Three Chartered Accountants talk to Accountancy Ireland about what worked and what didn’t in 2020, and the changes they have made to ensure success in both their work and personal lives in 2021. As we moved into 2021, so did the pandemic, lockdowns and working from home. Three members of Chartered Accountants Ireland – Larissa Feeney, CEO of Accountants Online; Maeve Hunt, Associate Director at Grant Thornton; and Kevin Nyhan, Credit Manager at AIB – describe what made their 2020 difficult, how they overcame those challenges, and what they hope to change this year. Goal-setting and disconnecting Larissa Feeney, founder and CEO of Accountant Online, has found that making realistic goals and not loading up her task list has kept her going during the pandemic. As a company, we were lucky when the pandemic hit as we were accustomed to remote working and automation, but adapting to working from home during a lockdown is challenging for everyone. I put a routine in place from early on: get up at 6.30am to do some reading, yoga and meditation before going for a walk. I am ready for work at 9am. If I keep to that routine consistently, it keeps me focused for the day and on an even keel.  Every Sunday evening, when I am relaxed, I set out all my weekly goals – both work and personal – and there is a great satisfaction to ticking those off during the week. At the start, I tried to motivate myself by putting lots of things on the list but that only served to make me feel stressed, overwhelmed and anxious, so I ensure the list is realistic and follows SMART (specific, measurable, achievable, realistic, and timely) principles. All my weekly goals contribute towards my monthly goals, my annual goals and my five-year goals. I know that I have higher energy in the early part of the week, so I take on the harder tasks during those days.  I have three children at home, so homeschooling means that you can’t give both home or work life 100%, but we are all doing our best. We have to go easy on ourselves and know that we cannot operate at the same level as before the pandemic, but we will get back to those levels one day.  To disconnect, I read in the evenings – but books that are good for the soul, rather than the business and leadership books I read in the mornings. Walking and getting out in the fresh air always helps. At home, a different person makes the lunch and the dinner every day and we take turns to pick a family movie to watch together.  Apart from ‘getting back to normal’, what I would like to change this year is the further evolution and development of the team and further investment in automation and innovation. Personally, I will continue to work on the home/business divide, which can always do with improvement. Stick with a routine in 2021  Maeve Hunt, Director of Audit and Assurance at  Grant Thornton, first thought the same day-to-day routine would get her down, but it has proved to be a winning habit.  When the pandemic hit last March, we scrambled to leave our offices and head home with monitors under the arm (quite literally) to enter this new way of working. For many, it was a balancing act of working at home in shifts and looking after children. For others, it was an isolating moment in time with no one sharing their working environment. What we needed was a new ‘routine’ of working. Is there a word that is more uninspiring and dull than ‘routine’?  It is a word we want to escape from. We want to travel the world and hide from routine, and seek exciting new opportunities. Can we be creative if we are in a routine?  If we have learned anything from the last year, it’s that routine may be dull, but it is familiar and dependable. A good routine has been key in order to live a somewhat enjoyable and productive working and personal life through the pandemic.  What worked for me was starting my working day earlier, taking an extended break in the middle of the day to ensure I homeschool my five-year-old and play with my two-year-old.  Inevitably, this meant working at night but I found that the shorter, focused periods of work I was completing actually made me more productive. That became a good motivator for me. What I found most challenging in that first lockdown period was how easy it was to go from day to day without talking to another member of my team. I quickly realised that the part I loved most about my job, and missed most during the health crisis, was collaboration.  Scheduling a daily chat with a member of the team has really helped with this. These social calls have helped me disconnect and give me energy for the rest of the working day.  So where do we go from here? There are many things I would change about the last year, but I think I’ve learned a lot about the importance of sticking to a routine that offers a bit of variety. It may not be the traditional working day in the office, but it is all about balance.  It is ensuring you disconnect in the day and take extended breaks. The beauty of working at home is the ability to get back time, cutting out commutes, inevitable down time and unproductive moments in the office. Use this time! Use it to clear your head, go for a walk, read a book, play with the kids. You will be all the more productive for it. A few tweaks to that dreaded routine, which we believe kills all imagination, might end up providing us with enthusiasm and energy for our daily life.   The importance of connections and disconnection  Kevin Nyhan, Credit Manager at AIB, has gone into 2021 wanting to reconnect with his colleagues and knowing the importance of leaving work behind at the end of the day. I was fortunate in that I had been able to work from home a few days each month before the COVID-19 crisis, so it wasn’t a completely new experience to me. However, there’s a big difference between doing it occasionally and working remotely on a permanent basis.  From the start, I’ve made sure to form and try to keep a daily routine, similar to what I did when I was in the office. I get up at the same time each day, try to start and finish at the same time, as well as taking breaks and lunch around the same as I would have done in the office. I have found that really helps to maintain some sort of difference between work and home.  Working on my own all day, I do miss the social interaction of work. At the start of the pandemic, like most, I tried group zoom calls and quizzes but, as we all know, it’s hard to have group discussions via video call. Instead, I now make the point of scheduling a short video call each week with a colleague or friend to have a coffee and a chat and that does help keep in touch with people. I’m fortunate to have a spare room to work from so I can close the door in the evening and try to leave work behind. However, it can be difficult to switch off when you’re just walking from one room to another at the end of the day. The commute between the office and home was useful to disconnect from work-mode and I do miss that break between home and work. I now take a short walk in the evening after I finish work. That 20 minutes really helps me to disconnect. Plus, my dog is delighted with all the walks he is getting these days.

