead of the debate? Why are we not setting the tone of the discussion? How have we ended up in a reactive or defensive mode? Yet, this is how we appear to be, and appearance is reality in the 21st century. I think it is too easy to say it all got just too big, too multi-disciplinary, too difficult to manage, too many overlaps, too few competitors. It is a bit more fundamental than that – somewhere along the way, we lost connection to why we are here. Financial accounts preparation and audit are not sexy, but they are the reasons we are here.  Audit, let’s be honest, is a statutory obligation, not an elective option – but it is so for very sound reasons. It is a form of assurance to investors and the public at large that someone with a dispassionate eye has taken a look at the business and formed an opinion which it is willing to state publicly. For that opinion to have any value, reputation is fundamental. Reputation is built on sureness of purpose, values and a governance framework that acts to assure the assurance that the auditor can give. Communicating our value So, where to next? In Di Lampedusa’s masterpiece, The Leopard, we are told that in the face of great challenge and turmoil, “if we want things to stay as they are, things will have to change”.  We need a vision for our profession based on a collective review and recommitment to our purpose and values. We should undertake this review by taking back control of the problem, reaching out to a broad constituency of stakeholders to solicit their view on our purpose and what they expect of us. Because not only do we need to recommit, we need to understand what we need to do to re-engage the public positively and begin the journey of reputation repair and rebuild. If we re-establish the purpose and values that support the auditor and accountant, we will find the answer to how firms need to deal with and manage all the other non-audit and accounting services they currently provide. Lead from fundamentals and the answers to all other questions will surely follow – you might not like the answers, but at least you will know what they are. This is important for all in the profession – trust and confidence erosion, as I have said, is not solely a ‘practice’ challenge. We live in a world where awareness and action on environmental sustainability and governance (ESG) are lead indicators of understanding and living a business and a social purpose. We know that millennials are 60–80% (it depends on which survey you choose) more likely than any prior generation to want to invest in, work for and acquire product and services from businesses with strong ESG credentials. Governance is all about ethics, so go figure! We are at the heart of investor and regulatory confidence when preparing and signing off on financial statements, market disclosures, regulatory returns and, as members in practice, we are the fourth line of defence. We need the public to understand the roles we play in each situation – but if we don’t inform them as to what those roles are and how we deliver the outcomes expected, then who will? Too big to succeed? Perhaps it is time to realise that the ‘too big to fail’ mindset that framed the reaction to the banking crises could become the ‘too big to succeed’ reality for multi-disciplinary audit and accountancy firms. The big difference in the case of our profession is that few will shed a tear or seek to bail us out in the event of imminent demise. Looking at ourselves in the mirror in this way will not be easy, but it will be worth it. It is not the default way in which most of us confront a challenge, but if we are to get to a simple answer to the question I asked at the beginning of this article, it is probably the only way. I am reminded of Robert Frost’s wonderful poem, The Road Not Taken, and its final lines: “Two roads diverged in a wood, and I— I took the one less travelled by, And that has made all the difference.” Let’s not make it an existential crisis. Let’s make it another challenging phase and let’s make a difference. Conclusion Finally, I write this article from a personal perspective. I have never practised as an auditor, never been involved in financial accounts preparation or worked as a finance director. However, I am informed by my training in a Big 4 firm, working in financial services, prudential regulation, as an independent non-executive director, and by my enduring curiosity as to the role and purpose of the profession of which I am proud to be a member.   Lynda Carroll FCA is the Head of Capital Allocation & Risk-Based Pricing at AIB. 

