AI Extra

The new year is a perfect time to set up professional goals that will keep you motivated and driven in the office. We asked Chartered Accountants Ireland students to share their professional resolutions for 2018. Kathleen Hanway, Risk Assurance Services, PwC Given all the opportunities available, there’s a lot I want to do next year. Try new things at work  Next year I hope to start the Competent Communicator course with PwC Toastmasters. I’m also doing our Junior Achievement course, where I’ll gain experience teaching.  Performance goals Use my performance feedback to develop my skills and show consistent improvement and drive my career forward.  Set up a study plan and stick to it  Being a bit too ambitious initially, my study plan stretched my time too thin. I’m going into 2018 with a study plan that is realistic and time-efficient.  Triona Casey, Audit, EY There is a lot to look forward to in 2018, but these are a few of my resolutions: Aim to learn something new everyday One of my professional resolutions for 2018 is to make an effort to learn something new every day – it can be small, like a new excel shortcut, or finding a new approach to something in work, anything that requires a bit of practice to incorporate daily! Build my professional network In this profession, it’s important to network. Having a solid and diverse network will always make the challenges you face easier. One of my goals for the coming year is to attend more networking events and to participate more in professional collaborations. Do one thing a day that benefits your soul As busy season approaches, it’s easy to get caught up in deadlines and meetings, and it tends to get a little overwhelming! This year, I will aim to do an activity a day for myself. This could be anything from a moment to meditate, time to go for a run, or an evening yoga class – something that isn’t necessarily work related, but something to refresh the mind and prepare me for another productive day. Alan Coyne, Financial Services and Audit, Deloitte Stay fresh My main area of focus for 2018 is to stay fresh in the workplace. I find I am at my best when fully refreshed and ready for the variety of tasks given to me as a trainee in the financial services department.  Unplug when needed Knowing when to unplug is vital in order get the most effective outputs from your daily workload. Juggling your time can be a task in itself, however my aim this coming year is to continue having a healthy work-life balance.  Get involved I also hope to get involved in CSR activities, such as working with the Early Learning Initiative.I found this was a beneficial way to unplug during last year’s busy season. Orla Phelan, Audit, KPMG The transition from fine art graduate to accounting trainee was a daunting one. Three years on with the FAEs behind me, my three main goals to implement in 2018 are: Go for a higher standard Always. Aim to learn something new each day to increase skills, efficiency, or understanding. This is not to say that nothing is ever good enough, rather that the performance of any task increases experience and with every re-performance there should be an improvement. Take a step back Aim to look at the overall objective of the job rather than isolating each specific task. Understanding the main goal can prevent getting caught up in the trivial details and save on time as a result. The time saved links in with goal number three. Keep up the hobby Continue to do something entirely separate to work. This is key. Switching off completely in one area of life can bring clarity for when you switch on again (along with restoring your sanity!).

Jan 08, 2018
Practice and Business Improvement

Conal Kennedy writes: For many years we in Practice Consulting have assisted members to buy, sell and merge their practices. During the recession years, and for some time afterwards, there was very little activity, but in recent times we have been receiving more enquiries and helping more practices. A firm with a recurring fee base has a value based primarily on its goodwill. It is usually preferable to arrange succession from within a practice, but in the absence of this, a sole practitioner approaching retirement age might consider realising the value of the firm by selling the goodwill to a growing practice. There are other circumstances where a practitioner may be interested in selling their practice. On the other hand, many practices have informed us of their intent to purchase, if an opportunity arises. In other cases practices may come together by way of acquisition or merger in order to pool resources and leverage the benefits of increased size and more diverse skillsets. Many mid-sized practices would be interested in offering a senior position or partnership to a dynamic sole practitioner. This possibility might be of interest to a member who has set up on practice relatively recently. The member has found that he or she has the ability to run a business and acquire clients, but the pressures of being entirely alone are just too much. This profession is a people business and in any deal, the human element is always crucial. More important than top line valuations is the ability to trust your counterparty, to establish open communication and a good working relationship. The value of a practice still tends to be based on a multiple of its fee income and the classic 1:1 ratio of recurring fees to practice value is the starting point of many conversations. That said, buyers and sellers should be aware of the changes and pressures arising in recent years due to market forces. The general skill shortage in the profession means that the staff of the practice may be the most important element in judging the inherent value of the practice. Specific purchasers may be interested in purchasing a niche practice with clients that fit specific criteria. There is any number of ways to structure the deal. If a capital sum changes hands, then this may be based paid in stages over time. There may be a clawback based on clients who do not transfer. Separate arrangements need to be made to deal with WIP and debtors that are outstanding at the date of transfer. In general every aspect can be varied by either party to suit the circumstances of the deal. Practice Consulting assists practices to come together. We work in complete confidence. If you are interested discussing any of the matters in this article, please contact Conal Kennedy Tel: 00 353 1 6377396 or Jeremy Twomey  Tel: 00 353 1 6373972.

Dec 01, 2017
Practice and Business Improvement

Claire Percy writes: Members consistently tell us that “protecting and promoting the Chartered brand” is one of the key services that Chartered Accountants Ireland can provide to them. Often, this feedback relates to student recruitment and the continuity of the profession. However it is also critical in terms of helping consumers, employers and business decision-makers understand the value of choosing a Chartered Accountant. The Institute supports the brand year-long across all its services and through a range of promotional activities. This includes the annual brand advertising campaign, “Make Sure your Accountant is a Chartered Accountant”, which is currently running. The key message of the campaign is that businesses can have confidence in the training, standards and experience of Chartered Accountants in every sector. This “confidence” message is being carried across radio, press and online. This year, in order to maximise the local benefit to our firms and members nationwide, a number of regional innovations have been introduced, with regional press and radio in use alongside national outlets. In order to connect the advertising even more directly with our network of 1,500+ practices around the island, the campaign is also supplemented by a direct mail initiative. All firms should by now have received a pack containing two high-quality window vinyls for use on their offices windows or doors. The purpose of this is to promote visibility of the recently-refreshed Institute logo on the high street. This will help consumers link the advertising message to their own local Chartered Accountant – and create a “multiplier effect” that builds the confidence message for all members. The pack also provides access to co-branded marketing materials and gives links to download logos for use on firms’ own websites and promotional materials. There was also an online competition to win a table at this year’s annual dinner – simply by showing the Chartered logo in action. The design of this campaign was greatly assisted by the input of the Members in Practice committee and Strategic Communications committee. We are very keen to  hear wider feedback, and in particular may look at offering a more permanent signage option in future. Please take a look at www.charteredaccountants.ie/Brand for more information or to get in touch with feedback on the campaign or how we can assist you to make the Chartered brand work for your firm.  

Dec 01, 2017
Spotlight

Níall Fitzgerald discusses the ethics and governance issues that arose for boards during 2017, and what resolutions can help in 2018. Corporate Governance is not actually a big thing – it is a lot of little things. The ability to identify relevant issues and give them the right amount of attention before having to move on to the next is a requisite in governance. Every now and then, a big issue comes along and attempts to knock the wind out of your sails. Like a good captain of a boat, your knowledge of the sea and how to work with the elements is as important as your ability to handle your own boat when it comes to dealing with those big issues. While you, as part of a board, should have control of what goes on inside your organisation, you are unlikely to have similar control over the elements or anyone outside of your organisation.  Uncertainty The uncertainty resulting from political absenteeism in Northern Ireland, Brexit, US fiscal policy proposals, and the myriad of less-profiled but very present issues affecting Irish organisations were raised as concerns to Chartered Accountants Ireland in 2017.  Challenges to businesses come in different waves and, ideally, their impact needs to be considered before they happen. It is not always possible to see the big waves coming but dealing effectively with the smaller ones can help us prepare for the larger ones. Boards and management teams that respond well to uncertainty will have: A good understanding of their risk appetite and what risks they are prepared to take (know your vessel and what force it can withstand); Familiarity with maintaining a risk register and designing strategy to respond to and manage risk (the manoeuvres); A robust system that enables flow of information from ground up and vice versa. This includes management information, communication and financial planning systems (the rigging which will largely determine your ability to manoeuvre); and Robust and effective internal controls that facilitate the efficient flow of information while also safeguarding the integrity of the vessel (hull, RADAR, hydraulics and nautical knots). We don’t wait until a storm forms at sea to prepare the boat so, likewise, the board should not wait until a crisis before addressing the above and obtaining a good understanding of the organisations capabilities.  Board effectiveness Board effectiveness has been a hot topic, so it’s unsurprising that it featured prominently in 2017. While a number of challenges were presented, some of the more common issues related to understanding the role of the board, an individual’s own role as part of a board, board structure and problems relating to discussion or conduct at board and subcommittee meetings. In terms of understanding the role of the board or an individual on the board, the increasing volume of board paper contents, complexity or technical nature of matters for decision being brought to the table, and an increasing prevalence or expectation of foregone conclusions were the main problems. These issues have caused conflict, bitterness and mistrust and, in some cases, have resulted in an inability to progress effectively on other unrelated agenda items. When it came to solving these issues, members understood their role on the board within context of their own responsibilities and fiduciary duties but there was a knowledge gap in understanding where the line between management and governance fell.  The following gives a flavour of some of the quick wins identified during discussion of these issues: Board protocols should be enhanced by setting a more defined time-frame for receipt of papers, e.g. a tiered deadline when papers above a certain size are to be delivered to the Board and clear wording of any protocol for exceptions;  Board retention and delegation clauses in the terms of reference should be clarified and communicated; For boards that do not have established sub-committee structure, the Chair should be empowered to establish a specific task force that will address the more technically complex issues in advance of the meeting; Consideration for the need of external expert advice is given before management presents a complex problem to the Board.  The process of continuous improvement is necessary when it comes to optimising board effectiveness, and it’s important all members are bought into the process. Don’t wait for your organisation to enter choppy waters, take action before issues arise within the Board. You need a full and committed crew on board. Debate is healthy but nobody wants a mutiny. Conformance vs performance To quote Albert Einstein, “A ship is always safe at shore but that is not what it’s built for”. One issue that arises in conversation with members is the common occurrence of too much Board time being spent addressing conformance at the expense of addressing the performance of the organisation. To ensure that sufficient time is afforded to performance (including strategy, improving return and productivity, as well as employee and customer satisfaction), the following featured prominently as simple suggestions: Favour reporting by exception Boards should report compliance updates with a focus on instances of non-compliance while also including what corrective action was taken or recommended. This facilitates a discussion more focused on conformance issues that warrant greater attention while also ensuring that there is sufficient time remaining on the agenda to discuss performance and strategy-related matters. Mandatory strategy day  Whether it’s a half day or a whole weekend, it is important for any board, regardless of organisation size, to give this important strategy development exercise sufficient attention. Make it matter  While this includes typical advice such as having the right mix of skills around the table, ensuring important matters are given sufficient time on the agenda, etc, ‘make it matter suggests going further than a board might normally. This includes devising suitable key performance indicators (KPI’s), outside of boilerplate profit and productivity measurements, that provides board with specific performance related information; performing post-mortem reports of recent projects, whether they were deemed successful or not to identify lessons learnt; and devising a performance led agenda that endorses an “outside in” risk assessment, i.e. what are the threats facing the business based on what is happening in the market and trends in other industries and how would the organisation respond.  Reputation Possibly the most important risk to be managed in an organisation is its reputation. Reputation and trust with all stakeholders is essential for running a successful organisation. To avoid the wind being knocked out of your sails, consider the following actions when it comes to protecting the reputation of the organisation. Make sure ethics and organisational culture is a standing item on the agenda. There is so much happening in the current climate in relation to protection of the public interest (e.g. White collar crime and anti-bribery legislation), employee welfare and intolerable work practices that organisations need to assess their own culture to ensure it is a good fit in modern society. It is the Board’s responsibility to keep this in check and set the right tone at the top. The Board should ensure there is a clear and well-communicated speak up policy in the organisation. Encouraging staff to speak up about wrongdoing they encounter in the organisation without fear of reprisal is a powerful and effective detection control and the right thing to do. Make ethics real. Don’t wait for something to happen before taking the time figure out the organisation’s ethics. Like risk appetite, the Board should know their red lines and have a good understanding of what they consider to be unethical conduct.  Conclusion The above insights are a flavour of matters discussed at Chartered Accountants Ireland events, focus groups, briefings, queries and discussions regarding ethics and governance and key board concerns in 2017, and many of the themes were similar: uncertainty and how organisations can create their own certainty by preparing for and respond to it; implementation of a process of continuous improvement is a healthy solution for increasing board effectiveness; a high focus on conformance issues during Board meetings is important but performance decisions shouldn’t suffer as a result; and reputation means a lot to an organisation but requires good character to earn it and deserves attention to protect it. These key takeaways should sail along into 2018 for all organisational boards. Sail safe!

