Vision-Banner-Issue-2-min
News

Like in the hit 80s TV show Dallas, drama in a family business is almost unavoidable. That doesn’t mean you shouldn’t make a go at smart succession planning. Ask a millennial who shot JR and you’ll be faced with a quizzical stare – who, or what, is a JR? Ask someone who grew up in the 1980s who shot JR and they’ll be able to tell you where they were when JR Ewing, star of the hit American TV series Dallas, was shot. Incredibly, 75% of all US households tuned in to see who killed oil baron and all-round bad guy. However, after we found out Kristin Shepard, his sister-in-law, was the person who pulled the trigger, what kept viewers coming back to Dallas were the sub-plots of a family business constantly at war. Lawyers will tell you, “Where there’s a will, there’s a family.” Accountants, less prosaically, will advise: “Where there’s a family business, get a family agreement.” Families can, and do, fall out. Psychologists and family therapists have sent their kids to expensive colleges on the back of in-fighting in family businesses. Part-owners are forever trying to understand their siblings, and what makes them – in their minds – wholly unreasonable. I’m no psychologist, but I’ve had plenty of family business drama shared in our boardroom. Families fall out over, inter alia, sibling rivalry, conflict with in-laws and simple estrangement over time. But, the big issue is always inheritance – a simple word, but one that has kept the Four Courts busy since opening for business. I’ve dedicated part of my professional life to avoiding these inheritance wars. And, though the situation is improving, bad things do happen – sometimes due to serious illness or death of an owner, other times where little or no succession preparation is made. Sometimes it just happens. This can lead to what sports players call ‘unforced errors’ – a spouse, who may not be wholly familiar with the business, suddenly making key decisions that can, in turn, lead to families falling out when those decisions don’t go their way. Often, too, there’s no provision made for the retirement of the business owner or their spouse. These situations can be difficult. I’m always taken aback by the statistic that fewer than 5% of family businesses get to the third generation. It’s clear that without a plan, succession can be difficult or nigh on impossible. Smart rules of succession When planning for succession, there are some rules that should be followed if it’s going to be drama-free: Statement of Affairs: No succession should occur unless sufficient provision is made for the business owner and spouse. This means looking at their Statement of Affairs, including plans for company pensions, etc. Management succession: The most important decision to protect the business is to ensure management succession. This is not about ownership of the business, and this distinction should not be misunderstood. The big challenge here is to find the “right person for the job”. Family agreement: Get a family agreement in place as early as possible. The details of a family agreement will be different for each situation, although ideally it would refer to the following: Family buy-in to protect the business and the commitment of all children (including those not working in the business); and Structures to professionalise the business, funding of retirement, wills and overall succession planning, transition plan and timetable. Follow these rules and you may fare better than poor old JR. Michael O’Leary is Tax Partner at JPA Brenson Lawlor.

May 23, 2019
News

Sometimes, 60-hour work weeks are inevitable. Most of the time, however, they aren’t. Such long weeks creates a bad corporate culture and can undermine your leadership abilities. Sure, we’ve all had busy weeks: possibly because there are business-critical issues that just need to be fixed, or a major project with a tight deadline. Sometimes, you have no choice and something like a 60-hour week may be unavoidable. However, if this is a regular occurrence, you’ve got a problem. Not only because doing this for an extended period of time will put you and your team at risk of burnout, but because it actually sets a bad example. Working hard does not equal working smart A 60-hour work week sets a bad example. Not when it’s an exception, but definitely when it’s an expected norm. Be careful not to give the impression that ‘staying late’ is something to be commended. It should be applauded when people do leave on time, having done everything they set out to do that day and your management style should reflect that. Productivity is what makes the world go around My biggest question has always been: why on earth wouldn’t you find a way to deliver the same results in a shorter time? If you can do your job in seven and a half hours a day, as opposed to 10, that’s a good thing, right? In fact, it’s a great thing for everyone: a business will ultimately get more from you without impacting your work-life balance. And the same goes for your team. As a leader, you should be incentivising your team to find ways to do their jobs more efficiently, not encouraging ‘hard work’ and late nights as a measure of ‘effort’. Stress hampers team performance We all know that engagement and performance are intricately linked, and if your team is fed up and stressed from working enforced long weeks, it’s likely they are going to become disengaged. That continuous feeling of being under pressure inevitably evolves into a vicious cycle of performance decline. The fact is, as a workforce, many of us are under stress. Statistics show that one out of five workers are experiencing unnecessary stress-levels because of work, and it’s well known that it’s a leading cause of sick leave. So, fixing this business culture imbalance is not only a personal priority, it’s a business one. As a leader, it is your responsibility to ensure your team is sufficiently resourced and supported. What can you do to stop it? It’s not an accident that you’re working long hours. You should always plan your week and schedule it all within working hours. Never be tempted to plan a 12-hour day, however. Prioritise complex matters and table them in the morning when you’re fresher and problems don’t seem so daunting. Close your email inbox between certain hours to avoid distraction and accept the fact that it’s okay to not be available 24/7. Above all, it’s about taking control and finding out how to strip out the inefficiency and non-value work that you and your team are doing. Focus on the problem areas and find ways to close-out time in your work day for ‘you’ and the tasks you need to deliver. At the end of the day, your team will always be a reflection of you – let them pick up your good habits, not your bad ones. Ed Heffernan is the Managing Partner of Barden.