Jun 03, 2019
Spotlight

Following Microsoft’s transformational experience, organisations can create a growth mindset culture in five simple steps. In my seven years at Microsoft, I have seen our culture transform. Fundamental to this transformation is the belief in a growth mindset, which starts with the understanding that everyone can grow and develop; that potential is nurtured, not pre-determined; and that anyone can change their mindset. So, what is a growth mindset? Our mindset is the way we think and how we make sense of a situation. Carol Dweck, a Stanford psychologist, researched this area deeply and developed the term “growth mindset”. A growth mindset refers to a belief that understanding and abilities can evolve, and that our attitude and mindset have an incredible influence over our skills and abilities. Those with a growth mindset can push the boundaries of what’s possible and unlock new business and personal progression opportunities by being open to new ways of working. On the other side, a fixed mindset is one that assumes abilities and understanding are determined. Those with a fixed mindset may not believe that intelligence can be enhanced, or believe that “you either have it, or you don’t” when it comes to abilities and talents. What does having a growth mindset look like? People with a growth mindset believe they can develop by learning from others, taking risks, failing fast, but always learning.  They recognise that people may of course have natural talents, but anyone can learn and grow in any area. It doesn’t mean that anyone can become an Olympic athlete or CEO of a Fortune 500 company, but anyone can improve and strengthen their abilities. It is through feedback and learning from our mistakes that we learn and grow. With a fixed mindset, however, mistakes can be viewed as a failure and the person responsible deemed to be no good. People with this mindset like to avoid challenges by staying in their comfort zone, and can feel threatened by the success of others. It is easy to see the difference between the two mindsets outlined in Table 1 when it is black and white. While we can all aspire to have a growth mindset, if we are honest with ourselves, we will recognise that it is easy to slip into a fixed mindset in some situations. Have you ever told yourself that you can’t do something? Whether it relates to going for a new role, developing a new skill or speaking up in a challenging situation, there can often be times when we establish invisible barriers that limit our belief about our potential. Awareness of these self-imposed barriers is the first step in understanding what it is to have a growth mindset. Within the accountancy profession, there may also be a tendency towards fixed mindset thinking. In an article for Accounting WEB entitled “Develop Your Growth Mindset Practice”, Richard Hattersley mentions that accountants are prone to a fixed mindset because of the “tendency to label themselves in a pigeonhole”.  This label is attributable to the fact that a significant portion of the work of accountants is analytical, technical and sometimes routine. As with many industries right now, the accounting profession is entering a time of significant change. New technologies such as robotic process automation, artificial intelligence, data analytics and machine learning are changing the business environment.  The role of the typical accountant is also evolving and changing, and it is more important than ever before to have a growth mindset to transform and continue to be relevant in the future. How to cultivate a growth mindset In Microsoft, some manifestation of the growth mindset is almost always present. It can appear in how we engage with customers, how we interact with our colleagues, how we conduct our meetings, how we take on challenges, how we learn from mistakes and how we give and receive feedback. Having a growth mindset is an integral part of our ongoing cultural transformation, changing how we do things and how we work together to achieve more for our customers and society overall. This transformation has been a journey, however, which has been led by our CEO Satya Nadella and permeated throughout the Microsoft team.  Through this journey, the five tips I would share to encourage a growth mindset culture are: 1. Raise awareness Discuss these mindsets with your teams. Knowledge of these different mindsets is key to understanding your behaviour in certain situations. If someone says that something can’t be done, challenge them to see if they have a fixed mindset on an issue or play devil’s advocate to avoid groupthink. 2. Step out of your comfort zone Seek out new challenges and new opportunities to push yourself beyond your current capabilities. Be curious and embrace these challenges as opportunities to develop and strengthen your abilities. 3. Seek feedback Look for feedback from others and recognise this not as criticism, but as a gift. 4. Learn from your mistakes Reframe setbacks or failures as opportunities to learn. Every successful person has had to deal with setbacks along the way; it is how we view these setbacks that make the difference. Making mistakes leads us to a pathway to mastery.  5. Inspire and be inspired Leaders and managers have a significant role to play in how the growth mindset culture is nurtured within a team or organisation. How you, as a manager, react to your own mistakes or your team’s mistakes is critical. Are you defensive of your mistakes? Do you step back and allow your team to view a mistake as a learning opportunity? Do you ensure that the efforts and learnings of the group are recognised? As we enter times of change, whether political, economic or technological, there can be a focus on strategies to deal with this uncertainty. Nurturing a growth mindset culture can have a profound effect on the outlook of your workforce and therefore, how the chosen strategy is implemented.  How you, your team or your workforce view uncertainty, how you approach new challenges, and how you deal with setbacks are all driven by your mindset and the culture created within your organisation. The importance of the growth mindset culture for accounting professionals, as well as organisations, has never been more critical. As Peter Drucker once said, “culture eats strategy for breakfast”.   Susan O’Reilly FCA is Group Financial Controller, EMEA Operations, at Microsoft.