Dec 01, 2017
Spotlight

The success of an NGO depends on a board with the expertise Chartered Accountants already possess, says Michael Wickham Moriarty. Non-profit organisations play a major role in Irish society. They generate more than €10.9 billion in turnover annually, 8% of current exchequer funding is channelled through non-profits and organisations described as Section 38 and Section 39 bodies under the 2014 Health Act deliver much of Ireland’s health and social services. Almost a quarter of Ireland’s official overseas development aid is delivered through NGOs. Non-profits are at the forefront of responding to Ireland’s current housing crisis. Chartered Accountants have a lot to offer Ireland’s 19,505 registered non-profit organisations. Non-profits require volunteers to give their time and expertise to act as directors. The non-profit sector has been subjected to both increased regulation and increased public scrutiny in recent years and there is a need for engaged, educated and diligent directors for non-profit organisations of all sizes. Chartered Accountants are trained as experts in financial management and financial reporting, but what they have to offer non-profits goes much further than this. They are trained in company law and are bound by a code of ethics and professional standards. Many Chartered Accountants have developed expertise in areas such as risk management, strategic planning, governance and investment management, all essential for boards of non-profits. Finding the job There are a number of routes for Chartered Accountants who wish to become directors of non-profit organisations. People do get invited to join non-profit boards by peers or through existing relationships with organisations they support, and many non-profit organisations elect their directors from a broad membership base, which members of the public can join.  There are a few ways someone interested can find out about board vacancies. Some organisations openly advertise when there is an opening on their board. Vacancies can occasionally be found on the careers pages of the Chartered Accountants Ireland website, and the Institute of Directors in Ireland also assists non-profits to recruit new board directors. Recruitment services in the charity sector such as Activelink.ie and Charity Careers Ireland advertise board positions (as well as paid, professional roles), and Boardmatch Ireland is a charity which matches professionals to non-profit boards. One effective route for accountants is to first join a board subcommittee as an external expert. Finance and audit committees may recruit volunteer accountants to work alongside board members. This is a good way to learn about the inner-workings of a non-profit without suddenly taking on  the full, legal responsibilities of a company director. Tools and supports   There are a range of tools and supports available for directors of non-profits. The Charities Regulator has recently published a range of guidance documents, such as Guidance for Charity Trustees, Internal Financial Controls Guidelines for Charities and Guidelines for Charitable Organisations on Fundraising from the Public, which can be found on its website. The Institute of Directors in Ireland has also published guidance for directors of non-profits. The Institute offers many CPD courses that can assist directors of non-profits and has a Charity & Non-for-Profit Group for members active in the sector. Non-profit umbrella bodies such as The Wheel and Charities Institute Ireland run events and training relevant to board directors.  For non-profits that have a cross-border structure or are based in Northern Ireland, there is guidance available from the Charity Commissioner for Northern Ireland. The Charity Commission for England and Wales has extensive resources available online, many of which are relevant for directors of non-profit organisations in Ireland. Common pitfalls  There are a number of challenges that frequently arise for directors of non-profit organisations. Many small non-profit organisations may not have the resources to employ full-time accountants or management staff with a comprehensive range of skills at executive level. In such circumstances, it can be tempting for highly-skilled directors to step in and carry out work that should be the function of executive management. It is important to clearly define and document the separate roles and responsibilities of management, and those of the board of directors. Directors should remember the old adage that they should put their noses in, but keep their fingers out. Sometimes board members can over-rely on these finance experts. Boards may appoint treasurers from among their members and they may establish subcommittees such as finance and audit committees to focus on specific areas. However, such structures can never delegate away the responsibility of the board of directors for the sound financial management of the non-profit.  It is vital that all directors understand the financial affairs of the organisation and that they contribute to key financial decisions. Chartered Accountants on boards can assist by ensuring financial reports to the board, such as management accounts are presented in a way accessible to non-financial experts.  The most serious governance failures often occur where one individual or a tight knit group control the organisation over an extended period of time. The board of directors as a collective body should exercise ultimate control over the non-profit instead of a CEO or founder. As unpaid voluntary directors, a non-profit board is heavily reliant on executive management to inform them about the organisation and to implement their decisions. The relationship between the Chair of the board of directors and the CEO is crucial to maintaining appropriate control and delegation. In a well-governed non-profit, this relationship should have some healthy tension. Reporting for non-profits The Charities Statement of Recommended Practice Financial Reporting Standard 102 (Charities SORP FRS 102) is mandatory for UK charities and is considered best practice for charities in Ireland. The Charities Regulator has signalled his preference for this to become compulsory in Ireland in the near future. Since not all non-profits are regulated charities, this accounting standard is not appropriate or applicable to some non-profit organisations. Where it is applicable, directors of non-profits should ensure that the Charities SORP FRS 102 fully is implemented in their financial reporting. In cases of charities where it is not in place, directors should seek a road map for its adoption. Directors should seek that non-profits have a clear objective manner of measuring their success against their aims and objectives and that these should be communicated to stakeholders. There are a range of voluntary and mandatory codes of compliance applicable to sub-sets within the non-profit sector. For example, the Code of Practice for the Governance of State Bodies from the Department of Public Expenditure and Reform applies to many non-profits funded by the Irish state. The Department of Public Expenditure and Reform Circular 13/2014 sets out some of the responsibilities of non-profits in receipt of state grants. Dóchas – the umbrella bodies for overseas aid NGOs – has a Code of Corporate Governance for Irish Development NGOs. In addition, there is a more widely relevant Code of Practice for Good Governance of Community, Voluntary and Charitable Organisations. Directors should understand which codes are most suited to their organisation. They should understand whether these are voluntary or mandatory and they should understand how their organisation measures up against these standards.    For non-profits seeking to benchmark themselves against the highest standards of the sector, there are some annual awards to consider. The Leinster Society for Chartered Accountants runs the Published Accounts Awards and includes categories for non-profits. Separately, the Good Governance Awards is an initiative that recognises and encourages adherence to good governance practice by community, voluntary and charitable organisations in Ireland. Charity umbrella bodies such as The Wheel and Dóchas run awards that recognise the impact of non-profit organisations. Boards should take a look at the calibre of the reporting the winners have displayed and aim to emulate that standard. Conclusion There are many opportunities for Chartered Accountants to volunteer as directors of non-profit organisations and they have so much to offer. These roles come with challenges and the duties are not to be taken lightly. While serving as a non-profit director is unpaid, it can be a personally very rewarding experience.  Michael Wickham Moriarty is the Head of Finance of the Central Remedial Clinic and he is a Governor of the Rotunda Hospital.

Dec 01, 2017
Spotlight

Directors must understand the vital role of ethics in establishing the values and behavioural DNA of a board and its organisation. The ethics and values of an organisation are generally formed and espoused by the founders. They can be based on a set of strong beliefs about a particular issue such as ethical beauty products, climate change or a particular way of doing business. Regardless of the starting point, these ethics and associated values will be formative in how an organisation evolves and is run. Ethics and values cannot be painted onto an organisation, however. Ethics  In a business context, ethics involves the exercise of values – such as trust and integrity – which influence and determine the day-to-day behaviours and actions of a company. Embedded values and ethical behaviours are hard-won company assets built up over time that can easily be destroyed by actions that are, or perceived to be, unethical. Ethical behaviour instils trust and empathy. It also enhances reputation, which can in turn improve income by attracting more customers who are attracted by the associated brand. It should in turn mean greater financial sustainability and finally, while good behaviour engenders more good behaviour, the opposite is also true. If you are considering a directorship, whether as a non-executive or an executive director, it is important that you have a good understanding of the ethics and values of a company. If you work in the company, these should be self-evident. If not, it needs to be part of your due diligence. This process can include talking to current and former board members and senior executives. If you would have a difficulty in supporting these ethics and values, then you may want to reconsider whether becoming a board member is right for you. Looking at the same issue from the company’s perspective, during the recruitment process board members should evaluate closely the ethics and values of any potential director against those of the company. The induction and ongoing professional development process for all board members, as well as staff, presents a good opportunity to introduce and reinforce ethics and discuss the company’s values – in other words, what it feels strongly about. Ethics and the role of the board Once you have joined the board or are an existing board member, part of your role will be to ensure that ethics are embedded and exercised in the organisation. Company directors are responsible for setting the ethical standards and values for their organisation, and this is the most valuable asset directors can cultivate within an organisation. If these standards are embedded in the organisation, they will form the bedrock for the company’s future sustainability.  The process of embedding ethics and values is not an easy task, as ethics and values tend to be intangible. Yet, they must be made tangible to staff and customers for them to be real. Therefore, ethical standards and the associated behaviours must be led, developed and disseminated by the board. The board – both as a collective and as individuals – set the ethical tone from the top of the company and must ensure that it becomes part of the DNA of the company. Ethics, values and the appropriate behaviours should permeate every pore of an organisation and be reflected in its mission, vision and strategy. In this context the board’s responsibilities include: Developing, agreeing and documenting the ethical and values framework of the company; Living these values as the leaders of the company; Supporting ethics programmes for staff at induction and on an ongoing basis; and Ensuring that the company lives up to its stated ethical values through appropriate monitoring mechanisms. Ethics in practice The larger the company, the more difficult it is to maintain consistency in the application of values and ethical behaviour. It is unlikely that all staff can be relied upon to react in the same way, particularly where there is significant cultural diversity in the countries in which a company operates. This is why a code of ethics is essential. A well-written code, consistently applied, will minimise uncertainty and raise awareness of ethical issues in the company. The code should help to operationalise ethics and values by developing an associated set of behaviours that will help guide the actions of staff in situations where they may face ethical challenges. For example, a retailer selling clothing in Ireland might have questions over the type of labour and the employment conditions used in developing countries to produce their goods. Similarly, if a company is seen to exploit tax planning to the limit, even though it may be permissible within the tax codes, it may impact on the values and the reputation of the company. Ultimately, good ethical practice should improve transparency, decrease the risk of fraud and reduce the likelihood of reputational damage. A code of ethics A company’s ethics programme should contain the following elements: Code of ethics A code of ethics is a written set of guidelines issued by a company to its management and staff to help them conduct their behaviour and actions in accordance with its values and ethical standards. The communication of the code of ethics is important. It should be included in the induction process for new staff and in staff handbooks. It should also be available online as a staff resource. Training Training in ethical behaviour ensures that all directors and employees know what is expected of them. It helps instil ethics in the culture of the company. Companies should have a person responsible for ethics. For instance, Coca-Cola’s code of ethics is administered by an Ethics & Compliance Committee composed of a cross-functional senior management team. It oversees all ethics and compliance programmes and determines code violations and discipline. The Ethics & Compliance Office has operational responsibility for education, consultation, monitoring and assessment related to the code of conduct. A means to report breaches of the code of ethics Companies should provide the means for staff and others to raise ethical concerns. Companies should encourage good faith reporting (‘whistle-blowing’) and foster a culture whereby they are protected. Rewarding those who ‘live the ethical culture’ Ethical behaviour should be recognised and rewarded. Adherence to the company’s code of ethics should be part of the performance review process for all staff, including directors. Those who breach the code of ethics should face appropriate action. The requirement to follow and conform to the code of ethics should be included in employees’ contracts and directors’ service agreements. Monitoring and reporting Companies should monitor the impact of their ethics programme and report the findings internally with an improvement plan to address areas of concern. Many companies issue corporate social responsibility (CSR) reports annually, which cover ethics and values. Summary The board of directors is responsible for setting ethical standards and values, and ensuring that they are embedded in – and become part of the DNA of – their organisation. An ethical business should be a more sustainable business. David W. Duffy is author of A Practical Guide for Company Directors and founder of www.governance-online.com.