Do ultra-low interest rates justify ultra-high stock market values? Cormac Lucey shares his thoughts as US tech stocks continue their astonishing rise. Are we experiencing a stock market bubble? The question arises because of the startling rebound in global stock market indices since last March and, in particular, because of the astonishing rise in value experienced by US tech companies. Since their March lows, the Nasdaq has nearly doubled, the NYSE FANG+ Index has risen by 150%, and Tesla has risen to an astounding 12.2 times its starting position. The other factor that suggests we are in the middle of an equity bubble is valuations. The best measure of underlying long-term valuation is the Cyclically Adjusted Price Earnings (CAPE) ratio. It overcomes the weakness of the traditional Price Earnings (PE) ratio, that cyclically inflated earnings can make a cyclically inflated price look reasonable, by replacing one year’s earnings with average earnings over the previous 10 years, adjusted for inflation. The US CAPE is currently 35. That level has only ever been seen before as the Nasdaq bubble peaked in 2000. After that, the US tech index fell by three quarters before eventually bottoming in early 2002. On one hand, Jeremy Grantham, founder of the GMO fund management group in Boston, reckons that US stock markets are in the final stages of a speculative bubble worthy of comparison with the dot-com bubble, the Great Crash of 1929, and the South Sea Bubble. On the other, Martin Wolf, a Financial Times columnist, doesn’t believe that we are currently experiencing a stock market bubble. He contends that equity prospects depend on the future course of corporate earnings and interest rates. He concludes that, provided the former are strong and the latter ultra-low, stock prices look reasonable. There’s the rub. Do ultra-low interest rates justify ultra-high stock market values? And how long will interest rates remain ultra-low? On the face of it, the value of equity assets should rise as interest rates fall. Interest rates are a vital component of valuation models in general, and the Capital Asset Pricing Model in particular. When interest rates fall, the discount rate used in these models decreases and the price of the equity asset should appreciate, assuming all other things remain equal. Today’s interest rate cuts by central banks may therefore be used to justify higher equity prices and CAPE ratios. But John Hussman, a fund manager and former professor of finance, argues that when people say extreme stock market valuations are “justified” by interest rates, they’re actually saying that it’s “reasonable” for investors to price the stock market for long-term returns of nearly zero because bonds are also priced for long-term returns of nearly zero. “What’s actually happening today,” he argues, “is that investors are so uncomfortable with near-zero bond market valuations that they’ve priced nearly every other asset class at levels that can be expected to produce near-zero, or negative, 10-12 year returns as well.” I agree with Hussman: US stocks are in a bubble. While equities may appear reasonably valued relative to bonds, in absolute terms their ultra-high valuations today suggest ultra-low investment returns over the coming 10-12 years for those who buy them now and hold onto them for several years. However, just because stocks are in a bubble doesn’t mean that they are about to fall. As the then-Taoiseach, Bertie Ahern, said in 2006: the boom can get boomier. What should investors do? First, expect significant growth in short-term stock market volatility. The recent one-day 25% drop in the price of Bitcoin may be a straw in the wind. Second, the final market top may coincide with central banks allowing long-term interest rates to rise in the face of rising inflation expectations, perhaps in 2022. Until then, enjoy the boom getting boomier. Cormac Lucey is an economic commentator and lecturer at Chartered Accountants Ireland.

Dr Rodney Irwin explains how Chartered Accountants can fulfil their professional duties by strengthening company value through environmental, social and governance criteria. The COVID-19 pandemic has its origins in nature, and through poor biosecurity, it made its way into the human population. Everyone has been impacted to some degree, but how many have considered the pandemic an issue of sustainable development and, perhaps, only the tip of an iceberg? Sustainability is sometimes seen as a cost, but this is not the case. A report by the Business & Sustainable Development Commission estimates that at least $12 trillion in business opportunities would come with the realisation of the United Nations’ Sustainable Development Goals (UN SDGs) by 2030. So, it is not hard to understand why many companies are setting ambitious strategies and targets to reap the benefits. Examples include PepsiCo pledging net-zero emissions by 2040, Stora Enso issuing a €500 million green bond, and Unilever building its successful strategy around making sustainable living commonplace. Companies are increasingly shifting towards more sustainable strategies and stakeholder capitalism by moving away from short-term shareholder primacy. Financial and accounting systems influence decision-making, the assessment of corporate performance, and the value attributed to it. Therefore, financial and accounting systems play an important role in helping management and others evaluate a company’s ability to identify and manage environmental, social and governance (ESG) risks and create sustainable value over time. As accountants, we are expert in financial capital, management information, and accounting standards. But I would strongly argue that the stocks and flows, impacts and dependencies of other forms of capital are equally – if not even more – important in the 21st century to understanding value creation. I argue that we are not accounting for sustainability, value, equity and, ultimately, survival. Sure, we might be compliant with the letter of the existing rules as professionals, but we have a duty to act in the public interest, and I feel that today, we are failing in this fundamental duty. With that in mind, what can we do in our day-to-day lives to fulfil our professional duties? Keep abreast of the ever-changing landscape 2020 marked the five-year anniversary of the Paris Agreement and UN SDGs, and the three-year anniversary of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). These are fuelling many governments to set out expectations for companies to adopt accounting, financial and reporting approaches designed to support the transition to a more sustainable future. For example, the EU’s non-financial reporting directive (NFRD) update is planned to be adopted by the European Commission in Q1 2021. In a significant move, Canada, New Zealand and the UK are looking to make climate disclosure mandatory for large companies and financial institutions. Work is also underway to harmonise the so-called non-financial reporting landscape: the big voluntary standard makers announced their intention to work together; the World Economic Forum launched streamlined ESG indicators; and the IFRS and IOSCO expressed strong interest in taking a role in sustainability. Chartered Accountants must stay ahead of the curve to ensure that compliance does not create a burden, but unlocks insights into the company’s ability to create value for all stakeholders. Identifying risks, opportunities and strategies Companies need to understand and manage ESG-related risks. As well as maximising the potential for $12 trillion in business opportunities, we have seen companies issue profit warnings and file for bankruptcy due to ESG-related events. BASF issued profit warnings due to low water levels in the Rhine river, which affected transportation and production in 2018 impacting Solvay, Shell and many other companies as well. Said to be the first known climate change bankruptcy, PG&E filed for bankruptcy in 2019 following California’s drought and forest fires. However, 44% of companies show some alignment between what they say is material in their sustainability report and what they disclose in