Jun 03, 2019
Feature Interview

Conall O’Halloran FCA, President of Chartered Accountants Ireland, outlines his plans as he prepares for a busy year in office. After six years as Head of Audit at KPMG Ireland and more than 20 as Partner, Conall O’Halloran is very well-prepared to assume his position as President of Chartered Accountants Ireland. The timing is fortuitous given the feverish debate over the value and future of audit. But that is just one of the many issues the Cork native plans to address during his presidential year. Speaking at the Chartered Accountants Ireland AGM following his election on Friday 17 May, Conall noted that his tenure as President would also focus on broadening the public’s understanding of the role and value that Chartered Accountants bring to business and society, and widening access to the accountancy profession at graduate level. Building blocks of the profession At the core of his ambition for the profession, however, is quality. That, he said, begins with the profession’s trainees. “When I graduated from University College Cork with a degree in engineering, Chartered Accountancy offered the most flexible and most appropriate route into business with any degree of authenticity,” he said. “And over three decades later, that still holds true. The training, the discipline and the analytical skills are embedded in a foundation of ethics and integrity, and it is this that makes Chartered Accountants a very compelling proposition as business leaders.” Despite the negative publicity levelled at the profession, Conall points out that demand for the services of Chartered Accountants – particularly in the areas of audit and assurance – continues to increase year-on-year. This, he adds, is mirrored in the number and quality of candidates pursuing a career in the most versatile of professions. “We continue to attract top-quality candidates to this day and they are the profession’s basic building blocks,” he said. “If you don’t have the right foundations in place on day one, you can’t expect quality further down the road. Chartered Accountancy is very fortunate in that respect and that’s very precious to me, to the Institute, and to the wider profession.” Rising to new challenges However, Chartered Accountants and the profession as a whole are facing into an era of new challenge. From regulation to technology, the business landscape has changed in recent years but in Conall’s view, the biggest changes are yet to come. “While there have been huge advances in technology, most of what our audit trainees do today isn’t vastly different from what previous generations of audit trainees did,” he said. “But we are on the cusp of massive change. The larger firms have invested heavily in their data analysis tools and electronic audit capabilities, which are capable of achieving a transformational change in the quality of evidence available to the auditor.”   To help the profession thrive in this new data-driven environment, Conall plans to focus on enhancing the routes of access to a career in Chartered Accountancy in an effort to harness the profession’s full potential. “We are very fortunate that our large- and medium-sized member firms train the vast majority of our students, but there are many other very capable candidates who simply aren’t interested in that particular training mechanism and would prefer to begin their career in industry,” he said. “Training in professional practice is a wonderful discipline, but it isn’t for everyone so I will focus on working with senior Chartered Accountants in industry to reinvigorate our industry training programme while at the same time, the Institute will continue its work on the syllabus to ensure that we train Chartered Accountants who are much more IT savvy.” The value of audit Further change may be forced on the profession as the UK’s various audit reviews are concluded and acted upon. From the Kingman recommendations to the current review by Lord Brydon and the Competition and Markets Authority (CMA) Study, the profession – and audit in particular – is under unprecedented scrutiny. Speaking on the issue following his election, Conall noted that he has recently been looking to the UK and reflecting on the fractured relationship with the regulator, the Financial Reporting Council (FRC) and with society. “Many of the reforms recommended by Sir John Kingman’s recent independent review have now been accepted by the FRC and by the profession and politicians generally. However, the wider review by the Competition and Markets Authority and also the independent review into ‘The Quality and Effectiveness of Audit’ being conducted by Lord Brydon will be fundamental to our future and the future of business more broadly,” he said. “I think we need to be very careful here in Ireland that what works, and indeed what may be required to work in the UK, is not necessarily or automatically right for Ireland. I will work very hard as President to ensure the profession delivers what is expected of us by society and regulators and ensure the very particular strengths that we have in Ireland are protected and nurtured.”   