Dec 01, 2017
Regulation

Amid a sea of change, how can insurance entities survive and thrive in 2018 and beyond? The insurance industry in Ireland is undergoing a period of rapid change. How boards and their businesses engage in innovative transformation, on both strategic and regulatory risk management fronts, will dictate whether they get ahead during this transitional period and ensure their sustainability and profitability going forward. This trend extends to the global insurance industry also, which is experiencing technological advances, product changes, increasing consumer demands and increased competition through non-traditional channels. Against this backdrop, the regulation of the industry is evolving with boards now grappling with the implementation of Solvency II, the first annual reporting date this year and the advent of the Insurance Distribution Directive (IDD) and Packaged Retail and Insurance-based Investment Products Regulations (PRIIPs) next year. New products are also on the horizon, such as driverless cars and peer-to-peer insurance, which are being facilitated by price comparison websites, mobile internet transactions and telematics-based services. The domestic landscape On the domestic front, more than 430 international financial services companies operate in Ireland. Together, they employ over 38,000 people, hold €200 billion in assets and generate €32 billion in premium income from domestic and international customers. From a regulatory perspective, Ireland’s insurance sector has a ‘hub and spoke’ structure with 82% of business written by branches outside Ireland. There has been an 11% increase in the number of regulated insurance entities in Ireland since Q4 2015, according to the most recent Central Bank of Ireland annual report. The IMF Financial Sector Assessment Program (FSAP) indicated in July 2016 that Brexit is likely to have a negative effect on the Irish financial system, although it has undoubtedly created opportunities for the insurance industry to grow in Ireland with potential for new market entrants, new business opportunities and even the cessation of current partnerships. Key themes to date 2016 was all about data and most notably, the risk management of cybersecurity. Cybersecurity remains firmly on the agenda of insurance entities as they seek to protect consumers’ data in line with the Central Bank of Ireland’s guidance, issued in September 2016. Insurance entities are required to demonstrate how they manage and mitigate cyber risk including stolen data, lost data, corrupted data and unauthorised use of data. In 2017, the focus remains centred on risk management which is central to the sustainability of all insurance industries. In the words of Sylvia Cronin, Insurance Director at the Central Bank of Ireland, “The creation of long-term value can only be assured by practical and effective risk management which pro-actively anticipates the comprehensive range of risks underlying every business”. From a regulatory perspective, the first annual reporting deadline for Solvency II was May 2017, which included the auditor reviewing parts of the returns for the first time. Insurance entities are now required to ensure that their business models are aligned with their risk management to ensure that adequate capital provisions are maintained. The Solvency and Financial Condition Report (SFCR) required entities to demonstrate effective risk management including classification of own fund items, the ongoing compliance to the tiering criteria, obligations relating to own fund items and the related stress-testing. Boards of insurance entities are also required to approve and monitor medium-term capital management plans. Consumer protection is also a key regulatory theme during 2017. In April of this year, the European Insurance and Occupational Pensions Authority (EIOPA) published a report on its thematic review of issues in the unit-linked life insurance market arising from business links between providers of asset management services and insurers. The Central Bank of Ireland also published a Consumer Protection bulletin in April, which focused solely on the motor insurance industry, and revealed that 62% of personal motor insurance policies are provided by companies incorporated in Ireland and prudentially regulated by the Central Bank of Ireland. The Consumer Protection Risk Assessment (CPRA) guide followed in July of this year and it outlines how the Central Bank of Ireland will assess the consumer protection risk management frameworks in place in all financial services entities. The guide requires that consumer protection not only be part of an entity’s strategy, business plan, policies and procedures, but – most notably – be part of the culture of the business itself. The future Looking to future, insurance entities operating in Ireland will face a number of issues during 2018. The Central Bank of Ireland has established a team to deal with entities considering relocating to Ireland from the UK as a result of Brexit, and it will be interesting to see what entities will relocate here. Looking beyond 2018, geopolitical uncertainty around Brexit and Trump could adversely impact asset values. Insurance entities’ stress-tests will need to be robust enough to ensure that the entity can withstand asset shock. From an economy perspective, the low interest rates experienced for the past 10 years are expected to increase gradually, which will no doubt impact on the investment strategy of insurance entities and ultimately, investment performance. The overall solvency position of the insurance sector remains high but according to the International Monetary Fund (IMF) FSAP, several factors put pressure on long-term non-life sector profits. In the life sector, there is strong resilience to interest rate shocks as few products carry guarantees on principal rates of return. However, the non-life sector is more reliant on investment return for profitability and is facing an increase in the frequency and average cost of claims. The regulatory view From a regulatory perspective, the European Commission is expected to carry out an assessment during 2018 of whether Solvency II should be amended in relation to the prudential treatment of private equity and privately placed debt. The implementation of PRIIPs was delayed in November 2016 and will come into force on 1 January 2018. Some insurance entities which are also MiFID firms will be affected by the implementation of MiFID II and MIFIR on 3 January 2018. The IDD will apply from 23 February 2018, with EIOPA required to submit the final draft regulatory technical standard under Article 10(7), which relates to the adaption of certain amounts in euro to the European Commission. Accounting developments will also have an impact on how insurance companies are required to report their results through their financial statements including IFRS 17, which will replace IFRS 4 from 1 January 2021. Conclusion Insurance entities have faced – and continue to face – an unprecedented level of change. Boards will need to adapt their business models to not only to meet the regulatory challenges, but to also build regulation into their culture. Those that engage in the ongoing innovative transformation of their entity with a focus on risk management will not only get ahead, but stay ahead and ensure their organisation’s ongoing adaptation to the changing nature of the industry and consumer demands. Sarah Lane is Director, Financial Services Risk & Regulation, at Mazars Ireland.

Dec 01, 2017
Regulation

Come May 2018, all businesses within the EU will be required to implement the General Data Protection Regulation. Peter Bolger maps out what you can do to make sure your firm is compliant. Chartered Accountants Ireland has consistently been to the forefront in ensuring the profession it represents remains relevant to business needs in Ireland and abroad. From May 2018, Chartered Accountants in the EU will be required to incorporate new changes, set out in the General Data Protection Regulation (GDPR) and supplemented by the Data Protection Bill 2017 (which is still unpublished), in their businesses.  While the GDPR becomes directly applicable on 25 May 2018, one should be aware that it is already a final form law, having been passed by the EU legislators in 2016. The intention of GDPR finally becoming directly applicable in the EU is that it will lead to greater harmonising of data protection rights and obligations throughout the area.  This lead-in period facilitates awareness about changes GDPR introduces to privacy law and allows businesses to review and update their current policies and practices on processing of personal data so that these are compliant with GDPR, in so far as is possible, by next May. Contrary to much of the hype surrounding the regulation, one should remember it is not a once off event or test for compliance. The GDPR marks the beginning of an enhanced approach by lawmakers to individuals’ privacy rights where those individuals are situated in the EU. From 25 May 2018 onwards, businesses will be required to demonstrate ongoing compliance with these rights. This article focuses on some practical measures accountants in Ireland can take over the next six months to prepare their businesses for changes in data protection law.  Application of GDPR GDPR applies to organisations established in the EU that process personal data, either as a data controller or data processor. In practical terms, this applies to every organisation operating in the EU because of the wide meaning of “processing”. Processing essentially means anything that is done to, or with, personal data (including simply collecting, storing or deleting that data). The meaning of “personal data” is broader under GDPR than it is in Ireland under the Data Protection Acts 1988 and 2003 (DPA). GDPR adds identifying types of data to the definition of “personal data”:  “an identifier, such as a name, identification number, location data, online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that person.”  The wider definition of personal data under GDPR reflects the significant impact of technological changes on individuals’ everyday lives. In fact, this is a primary principle underpinning GDPR; to make data protection rules fit for purpose, taking account of the vast technological developments over the last two decades. These changes in technology also extend to how organisations collect and store personal data. How to the prepare for GDPR Begin data mapping Accountants, whether practising in accountancy firms or acting as Chief Financial Officers in organisations of other disciplines, may be best placed as the ‘go-to’ person to commence a dialogue on coordinating the organisation’s data mapping. Data mapping is a practical prerequisite for any organisation to plan its GDPR compliance strategy. It involves identifying, understanding and mapping out the data flows into and out of the organisation. To be effective, the process requires information to be collated from all departments in an organisation. This is likely to necessitate the input of senior management and IT. As the data map evolves, you should be able to identify the flow of data, gaps in required contracts and consents for processing data under the GDPR, required impact assessments, risks in security measures and whether the organisation should appoint a Data Protection Officer (DPO). Review existing contracts and policies Accountancy firms should review their existing contracts with their customers and suppliers to identify whether the accountancy firm is the data controller or data processor of any personal data it processes under different contracts. The test of data controller or data processor will be determined by the factual matrix and not the terms the parties ascribe to the relationship in a contract. This involves identifying the different categories of data held by your business, the purpose for which you process it, the categories of data subjects, who you share the data with and on whose authority.  If an incorrect entity is designated data controller or data processor, it is recommended that the contracts are amended prior to May 2018 to ensure they reflect the provisions under GDPR. In many cases, accountants will be the data processors of their customer’s personal data but there may be circumstances where they will be joint data controllers. If this is the case, it is recommended further advice is sought.  Get new consents that meet GDPR standards The principle of consent is fundamental to GDPR. GDPR increases data controllers’ and data processors’ obligations to obtain an individual’s consent to process personal data as part of their business activities. GDPR provides, that where consent is relied on for a reason to process personal data, the consent must be “freely given, specific, informed and unambiguous”.  If your business currently relies on consent for processing personal data, double-check if the consent practices comply with the GDPR. Where possible, it is recommended that organisations rely on a different basis to consent, such as compliance with legal obligations or legitimate interests, for processing personal data. However, this exercise cannot be artificial. For example, if your business sends direct marketing material to clients, you will need fresh consent from each client to do this under GDPR. It is unlikely that direct marketing will be considered a legitimate business of an accountant’s practice. It will be important that consents are kept entirely separate from other terms and conditions related to your organisation’s offerings. It is equally important that you are able to demonstrate that the consent was freely given, clear, informed and required an affirmative action by an individual. It is likely that consent will require an audit trail to ensure that organisations’ consent processes can be independently evaluated.  Carry out Data Protection Impact Assessments GDPR makes privacy by design an express legal requirement. Accountancy firms typically have access to their client’s personal data during financial audits. The nature of audits, which may include special categories of personal data, akin to sensitive personal data under the current DPA, means it is highly likely accountants will have to carry out Data Protection Impact Assessments (DPIA).  A DPIA is a process for building and demonstrating ongoing compliance with GDPR principles and only mandatory when the processing of personal data is “likely to result in a high risk to the rights and freedoms of natural persons”. Depending on the circumstances, a DPIA may concern an organisation’s single processing operation, or a single DPIA may be used to assess multiple processing operations that are similar. This latter scenario may arise where the same technology is used to collect the same sort of data for similar purposes.  The Article 29 Working Party, the advisory body on GDPR, represented by the data protection regulator of each Member State, has issued guidance stating the rights and freedoms in question are not limited to privacy and may involve freedoms of speech, thought, movement, prohibition of discrimination and rights to liberty, conscience and religion. One or more of these rights may trigger an obligation to carry out a DPIA for a processing activity.  It is important to be aware that even in circumstances where your organisation is a data controller, and GDPR obligation to carry out a DPIA has not been met, the organisation is still required to continuously assess the risks created by its processing activities and be alive to situations where the obligation to conduct a DPIA is ignited.  Assess your organisation’s personal data security measures Data security has a prominent role in GDPR. Organisations in Ireland will be required to report personal data breaches to the Data Protection Commissioner. However, this obligation does not arise in all circumstances where there will be a breach. The notification obligation is triggered where the breach is likely to result in a risk to the rights and freedoms of individuals. As discussed above, the rights in issue are wider than data protection and privacy rights. GDPR also places obligations on data controllers to directly communicate breaches to affected individuals unless doing so would involve a disproportionate effort. The Article 29 Working Party has stated in its guidance that this risk exists where the breach may lead to physical, material or non-material damage to the individual whose data has been breached. This could be financial loss, identity theft, fraud and reputational damage. To mitigate against breach notification, GDPR also encourages data controllers to conduct a risk analysis of the security measures they implement to assure adequate personal data security. At a minimum, the GDPR requires these measures to include: The pseudonymisation and encryption of personal data; Ensuring the resilience of systems and services processing data Restoration of access to personal data in the event of a breach; and Frequent testing of the effectiveness of the security measures. In addition to being best practice, putting in place the security measures listed above is likely to remove the standard obligation to inform affected individuals. An organisation’s failure to comply with its data security obligations may result in a fine of up to €10,000,000 or 2% of its total worldwide annual turnover. It is much more cost effective for data controllers to review and upgrade their security measures, implement relevant industry best practices and develop and maintain data breach plans.  Decide whether to appoint a Data Protection Officer Under the GDPR, an organisation is only required to appoint a DPO where: It is a public body; It carries out large scale regular and systematic monitoring of individuals as part of its core activities; or It carries out ‘large scale’ processing of special categories of or data relating to criminal convictions and offences. ‘Large scale’ is said to include large-scale processing operations which aim to process a considerable amount of personal data at regional, national or supranational level and which could affect many data subjects, and which are likely to result in a high risk. Most accountancy firms will not be required to appoint a DPO but may choose to do so. The appointment of the person to the role of a DPO should be undertaken with great care. GDPR does not list specific qualifications or credentials that a DPO should possess, but it does state that a DPO should be a person of high integrity, professionalism and have “expert knowledge of data protection law and practice” to be able to carry out his or her duties. The Article 29 Working Party has issued the following guidance for organisations on appointing a DPO:  In determining if a DPO is required, keep a copy of their analysis in their records as this assessment falls within the scope of its wider accountability obligations; Preferably, the DPO should be located within the EU; There can only be one DPO, but he or she can be supported by a team; and Senior managers including HR, marketing and IT individuals are barred from serving as the DPO. GDPR preparation will be a large undertaking for most businesses, but if they take the time to implement some practical data privacy measures before May 2018, ongoing compliance processes won’t be so daunting. Peter Bolger is the Head of Intellectual Property, Technology and Privacy at LK Shields.