May 23, 2019
News

In a competitive labour market, it is more important than ever to develop a sound recruitment strategy with your organisation's best assets in mind, says Teresa Campbell. Across the island of Ireland, many employers are struggling to recruit and retain the skills they need. In the Republic of Ireland, the Central Statistics Office’s latest Labour Force Survey (19 February 2019) reported an annual increase in employment of 2.3% in the year to the fourth quarter of 2018, bringing total employment to 2,281,300 while the long-term unemployment rate decreased from 2.5% to 2.1% over the year to Q4 2018. In Northern Ireland, Northern Ireland Statistics and Research Agency’s latest Labour Force Survey (19 March 2019) reports that the NI unemployment rate (3.5%) is below that of the UK (3.9%). However, nearly half of those unemployed in Northern Ireland have been out of work for a year or more, almost double the long-term unemployed in the UK (46.9% vs 26.7%). While there are signs that economic growth may be slowing, employers are likely to continue to face difficulty for some time with rising housing and rental costs, particularly in Dublin. This is a massive challenge when seeking to fill key roles. It’s time we start thinking about the factors that can help attract employees. Here are a few that top talent tend to look for when sending out CVs. Your reputation as a good employer Are past employees happy they worked with you? Are you known for providing mentoring, non-pay benefits, career progression opportunities, a good work-life balance? Do you have a developed health and wellbeing strategy? Is your business engaged with the community? If not, it’s time you highlight the benefits and good working environment that you can offer potential hires. Advertising clearly defined roles When looking for new talent, make the role you are trying to fill very specific. People like knowing what they are walking into, what is expected of them and if the role will challenge them to eventually move up. Remuneration Do you offer competitive pay on top of non-pay benefits? With so much choice out there for candidates, it’s good to give a good look at salary when trying to fill a position. Authentic leadership and vision Top management should consist of real leaders in the organisations – people who can inspire those they manage – and not just good performers. Ability to give employees a sense of belonging Most of all, people need to feel like they belong. Some might even say they should feel like part of a ‘family’. The more a person feels like they can come into the fold, the longer they will want to stay. Highlight these aspects of office life when recruiting. Finally, leverage your brand and, where appropriate, consider using social media to extend your reach when recruiting. LinkedIn, in particular, can be useful when seeking to fill certain roles. If your business is located outside the main urban areas, emphasise the benefits of working and living outside the capital such as lower rents, shorter commute times, better quality of life, etc. It’s important companies play to their strengths, whether it’s a good mentoring programme or a fantastic location. Making your organisation attractive to the top talent is what is going to lead to success in the future. Teresa Campbell is the People and Culture Director at PKF-FPM Accountants Limited.