He added: “It is very clear to me that the absolute focus of KPMG and all the large audit firms is on audit quality. We have had a very strong and robust auditor oversight regime in place in Ireland now for many years, and it is heartening to note that our audit regulator, IAASA, has confirmed that, following its recent complete round of inspections, the quality of audit here is generally of a good standard. However, we need also to recognise IAASA’s shared role in driving quality and take actions ourselves to reinforce public confidence in audit.   “Take for instance auditors’ provision of non-audit services to audit clients. The reality for almost all Irish public interest entities (PIEs) is that auditors do not provide any consulting services and only modest levels of tax services. However, because the profession campaigned for a more permissive regime over many years, the impression was created that audit was somehow a loss-leader for the provision of other consulting services. This is absolutely not the case in the PIE market here in Ireland but as a profession, I feel we could have shown more leadership and more respect for the societal role auditors play when we campaigned for more relaxed rules,” Conall continued. “While we need to do a better job of explaining what we do to the public, audit committees can also play an important role in representing and reporting to shareholders,” Conall added. “They understand what we do and the positive feedback from audit committee chairs with regard to the quality, robustness and integrity of our work is incredibly powerful and a great endorsement of what we actually believe about ourselves. What we as auditors read about ourselves in the press is completely alien to how we see ourselves and how we actually deliver our duties to the public.” Acting in the public interest Conall is also very clear on how auditors can play their part in rebuilding trust with the public and key stakeholders; particularly focusing on anything that could damage the perception of audit independence. “That’s the core area where society wonders if we are acting in their interest, or not,” he said. “While the quality of our audit work is difficult for the public to assess, any suspicion that our independence is impaired is easily understood and very damaging to our relationship with society and we do recognise that much more keenly now. I think that all firms and PIE auditors understand that they have an incredibly important societal responsibility and that they treasure the responsibility very carefully.” The voice of business Despite the dialogue and debate surrounding the profession, Conall is extremely optimistic about the profession’s prospects for the future and members can expect to see the Institute take a more prominent position on a range of issues affecting businesses and the economy on the island of Ireland. “Chartered Accountants Ireland is the largest professional body on the island and I think anyone would say that we represent the gold standard in accountancy,” he said. “But beyond our technical capabilities and business acumen, we can also add value by commenting on economic and tax policy, and by essentially acting as the voice of business to help Government and policy-makers understand the consequences of the many options placed before them. Yes, they have to listen to many interest groups also – but when they hear a view from a body like Chartered Accountants Ireland, they take it as being balanced, informed and fair.”   And as with past presidents, Conall will also lead the Institute as it navigates the unpredictable terrain of Brexit – but he has lauded Chartered Accountants Ireland for being to the fore and discharging its all-island remit in the best interest of society both north and south of the border. “We were one of the first business bodies to publicly express a view on Brexit and although there are members who may not have supported our position, we were very strong and very public,” he said. “I also think that while Brexit will certainly challenge our ability to operate as an all-island body, it will not prevent us and my sense is that there is little appetite in the UK to diverge significantly from EU standards in any meaningful way – there is no commercial rationale to do so.”