their legal risk filings. In practice, this means relevant risks are not being properly disclosed or considered in strategic decision-making. As trusted advisors, Chartered Accountants must provide decision-useful information for both management and investors to make the right resource and financial allocations. Focusing on materiality The misalignment in reporting mentioned above is just one indication of the dilemmas companies and others face in determining which ESG matters represent sufficiently serious impacts and dependencies, and over which time-scales, to threaten corporate performance. The concept of materiality is developing. The EU has introduced its double-materiality that takes account of the significance of ESG issues affecting the company’s development, performance and position (sometimes known as “outside-in” materiality) and the significance of the impact of the company’s activities on the environment and society (sometimes known as “inside-out” materiality). We are in a crucial position to ensure that both types of material information get captured, managed, and demonstrated to our key stakeholders. Providing robust information The number of signatories to the UN Principles for Responsible Investment (PRI) grew to over 3,000 globally in 2020. Strengthening the investment case, several studies have shown no negative impact of including ESG considerations in the investment selection criteria. Furthermore, companies are likely to generate better returns when they manage ESG issues well. With these trends, we must ensure that the ESG information produced is of high-level, decision-useful quality for internal and external decision-making and that our companies can profit from a lower cost of capital due to more robust management of risks like ESG. Accounting for ESG matters is not a rejection of traditional accounting. It builds on concepts such as accounting for externalities, which have been in circulation for a century. Many studies in the public domain criticise accounting (at a corporate and national level) for mismeasurement, using deficient metrics that ignore ecological and social depreciation and amortisation. However, the IASB has made it clear that we have existing tools in our armoury of standards to account for ESG risks. This is a new chapter for Chartered Accountants. We need to embrace the ESG agenda, skill ourselves sufficiently to be competent and honour our profession’s call to act in the public interest. We can be architects of the future, building on our heritage and developing a new accounting language so that new knowledge will emerge to secure both reward and survival. We should, and we must, enhance and share our unique and important skills to help decision-makers understand and act on this new reality. Ensuring sustainability information is decision-useful: new guidance coming on assurance Investors are increasingly looking for third-party assurance of sustainability information. The problem is that, unlike auditing financial statements, the market for sustainability assurance is unregulated and practice is inconsistent – even though standards do exist. To strengthen practice, the International Auditing and Assurance Standards Board (IAASB) is developing guidance to assist practitioners with the critical challenges in assuring sustainability information. A primary focus is on report users’ needs to ensure that they can use the information with confidence. The IAASB expects to issue its final guidance in March after an extensive consultation process. Once launched, the guidance will be promoted through the global network of over 170 professional accounting bodies, which are required through the International Federation of Accountants’ membership criteria to follow international standards. The World Business Council on Sustainable Development (WBCSD) has been instrumental in driving greater credibility in sustainability through its assurance project. In addition to working with the IAASB, WBCSD has produced the freely available Buyers’ Guide to help companies procuring external assurance, guidance on internal controls over sustainability information, and a study of investors’ needs when reviewing sustainability assurance. These tools aim to help practitioners, companies and investors have greater confidence in sustainability reporting so that the information, regardless of what report it appears in, can be relied upon for decision-making. Practical steps to integrate ESG to ensure long-term value creation As the prominence of environmental, social, and governance (ESG) is growing, companies need to meaningfully integrate ESG into mainstream business processes to ensure long-term profitability and resilience. To do this, the World Business Council for Sustainable Development (WBCSD), a global and CEO-led organisation of over 200 leading businesses working together to accelerate the transition to a sustainable world, has created strategic and practical steps to understand and manage relevant ESG matters: Step 1: Understand key risks, opportunities, impacts and dependencies by assessing the broader range of your impacts and dependencies by using the Capitals Coalition’s Natural Capital Protocol and the Social & Human Capital Protocol. Also, build your company’s resilience with the COSO-WBCSD guidance on applying enterprise risk management (ERM) to ESG-related risks in conjunction with our diagnostic tool to understand your level of ESG integration. Step 2: Report strategically by building effective disclosure with the help of our ESG Disclosure Handbook, and uncover good practice and sustainability reporting trends through Reporting Matters. Step 3: Give investors decision-useful information by exploring the Task Force on Climate-related Financial Disclosures (TCFD) Preparer Forum’s good disclosure practices. Strengthen your understanding of investor perspectives and dialogues and improve your data quality and credibility through the Buyer’s Guide to Assurance on Non-Financial Information. Step 4: Prepare for change by modernising corporate governance by understanding the relationship between sustainability and governance and ensuring robust internal controls, using the latest guidance on improving ESG information quality for decision-making. For the full list of steps and access to the resources referenced above, visit www.wbcsd.org. Dr Rodney Irwin FCA is CFO/COO of the World Business Council for Sustainable Development (WBCSD).

Despite the challenging business environment, Prof. Anne Marie Ward and Nadine O’Kane have identified several competitive advantages that credit unions in Northern Ireland could and should promote as they seek to bolster the sustainability of their business models. There are 146 credit unions (CUs) in Northern Ireland, with 592,171 adult member accounts and 104,906 juvenile deposit accounts, according to the Bank of England’s Q2 2019 Credit Union Quarterly Statistics. In some communities, CUs are large, are open six days a week, and provide a range of sophisticated products and services. In others, CUs are small and offer simple products and services to a small number of members, sometimes opening for only a few hours each week. Irrespective of their size or sophistication, CUs have become increasingly important over the past decade, which has seen the flight of bank branches from small towns, for nurturing sustainable, healthy societies. Financial exclusion is a continuing problem and CUs are a solution. In January 2020, Grant Thornton Northern Ireland and Ulster University hosted a workshop in Grant Thornton’s Belfast office to facilitate the exchange of knowledge between various stakeholders in the CU sector in Northern Ireland. The day focused on the themes of sustainability, corporate governance, diversity and regulation. The first of these themes, the sustainability of the credit union movement, is the focus of this article. The workshop included short presentations by experts, round-table discussions, and question and answer sessions. The experts were: Patrick Darcy and Sinead O’Neill, Grant Thornton; Gordon Smyth, Ulster Federation of Credit Unions; Matthew Howse and Damien McElholm, Eversheds; Martin