Dec 01, 2017
Feature Interview

Charities Regulator, John Farrelly, talks about upcoming regulatory changes and the role Chartered Accountants can play in supporting the sector. The Charities Regulator has just completed an extensive public consultation process on the future governance of charities. This consultation will inform the deliberations of a panel established by the regulator to make proposals for the governance of charities and to support trustees in their duties. These proposals will, in turn, feed into new legislation to amend the Charities Act 2009. The new legislation will mean that, for the first time, all registered Irish charities will have regulations regardless of their legal form. The intention of this new legislation is not to impose an onerous regulatory burden, but to instead support the sector according to Charities Regulator, John Farrelly. “We want the public to be able to have confidence in the good work charities are doing”, he says. “There are good people in charities doing good work in the public interest and they should be protected and encouraged. As a regulator, we aim to apply the law so that good charities can flourish.” He points out that a one-size-fits-all approach will not work for a sector which comprises 8,860 charities with 47,000 trustees at the last count. “Good charities regulation needs to take the diversity of charities into account”, says John. Understanding the challenges Having volunteered and worked as a manager and board member in a number of charities over the years, he is mindful of the varying levels of capacity and capability, as well as the pressures, faced by charities. “As a regulator, we will more effectively deliver on our mandate if we understand the charitable sector and its challenges”, he adds. “This requires engagement and consultation. The international evidence shows that engagement is a key feature of an effective regulator. We have put considerable effort into this.” Indeed, the recent consultation process is an example of this engagement. It would be easy but incorrect to assume that the process is a response to some of the recent scandals which have beset the sector. “I don’t agree that you can look at the failings of a few people in a few charities and say that there are failings in them all,” John argues. “A small number of them are struggling with governance, but they are attempting to do things right. Our role is to support them. There has never been a structure in place before now to support trustees.” Key changes One of the key changes that will be made in the New Year is the introduction of mandatory reporting. “This will be proportionate. It will bring a greater level of transparency in areas such as trustee expenses, related party transactions, salaries and so on, and there will be independent scrutiny of accounts.” He explains that one of the Charities Regulator’s key functions is to ensure that charities are accountable for their funds to donors, beneficiaries and the public. “We see a charity’s set of accounts as playing a vital role in delivering that transparency and accountability,” Farrelly continues. “The new regulations make Charities SORP mandatory for larger charities and this will bring greater transparency in terms of disclosures.” For smaller charities, this will involve an independent examination of accounts while larger concerns with turnover above €250,000 will require a full audit. “An auditor gathers evidence that everything has been done correctly, while an independent examiner will bring to the attention of the trustees issues that they think need to be addressed,” John explains. The role of Chartered Accountants Chartered Accountants will be key players in both areas and have a major role to play in the running of charities, John adds. “We know that there is a strong inclination towards voluntarism on the part of the accountancy profession. We would encourage that. This is a group of people with a significant amount to offer to their local community. Many Irish charities are well-served by trustees who are Chartered Accountants volunteering their time in the public interest.” John believes that adopting and consistently demonstrating high levels of governance, accountability and transparency are essential in helping organisations foster the trust of their donors and beneficiaries. “In fact, I would say that irrespective of regulation, it is the transparent, accountable charity which will command trust and confidence and, therefore, deliver best on their mission.” The role of professional accountants is critically important in this respect. “It is vital that when auditors are planning their charity audits, they first recognise that they are auditing a body that is managing, controlling and expending charitable funds,” he says. “This is crucial. Auditors must test the probity of expenditure in relation to the spending of all income. They also need to raise with the charity trustees matters they find in relation to internal financial control issues. In addition, I see a wider role for accountants and auditors – adding value to their clients in terms of improving governance and financial management within charities.” Increasing public trust Auditors and independent examiners should be seen in a positive light by charities, according to John. “The audit and the independent examination are tools to support trustees,” he points out. “Chartered Accountants are out there doing the work and they understand the needs of the charities. They provide valuable help and advice to trustees.” He welcomes the fact that accounting bodies like Chartered Accountants Ireland are including CPD training days in the area of charity accounting. “I see this as a key step to ensuring that accounting professionals are equipped to conduct charity accounting engagements in a professional and value adding way. We would also encourage Chartered Accountants to continue to volunteer to act as trustees and offer their time and expertise to charities.” The Charities Regulator will play its part as well. “We have developed a new online tool for trustees that explains in an interactive way their duties and responsibilities. We are also putting in place IT systems with the capability to monitor proactively the activities of charities so that we can support people who are doing good work and get involved to help those charities where we identify a risk.” The Register of Charities is another key step towards increasing public trust and confidence, adds John. “The register will provide relevant information to donors, beneficiaries and the general public”, he notes. “It will help to strengthen the accountability of each individual charity and the overall sector. It is a key regulatory tool in transparently connecting the public to the work of charities. The register provides assurance to members of the public that this charity is real and is worth supporting.” The Charities Regulator will use the register to educate the public on how to identify and support a registered charity. “The public will become our eyes and ears and contact us if they believe a person or entity is pretending to be a charity or if a charity is not in compliance with the law,” he explains. “A well-regulated sector is one that assures the public and enables people to give with confidence”, John concludes. “We have been vested by the State, on behalf of the people, with certain powers and we will use them responsibly. We will regulate the charity sector in the public interest so as to ensure compliance with the law and support best practice in the governance, management and administration of charities.”

Dec 01, 2017
Management

As the number of virtual teams grows and the amount of face-time declines, managers must take an innovative approach to trust in their teams and organisations. Teamwork plays an increasingly vital role in organisational life. An impetus behind this development is derived from the ever-growing presence of millennials moving into positions of influence and leadership. Meanwhile, technology is disrupting old methodology fast and creating opportunities to develop new ways of working. This in turn presents new challenges for managers, mentors and coaches – many trained and developed before VUCA (volatility, uncertainty, complexity and ambiguity) times, and perhaps feeling ill-equipped to leverage their skills to good effect within the new paradigm in which they are required to work. The virtual team One significant arrival in the workplace is that of the virtual team, which is defined by leadership development adviser Beth Millar as being comprised of members who are not located in the same physical place but in different cities, states or even separate countries; using technology and specific skills to achieve a common goal. This is all very exciting, but it presents challenges. There are challenges to team members themselves – how does a team based in five different locations and who predominantly use phone, tablet and screen to communicate develop what Prof. David Clutterbuck calls “situational team knowledge”, the almost intuitive interpretation of each other’s cues and intentions? And then there are challenges for their coach – be that an external or internal coach, or indeed their line manager – in helping them develop, harvest, build upon and leverage this situational knowledge for the benefit of themselves and their organisation. Some of the most important work in this field has been carried out by American executive coach, Dr Pam Van Dyke, who concludes that a coach must understand that there is an art and a science to creating a virtual presence both during the session and in between sessions. Having understood this, the coach then needs to pay careful attention to developing both disciplines. Commenting on Van Dyke’s work, UK coaching guru Peter Hawkins argues that elements of this art or science begin with the need for the coach to work in real time with the team when it is working together. This will involve joining teleconferences and web-based discussion, and perhaps establishing a closed web-based workroom, where the coach can meet team members in a place that feels secure enough to allow them to become vulnerable. The essential ingredient Vulnerability is an essential ingredient in the building of trust between team members, which is itself vitally important to the development of a healthy approach to conflict resolution. In a world where online relationships can become almost synonymous with anonymity, pretence and manipulation, one vital role of the coach is to create and hold a space that is contracted to be secure, honest, confidential and non-judgemental. A place where, as Patrick Lencioni put it, team members can share their skills and display their weaknesses without fear of reproach. Other productive areas in which a coach can work with a virtual team include two very helpful ideas from Harvard Business Review, the first of which is to help the team to build its own working rhythm. By its very nature, remote working offers individuals the opportunity to create their own working patterns and behaviours, and the very act of agreeing together to set some clear and mutually acceptable touch-points can be the first step towards a commitment to develop mutual accountability, which is a prelude to high performance. The other suggested area is for the coach to work with the team to create a virtual water cooler. The image of co-workers gathering around a water cooler is a metaphor for informal interactions that share information and reinforce social bonds. In its absence, team meetings can become task-focused at the expense of team cohesion and unity. As an initial coaching intervention with a virtual team, this change might generate some great ideas, create excellent working chemistry and set a very positive tone for the ongoing coaching project. A new challenge Michael Eisner, former CEO of Disney, has said that “the worst decisions I ever made were on conference calls”. However, increasing globalisation, cost of travel in terms of money, time and world resources means that we will need to find ways to build trust with less face-time than we have previously been used to. This presents a new challenge for team coaches and managers, one that will have to be addressed both quickly and effectively if the potentially positive disruptive power of technology is to be fully leveraged into strong bottom line human performances. Ian Mitchell and Siân Lumsen are Partners at Eighty20 Focus, a boutique executive coaching firm.

Dec 01, 2017
Personal Development

After a year of insight into what can bring you success, Neil O’Brien shares his lessons from a different angle. I thought that I should end this series of articles with something slightly different. So far, I have been laying out my case for why I feel the way I do about various topics that relate to the human condition. This time I’d like to tell a story. This is a true story from one of my clients and I hope will summarise all that I’ve covered in the previous articles.Sort him out I got a phone call from a woman who had attended one of my talks.She was phoning on behalf of her brother Jimmy. She wanted Jimmy to see me so I could “sort him out”. When I explained that this is not how coaching works, she relented, said she would get him to contact me. His unusual surname stuck with me. About two weeks later, I got the call. As soon as I heard the name, I knew who this was. He was very nervous and uncomfortable, and admitted that he’s “old school” so all this “coaching therapy stuff” was new to him. In response, I suggested that we meet just once and if he would like to meet again, we could. He agreed. Meeting one: nervous and awkward Our first meeting was very fraught and very heavy. Jimmy was nervous and tense throughout. However, he stated his objective for our work together: help him find a person with whom to share his life. He explained that he was separated, feeling very lonely and was going in on himself, not making an effort for anything other than work. Ironically, work was going great. He was a small business owner employing a number of people but he was spending too much time at the office in order to avoid going home to a cold, empty house. Jimmy was clearly quite low at this first meeting, so I decided that first we would build him up first before tackling the overall objective. For homework, he was to go for three walks a week for four weeks; a target of at least 12 walks in a month. I ended by reminding him that the walking is all he is committing to right now and if he ever wants to meet again, he knows where I am.Meeting two: confident and optimistic A month later, Jimmy arrived to our meeting with a noticeable pep in his step. He was much more relaxed, and keen for us to move forward. He reported that the walking was working. He was walking everyday – sometimes twice per day. He easily exceeded the challenge I set for him.  During this second session, he engaged with the process much more. He was into it and challenged me during our talk about his life and work. The session ended with him having more homework to complete outside and at work. There was a conversation in the office that he had been avoiding. I told him he was to have this conversation immediately. And, the usual deal applied – if he ever wanted to meet again he knew where to find me. Meeting three: Elvis is in the building A month later, Jimmy arrived to our meeting with a swagger and confidence I didn’t even think I could have. He proceeded to outline what a fantastic month he’d just had. “Work and life couldn’t be better,” he said. Following a great business meeting earlier that month where he had the conversation I encouraged him to have, he decided he’d treat himself to a bottle of aftershave. He went into a well-known department store on Grafton Street and was sampling two different types when he noticed a woman standing beside at the counter. In that moment, he did something completely out of the ordinary. He turned to her and asked her which aftershave she preferred. She entered into the spirit of the moment and they had a bit of fun choosing the the best one. They got on so well that Jimmy asked her out for lunch the following week. Jimmy met Barbara for lunch and his usual surname was mentioned. Barbara commented that when she was 16, she was madly in love with a boy called James of the same surname... and then it dawned on them.  Jimmy and Barbara went out with each other many years ago. Although they were madly in love, Jimmy ended the relationship because his father told him that the Leaving Cert was more important. It was time Jimmy knuckled down, worked hard, stopped seeing that girl. To please his father, Jimmy did as he was told.However, in a department store on Grafton Street, Jimmy and Barbara found each other again after many years apart. They are still madly in love and Barbara is working with Jimmy in the business.Jimmy’s lasting legacy There are three things that Jimmy taught me though our work together. First, the Jimmy I met at our first meeting was not the real Jimmy. He was only a fraction of himself. There is so much more to Jimmy when he values himself. Second, look at what he achieved when he was prepared to do what he thought was out of character behaviour. In other words, look how easy it was for him to leave his comfort zone when he felt stronger and lighter. Finally, Jimmy will freely admit that everything started to turn around for him with his three walks a week. Don’t underestimate the power of small, regular steps.2018 My wish in 2018 and beyond is for you not to overthink, and have enough courage from time to time to do something you wouldn’t normally do. And, like Jimmy, if it’s for the right reasons, it can only work out for you. Thank you for reading these articles throughout 2017. I thought that ending with a love story might be something that Accountancy Ireland Extra wouldn’t normally do!