May 19, 2019
News

Just as the scale and seriousness of the cyber threat facing businesses have evolved in recent years, so too has the role of the chief information security officer (CISO). Sir Rob Wainwright makes a case for the CISO, not only for security but to add value to the organisation. Cyber aggressors, including hostile states, organised crime gangs and lone hackers have become more numerous, focused and sophisticated. The methods at their disposal have become more innovative, varied and destructive. Many businesses have adjusted to this more hostile cyberspace. Those that have adapted have re-modelled their short-term tactical procedures and long-term strategies to improve their defences. They have invested in the latest detection and prevention software. They have become better at responding to and getting operations back to normal as soon as possible after breaches. And, these businesses have elevated their chief information security officers (CISO), giving them more authority and budget. Cybersecurity is now dealt with higher up the corporate ladder. In many cases, the CISO has become a close peer of the chief information officer (CIO). The role now demands business leadership as well as information security and technical skills, and the CISO is now seen as a business partner, not just a business protector. Value for money The CISO’s department has become a much bigger cost centre than it ever was and, therefore, has to demonstrate value for money. The argument has to be made that high-security expenditure will, by reducing the incidence and severity of attacks, save the company money in the long run. If this argument is accepted, the CISO will be seen as a money saver. Some companies, such as certain telecommunications and defence companies, have developed such sophisticated and effective security that they can sell their solutions to other companies and have spun off separate businesses to do so. In these cases, the CISO has become a money maker, and thus a good friend of the chief executive and finance director. However, the rise of the CISO is far from over. Robust cybersecurity is the foundation of a resilient company. With effective cyber risk management, businesses can achieve smarter, faster and more connected futures, driving business growth. As cyber threats to businesses increase, the role of the CISO will become even more critical.  Cyber threats The main cyber threats to businesses fall into several broad categories. One is the opportunistic, high-volume theft and use of data – data breaches – by criminal groups and individuals for commercial gain. Another is the targeted use of higher-end capabilities such as malware and ransomware by malicious state actors, “hacktivists” and criminal gangs with the specific intention of disrupting banking networks and the operating systems of other global industries. There is also the attack that spreads from intended targets to unintended victims, disrupting or destroying business supply chains and causing catastrophic collateral damage.  Companies have adopted a range of tactical and strategic security measures to counter these threats, but none provide 100% protection. It is inevitable that breaches will happen. The best that can be hoped for is that the risk of breaches is minimised and that when they do occur, they are dealt with quickly and business continuity plans kick in immediately, and that’s where an effective CISO comes in. Understanding these threats and putting effective counter-measures in place is the responsibility of the CISO, but he or she depends on many others in the company. The board and top management need to be aware of the risks and approve a budget that provides the CISO with the necessary technology and human resources. Staff at all levels need to be educated about the critical roles they play in their company’s security and follow the established procedures on the use of passwords, data access rights, and so on. However, the brunt of the day-to-day responsibility falls on the CISO. The CISO has to communicate the nature and extent of the cyber threats to all levels of the company. They have to influence senior management and the board to support the cybersecurity strategy and sign-off an ever-increasing budget.  The evolving CISO It is fascinating to see how the position of CISO has evolved, from being a cost generator to a value protector and, in some instances, to a value adder. Different companies are at different stages of the evolutionary process, depending on a variety of factors such as management foresight, industry sector and country of operation. With a dynamic landscape such as ‘cyber’, it calls for a new breed of cyber security leaders, and there must be a continued acceleration of the CISO role to adapt to the ever-changing, cyber environment. The role of the CISO has changed. In the past four or five years, it has broadened, from being almost purely technology-oriented to being more people-oriented; and from being a middle-management function, to being a business and technology leadership function. The role continues to accelerate in the same direction to meet these needs. Sir Rob Wainwright is a Partner in Risk Advisory at Deloitte Netherlands. Sir Rob was previously the Executive Director of Europol, from 2009 to 2018 and has had a 25-year career in intelligence, policing, government, EU and international affairs, including at the Serious Organised Crime Agency, National Criminal Intelligence Service and the British Security Service. In June 2018 he was awarded a Knighthood by HM The Queen for his services to security and policing.