Fisher and Marianne Cushley, Irish League of Credit Unions (ILCU); and Nadine O’Kane and Prof. Anne Marie Ward, Ulster University. Marianne Cushley from the ILCU’s Communications Department (Northern Ireland) began the workshop with a presentation on sustainability. Marianne works with individual CUs to develop marketing strategies and campaigns to help with their sustainability and growth. She explained how CUs are concerned about ageing memberships, a highly competitive lending market, reduced loan demand, high savings levels but with restricted investment opportunities, increased regulation and compliance, lack of electronic services, low returns on investments, and difficulties in attracting volunteers. In concluding her presentation, Marianne asked attendees to focus on challenges in three areas: accessibility, relevance, and competition. It was clear from the discussions that the challenges were not homogeneous across CUs. Accessibility challenges Loan application processes and policies A major concern of attendees was that their loan application processes and policies needed to be quicker to meet the demands of today’s networked society. While representatives from the larger CUs explained that they have automated lending software systems enabling same-day and next-day lending, several of the smaller CUs do not. Their loan application processes need to be streamlined and made available and easily accessible online. Another stumbling block noted by some CU representatives was the prerequisite 13-week saving period that some smaller CUs still enforce before allowing a new member to borrow. It was generally agreed that loans should be provided based on ability to repay, and not savings records. Finally, some CUs noted that staff were reluctant to authorise loans. Therefore, loan requests had to go to the credit committee, which increased the time between a member making a loan inquiry and receiving the funds. It was advised that loan officers be appointed, trained, and delegated powers to lend money up to a certain threshold. This would allow the credit committee to focus on larger loans and problem accounts. Opening hours and location Most participants in the workshop concurred that the location of CU premises can be a challenge; the ideal scenario is where the CU is located within its community and where footfall is plentiful. In addition, free on-site car parking would improve access and be popular with members. Finally, all agreed that accessibility is improved with flexible opening hours, including Saturdays and evenings, though this may not be possible due to resource implications. Digitalisation It was generally felt that online services are important to each CU’s future sustainability, though cost is an issue. The larger CUs have sophisticated IT support systems and are more concerned with keeping up-to-date with the latest digital technology and applications. The smaller CUs, on the other hand, are concerned about their inability to provide even basic digital services. It was advised that CUs should work with their trade associations, IT providers, or with a neighbouring CU to obtain cost-effective solutions. Several representatives from larger CUs flagged big data and data analytics as a challenge. In particular, they focused on how to use member information and publicly available data to drive strategy, operational activity, and marketing. Readers should note that this workshop took place a few months before the onset of the COVID-19 pandemic, which accentuated the importance of online services and systems to cater for members’ needs when physical access is not possible. Most CUs provided phone support when premises closed due to pandemic restrictions. Relevance challenges Attracting new members As well as increasing accessibility, it was agreed that engaging with online services and providing new services, such as debit cards, will increase the relevance of CUs. However, participants also felt that emphasising the unique characteristics of CUs was the best means of attracting new members. In that context, CUs: Specialise in non-business customers, although some are beginning to explore business lending to corporate members; Have a presence in many towns; Are community-based and provide social benefits for their communities; and Focus on member wellbeing. The promotion of these attributes will differentiate CUs from other financial services providers. Engaging with current members In general, participants agreed that a formally structured survey of members every two or three years would enable the board of the CU to prioritise the development of certain products or services, knowing they are responding to members’ needs. Several CUs had undertaken surveys and argued that it demonstrates a willingness to engage with members, provides evidence for the regulators that the board is responding to members’ needs, and can also inform the business plan. However, it was noted that a survey should only ask about services that the CU can realistically deliver and that it is important to report to members on survey findings as it shows that the CU is listening. Competitive challenges CUs operate in a fiercely competitive lending market where they must compete with high street banks, challenger and online banks, doorstep lenders, and alternative lenders such as supermarkets, as well as each other. Two competitive challenges were discussed at the workshop: reaching non-members with their message, and differentiation from other lenders. Reaching non-members Participants shared their experience of the challenges in communicating the CU message to potential members and the comparative competitive advantage of other lenders with large marketing budgets. Suggestions for extending the reach to non-members included widening the ‘common bond’ (i.e. the range of people eligible for membership) and building on current relationships with primary schools to attract younger members. CUs should also engage with local groups and organisations, communicating the benefits of CUs and what they can do for people. In doing so, they could use several promotional activities and channels. Options include direct marketing, targeted outdoor advertising, social media and digital marketing, visits to local secondary schools and colleges, running personal financial management classes, raising funds for community events, and sponsorship of local initiatives, which would meet social objectives while gaining publicity. Differentiation It was noted that competitors can provide a wider range of products and services. Updating the specific legislation governing CUs would allow them to better compete in the marketplace. Examples of new services suggested to attract members and potential members include: An overdraft with a revolving credit facility; and Increasing loan interest rates to 3% per annum so that CUs can provide differentiated higher-risk, higher-return loans to people with poor credit ratings – for example, students with mobile phone debt (though this suggestion was controversial). Conclusion CUs face many challenges. It was generally agreed that trade associations and the wider CU family should focus more on CUs’ comparative advantages over other financial institutions and not try to label themselves as banks. They should focus on and communicate their unique attributes and offerings. CUs in Northern Ireland currently enjoy strong member loyalty and are seen as trustworthy. They have a skilled workforce and, due to high levels of savings, have readily available funds for lending. CUs focus on the welfare and sustainability of their members and respective communities. For example, capital retentions are used to improve a CU and ensure that it has strong capital and solvency ratios; office supplies and maintenance technicians are sourced locally; and excess surpluses are returned to members. This is a competitive advantage that should be exploited when promoting CU products and services. Prof. Anne Marie Ward is Professor of Accounting at Ulster University, and Nadine O’Kane is a PhD Researcher at the Department of Accountancy, Finance and Economics at Ulster University.  