Nov 01, 2017
Personal Development

The Danes have figured out how to be happy with hygge. How do we employ those same concepts in Ireland? The Danish term ‘hygge’ is being used to sell everything from pyjamas to rugs. The Oxford Dictionary even shortlisted ‘hygge’ as one of their Words of the Year 2016. Hard to explain and even harder to pronounce, it translates roughly to ‘cosiness’ and is intended to promote a feeling of well-being or contentment.  Surviving the Danish winter is as much a mental challenge as it is a physical one. Hygge is a way to cope with the freezing temperatures and long, dark days. From lighting candles, snuggling up with a blanket and a hot chocolate, to meeting up with friends and family in a warm pub, the concept is to overcome the cold and miserable weather by feeling warm and cosy inside.  Dr Mark Williamson of Action for Happiness explains: “Research shows that people who are able to be kind to themselves rather than harshly self-critical tend to have better mental health and higher life satisfaction, and allowing ourselves some hygge time to boost our own well-being leaves us better placed to contribute and help others.”   By placing such an emphasis on spending time with family and friends, hygge ensures one of the most important contributors to our psychological well-being. Danes are ranked the happiest nation in the world. A UN resolution states that the pursuit of happiness is a fundamental human goal and they publish an annual World Happiness Report, considering many factors such as health, family, job security and social factors. In this report, Denmark has topped the list four times out of five.  Meik Wiking, author of The Little Book of Hygge and Chief Executive of the Happiness Research Institute in Copenhagen, believes that hygge is the main reason for this ranking. He argues that while other countries have similar concepts, hygge is uniquely Danish. “It’s an integral part of our cultural DNA: we talk about it tremendously often. Since I began researching the book, I’ve noticed just how much hygge comes up in everyday conversation”. While our winter in Ireland is not quite as bad as Denmark, the short days and relentless damp can crush even the most optimistic of spirits. Add to that the stress of working while attending lectures, completing assignments and preparing for exams – our lives can become extremely stressful at this time of year. So, how can we adopt the principles of hygge in a way that fits with our culture (and without spending a fortune on candles and slankets)? In Irish terms, it’s a bit like going home for Christmas – meeting up with old friends in the local pub, visiting family, or eating selection boxes in an onesie on St. Stephens Day. Hygge is a conscious act, one that promotes happiness, safety and emotional well-being.    In short, hygge is about being intentional in doing those things that feed our souls so that we can overcome the challenging periods of our life with our sense of well-being intact.  Even Hillary Clinton subscribes to the self-care aspects of hygge. In her memoir What Happened, she describes how she passed the days and weeks following the US election. She did “quite a bit of thinking and writing … some praying, some stewing, and, in time, a good deal of laughing. I went on a lot of long walks in the woods, with my husband and our dogs … I surrounded myself with friends and caught up on some of the shows that people have been telling me about for years ... I spent time with my wonderful grandchildren. I believe this is what some call ‘self-care’. It turns out, it’s pretty great”.  The next time the stresses of life are getting too overwhelming, try to adopt some of the principles of hygge. Whether that is sitting by an open fire, going for a walk, or meeting up with friends for a cup of tea; the essence of hygge is to carve out time in our busy lives for ourselves. Dawn Leane is the Principal of LeaneLeaders.

Nov 01, 2017
Ethics and Governance

With the Gender Recognition Act 2015 now in place, boards must ensure that robust, employee-focused policies are developed. Good corporate governance is now widely recognised as being sited in a sound corporate culture which includes, among other things, real respect for all persons. Most companies have a suite of policies on equality and diversity and although the human resources department is normally responsible for managing these policies, boards have an oversight role in ensuring that written policies are genuinely embedded in the practices, behaviours and reward systems of the organisation. This should include policy and procedures to cover situations where employees are gender transitioning. The Gender Recognition Act 2015 A human rights case in 2007, taken by Dr Lydia Foy, found that Ireland had an obligation to adopt a system to recognise the preferred gender of its citizens. It took until 2015 to introduce such legislation and several unfortunate clauses were removed from the Bill in its slow movement towards enactment. It was originally drafted so that gender identity would have to be established following a “medical evaluation” model. Good sense prevailed and the Act allows for a process enabling trans people over 18 years of age to achieve full legal recognition of their preferred gender and allowing them to obtain a new birth certificate reflecting the change. This preference is based on “self-determination” rather than certification by medical practitioners. It was originally proposed that married people could not apply, which would have required a “forced divorce”, but following the same-sex marriage referendum this requirement was removed. There are very restrictive provisions for persons of 16 and 17 years of age to apply for gender recognition, but there are no provisions for anyone younger than 16 to apply. Although there is no specific reference to intersex persons or to non-binary persons, it is widely assumed that the Act covers such persons. In the period between 4 September 2015 and 31 December 2015, 198 people were legally recognised under the Act, of whom eight were 16 or 17 years old.  At the time of writing, the Government had undertaken to commence a review of the workings of the Act in September 2017 and to report before September 2018. Implications for the person The main implications for a person whose preferred gender is recognised include: For all purposes, his/her gender becomes the preferred gender; She/he shall not be required to produce the certificate of gender recognition (unless by his/her own choice); His/her rights and liabilities and consequences of actions taken in the original gender remain unaffected; There will be no change to his/her parenthood status; There can be no effect on a property to be willed where the will was drawn up before the change; If desired, the marriage status can remain unchanged; and The change cannot interfere with any pursuit of an alleged sexual offence or an attempted sexual offence against him/her. Implications for the workplace Organisations need to enhance their suite of equality policies by having a specific policy covering transitioning by anyone in the organisation. While there may not be many such situations each year, it is important that a policy is thought out, discussed and agreed before a live case is presented. This policy should include: a basic statement of support; a statement of the understanding of the definitions of terms used in the policy; and an agreed procedure to support anyone who is transitioning. Statement of policy The policy should fit with the lived culture within the organisation, but might look something like: “As part of our suite of policies on equality and diversity, the board has approved this policy on gender transitioning to amplify our culture of welcoming and respecting diversity. We undertake to provide appropriate support to any person who is transitioning either with or without medical/surgical intervention. We will not tolerate any behaviour which disrespects or damages the dignity of any such person or engages in any form of bullying, sexual harassment or harassment. “We recognise that, while most people’s gender identity matches their sex assignment at birth, there is a small number of people for whom the sex assignment at birth does not match their innate feeling of being male or female. For those people who wish to transition, i.e. to align their life and physical identity with their gender identity, we undertake to be a safe and respectful workplace in accordance with our culture but also in compliance with the requirements and the spirit of the Gender Recognition Act 2015. The most commonly acceptable term used to describe people who wish to transition is “trans” and that term will be used in this policy. “Just as gay, lesbian and bisexual employees are welcome here, so also are employees who are trans. We recognise that a transitioning employee must come out to us, as his/her employer, so that she/he can live consistently with their preferred gender identity and we undertake to become fully involved to support this process. We recognise that each person will have different needs and so, this policy is as flexible as possible to tailor support as appropriate.” Definitions For the purpose of clarity, the policy should state the definitions of terms that should underpin the organisation’s policy. These might include: Gender identity: this means a person’s innate, deeply-felt psychological identification as male or female. This may or may not correspond to the person’s body or designated sex at birth and included on the original birth certificate. This term is not the same as ‘sexual orientation’, which is the preferred term used to refer to an individual’s physical and/or emotional attraction to people of the same or opposite gender. Gender expression: this refers to the observed signs and behaviours that are socially associated with the masculine or the feminine. So this includes dress, manner of speaking, moving, wearing make-up, hairstyles, social interaction and so on. Of course, this can vary from culture to culture. Some trans people feel very strongly that they need to live in their real identity and this can involve a transitioning journey including steps such as changing their names, having hormone therapy or undergoing surgery. Not all trans people want to transition in this way. Some don’t clearly identify as either male or female, but see themselves as being on a gender spectrum between male and female and would consider themselves as being both. Trans: trans people are those whose gender identity does not match the gender assigned. This is an umbrella term that includes people of different gender identities and gender presentations. It includes people who are transsexual, cross-dressers or gender non-conforming in other ways. Non-binary: again, this is an inclusive term that covers all identities that fall outside the clear male/female identity. This includes people who identify as neither completely male nor female; people who identify as both male and female or in any way between or beyond genders. People in this category may describe themselves by a variety of terms such as gender fluid, or bi-gender or gender neutral. Transitioning: this is the journey travelled by those who wish to change from the gender assigned to the gender with which they identify. It might include social, physical or legal changes. It can involve a range of actions including coming out to family, friends and colleagues at work. It can include changing appearance, changing sex designation on legal documents and asking to be referred to a ‘he/him’ instead of ‘she/her’ or vice versa. It may or may not involve medical and/or surgical assistance. Transsexual: this term is limited in its use as it focusses on the polar identities of male and female. It has been confused with sexuality or sexual orientation rather than gender identity. It is a term we will avoid. Cross-dressers and transvestites: a transvestite or cross-dressing person is someone who sometimes wears clothing, make-up and accessories which are not traditionally associated with his/her assigned gender. Usually, this is not associated with any desire to change assigned gender identity and it has nothing to do with sexual orientation. Intersex people: an intersex person was born with one of a range of conditions whereby their reproductive organs do not fit the typical definitions of female or male. They may have surgery to assign gender (i.e. as opposed to trans people who may have surgery to re-assign gender). Sexual orientation: this is the term used to refer to a person’s attraction to the same and/or the opposite gender. Homosexual, heterosexual and bisexual are all descriptions of a person’s sexual orientation. It is not the same as a person’s gender identity. Transphobia: this is the fear, dislike or hatred of a trans person/trans people. People who experience transphobia assume that there is a normal way for men and women to look and behave and diverging from that is ‘abnormal’. Often, derogative and offensive language can be used such as ‘sex change’. ‘she-male’, ‘gender bender’, ‘hermaphrodite’ etc. Policy In writing a policy suitable for your organisation, it will be important to engage in organisation-wide consultation. There is no template for such a policy, but it might be useful to include the following headings and populate each section with procedures: A basic statement of assurance that trans employees and stakeholders will be treated with respect and dignity; A basic statement that all other employees are required to comply with the policy and failure to comply will result in disciplinary action, up to and including termination of employment; An undertaking to take action should customers, suppliers, contractors or other stakeholders discriminate against our employees because of their gender identity; A statement that the policy is dynamic and will be amended as experience is gained in the area. It should include a hope that trans employees and other stakeholders will assist the organisation in reviewing and improving these guidelines; Guidelines for employees should be included, inviting them to make contact in advance of transitioning to discuss intentions, needs and concerns; Provision should be made for a support team and its procedures; Some consideration of how the dress code will operate and assurance that the gender identity preferred will be respected within the provisions of the normal code for employees of that gender; Procedures around the rights to use gender-segregated bathroom facilities. Where necessary, single-occupancy facilities will be provided consistent with the preferred identity; A statement on the eligibility of a trans employee to all welfare rights available to staff; Clarity around the right to confidentiality and the manner in which the change of identity is to be disclosed to colleagues; Guidelines for managers to whom an employee’s intention to transition is disclosed. This should include all the issues referred to above and practical issues such as name change, pronoun change, email nomenclature and the availability of sick pay, if appropriate; and Guidelines for the process of disclosing to colleagues, taking into account the wishes of the person who is changing. This might include a general meeting or may be done on a person-by-person basis. Overriding requirement The most important issue is to ensure that colleagues who have decided to transition, whether surgically, medically or without such intervention, should know that they are valued in the organisation; that their decision is respected and that they will be supported in the manner in which they would like to transition in the workplace. Prof. Patricia Barker FCA is Adjunct Professor of Accounting at Dublin City University.