May 19, 2019
News

Studies show that members of senior management are always 'switched on' for business and, unfortunately, don't feel they have the right to turn off. Is this to the detriment of not only themselves but also the business? Paul Stephens explains. Feeling the pressure at work is not a new phenomenon, but for some, advances in technology have exacerbated the issue. The ‘always on’ culture associated with mobile phones and digital media can make it difficult for people to find a healthy equilibrium between the two. ‘Always on’ culture Research from the Close Brothers Business Barometer, released last week during Mental Health Awareness Week, highlighted that 40% of all senior business leaders ‘do not switch off’, and one in three say that they never turn off their mobile phone. Those in senior financial roles reported a similar struggle to find a positive work-life balance. Two-fifths of Finance Directors and CFOs said that they feel their business requires them to be available at all times, and only a third turn off their phone in the evening or at weekends. However, those in the most senior roles were most intensely impacted, with 60% of Chief Executives and Managing Directors saying they were ‘always’ switched on for business. This continuous pressure can hurt both the individual and the business. A lack of downtime can increase stress levels, reduce effectiveness and have a negative effect on mood. Benefits for everyone Positively, there are signs that workplaces are taking note of the issue. Companies are promoting wellbeing by encouraging behaviours such as flexible working, leaving on time and taking regular breaks and holidays. However, more still needs to be done to ensure that employees at all levels receive support. According to our research, nearly a fifth of senior decision-makers say that wellbeing practices do not apply to them, and a further 13% said that they are only partially relevant. It is vital for the good of the person and the company that wellbeing and mental health initiatives are accessible to all staff, regardless of their seniority. Aside from reducing stress, ensuring that the workplace is a pleasant place to be can bring tangible benefits such as increased productivity, reduced absenteeism and a more committed workforce. Senior figures should lead by example. By working cohesively and ensuring workloads are shared, we can all improve work/life balance. Four things senior management can do to ensure a good work-life balance Keep meetings on time If a meeting is meant to start at 3pm and end at 5.30pm, stick to the agenda and work as efficiently as possible. Make sure everyone – including the most senior manager – is out of the office on time. Learn to delegate properly Be willing to trust the people you hired or work with to get the job done. Micromanaging is bad for office morale and even worse for time management. Insist on taking time off Schedule in the time you will be on holidays or unreachable and stick to it, regardless of what comes up, and respect when your staff want to take time off, too. Know that balance is different for everyone ‘Balance’ for one CEO can mean something different for another. If you don’t mind working 12 hour days but want to be free once you’re home and on the weekend, that’s OK. That’s your definition of balance. Take the time to think about what balance means for your life and how it would ideally work. Paul Stephens FCA, Dip Tax, Dip Corp Fin is the Head of Corporate and ABL at Close Brothers. *All figures unless otherwise stated are from a GMI survey conducted April 2019. The survey canvassed the opinion of 896 SME owners and business managers from several industries across the UK and Ireland on a range of issues affecting their businesses. The survey was commissioned by modern merchant banking group, Close Brothers.

May 19, 2019
News

IAASA has issued a consultation paper seeking stakeholders' views regarding IAASA's proposal to issue a Guidance Note on the Audit of Credit Unions. The Consultation Paper is available here. The accompanying draft Guidance Note is available here. The Guidance Note is based on Practice Note 27(I) The Audit of Credit Unions in the Republic of Ireland (issued May 2016) published by the Financial Reporting Council which was subsequently withdrawn. The principal changes are: Amendments required to reflect that IAASA is now responsible for the Irish auditing framework, including changes to the International Standards on Auditing (Ireland) ('ISAs (Ireland)') in the intervening period; Amendments required to reflect changes in the legal and regulatory framework for credit unions in Ireland since May 2016; The insertion of a new section to provide guidance on the application of ISA (Ireland) 320 Materiality in Planning and Performing an Audit when auditing a credit union; and Updating of the guidance in respect of ISA (Ireland) 540 Auditing Accounting Estimates and Related Disclosures to reflect the revisions to the standard in December 2018, that are applicable for accounting periods beginning on or after 19 December 2019 (earlier adoption is permitted). Stakeholders and interested parties are invited to provide responses by email only to submissions@iaasa.ie by 5pm on 14 June 2019. Published: 16 May 2019. Source: IAASA.

May 17, 2019