Jun 03, 2019
Innovation

Past issues of Accountancy Ireland have examined the transformative effect of technology on how we work, but what about the impact of technology on workplace culture? Technology is not only transforming the way we work; it is also changing how we work together. As technology companies flocked to Ireland to take advantage of the talent pool, they also introduced many new perks such as on-site gyms, free food and festival-style summer parties to name but a few. How can small and medium-sized enterprises (SMEs) and the start-up community compete with such perks when it comes to attracting and retaining talent? In this article, I examine some of the ‘smart working’ initiatives deployed by companies to win the war on talent. Flexible working arrangements Today’s workforce is now more connected than ever. With the promise of 5G on the horizon, this connectivity is only going to improve. As long as we have an internet connection we can, therefore, work from any location on the planet. Removing the need to be physically present in the office enables employers to introduce flexible working arrangements. Remote working, for example, has increased in popularity over the last few years. There are many benefits for both employees and employers, such as cost savings and increased productivity. Utilising collaborative working tools such as G Suite or One Drive enables individuals in different locations to work together and, should they need to meet as a team, video conferencing makes that possible. Some business leaders still struggle to get comfortable with the idea of their employees working remotely (i.e. from home). This mindset tells your team that you don’t trust them, and it needs to change. Otherwise, employees are more likely to seek employment with an organisation that offers remote working. Many organisations also afford their employees the flexibility to set their working schedule provided employees work a minimum of 37.5 hours per week. How those hours are completed is the responsibility of the employee. This flexibility enables employees with a long commute to utilise that time as part of their working day. Organisational benefits There are many reasons why organisations should consider flexible working arrangements for their employees. They include: Higher output: organisations that focus on outputs, not inputs or attendance, tend to have a highly engaged and efficient workforce; Attract talent: traditional rules on office hours and attendance serve to limit the talent pool available to organisations. In a fast-changing world that requires a high degree of specialisation, flexible working arrangements can attract more talent; Employee retention: employees who feel more empowered and trusted with their working day will be loyal to the organisation that gives them the flexibility they desire; and Sustainability: organisations can do their bit to help save the planet. If employees who drive to work each can work from home at least one day a week, this will reduce carbon emissions. Unlimited annual leave Netflix led the way when it introduced an unlimited annual leave policy, with many organisations now choosing to adopt this policy as a means of attracting and retaining talent. Whenever I mention this to business leaders, the word “unlimited” brings fear to their eyes. It is a bit misleading; it would be more apt to describe it as a ‘take what you need’ annual leave policy. The overall aim of an unlimited annual leave policy is to create a results-driven culture of trust. The intention is not for employees to take weeks or months off work without proper notice and approval. However, it does remove the need to track annual leave, overtime and time owed in lieu. Employees can benefit from being able to easily take time off for personal needs, such as medical appointments or school visits. They will also be less likely to call in sick because they can take breaks when needed. This flexibility, if set up correctly, can help increase employee engagement and improve efficiency. The Don Draper clause The latest talent-attraction trend is to add a provision to employees’ contracts so that employees regularly receive a strange, funny or creative personalised gift paid for by ‘The Don’. The clause, which is negotiated by the employee, can include chocolates or vouchers. It could also include a day off work for the employee’s birthday, spa days or rollercoaster rides. Check out #DonDraperClause on Twitter for some inspiration. The thinking behind this trend, which has been around since 2014, is to reward employees and make them feel part of an organisation that treats them well and as human beings. Conclusion From the trends emerging from the tech and start-up community, one critical thing is the importance of treating employees as individuals, not as a resource.w Organisations need to stop using phrases like “our employees are our greatest assets”. They should instead focus on the individual if they genuinely want to create a workplace culture that is fit for the future. Michael J. Walls ACA is the Founder and CEO of Dappr and the 2018 Young Chartered Star. A new world of work A variety of emerging workplace trends can now be seen in non-tech environments. Here are five of the most notable developments: Ditch annual appraisals: back in 2014, Deloitte reported that only 8% of companies believe that appraisals are worth the time and effort devoted to them. So why are we still doing them? New approaches under consideration include a move towards employee-led coaching and mentoring, which is less formal and enables real-time feedback on performance. Bonuses aren’t the only way to reward employees: organisations are beginning to reject traditional bonus schemes in favour of reward practices based on a different set of assumptions. Bonuses now have an element of surprise. They are timely and based on what people value and want, and they are personal and not always about money. Chill-out area: modern offices are now setting aside space to encourage employees to take micro-breaks from work. The chill-out space is a designated relaxation area where employees can unwind. Usually furnished with soft seating like cushioned chairs, bean bags and sofas, it should be a stress-free zone and not merely a more comfortable seating area for high-powered business meetings. Digital learning: employees can get additional training from anywhere with the emergence of online learning. Tools such as LinkedIn Learning or the Institute’s online CPD courses enable employees to access courses from anywhere to learn a new skill or keep up-to-date with the latest CPD. Diversity and inclusion: it isn’t enough for organisations to tick boxes on their diversity checklist, ensuring that they have the desired quota of minorities for reporting. The inclusion part is now more critical than ever. I for one am delighted that employees and society are now ensuring that organisations follow through when making statements regarding diversity and inclusion.