Oct 02, 2017
Spotlight

Ireland has performed well in the face of Brexit-related uncertainty, but there are risks on the horizon. Ireland’s economy has thus far weathered the impacts of Brexit uncertainty well. Employment growth in the first half of the year was 3.4%. This represents a pick-up on employment growth of 2.9% in 2016 and is well ahead of expectations. Private sector business employment grew by 5.2% in Q1 2017. Our expectation for the full year is that employment growth will emerge at around 3.2% for the full year of 2017. Despite this solid economic backdrop, there are serious risks on the horizon. It is still likely that some slowdown in the pace of employment growth will occur in 2018 as Brexit uncertainty begins to bite on labour-intensive sectors. There is significant downward potential for our forecasts if the prospect of a ‘no deal’ scenario emerges.The figures on Ireland’s exposure to any change in the EU-UK trading relationship are well rehearsed. The UK accounts for 14% of Irish goods exports and 20% of our services exports, the highest share of any European country and double the exposure of the EU average. In addition, more than 32% of goods imports come from the UK. Any change to either through the introduction of tariffs or non-tariff barriers will hit Ireland disproportionately. Although large in their own right, these figures might even understate Ireland’s exposure. Indigenous firms only account for around 12% of exports and the foreign direct investment (FDI) pipeline continues to deliver. As such, aggregate exports may still experience strong growth to the EU, US and elsewhere. This must be seen in context, however. Indigenous exporters spend as much in the domestic economy through purchases and wages as the multinational exporters and employ more people. These indigenous exporters are also much more reliant on the UK than the multinational sector. 43% of output from indigenous manufacturers goes to the UK, compared with only 10% of that from non-Irish companies. The impact of Brexit on that 12% of our overall export base will be almost as important for the domestic economy as the fortunes of the other 88% for the average Irish household. Irish business wants the UK to remain in the customs union, maintain tariff-free trade and minimise non-tariff barriers with the EU. However, the prospect of this appears to be getting further from reach. The UK has indicated that, while it wants trade with the EU post-Brexit to remain as frictionless as possible, it also wishes to agree its own trade deals with third-parties and decide its own rules and regulations for doing business. This would exclude the UK from the EU customs union as we know it and necessitate a new external EU customs border between the Republic of Ireland and Northern Ireland, and on the east-west aviation and maritime trade routes between the Republic of Ireland and Britain. Ireland’s geographic position, with the use of the UK as a land bridge to other EU states and the reliance on UK suppliers and markets, in addition to the land border with Northern Ireland, means it is uniquely exposed to the cost, complexities and disruptions associated with applying and administering a customs border. In a very worst case scenario, this could be coupled with a ‘cliff-edge’ outcome involving the imposition of World Trade Organisation (WTO) tariffs on trade. It is difficult to predict what the final outcome will be, but this much is clear – Brexit is likely to disrupt Irish/UK trade in a significant way; it will increase the cost of doing business and as we are already seeing (through falling real incomes), it will leave the UK consumer much poorer. For Ireland, the negotiations are now about degrees of pain rather than the inevitability of Brexit. The best advice for business is to know your exposure, prepare for the worst and hope for the best.The regional perspective The economic implications of Brexit are clearly very large across the Republic of Ireland; for the regions, they are enormous. A number of sectors are most at risk in the event of a hard Brexit and have already been significantly impacted by the weakening value of sterling. These include agri-food and beverages, accommodation and tourism services, air and freight transport, and traditional manufacturing. The downside of Brexit will hit sectors that are regionally dispersed and any potential upside is likely to be concentrated in Dublin and other major urban centres. In agri-food, which accounts for two-thirds of indigenous exports, 46,000 jobs in the sector are linked directly or indirectly to exports to the UK. In recent economic work, Ibec showed that Irish agri-food exports to the UK begins to slow at a sterling/euro exchange rate above 80p and that approaching 88p, Irish agri-food exports to the UK begin to fall. This was borne out in the latter half of last year with Bord Bia estimating a loss of over €500 million in exports. The impacts of Brexit are already being felt in some sectors. Figures from persons who declared their sector of work in Census 2016 show that 243,000 workers (13.2% of the employed population who declared a sector) work in these sectors. By examining employment in these sectors across different counties, we can give some idea as to which areas of the country are most exposed in the event of a hard Brexit. The counties with the highest exposure are Cavan (28%), Monaghan (27%), Kerry (22%) and Longford (21%) with over one in five workers in each of those counties employed in exposed sectors. Meanwhile, exposure is lowest – as expected – in urban areas. The least exposed counties include Cork and Galway along with the four Dublin local authorities and their surrounding counties (Louth, Meath, Kildare and Wicklow), where there is a potential upside from Brexit. These figures give an overall picture, but local and company-specific factors will mean other counties (particularly those along the border) will be much more exposed. New Irish tourism numbers illustrate this point. Overall, tourism is already experiencing an evident Brexit-related slowdown in UK trips to Ireland. Between 2015 and the first half of 2016, visits from the UK to the Republic of Ireland grew annually by an average of 13.5%. Q1 2017 has seen these figures collapse with visits falling by 6.5%. This was driven by both the impact of sterling and falling real incomes for UK consumers. British tourists spent over €1.1 billion in Ireland last year with 68% spent outside Dublin. As a proportion of their total income from tourism, British tourists are most important for the northwest (47%), east and midlands (36%) and southeast (35%) regions.The domestic response Brexit involves an unprecedented fracture of the single market, with Ireland particularly exposed. As such, it is vital that EU institutions and national governments recognise the potential for economic disruption and take decisive steps to offset such risks. This must start in Budget 2018. To support businesses, funding should be provided over a three-year period from both Government and EU sources to help companies trade through any period of disruption, adapt, and succeed into the future. These funds will be needed for enabling technology, low-cost refinancing, management upskilling, plant renewal and expansion, market development and innovation. Some will require a temporary state aid regime similar to the 2009 regime. The need to improve the taxation environment for small business has also become even more important in the context of Brexit. In the past, the State often viewed indigenous firms as captive and only FDI as contestable – that has now changed. A central threat to the Irish indigenous business base is that of Irish companies moving capacity to the UK in order to keep a foothold in their major market. For most, this is likely to be a more economical and less risky option than attempting to diversify into new markets. This threat has been heightened by the fact that those companies would receive more favourable treatment when it comes to capital gains tax, investment taxes and the tax treatment of share options in the UK. These gaps must be closed in the short-term to make sure the best of our growing indigenous sectors do not become contestable.Gerard Brady is Head of Tax & Fiscal Policy at Ibec, which represents Irish business both domestically and internationally.

Sep 28, 2017
Feature Interview

Enterprise Ireland’s Julie Sinnamon is preparing for a hard Brexit, but that isn’t the only challenge on her agenda.   When Julie Sinnamon assumed the top job at Enterprise Ireland back in 2013, Ireland was steadily crawling out of a recession and the future looked bright. Now, in the aftermath of the UK’s decision to leave the European Union (EU), many of the state agency’s clients have a fight for survival on their hands. Sterling is on a seemingly inexorable downward path, with parity with the euro by Christmas not such an outrageous proposition. Meanwhile, the very terms of the UK’s divorce from the EU remain uncertain, raising fears about possible customs and tariffs on Irish exports to the UK. Unlike previous crises, Sinnamon is clear that this is not simply going to go away. “It’s not a blip; it’s a permanent restructuring of Irish enterprises in global enterprise,” she says, refusing to sugarcoat the challenge ahead. “It’s a massive problem for Irish companies,” she says, adding that with sterling having touched 93p to the euro, “it’s really difficult”.  What Brexit might mean for Irish exporters is as yet unclear; but what it most definitely does mean for Sinnamon and her staff at Enterprise Ireland, the agency responsible for developing and growing Irish companies in global markets, is a sharp uptick in its activities. A perfect storm Sinnamon recalls the day it all changed. On 23 June 2016, she went to bed before midnight with the polls showing a win for remain. Three hours later, she was woken from her reverie with news from her husband that it was going the other way. Born in Co. Down and a graduate of the University of Ulster, Brexit also has a personal dimension for Sinnamon. “I realised it was real, and it was a matter then of looking at what we had prepared... and it’s been hectic ever since,” she said. Indeed, Enterprise Ireland has since recorded a 50% increase in its internationally-focused work. But while Brexit may have all the makings of a perfect storm for Irish exporters, Sinnamon and her team are taking a common sense, practical approach to helping companies weather that storm in the coming years. According to Sinnamon, the approach is three-pronged: first it’s about boosting competitiveness, then working on innovation, and finally helping companies diversify their market footprint. On the competitiveness front, it’s about cutting costs – something many Irish companies have experience of coming out of the most recent downturn. “A lot of the stars of Irish industry would not be here today if it hadn’t been for working on the lean programme,” she says. However, given that this happened in the recent past, it also means that there isn’t much “low hanging fruit” left to be picked as many companies have already removed excess costs. This means that innovation may be even more important this time around. As Sinnamon notes, enhancing the product offering can enable a company to charge a higher price – and this is a “massive part of the solution”. Entering new markets is also part of the strategy, with Sinnamon citing role models such as forklift manufacturer Combilift’s expansion in Germany and animal pharmaceutical producer, Chanelle, working on expanding from the UK to Europe. “We’re working to help companies diversify, but it takes time, particularly the more sophisticated your product is.” Nonetheless, Enterprise Ireland and its client companies are making headway, with a clear goal to boost exports to the eurozone region by 50% by 2020 while exports to New Zealand, Australia and Canada are growing strongly. “Companies are increasingly showing interest in those markets,” Sinnamon says. And even if the UK market has become more challenged, companies are also finding opportunities with Sinnamon pointing to some companies who may have traditionally gone to the southeast of England seeking out more lucrative work in the north of England and Scotland. International markets week, held in early September, is a key part of this approach as all of Enterprise Ireland’s international team comes home to talk to Ireland-based companies about the opportunities around the world, hosting over 2,000 meetings in just two and a half days. Taking action When it comes to Brexit, one problem has been the reluctance of Irish companies to take action. In the aftermath of 23 June 2016, people tended to think that “common sense will prevail”, Sinnamon recalls. With Brexit negotiations in full swing, companies now need to rise to the challenge – even if they don’t know what a Brexit will actually look like.  “Nobody knows where it’s going to end up, but I keep saying – and have said so from the start – that the actions you take are for a hard Brexit,” she says, adding that even if this doesn’t end up being the case, it makes good business sense to be “as competitive as possible”. Somewhat surprisingly, however, given currency fluctuations, Sinnamon notes that while the larger companies are hedging their currency risk, many smaller ones still aren’t doing so. “We’ve had companies saying maybe it will get better; today it’s 92/93p so we’re going to wait till it comes back down.” One way companies can assess their level of preparedness is to check out Enterprise Ireland’s Brexit tool on its website, which takes about 15 minutes to complete. It shows where you might have the biggest issues and by going back to it in three to six months, you can review your exposure. Enterprise Ireland is also offering a consultancy grant for companies who need help in putting a plan together. “If the relationship with the UK changes permanently, then you need to have a plan. Then it’s about innovation, about becoming more competitive, and out of that will come lots of actions,” advises Sinnamon. Government support is also helping, with Enterprise Ireland getting approval for 39 new staff members last year, about half of which have been placed overseas, while the Government also plans to double Ireland’s overseas diplomatic presence. Enjoying the role But it’s not just about Brexit. Coping with the challenges it brings is just one arm of the state agency, which also has other targets on its mind. And bringing companies into new markets has gotten easier with the good reputation Ireland now has at an international level for its economic recovery. “I came into this job in 2013 and we were still talking about the downturn and apologising globally for the issues we had whereas today, if you’re being introduced anywhere in the world, people will talk about the Irish turnaround,” notes Sinnamon. Indeed Brexit is not the first challenge Sinnamon has seen during her years with Enterprise Ireland. She first joined the enterprise agency when it was established back in 1998, having previously spent 10 years on the other side – targeting international companies to move to Ireland through her work with the IDA. For Sinnamon, the joy in her current role is seeing client companies succeed against tough global companies. “It’s seeing companies grow from small companies and seeing the impact of those [companies],” she says. Leading women Of particular interest to Sinnamon is encouraging female entrepreneurs. When the top job at Enterprise Ireland first came, she concedes that she had to think about whether or not it was something she really wanted. “I’m probably no different than anyone else in terms of a lack of role models,” she says, noting that women have to convince themselves that they can make it work rather than trying to emulate readily identifiable role models who they can clearly see have already made it work. Now, Sinnamon is helping female entrepreneurs find the ambition within themselves, and her efforts are starting to pay dividends. Back in 2011, just 7% of Enterprise Ireland’s start-ups had a female founder. Fast forward to 2016 and the figure has jumped to 22% – a figure that compares well to international standards. TechCrunch, for example, found earlier this year that just 17% of start-ups worldwide had a female founder. But there is still a difference that Sinnamon is hoping to erase. “The applications we get in from women are typically smaller projects,” she says. “The lack of ambition and confidence is a real issue, so we put a lot of focus on spotlighting successful ones.” Sinnamon likes to tell female founders that “your projects are important, but at least as important is the impact you will have on female entrepreneurs going forward.” Also of assistance are Enterprise Ireland’s efforts to encourage more females to take the step of starting their own business. This year, for example, Enterprise Ireland has a €750,000 start-up fund for female entrepreneurs with up to €50,000 equity funding available. Scaling up While Ireland has undoubtedly been successful in creating a start-up hub, one area where it hasn’t quite risen to the challenge is in helping start-ups to grow into world leaders. Flotations on the Irish Stock Exchange remain few and far between while companies like Strype, the $9 billion payments service founded by Limerick brothers Patrick and John Collison, have opted to locate in the US rather than Ireland. Sinnamon is aware of the challenges and notes that Enterprise Ireland is increasing its focus on this area and giving targets to get companies to certain thresholds. “One of the big issues we see for start-up companies is when someone comes and offers them a cheque and they sell out,” she says, noting that the people in the start-up have taken the risks – but it is the company that comes along and buys them that makes the real profit. “It’s about having role models and increasing the number of companies who hang in there and don’t sell out too early,” she says. The availability of follow-on funding was one hindrance to growth oft-mentioned in the past, but this issue has dissipated. “More growth funds are now available than at any time in the past,” Sinnamon says. “I don’t think it’s as big an issue as it was”. The very competitiveness of the Irish economy is also an issue. On the day we meet, traffic has snarled to a standstill in Dublin’s city centre on the back of new traffic management measures, while the ongoing housing crisis is beginning to bite foreign direct investment. Sinnamon concedes that both are an issue, with rents of particular concern to some clients when they look to bring in talent from overseas. “It’s linked to infrastructural development that didn’t happen for a while,” she says. Competitiveness is on Sinnamon’s mind, and she’s also looking to the forthcoming Budget to improve the offering for entrepreneurs in Ireland. While the Government has made some moves to enhance the capital gains tax regime for entrepreneurs, Ireland is still “not as competitive with the UK in that space” she says. After all, driving entrepreneurship reaps many rewards for a country. With the pressure on Dublin to cope, Sinnamon notes that 65% of Enterprise Ireland client company jobs were created outside Dublin last year. “There are towns in Ireland that really need to grow, and local business will drive that turnaround,” she says.