Joanne Hession explains the concept of positive leadership and shares five strategies to help you develop this increasingly vital skill. I remember the financial crisis of 2008. I remember scrambling to try to keep my two businesses afloat. I remember thinking, to paraphrase Seamus Heaney, if I can get through this, I can cope with anything. Across the world, businesses were faced with incredible challenges. It was difficult for everyone. Employees took wage cuts, worked long hours, found new markets, and sought innovative solutions to keep their businesses going until things picked up. Some businesses did not make it while others did. Thankfully, we weathered the storm. Why did some businesses survive while others did not? There are many reasons, but a couple of years ago, I came across research conducted by Dr Fred Kiel in Harvard Business Review (as well as in Dr Kiel’s book, Return on Character). In 2015, Dr Kiel looked at whether business performance has any relationship with the CEO’s character. He asked employees in over 100 organisations to rate their chief executive on integrity, compassion, forgiveness and responsibility. Based on respondents’ feedback, he gave the CEOs an overall score, which he called their ‘character score’. Then, he looked at the return on assets (ROA) of the companies they led to see whether there was any relationship between character scores and business performance. The categorical answer was: yes, there was. The CEOs rated highest for their character score invariably led the companies with the best performance. The five highest-ranked leaders led companies with a ROA of close to 10% over the period. The companies of CEOs with a medium character score had an average ROA of about 5%. Interestingly, the leaders with the lowest character scores had ROA rates of around 2%. For me, this finding echoes the work of psychologist, Prof. Chris Peterson of the University of Michigan. Prof. Peterson carried out an analysis of the common factors among US soldiers who returned from difficult tours of duty with higher resilience levels than others. As he analysed the data he noted that, aside from resilience, soldiers who progressed to leadership positions in the military also had the highest scores on ‘strength of character’ indicators such as honesty, hope, bravery, industry, and teamwork. These traits seemed to be most important in progressing to positions of leadership in the military. This research resonated with me deeply. I have always believed that the most important aspect of leadership lies in character, and both Dr Kiel and Prof. Peterson confirmed this. But more importantly, Dr Kiel’s research demonstrated that positive character attributes directly correlate with better leadership, all the way down to the bottom line. The central point is this: when things are really difficult, as they were in 2008, character is central to how people respond. Little did I know back then just how much more challenging the world would become 12 years later, and just how vital positive leadership would be. The role of influence Leadership is an interesting concept. Ask most people to name a leader and they will invariably choose a CEO, politician or perhaps a team captain. Whatever the context, it will almost always be the person at the top. Bottom-line results are often why one person is chosen over another: X was in charge when Rabona United won the league; or Y was the CEO when Tech Co. Inc. increased its share price three years in a row, for example. There are undoubtedly great leaders among these positional leaders. Yet I cannot help thinking that this notion of leaders as those at the top of their environments misses the point about what leadership is and where we can find it. Leadership is influence. If you influence others, you are leading them. Positive leadership is therefore about positive influence. Whether it is termed ‘authentic’, ‘transformational’, ‘charismatic’ or ‘servant’ leadership, positive leadership is influence that emerges because someone cares, empowers and supports others and because their behaviour or character provides an example that others use to forge their futures. I have been in the privileged position of running several businesses for over 20 years now. As founder and CEO, I have, in a literal sense, led those businesses. But just as importantly throughout those 20 years, numerous others have led me. When one of my staff saw a potential niche market, offering and explaining his findings, I was influenced to change our business direction slightly. When one of our technical experts saw a more efficient way to allow our teams to collaborate, I followed her lead to progress the overall business vision. In purely business terms, I may be founder and CEO, but I am well aware that there are times when my role is to lead, and there are times when my role is to take my lead from others.  This is a liberating and empowering idea. It doesn’t matter what our role is, and it doesn’t matter whether we are running a business or are the newest recruit through the door. Every one of us leads at certain times and follows at others. We all encounter moments every day when our actions, words, or behaviour might influence others. When this happens, others are effectively taking their lead from us, and we are leading them. Equally, we are all influenced by others and, regardless of our seniority, we need to maintain the humility to recognise that leadership is a shared endeavour. When everyone within a business understands that how they act will potentially influence and lead others, and when they are given the space and permission to exercise this leadership role, the benefits are immeasurable. Employee satisfaction increases as strict hierarchical structures gain flexibility; individual ownership and responsibility for behaviour and performance rise; and the sense of mutual collaboration within teams and across departments and functions grows exponentially. Beyond the professional realm, we can be leaders in all walks of life. In our families, we might have children, siblings, or parents who are influenced by us. Among our friends, we are constantly influencing and being influenced. This places a responsibility very squarely on our shoulders – if we are continually being asked to lead, how can we ensure that we are leading well? We all need an understanding of what good leadership should look like. What ‘good’ leadership looks like Good leadership has nothing to do with control or power. We can say that we are leading well only when we have exerted positive influence, whether we are aware of it or not. Even if we are not in a leadership position, we should aim to provide a positive example in how we lead ourselves and potentially influence others in a positive direction also. We cannot force others to follow us; we can only try to behave in a way that others will choose to follow. This means focusing on building our character in order to develop our leadership capacity. As a good starting point in building positive leadership, it is worthwhile to consider five main areas: 1. Reflect on your values. Positive leaders are clear about what they stand for. To develop your positive leadership capacity, you must understand your values. Make this a written exercise. Dig deep. What is it that matters to you? What are the boundaries that you will not cross, regardless of the pressures you might be under? What do you want to contribute to your business, community and family? Take time to reflect on your values because they are the yardstick by which others will measure you, and you will measure yourself. 2. Reflect on your behaviour. Few things are as powerful as seeing someone with deep integrity, who has the courage to be accountable and is willing to stand up for what they believe in. Unfortunately, few of us are as consistent as we would like to be. We all fall below the standards we expect of ourselves occasionally. Allow yourself to reflect regularly on your behaviour in light of your values. Be honest with yourself. Do you have higher expectations of others than you do of yourself? Have you judged others by their actions, but judged yourself by your intentions? Review your actions and behaviour over the previous days or weeks. How do you feel you have lived up to your values? Have you led as positively as you intended? How has your behaviour impacted on your team, colleagues, and those around you? 3. Reflect on your relationships. To influence another, for them to choose to take their lead from us, we must create a real and meaningful connection. People respond to genuine connection. If we want to build our positive leadership, we have to focus on the most basic (but frequently, the most difficult) things: to truly listen to what others are saying; to genuinely understand their perspectives or concerns; to treat everyone with respect and fairness. Assess how you have performed here. What could you do better? 4. Decide how you can improve. One of the most inspiring leadership characteristics is seeing someone who makes the most of what they have and works to maximise their abilities. Unless we learn to give our best and work to improve continually, we have little authority to influence or lead others. When you reflect on your behaviour and identify where you have fallen below your own standards, set yourself a finite and measurable action that will force you to address that shortcoming, even if it is only in a small way. Hold yourself accountable. 5. Repeat. Building positive leadership character is like going to the gym. It needs to become a part of your life to have a meaningful and lasting impact. Don’t try to change overnight. Instead, focus on making the steps above part of the fabric of your routine. Just like ‘peace’, in Yeats’ poem, change “comes dropping slow”, but small actions done consistently can create great change. Joanne Hession is Founder and CEO of LIFT Ireland, a not-for-profit initiative to increase the level of positive leadership in Ireland.