Jun 03, 2019
Ethics and Governance

How can companies transform corporate social responsibility from a ‘nice to do’ activity into a strategic imperative? While corporate social responsibility (CSR) is a discretionary expenditure, leaders are increasingly tuned in to the corporate value of CSR. Indeed, in the current socio-economic environment, it can be argued that companies must be seen to be involved in CSR in some way. And there are many benefits for companies including improved company reputation, a more attractive employer brand and greater employee engagement. As a cost, companies should be able to evaluate the return on their CSR expenditure as they do for any other expenditure. However, many companies do not view CSR expenditure in this way. Instead, they see it as a moral obligation to give back to the community. Nonetheless, many companies are taking a more formal approach to their CSR expenditure. There is growing support for the idea that the measurement of CSR activity is important as it supports decision-making within the company, makes managers more accountable for CSR expenditure and generates support within the company by illustrating the company’s CSR achievements. Thus, companies can use measurement as a means of building a business case to justify their CSR expenditure, which in turn can help protect CSR projects into the future. How, then, can companies go about measuring their return from their CSR activities? One model or framework which encapsulates the process is the Impact Value Chain Model.  Inputs – Activities – Outputs – Outcomes Let us take as an example a company that wishes to employ staff members from minority groupings.  The objective is to reach a certain percentage by a specified date; the inputs are the resources devoted to this objective, in terms of money and employees’ time; the activities are the actions taken in terms of recruitment and retention practices; and the outputs are the number of individuals from minority backgrounds recruited and retained within a specified time period. The short-term outcome would be, for example, the achievement of the company’s goal of reaching the agreed target by the agreed date. Long-term outcomes, on the other hand, would include improved staff morale, a more appealing employer brand among minority groups and a boost for the company’s reputation. However, measuring outcomes can pose difficulties for organisations as there can be both intended and unintended outcomes. Furthermore, outcomes can be examined in the short-term or the long-term and there may be difficulties in linking long-term outcomes to company actions. For example, to what extent does a scheme to pay farmers a fair price in a specific area drive economic activity in that area compared to other initiatives that may have taken place at the same time? In summary, measuring the benefits arising from a company’s CSR activity can help the company assess whether it is achieving its CSR objectives; ensure that it does not waste resources; build support among employees; protect CSR programmes when resources are constrained; and ensure that a strategic approach is being taken. So, how can managers ensure that the right approach is being taken when evaluating CSR expenditure? Define your objectives Clearly define what you want your CSR activity to change. What will the activity achieve for the beneficiaries and for the company? The goals must be set out in quantitative terms as far as possible. For example, a company might want to be seen as an employer of choice. This goal can then be quantified by the number of applications received and whether retention levels have improved over the course of the CSR initiative. Identify the inputs You must be clear on the inputs required. And don’t confine it to financial resources alone – include staff volunteering hours and other resources, such as the company facilities used to provide the CSR initiative. Outline your activities It is also important to define the activities undertaken. Sometimes, more activities emerge from the inputs than was planned. As an example, let’s return to the recruitment initiative to increase the number of people from minority backgrounds. This initiative also adds to the company’s equality agenda and positively impacts the company’s reputation. Be clear on the outputs The outputs generally receive the most attention. If, for example, the aforementioned company is successful in the recruitment of individuals from minority backgrounds and they stay with the company for a specified period of time, or a fundraiser raised a certain amount of money for charity, the recorded metrics can provide a short-term measure of success and can be useful in boosting morale. Classify the outcomes It is important to outline the list of short-term and long-term outcomes accruing from the CSR initiative. These outcomes need to link back explicitly to the overall objectives of the initiative. Quantify the outcomes Difficulties in quantifying the outcomes can make managers shy away from this part of the process. The key question is: can we attribute the increase in the company’s reputation score to the company’s CSR activities? It is important to isolate the issue as much as possible. While the results will not be scientific and may be arrived at through an element of guesswork, it can help identify broad linkages. This exercise will assist in highlighting the value of the CSR initiative and, therefore, safeguard the future funding of the initiative. Ensure the participation of staff throughout the process The participation of staff in the above process is key, as it gives staff ownership of the chosen CSR initiative and thereby increases the likelihood of staff buying into the process. This in turn can lead to increased motivation and greater team cohesion within the organisation. Debrief The need to debrief in the aftermath of a CSR initiative is imperative. The idea is to step back and examine what was achieved, how it was achieved and what could be changed in the future to make the initiative more effective or increase the benefits to both the company and the relevant stakeholders. Conclusion In conclusion, the Impact Value Chain Model is a roadmap for how CSR can be evaluated. It provides a strategic lens through which management can assess the value of CSR initiatives and move CSR from a ‘nice to do’ activity to a strategic activity; one that can demonstrate its contribution in terms of the many benefits it brings and thereby ensure support and funding into the future. Dr Blath McGeough is a Lecturer in Management at the Technological University Dublin, Tallaght Campus. Dr Francis McGeough is a Lecturer in Accounting at the Technological University Dublin, Blanchardstown Campus.