Sep 28, 2017
Personal Development

Build trust, gain influence and get meaningful work done with these simple but effective ‘soft skills’ challenges. In the collaborative workplace, soft skills play an increasingly important role – particularly if you’re looking to set yourself apart from your peers. But how do your improve your soft skills? And what are they anyway? Here are four prominent soft skills and some challenges to help you put them into action. Communication When we think about communication, the output often springs to mind – what we say and how we say it. But communication also involves eye contact, posture and active listening. Great leaders are, generally speaking, great listeners so challenge yourself to striking up a conversation with one colleague each day where you focus on what they have to say. Of course, communication works best as a two-way process so there will be an element of give and take, but focus on giving your colleague the opportunity to tell you about their weekend, work project or hobby. Doing so will position you as an approachable and affable colleague and potential leadership material. Influence You might think that influence comes with seniority but in truth, everyone has the ability to influence irrespective of their role or status. This elusive skill is the sole subject of one of the bestselling business books of all time – Influence by Robert Cialdini – but to get you started, try this simple challenge: refer to colleagues by name and offer a little praise. It might sound superfluous but as Dale Carnegie, another famous writer and lecturer, noted: “A person’s name is to that person, the sweetest, most important sound in any language”. Add to this a compliment or two and you will greatly improve your chances of getting what you want – even from distant colleagues. Time and priority management The ability to identify what’s important and prioritise accordingly is an admirable trait, and one your superiors will cherish. In his book entitled Deep Work, Cal Newport defined this concept as the ability to focus without distraction on a cognitively demanding task. If you don’t schedule time for deep work, however, it’s unlikely to happen as you get dragged from one meeting to the next. So leave your smartphone to one side and refuse to allow your inbox to dictate your day; but most importantly, schedule time in your calendar for deep work each week. If you don’t ring-fence time for value-add activity, the likelihood is that someone will fill the void for you. Critical thinking According to the National Council for Excellence in Critical Thinking, critical thinking is “the intellectually disciplined process of actively and skilfully conceptualising, applying, analysing, synthesising, and/or evaluating information gathered from, or generated by, observation, experience, reflection, reasoning, or communication, as a guide to belief and action”. In simpler terms, it’s the process of making reasoned judgements that are logical and well-thought out. To improve your critical thinking skills, begin by asking yourself how a colleague or friend might approach an issue before making a decision. Too often, we approach challenges solely from our own point of view and spring into action in the firm belief that we are doing the right thing. By looking at issues through the eyes of another, however, you will be better placed to bypass your own biases and make more informed decisions. Summary You now have four simple tasks to help you hone your most valuable soft skills: chat to a colleague each day; refer to colleagues by name and add a compliment or two; book time in your calendar for deep work; and push yourself to look at things from the viewpoints of others. If you allow these challenges to develop into habits, you will reap benefits in many areas from productivity to professional relationships.

Sep 01, 2017
Spotlight

Collaboration between the public and private sectors could greatly enhance the lives of those working in Northern Ireland. It is a time of uncertainty for Northern Ireland. It is not controversial to suggest that this isn’t particularly helpful in terms of growing our economy, creating jobs or providing the best possible public services for our people. Key factors are the ambiguity of Brexit and the absence of a functioning Northern Ireland Executive, followed by slow-moving negotiations to reconstitute an Executive. There was hope that after the UK General Election, the Northern Ireland parties could form an Executive and the Northern Ireland Assembly could reconvene and begin to address the questions posed. However, the breakthrough hasn’t happened yet and it now looks like it may have to wait until the autumn – or else we fall back to direct rule from Westminster. We firmly hope that local political parties will be able to resolve outstanding issues to allow a budget, a new programme for government, direction and clarity for Northern Ireland to be put in place. It is important that our business leaders and political leaders work together to find a way through. Of course, the local business community will get on with things and continue to do business – it always has. Imagine, though, how much better it would be if politicians, public sector decision makers and private sector leaders were working together to address the key issues. We need a collaborative approach from business and the public sector. It is the only way we can hope to deliver a sustainable economy and the social, health and education benefits that come with it. We want an approach that displays responsibility, accountability and maturity. Leadership vacuum Brexit is a key concern for the Institute’s members, both north and south of the border. Separate surveys in each jurisdiction found that 80% of members viewed Brexit as a negative factor in their region in the year ahead. 80% felt that Northern Ireland will be more negatively impacted by Brexit than other UK regions, while 87% felt that the Republic of Ireland’s trade relationship with the UK will suffer. The detrimental effect of not having a Stormont Executive to address Brexit planning is hard to quantify, but it stands to reason that we would be better served by a group of elected representatives working together to speak for Northern Ireland and engaging with the business sector. It was noticeable that the EU chief negotiator, Michael Barnier, met with the first ministers of Scotland and Wales in July to “listen to different points of view”. Without an Executive, there was no-one to meet with from Northern Ireland. The clear majority of members, north and south, want free trade in goods and services to be part of the UK’s deal with the EU and are opposed to a hard border on the island of Ireland. No matter what your opinion of the UK’s relationship with the EU, those views suggest that the removal of customs barriers through a Customs Union has been one of the big successes of the EU project. One of Theresa May’s clearly-stated objectives is that the UK will leave the Customs Union as a result of Brexit. That means we could be back in a similar position to where we were before 1993 – a trade border between the Republic of Ireland and Northern Ireland. It will mean considerable change for businesses engaging in cross-border trade. It will require significant investment in planning and skills. So what is the answer? Cooperation. Working together. There will need to be cooperation between business, public sector and political leaders in Northern Ireland, the Republic of Ireland and the UK. There will need to be cooperation between the EU, HM Revenue & Customs and the Irish Revenue. Local businesses, with the help of politicians and customs bodies, will need to work on their customs expertise. Corporation tax The Brexit challenge is just one area where renewed partnerships between the public and private sectors are necessary. Our Institute has been a strong advocate for a reduced rate of corporation tax for Northern Ireland for many years. We first called for it over 10 years ago. The strong cross-border support for such a measure is both notable and commendable. It speaks volumes on the benefits that it could bring. In a recent Ulster Society survey, members identified a reduced corporation tax rate as a key measure in improving the local economy. 63% said that a lower rate would have a positive effect on Northern Ireland’s economic performance. We believe that it represents an investment in the future growth of the economy and would act as a welcome catalyst for growth of the private sector. It is an attention grabber that enables those tasked with attracting inward investment to ‘get a foot in the door’ with potential investors. The potential new rate of 12.5% and operation date of 1 April 2018 was announced as part of the 2015 Fresh Start Agreement. Since then, it has looked increasingly likely that the date will slip. The agreement between the Conservative Party and the DUP following the UK General Election has provided a much-discussed funding deal which will take some immediate strain off the Northern Ireland public sector and will allow for some much needed infrastructure investment. The confidence and supply agreement has also brought focus back onto the prospect of corporation tax devolution, but it is reliant on the restoration of the Northern Ireland Executive and it being able to “demonstrate its finances are on a sustainable footing”. If this can be delivered, it will be a tremendous boost for the private sector in Northern Ireland in an economy which is very much over-reliant on the public sector. If the will is there to make a deal work and to get a local Assembly working, there is potential for closer working between the public and private sectors. Collaborative approach My experience, both in practice and the public sector, has illustrated to me the power of business and the public sector working together. It is not an exclusive relationship; it does require a strong partnership. Perhaps some of this comes down to the public sector adopting more of a private sector attitude – a ‘can-do’ approach. Can the public sector allow the private sector a role in showing how to move away from risk-averse culture? Can those in the private sector be encouraged to ‘put their heads above the parapet’ and deal with the scrutiny that the public sector is so used to? It goes far beyond the economy, however. A sustainable and diverse local economy is vital if we are to deliver on the social, health and education benefits we want to see. A strong economy will help us to provide greater opportunity and the best possible public services for our people. If Northern Ireland is a great place to do business, it will help us to ensure that Northern Ireland is also a great place to live. The island of Ireland has fantastic potential. For a small place, we have a big impact around the world. There is much of which we can be proud but by working together and moving outside our comfort zones, we can achieve more. I believe that our profession has an important role to play in driving a collaborative approach. As leaders and decision-makers within organisations, and with careers and networks that stretch across sectors, we are in a great position to facilitate change. At the inception of our profession, our predecessors were not just leaders within our profession. They were not only leaders of industry. They were leaders within the broader society in which we live. They brought business and civic life together. Many of our members today maintain that connection through their voluntary work – they bring their experience to bear for their local community. I believe that we can expand on this and bring our professional expertise, our experience and ability to forge a strong link between the public and private sectors. This contribution has the potential to improve the lives of all within our communities. It’s a contribution that Chartered Accountants may be uniquely placed to make. Pamela McCreedy FCA is Chair of the Chartered Accountants Ulster Society.

Aug 14, 2017
Regulation

Sarah Lane outlines the top 10 questions that should be on the minds of directors and management teams. In March 2017, the Central Bank of Ireland published the Central Bank Investment Firms Regulations. This document consolidates all requirements for investment firms into one document, which is timely given the imminent overhaul of EU legislation for markets in financial instruments. For example, MiFID II will go live on 3 January 2018 while other ongoing regulatory changes continue to affect the industry. These include European Market Infrastructure Regulation (EMIR), Base Erosion and Profit Sharing (BEPS) and General Data Protection Regulation (GDPR). The regulations supplement existing legislative requirements, most notably MiFID (European Communities (Markets in Financial Instruments) Regulations 2007) and the Investment Intermediaries Act 1995. While the majority of regulations remain the same, there are some new requirements – particularly for fund administrators. Below, we summarise the top 10 questions for directors and management teams of the affected entities. 1. Who do the regulations apply to? The new regulations apply to investment firms, certain investment business firms (excluding retail intermediaries) and fund administrators. 2. What is the application date of the regulations? The Central Bank Investment Firms Regulations (S.I. No 60/2017) came into force on 7 March 2017. 3. What is the background to the legislation? The Central Bank consulted twice in relation to the regulations, first of all in CP 97 (Investment Firms Regulations) and secondly, in CP 100 (Risk Assessment and Capital Planning for Fund Administrators). The regulations are legislated for through a statutory instrument. Therefore, non-compliance may constitute a prescribed contravention under Part IIIC of the Central Bank Act 1942, giving rise to Central Bank enforcement action. 4. Which sections apply to MiFID investment firms? MiFID investment firms are subject to the requirements detailed in Part 2 (including relationship with the Central Bank, internal audit requirements and reporting requirements). Investment business firms that are not fund administrators are subject to the requirements in Part 2 and Part 3 (additional supervisory requirements, including organisational requirements and telephone recording). 5. What topics do the regulations cover for MiFID investment firms? The general requirements for MiFID investment firms can be split into the following broad headings: relationship with the Central Bank; acquisition and disposal of assets; internal audit requirements; change in auditor; and reporting requirements. There are also additional supervisory requirements for investment business firms including: organisational requirements; client borrowing; books and records; and telephone recording. 6. What guidance did the Central Bank issue alongside the regulations? The Central Bank published guidance on the following topics: relationship with the Central Bank; fund administrators outsourcing; and own funds, risk assessment and capital planning for fund administrators. The Central Bank, on the same date, also published the Central Bank Investment Firms Regulations Q&A to set out answers to queries likely to arise in relation to the new regulations. 7. Which sections apply to fund administrators? Fund administrators are subject to the requirements in Parts 2-5 (including requirements around directors, client assets, fund prospectus, outsourcing and capital adequacy). It is important to note that the obligations of fund administrators under the regulations and the guidance apply to both Irish and non-Irish administered funds and also apply equally to intra-group outsourcing arrangements. 8. What topics do the regulations cover for fund administrators? The regulations replace Chapter 5 of the AIF Rulebook entitled Fund Administrator Requirements, and include those requirements outlined above as well as the following: Fund prospectus; Client assets; Directors: residency is now defined as being present in the State for 110 working days; Outsourcing: a new annual return to the Central Bank is required (see question nine below) and certain activities are prohibited from being outsourced (see question 10 below); and Own funds and capital adequacy requirements for fund administrators: similar to the Capital Requirements Directive (CRD), there is a requirement to develop a risk analysis and capital adequacy assessment process which is documented to identify, assess and manage risk. 9. What is the annual outsourcing return requirement for fund administrators? The Central Bank issued a letter to all fund administrators on 7 March 2017, which emphasised that requirements on the outsourcing of administration activities in relation to investment funds are structured so that all fund administrators maintain a consistent standard of oversight of Outsourcing Service Providers (OSPs) and retain ultimate responsibility for the outsourced activities. The letter stated that between 48-61% of fund administration activities were carried out by OSPs as at 31 December 2015, based on the five larger Irish fund administrators they reviewed. To that end, the new regulations require fund administrators to submit an outsourcing return to the Central Bank annually, which contains the following information at the end of the calendar year: All outsourcing arrangements entered into by the fund administrator; The location of the outsourcing service provider; The date from which the fund administrator was permitted to enter into the outsourcing arrangement; and The names of all investment funds in the event that the fund administrator has outsourced the release of the final net asset value (NAV) where permitted (under permission from the Central Bank). It is important to note that governance and oversight of outsourcing remains a key control for the directors in order to ensure they minimise potential risks arising from outsourcing. The Central Bank included observations and recommendations regarding outsourcing arrangements within Irish fund administrators, which should be adhered. The recommendations include a documented, formalised outsourcing policy and the establishment of an outsourcing committee. 10. What activities cannot be outsourced for fund administrators? The Central Bank guidance for fund administrator outsourcing dictates that core management functions shall not be outsourced in order for the fund administrator to exercise adequate and effective control and decision-making. Core management functions include: Setting the risk strategy; Setting the risk policy; Setting the risk-bearing capacity of the fund administrator; Management functions, such as the setting of strategies and policies in respect of the fund administrator’s risk profile and control; Oversight of the operation of the fund administrator’s processes; The final responsibility towards clients and the Central Bank; Maintenance of the shareholder register; and The check and release of the investment fund’s final NAV. Sarah Lane is Director, Financial Services Risk & Regulation, at Mazars.