Julia Rowan answers your management, leadership and team development questions. Q. I do my best to bring my team together on calls, but it’s a one-way street with me doing all the talking. In general, we all get on well enough together. How can I get everyone to contribute? First of all, congratulations on noticing this (not all leaders do) and wanting to change it. Team meetings are often the only time the whole team is together, and they are a vital tool for building the team you want. There are many reasons for silence and non-participation at meetings, but you say that team members get on well. So, I wonder if you and the team have fallen into a pattern where you call and run the meeting, share information, get through business – and they sit and listen. Think about how you want your team to develop. Do you want colleagues to be more proactive? More collegiate? More strategic? Then, reflect on how you use the team meeting to achieve that. Changing established patterns takes time and discipline. Prepare great questions to ask your team – a great question leads to a great discussion and doesn’t necessarily have a ‘right’ answer. It would help if you also let go of the pressure to talk. This is a tough habit to break, especially when there’s silence. Invite the team to share their experience of the team meeting – what they find more and less valuable or how the team meeting could be more useful. Working from home provides you with a great reason to do that, so give the team some notice and invite them to share what they like and what they don’t. Listen to the feedback without responding, other than to say “thank you”. Explaining and justifying sends a clear message that we’re not really listening. Then, act on the feedback and check-in after a few meetings. Ask about what has improved and what still needs work. This reaffirms the idea that talking about how we work together is good. Q. One member of my team is outstanding at most of his job, but poor in one aspect. I’ve given him lots of feedback – positive feedback about what he does well and honest feedback about where he needs to improve. He always listens and agrees, but nothing changes. This is common, and it sounds like you’ve fallen into a comfortable pattern: you give feedback, he listens, nothing changes, you give more feedback, and so on. Patterns can take on a life of their own, but they need to be broken if they’re not working. You must change the pattern. Instead of (yet again) giving your team member feedback on the one aspect of their job they are poor at, say: “John, I’ve given you feedback about (aspect), and I notice that (aspect) is continuing. Can we talk about why that’s happening?” This leads you to quite a different discussion. When giving feedback, it’s useful to describe (e.g. “your report was two days late”) rather than judge (e.g. “you don’t care about this project”). This is difficult as our brain automatically interprets (judges) behaviour and concludes what it means! So “you don’t care about this project” may appear to be the truth, but it’s not – it’s your story. The truth is that the reports are late. Paring back from judgement to description takes preparation. Julia Rowan is Principal Consultant at Performance Matters, a leadership and team development consultancy. If you have a question, email julia@performancematters.ie

‘Employability’ refers to the skills, knowledge, experience and personal qualities needed to gain and maintain fulfilling work during an individual’s career. In this article, Dr Mary E. Collins discusses the importance of employability from an employer’s perspective and provides practical strategies to help organisations focus on the issue, whatever their size. Over the past year, the employment market has experienced extreme volatility. Certain sectors have been hit particularly hard, with tens of thousands of jobs in the hospitality and tourism sector the first to feel the full impact of the COVID-19 restrictions. In other sectors, there has been a spike in job openings and, indeed, an employment boom due to the global pandemic. Research from Glassdoor has shown that coronavirus-related job postings have increased in recent months: government, pharma, healthcare and non-profit sectors in the US have all tripled their hiring efforts in response to the coronavirus outbreak. The trend is similar internationally. In Ireland, we have seen increased job vacancies in health, IT and communications, logistics, procurement and insurance. Professional services employment trends remain stable. One certainty in this dynamic, volatile employment market is that talented people always have choices. In fact, the war for talent heated up in the past year with the explosion in remote working. Many roles that were once limited by geographical location can now be fulfilled from anywhere with decent broadband connectivity. What is ‘employability’? The Institute of Employment Studies in the UK defines employability as the “capacity to move self-sufficiently within the labour market to realise potential through sustainable employment… for the individual, it depends on the knowledge, skills and attributes they possess, the way they use those assets and present them to employers.” Employability is the ability to be employed from three perspectives: Gaining initial employment: the ability to get started in a career, leveraging education, careers advice and so on to ensure one has core, marketable skills. Maintaining employment: the ability to keep a job and make transitions between new roles within the same organisation, adapting to new job requirements. Obtaining new employment: the ability to succeed in the labour market and manage employment transitions between and within different organisations. The business case There is now a strong business case for employers to make explicit commitments to employees about supporting them in becoming, and remaining, employable; that working with the organisation will make them more employable for future roles. We have seen a cultural shift whereby younger generations look to their employers for purpose and meaning in an increasingly unpredictable world. Employers who care about their people’s future employment opportunities demonstrate a commitment to the broader ‘covenant’ between employer and employee. The younger generations in the workplace are generally known as Millennials or Gen Y, who were born between 1980 and 1998, and Centennials or Gen Z, who were born from 1999 onwards. These generations hold the balance of power in recruitment, so employers must be aware of their expectations. A new approach is required to attract, engage, and retain them. This includes the provision of: Good work/life balance; Work arrangements with flexible locations and hours; Clear personal development routes; Clear promotion opportunities; Meaning and purpose in work (making a meaningful contribution to society); Support around personal wellbeing; and Commitment to their employability. Some commentators on the future of work predict that Gen Z will change jobs 15 to 20 times in their careers. Regardless of age, the concept of ‘a job for life’ is practically redundant and most people will hold positions with a variety of employers over the course of their working lives. Increased flexibility in working patterns means people need to be prepared to change jobs. It also means better opportunities. Emerging technologies such as artificial intelligence (AI) will replace many roles, while new roles are emerging that never existed before. Employability should be a core element of your employer brand, defined by CIPD as “a set of attributes and qualities – often intangible – that makes an organisation distinctive, promises a particular kind of employment experience, and appeals to those people who will thrive and perform best in its culture.” The CareerEDGE Framework of Employability Developed by Lorraine Dacre Pool and Peter Sewell in their 2007 article, The Key to Employability: Developing a Practical Model of Graduate Employability, the CareerEDGE Framework of Employability suggests that once individuals develop the essential EDGE components (experience, degree subject knowledge, generic skills, and emotional intelligence), this paves the way for the development of the “higher-order” areas of self-efficacy, self-confidence, and self-esteem that are critical in developing employability. Investing in people’s employability The challenge is for employers to focus on investing in the employability of individuals rather than maintaining roles that could eventually become redundant, thereby prioritising an inclusive and lifelong approach to skills development. Using the CareerEDGE Framework, here are some practical steps for employers to consider. Career development Provide access to mentors in the organisation, as this is an excellent way to support development at all stages of employees’ careers. Have career development conversations at least once a year as part of the performance management process. Seek external opportunities for coaching and mentoring from relevant government agencies, professional bodies, and initiatives (for example, the 30% Club Mentoring Programme to improve the female talent pipeline).  