Jun 03, 2019
Ethics and Governance

Chartered Accountants can bring a host of skills to their organisation’s CSR efforts. And as good business partners, they should. Chartered Accountants can use their unique skill set to help drive their organisation’s corporate social responsibility (CSR) agenda. Now, I know you are probably saying: “Does this guy not know how much work I have already?” Well, I can guess, but on the other hand, you know that you are already doing more than you have to; that you can do even more; and that you will get much satisfaction in making your organisation – and the world – a better place. How much you can help depends on your position in the finance hierarchy, but that’s the thing about being a good business partner: anyone can do it. I won’t go into the issues covered by CSR (for a comprehensive understanding, I recommend ISO 26000 Guidance on Social Responsibility). Instead, I will focus on the scenarios you are likely to encounter in business when dealing with your CSR department, which will typically comprise environment, safety, labour practices and business ethics. Earning legitimacy Your organisation’s CSR department may be chaotic. The subject is still relatively new, even though the Brundtland Commission’s report on sustainable development was published over 30 years ago. The department may struggle to establish legitimacy in the eyes of a management team that lies somewhere on the scale between sceptical and hostile. It may be trying to stay afloat despite being destabilised by the latest CSR issue, which it is likely ill-equipped to tackle. Such topics could include water extraction, tax payments, community involvement, plastic bottles, lobbying and so on. The department will probably feature environmentalists, human rights practitioners, labour rights specialists or business ethics aficionados – this will depend on what management sees as the “key CSR issue” – but will lack those with “pure” management or business skills. Because so many issues fall under the CSR umbrella, there will probably be insufficient coordination among these elements. In that context, Chartered Accountants may wish to consider the following: Get involved and make friends with CSR. They will be delighted that someone wants to help them; Comment on the suggested policies and procedures covering internal control, collection of information, budgets and so on. Chartered Accountants can write policies and procedures in their sleep, so consider how your organisation’s CSR policies can be made more robust; Challenge the CSR department on the appropriateness and objectivity of its chosen indicators. They shouldn’t merely be indicators that are easily achievable or collected out of habit; Critically review how the team sets CSR targets. Are they stretching yet achievable? Do they link to the business strategy? Has the organisation budgeted for the investments necessary to achieve the objectives?; Guide the CSR team on how to cost projects realistically. You will bring a dose of realism to the table and help your colleagues remove their rose-tinted glasses. You will do this not to scupper a project, but rather to ensure that, if approved, there is a fair chance of success; and Design appropriate graphs to help your colleagues visualise the organisation’s actual CSR performance. Encourage the team to move away from the useless-but-ubiquitous pie charts (at best, they add some colour to a report) and toward trend charts that show actual progress over time compared to the target. Working towards meaningful action Often, management’s commitment to CSR is shaky at best. The business is only “doing” CSR because an influential stakeholder has demanded it, which may result in lip service without any real commitment. Management will want to see “progress” – winning an award (any award) every year, reducing the number of non-compliances, or increasing the volume of CSR-related content in the annual report or on the organisation’s website – provided it doesn’t cost much or do anything to rock the corporate boat. If this paints a familiar picture, you may wish to consider the following: Challenge management by illustrating any lack of commitment and remind them of the risks associated with the weakest links in their approach. One example is the business that emphasises excellent progress in one area of CSR (gender diversity, for example) while remaining silent on another aspect it would prefer not to talk about (the absence of a whistle-blowing policy, for example); Push for a robust and objective CSR strategy that integrates into the overall business strategy. Ensure that it is real and motivates staff and other stakeholders, and is not just a convenient communications-friendly bolt-on; Develop and argue the business case for CSR with opponents who refuse to accept that there is one; Push for the inclusion of CSR targets in the strategy, budgeting and forecast cycles so that the business has a benchmark for actual performance; Challenge the mix of indicators used so that there is a reasonable balance between the following: Compliance (those for which there is no choice, such as the number of penalties for environmental transgressions); Capacity (measures indicating how the business is preparing for CSR, such as board attendance performance or implementing that whistle-blowing policy); and Commitment (realising a reduction over time in water use, CO2 emissions or the ratio of CEO remuneration to average employee pay). The reporting dilemma It is possible that reporting will also be chaotic, partly as a result of the department’s disorganisation but also because guidance rules on CSR are still imprecise – very much so compared to what you will be used to in accounting. You may, therefore, wish to consider the following: Help the department choose appropriate and objective norms and standards to use. There is a proliferation of these, usually set by profit-making organisations. The risk is that these standards may be too focused on one aspect of CSR or too heavy in specific sectors; Devise calculations in the absence of full information. For example, how much water is recycled? What CO2 emissions are attributed to employees’ travel to work or business travel?; Check that the indicators’ units of measure allow for consolidation at each level in the hierarchy. For example, there is little real benefit in collecting the number of female managers at each location or subsidiary if you don’t also know the total number of managers at each; Help the CSR department adopt reliable variance analyses incorporating volume, price, mix, efficiency and one-off elements. It is misleading to claim an improvement in an indicator by taking the change in the total value. You need to obtain an understanding of the drivers behind the change. It wouldn’t be acceptable for management to take credit for your business becoming greener if, in reality, legislation brought about the change; Push to get a standardised CSR reporting system, including what you would consider as standard input and validation checks (with blocking controls also). Data quality and data management will probably be dreadful: most data will be held in individuals’ Excel spreadsheets. Each element of CSR could well have different reporting routes and cycles that replicate information requirements, often with differing definitions. It would be best if you pushed for the adoption of one reporting system for all non-financial indicators; and Encourage the CSR department to collect information every month rather than in an annual free-for-all after year-end, so you can see trends emerging and do something promptly. Final thoughts Finally, there are some other ways in which Chartered Accountants can help CSR. You may wish to consider the following: Work to develop an annual report that gives a reasonable balance to each of the financial, CSR and other non-financial elements; Be a good citizen and push to ensure that the finance department applies relevant CSR policies; and Talk positively about CSR internally, as you will generally elicit a favourable reaction from staff who are willing to give their views or participate in initiatives. Peter Gillespie FCA is the founder of Meaningful Metrics. He worked in manufacturing and services in several countries for 30 years.