Aug 03, 2017
Regulation

With less than 10 months to implementation, General Data Protection Regulation should be high on the agenda of every business and board. After many years of negotiation, the General Data Protection Regulation (GDPR) was adopted into European law in May 2016. This new cybersecurity and data protection legislation will affect customers in Europe and also, those around the world who do business with Europe-based companies. It is important to point out that most of the articles in the regulation already appear in the legislation of individual countries. The aim of GDPR, however, is to harmonise data privacy laws across Europe and create a level playing field. EU companies now have until 25 May 2018 to implement and conform to the new regulations, or face large fines. So if you have not considered GDPR thus far, now is the time to act. A parallel directive affecting the processing of data by law enforcement authorities was agreed at the same time as GDPR, so the EU authorities are clearly taking a serious stance on this topic. However, recent surveys of Irish firms concluded that many are significantly unprepared for the new EU data protection law, with over half of organisations surveyed unlikely to detect a sophisticated attack. In this article, we will provide you with strategies and ideas to implement in your own company as you work towards achieving compliance. Major knock-on effects GDPR brings significant changes to how firms must handle and process personal data. Your organisation’s existing processes – which may include collection, retention and deletion, general inputting and so on – must be revised so that they comply fully with the new data protection rules, which are stricter than ever before. When legislation of this nature is announced, one can take a benevolent or malevolent view of the task at hand. If you take a malevolent view, you will see it as more bureaucracy, more cost and so on. If you take a benevolent view, on the other hand, you will view GDPR as a fantastic opportunity to tidy up your data, reconnect with your customers and build better and more solid relationships. Let’s take the benevolent view and state that, first and foremost, GDPR is for all EU data subjects and their protection. Customer data belongs to customers and GDPR makes this clear. You might provide data to a company, but this does not mean that they now own it. They merely borrow it and under GDPR, they will need to protect and explain more clearly why they have it. Your organisation’s internal governance processes should now be reviewed and, more than likely, altered ahead of the GDPR implementation date. For example, if you process data, new data governance obligations will apply and records of how you prepare and keep records of processing activities will come into force. You will also be required to demonstrate how decisions to use data for further processing are reached. Transparency will be more important than ever before. Personal data must therefore be processed in a transparent manner (i.e. collected for explicit and legitimate purposes), limited to what is necessary in relation to the purposes for which they are processed, and must be accurate and kept up-to-date. New rights for data subjects A data subject is the living person to whom personal data relates. Under GDPR, data subjects will have far more control over their personal data and, quite significantly, the right to be forgotten. This means full erasure of their personal data. Data subjects will also have the right to data portability (i.e. the ability to obtain and reuse their personal data for their own purposes across different services) and, if they require more information on their data, organisations must make it easy to request such data and provide a comprehensive response within one month from the date of request. All of this will inevitably lead to a major increase in the administrative burden for organisations, and that burden will be particularly onerous for those companies who store data on paper. New responsibilities First and foremost, consider your new responsibilities from the perspective of protecting people’s digital data. Data protection is not linked to a specific technology, and GDPR is principle-led for the protection of EU data subjects in general. A new concept of joint liability for both data controllers (the entity that determines the purposes, conditions and means of the processing of personal data) and data processors (the entity that processes personal data on behalf of the controller) will come into force under GDPR. The data processors will be jointly liable to data subjects for damages unless they can prove, for example, that a data breach was not their fault. Punishment for breaches will not be extreme and will be related only to how sensitive the data is that you hold, and what steps you have (or have not) taken to protect it. The implication here is that previous contractual obligations may need to be revised and new contracts will require appropriate stipulations. Data controllers will have far more responsibility to provide accurate information on how data is processed. They will, for example, be obliged to detail the retention period for the data and provide information about the legal basis for data processing. So, it isn’t only data controllers who will need to maintain records of their processing activities; data processors will as well. ‘Data protection by design’ is a new phrase in the data protection lexicon. It means that, in each element of designing or compiling a new data-based solution, organisations must demonstrate that the rights of the data subject were considered through encryption or pseudonymisation, for example. Where a security breach occurs, new notification procedures must be enacted. For instance, data processors must report breaches to the data controller. Data controllers must also report security breaches to the country’s supervisory authority without undue delay and no more than 72 hours after becoming aware of it. Furthermore, privacy impact assessments will be required when firms wish to undertake certain types of personal data processing. Transfer of personal data Transfer of personal data provisions remain largely the same as was outlined in the previous Directive. However, data transfers under the mechanisms of ‘safe harbour’ are no longer permissible. The EU/US Privacy Shield agreement was adopted by the European Commission in July 2016 and contains far more stringent rules than the previous ‘safe harbour’ agreement. It will, for example, offer more channels for the data subject to seek redress. Next steps To get your preparations under way, we suggest that you: • Identify the areas of your business that may be impacted by GDPR; • Seek help to design, develop and implement solutions in line with data privacy requirements. You should also take operational, IT and information security perspectives into consideration; • Design systems to detect, address and prevent security breaches through integrated hardware and software solutions. This should include the discovery and classification of sensitive data, vulnerability assessment, activity monitoring, quarantining, the protection of sensitive data and so on; • Ensure that you are compliant in how you process personal data through your internal governance processes and how you keep track of reporting data breaches; and • Design governance structures to build confidence in the way your data is explored and managed, particularly for unstructured data. A force for good The GDPR preparation period is a great time to review your data – not just for the purpose of GDPR, but for business development reasons also. Ask yourself: do you really know your customers? Can you help improve their relationship with you, so that you better meet their needs while protecting the information they have given you? Consent and general usage of personal data must be assessed no matter what. That said, you can turn this requirement into a force for good and build much greater trust with your customers and employees in the process. Look outside Your organisation may need to employ outside expertise to build internal capabilities, next generation threat intelligence systems, and enterprise monitoring and security operation centres. Ask yourself if your company has a robust plan for the management of security incidents. If you are not confident, now is the time to assess that risk and implement the appropriate security measures that will allow you to deal with incidents within your own firm. Conclusion Europe’s new regulatory environment for cybersecurity and data protection is less than a year away. This will offer both opportunities and challenges, ranging from improved governance to securing application and infrastructure. In a globalised and more interconnected business world, being able to navigate the regulatory environment of the future will be a critical success factor for practically all businesses. Your ability to deploy the appropriate security and data protection controls and procedures in a way that can be rapidly demonstrated is now a matter of good governance. The clock is ticking, so there’s no time to lose. Billy O'Connor is Managing Director at The Discovery Partnership and a registered IBM Business Partner.

Aug 02, 2017
Spotlight

While a niche choice for Chartered Accountants, academia offers unique opportunities for career fulfilment. A role in academia after your training contract is not the typical route for most newly qualified Chartered Accountants. However, it does have its attractions. While many Chartered Accountants will seek job satisfaction from closing deals, winning new clients or helping to grow their own or their client’s business, the job satisfaction associated with a role in academia is of a different nature. The ability to follow the development of students from their early days in third level to the completion of their professional exams and onto a broad variety of roles brings a great sense of accomplishment. Add to this the opportunity to engage in research that can provide an input into policy development and make a practical contribution to the business world, and you have a role that provides its holder with a unique sense of contribution and achievement. Creating an appreciation of accounting Although the career path offers a different structure and set of challenges to the more traditional practice and industry-based roles, the training received as a Chartered Accountant in terms of technical, commercial and communication skills remains very relevant. The lecturing aspect of the role involves a variety of accounting topics and student profiles, from introducing basic accounting concepts to first years to focusing on practical accounting methods and tools for experienced managers on Executive MBA programmes. While many students will not specialise in accounting, creating an appreciation of the value that accounting information can bring to an organisation and the role Chartered Accountants play in the broader business environment is an important insight for their development as future business professionals. Rigorous research Another significant part of the role is focused on research and, in the initial years of your academic career in particular, on your PhD. This is one of the unique attractions of a role in academia for many who see the inherent value in undertaking a significant research project that allows you to stand back from the usual task-based nature of the business world to examine in detail how and why certain phenomena occur. For many PhD students, the topic of their research will emerge from their own real world experiences, some of which they may wish to examine more rigorously. The beauty of a PhD is the freedom it gives the student to focus on topics and issues of particular interest to them, which of course is an important point considering many part-time PhDs can run for five or six years in duration. The focus of my own research has allowed me to bring together my experiences in accounting education and agriculture to examine the area of financial literacy in farming enterprises in collaboration with Teagasc. The PhD aims to provide an insight into financial practices at a farm level and will contribute to an evidence-based approach to designing future financial education programmes for farmers. This is an important issue in the agriculture sector with an increased focus on low farm incomes, uncertainty around future EU supports given the forthcoming CAP reform, and increased price volatility all drawing attention to the financial management and viability of farming enterprises. The next generation Accountancy academics also play a key role in the development of the next generation of Chartered Accountants. A significant cohort of students will seek career advice in the first instance from their accountancy lecturers at third level. Talking to students about choosing firms, departments and roles is very much a regular part of this job. Developing a student’s technical skillset is an important objective during their time in third level, but it is not the only objective. The role of the modern professional accountant encompasses a much broader range of competencies than mere technical knowledge. It includes areas such as communication skills, teamwork and commercial awareness, and we focus on developing these skills in all students throughout their studies at third level. Gatekeepers to new areas of knowledge The rapidly changing nature of today’s business world and the adaptive nature of the accounting profession to the needs of business means we must continue to update our course and programme offerings to prepare our students for the demands of 21st century commerce. Emerging areas such as data analytics, social and environmental performance measurement, and tax morality are just some of the new topics that the next generation of Chartered Accountants will be dealing with and where demand is increasing for accountants with such skills. Academics in many ways can be seen as the gatekeepers to these new areas for the next generation of the profession. The hybrid nature of our role as both researchers and teachers places us in a highly influential position as an important conduit of knowledge between the latest research impacting the accounting profession and the current and future generations of the profession. A symbiotic relationship Maintaining strong links between the academic community and the broader profession in practice and industry should be an important objective for the continued development of our profession. The regular dissemination of the latest research in the field to the broader population of Chartered Accountants (for example, via Accountancy Ireland), the incorporation of this research into the educational offerings at both pre- and post-qualification levels, and the active promotion of practice and industry-focused collaborative academic research projects (such as those supported by the Chartered Accountants Ireland Educational Trust, for example) are all avenues to further strengthen this important symbiotic relationship. Pushing the boundaries of knowledge A career path in academia is undoubtedly a niche one in the context of the broad range of accountancy-based roles available. It does, however, offer a unique set of opportunities to a Chartered Accountant in terms of playing a role in developing the next generation of the profession while also making a contribution to policy development and practice in areas of business and society of interest to you. Pushing the boundaries of knowledge in the discipline of accounting and ensuring the effective transfer of this new knowledge to the broader population of Chartered Accountants is an important role within the profession. To borrow a line from Benjamin Franklin, “An investment in knowledge pays the best interest”. While Franklin may have been focused on the individual, his words also hold true for the accountancy profession as a whole. John Nolan is a Lecturer at Dublin City University Business School and Chartered Accountants Ireland.

Aug 02, 2017

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