Experience A core part of supporting employability is providing appropriate work experience to support personal and career development. Every role should include some ‘stretch’ assignments, which are work projects that provide growth opportunities and challenge in a supportive way. Where possible, allow employees to work in different parts of the business to gain new and diverse work experience. Degree subject knowledge, understanding and skills In the CareerEDGE Framework, this refers to the knowledge and technical skills a graduate gains from their degree course(s) relevant to their career trajectory, and upon which they can continue to build their employability. Employers must support their staff in their continuous professional development and ensure progression to higher levels of attainment. Opportunities to sponsor and co-fund educational activities should be encouraged as a core element of supporting employability. Generic skills Dacre Pool and Sewell present a set of generic skills that employers expect to have been developed in graduates (see Figure 1). Employers should seek ways for employees to develop in all of these generic skills. It is important to note and record skills development as part of the performance planning process. Emotional intelligence Emotional intelligence (EQ) continues to grow in impact and importance. Daniel Goleman defines it as “the capacity for recognising our own feelings and those of others, for motivating ourselves, and for managing emotions well in ourselves and in our relationships”. Employers can support EQ development in the workplace by ensuring that leaders are role models in terms of self-awareness, managing their emotions, showing empathy, flexibility, and – crucial in these times – demonstrating resilience and optimism. Most leadership development programmes incorporate some element of EQ skills development. Self-assessment profiles, such as the Emotional Capital Report (see www.rochemartin.com), can be useful when working with a coach or mentor to develop these core skills from an early career stage. Dr David Foster, Director of Career Development and Skills at University College Dublin and Director of the UCD Careers Network, takes a holistic view of employability. “We’ve used the CareerEDGE Framework at Careers Network as a model for about five years now, and it’s been great as we aim to enhance students’ self-confidence and self-efficacy in all we do. We feel self-confident people can better unlock their mental energies and abilities to negotiate their personal and professional development, which we think leads to employability.” In conclusion, employability is core to the contemporary covenant between employers and employees and has become an important facet in attracting, developing and retaining talent. Even in recessionary times, talented graduates and professionals have choices, especially in a world that has embraced remote working. Focusing on supporting the employability of employees at all stages of the career lifecycle will greatly add to a positive culture where people want to give their best and stay longer, even if it isn’t a job for life.   Dr Mary E. Collins is Senior Executive Development Specialist at the RCSI Institute of Leadership.

Alan Johnson, President of the International Federation of Accountants, shares his thoughts on the challenges and opportunities facing the profession, and the priorities for his presidential term. 1. When you joined the IFAC Board in 2015, did you envisage at that time becoming President? Absolutely not. In fact, I didn’t know much about IFAC until 2011 when I was approached to consider joining the Professional Accountants in Business Committee, which I served on for five years. In 2015, ACCA, my member body, asked me whether I would consider putting myself forward for the board and quite honestly, I had never thought about that – partly because I wasn’t sure I would know what to do given that I didn’t have much knowledge of IFAC beyond my Professional Accountants in Business work. But then, having thought about it, I realised that I probably knew enough. I also realised the value of being a volunteer and giving back to the profession, a profession that had given me a good life and a good career internationally, so I decided to go for it. I knew it would be competitive, and I didn’t honestly expect to get it, but I was selected to my pleasant surprise. Then, when the call came out for board members to put their names forward in January 2018 for the Deputy President position, I didn’t put myself forward because I genuinely believed that other members of the board deserved to become President and would do a better job than me. But things developed by mid-2018 and I was again asked to consider putting myself forward. It was quite late in the process, but I put my hat in the ring. As they say, the rest is history. I was appointed Deputy President and the more I learnt about the role, the more I felt confident in the role so that, by the time the election for the presidency came around, I felt I was ready. So, that’s what happened. It wasn’t planned or envisaged. I never expected to get on the board of IFAC, let alone become Deputy President or President, but sometimes things work out. 2. And how has the work of IFAC changed over the five years of your involvement? The profession faces many challenges, as do all professions today. Number one, we have the scrutiny of the regulators concerning the quality of audit. Sadly, corporate failures will always bring the spotlight onto the audit profession, whether we like it or not. Failures – and I would not necessarily call them audit failures because it is not as if the audit itself failed – arise for various reason, including for example when management deliberately keeps information away from auditors. Now, that is not a good enough excuse to the public because every corporate failure leads to significant loss of jobs, loss of livelihoods, loss of value to investors, and damage to the society in which businesses operate. So, I don’t want to minimise corporate failure; it’s quite serious, and we have an important role in helping prevent it as part of a broader ecosystem. We also have to demonstrate that we operate ethically, that we act independently, and we do our best to provide independent, high-quality assurance on financial statements. We, therefore, spend a lot of time reinforcing the importance of ethical behaviour, independence and judgement. There’s a firm commitment to operate with sound and robust independence in what we do. The other thing I would say is that we talk about the auditors when it comes to corporate failure, but we should also think about the professional accountants in the business who are responsible for performance, oversight, risk and governance. We must look at ourselves from within the corporate entities and ask: where are we as professional accountants, and is this a situation where we should blow the whistle? That’s where the profession plays a vital role and that’s why the Code of Ethics for Professional Accountants, which covers not just accountants in practice but also accountants in business and the public sector, are essential as we support our professionals and encourage them to speak out when that is needed and necessary. You know, we talk a lot about the public interest, but if you asked me 30 years ago, when I was CFO of one of Unilever’s subsidiaries, if my job was a public interest role, I probably would have said no. We have a big role to play in explaining what public interest really means. I think the auditors get it, but I’m not sure whether professional accountants in organisations understand that they have a critical role in protecting the public interest. Yes, they are employees of an organisation. Yes, they are paid by the organisation. And yes, their careers are often dependent on those organisations. But since I got involved with IFAC, I have become aware that I’ve always had a “public interest” role. I always acted in the public interest, but I would not have defined that part of my role as it needs to be clearly defined, especially today in a world of multi-stakeholder capitalism. So, we have a significant role to play through our member bodies to ensure that our professional accountants understand their unique roles in protecting the public interest. And part of that is making sure that private enterprises operate correctly, ethically, within the law, and do everything that is right for society – not just what is right for shareholders. 