Jun 03, 2019
Ethics and Governance

Chartered Accountants Ireland is a proud supporter of the Trinity Centre for People with Intellectual Disabilities. In this article, we hear from those involved in the programme including Eavan Daly, who completed a very successful internship with the Institute last year. An introduction Shauna Greely, Chair of the Diversity and Inclusion Committee and a Past President of Chartered Accountants Ireland. Diversity has become an area of significant focus in the business world. Businesses recognise that having a diverse workforce with a greater variety of talents and experiences enables them to adapt to dynamic markets and be more innovative. A focus on diversity also allows under-represented groups to get their fair share of opportunity, and opportunity is a critical word in this regard. Chartered Accountants Ireland, through its Diversity and Inclusion Committee, ensures that the Institute focuses on the areas of diversity and inclusion that impact on and are important to its members. One diversity and inclusion initiative the Institute is involved with and which members may not be aware of relates to our involvement as one of the early business partners to a programme run by the Trinity Centre for People with Intellectual Disability (TCPID). Over the past 10 years, the Institute has invited several students with intellectual disabilities to gain work experience in Chartered Accountants Ireland. During my involvement with Chartered Accountants Ireland, I have been privileged to attend many events, meetings, courses and lectures where I have learned of the positive difference the Institute makes on accountancy, business and the wider community.  However, the event that stands out for me was my attendance at a presentation in the lecture hall of Chartered Accountants House given by a TCPID student. Eavan Daly has an intellectual disability and had completed many months of work experience with Chartered Accountants Ireland. Eavan gave a presentation on her experience and I was struck by that fact that, although this was her first job, Eavan was making a professional presentation in a lecture hall to a large group of colleagues. The experience led to many firsts for Eavan, and I was incredibly proud that Chartered Accountants Ireland made this possible. I saw first-hand the benefits that participation in this programme has brought to Chartered Accountants Ireland as an organisation and the positive impact it has had on staff. Equally important are the enormous benefits afforded to Eavan and her family. The experience gave Eavan the independence and confidence to go to work each day with a staff ID card, a desk to sit at, a computer to log-in to, and buddies to have coffee or lunch with – things many of us take for granted. There are many accountancy, financial services, legal and other business organisations already partnering with TCPID to offer internship and work experience. This programme provides such wide-ranging benefits that I would urge other organisations to consider getting involved. My work placement with Chartered Accountants Ireland By Eavan Daly Eavan Daly is my name, and I completed an 18-week work placement with Chartered Accountants Ireland in September 2017. I travelled alone by train from Drogheda to Dublin on Tuesdays and Wednesdays. I worked from 10am to 12.30pm on both days. I loved the whole experience of making new friends, learning new skills and facing new challenges. Most of all, I loved feeling included and being part of the workforce. In Chartered Accountants Ireland, I worked in reception as a member of the Conference and Facilities Team. It was my duty to meet and greet all visitors to the building. I showed them where to go or contacted the person they were looking for to let them know they were there. I received and signed for all deliveries and registered post. I emailed or rang the person whose delivery it was to let them know it had arrived. I visited the Publishing Department and sat in on a meeting, and I was invited to the President’s Dinner where I learned about networking. This was one of my highlights. At the end of my work experience,  I gave a presentation. My work colleagues, guests from the broader working community and my mentors from Trinity came to see me. Eavan has completed work placements in Chartered Accountants Ireland, Orix Aviation and Bank of Ireland. An employer’s perspective Bernard Delaney, Director of Human Resources at Chartered Accountants Ireland Chartered Accountants Ireland is proud to be an enabler of the TCPID programme – not just because of the benefits for the students and our staff, but because it is the right thing to do. Our proximity to Trinity College Dublin allows us to offer a safe environment where students have a familiarity with the locality while providing just enough challenge as they join a new workplace – a stressful event for most people. Our employees gain hugely by working alongside people with a different perspective and life experience. It informs and enriches our work experience by being inclusive rather than just diverse, and helps us challenge our ingrained views and work habits. We are a member organisation that values the contribution of every individual; this programme is a win-win for us, and we are privileged to be involved. A coordinator’s perspective Marie Devitt, Pathways Coordinator at the Trinity Centre for People with Intellectual Disabilities The Trinity Centre for People with Intellectual Disabilities is an established not-for-profit organisation, operating a pioneering education programme for students with intellectual disabilities. We are part of the School of Education at Trinity College Dublin. Our Level 5 Certificate in Arts, Science and Inclusive Applied Practice covers a wide range of modules over two years. Our goal is to equip students with the requisite education and training for future employment or further education, allowing them to lead more independent lives. We have established a robust network of business partners, including Chartered Accountants Ireland, who work with us to provide student work placements, mentoring, paid internships and, in some cases, permanent employment for our graduates. Our business partners have allowed us to offer insight into potential career paths for our students and graduates. In the past, these young people were marginalised with few opportunities for meaningful paid employment. With the help of our partners, this is now changing. Not only are we able to offer supported career pathways for our students as they move on from Trinity College Dublin, but thanks to the range of the business partners, we can now offer them real choice and allow them to look at specific industries that might suit their particular interests and skills. We developed the TCPID Graduate Internship Programme with the support of our partners. Since launching this programme on a pilot basis in January 2017, we have had over 23 paid graduate internships, five of which converted into permanent roles. In addition to these permanent roles, a number of our graduates have been in paid internships with our business partners for more than six months with their contracts renewed. Our ultimate goal is to find permanent roles for those who want them and transition pathways into further education for those who may wish to explore other options.  Our business partners are a core part of our programme and have supported us in many ways. We are looking to expand our network of partners to help increase the options available to our students and graduates. Together with our TCPID business partners, we can make a real difference and build true inclusion within the workplace and within society. A parent’s perspective Olwen Daly, Eavan’s mother Eavan’s family, friends and her local community are proud of her achievements and are grateful for, and appreciative of, those enlightened employers who choose to give her a chance. To those who have no experience of anyone with intellectual disability, we believe that to become fully literate, as Eavan has, and to travel alone from Co. Louth to Dublin is a magnificent achievement. It is the accumulation of thousands of tiny steps, often supported by extraordinary individuals and organisations. Marie Devitt along with the TCPID Graduate Placement Programme and supporting business partners fall firmly into this category. Eavan’s goal is a job, and we know she will get there. Please continue to support her and other students in their endeavours. For further information about how your company can become a part of the TCPID Business Partners Programme, contact Marie Devitt, TCPID Pathways Coordinator at devittma@tcd.ie or (01) 896 3885.

Jun 03, 2019
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
Practice and Business Improvement

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

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