3. For many professional accounting organisations, volunteers tend to come from public practice. Given your extensive background in industry, what does the perspective of an accountant in business bring to IFAC’s standard-setting and industry-convening roles? It’s an interesting question because that was precisely what I had in mind when I had concerns about whether I would be of any use on the IFAC board. Having said that, in all the roles I have had in business, I have always interacted with the profession. I was on the other side of discussions with auditors for many years. I was on selection panels to select auditors. I was the Chief Audit Executive at Unilever for six years and in that time, I engaged regularly with our external auditors. Even though I don’t come from that part of the profession, I understand what they do, what they need, how they operate, their challenges, and their critical role in society. And that’s why I have been able to contribute to the discussions in the Monitoring Group – because I understand the role standard-setting boards play as part of building trust and confidence in financial markets. When I joined the IFAC board, many colleagues came from the audit and assurance side of the profession. Today, we have a much better balance of people from business and the public sector while retaining expertise from the audit and assurance profession and improving the level of representation for small- and medium-sized practices (SMPs) on the standard-setting boards and IFAC’s advisory groups. If there is one thing we should feel proud of, it is how much more diverse the board is today. I thrive in working with diversity. As a person, you learn a lot more; you become a better leader; you become a better person. By the way, diversity of thought, views, expressions and debate around the table will, more often than not, improve outcomes. 4. A feature of Chartered Accountants Ireland’s membership is the relatively high proportion of our members working overseas. What supports should professional accounting organisations offer to their overseas members to encourage loyalty to their qualification while maintaining standards? I worked extensively in Europe, Africa and Latin America during my career, but I always had a strong affinity with Ireland through my early career in Unilever when I visited Dublin and other cities frequently. It’s a unique country that has always been a top talent provider around the world and Chartered Accountants Ireland is no exception. The Chartered Accountants Ireland qualification is highly sought-after, so it’s no surprise that there are so many Irish Chartered Accountants working worldwide, either because their companies have moved them or they sought opportunities abroad. When I look at where we are today, the three things that stand out for me are ethics, leadership and governance. Professional accountancy organisations need to equip their members with these skills wherever they are in the world because reputation takes years to build but can be lost in a flash. We need to protect the profession’s reputation, which boils down to ethics, leadership and governance. It’s also about courage and confidence. So, when I look at what our member bodies need to do, they not only need to support their existing members, they also need to attract the brightest, best and most committed people into the profession because we are a profession of people. Robots and machines might help us be more efficient in some areas, but most of what we do is people-centred and requires good judgement. It’s essential, therefore, that we remain an attractive profession for the next generation. If I look back at my memories of the profession, I think of long hours, hard work, no work/life balance, travelling a lot if you’re in audit and assurance, terrible for families, terrible for working mothers. Your career might pause if you’re a working mother and you take maternity leave or time away to look after young kids – that role that is still more typically assumed by women, although that is changing. As a result, the accountancy profession is not a natural first port of call for the next generation who want better work/life balance. So we must find new ways of doing what we do – not only more efficiently, but doing different things and often in different ways to make our profession attractive. I think accountancy remains very attractive and when I look at the statistics, we are a growing profession. Many young people in many countries are coming through the professional qualification so we can attract them, and that’s great – but we also have to retain them. Purpose is a critical element in achieving that. Young Chartered Accountants want to work for an ethical company, as we all do. It’s is not just about rapid career advancement; they want to see the purpose and the impact their organisation – and by extension, they themselves – can have on society. Young people are thinking about purpose much more than I did 40 years ago. It means much more to them, and they will form their views about whom they want to work with, where they want to work, and what work they want to do based on the ethos and the purpose of organisations. And to go back to the point about the public interest, if we can make it clear why our profession is truly a public interest profession, we will remain a very attractive profession in the future. 5. Your predecessor, Professor In-Ki Joo, described the Monitoring Group’s challenges as “among the most difficult circumstances” in his memory. What opportunities do you see for IFAC as the Monitoring Group’s work takes effect? As you know, the Monitoring Group is a group of international institutions and regulatory bodies that are working to advance the public interest in areas related to international audit standard-setting, audit quality and ethics. The initial Monitoring Group discussions started in May 2015, before I joined the IFAC board, and it remains a feature today.  Today we’re in a much better place, and I can see the light at the end of the tunnel. There will be some changes to the structure of the standard-setting boards and the process to select standard-setting board members. But whatever the outcome is, I think there is a clear recognition that the profession has developed high-quality standards for auditors, professional accountants and the public sector. The question is how we move forward in a changing environment with more agility, more speed, and more diversity – that’s what we’re discussing now. IFAC and its member bodies will continue to play an important role in the standard-setting process. Why do I say that? First of all, we have the knowledge and expertise. We are either the preparers, users or assurers, so we must have a role because we understand what good standards look like. That’s accepted by the Monitoring Group and the other players, including the PIOB (Public Interest Oversight Board) and the standard-setting board chairs. We also have to play a critical role in adopting and implementing international standards. A standard-setting board can write excellent standards, go through the due process, get them developed and get them approved – but indeed international standard-setters have no force of law. Standards need to be adopted and implemented by national standard-setters. That is where our profession comes in and why the profession has to stay connected to the standard-setting process, provide good quality resources to the standard-setting board and the technical teams that do the work, and – an even bigger job – facilitate adoption and implementation in jurisdictions around the world. IFAC will clearly have a very important role in standard-setting and an even more important role in making sure that the standards get used. A standard is worth very little if it’s never implemented; sometimes we forget that.  I am much more confident today that we have the right framework in place to have proper and fruitful discussions. There is also the right understanding of each player’s relevant and relative roles, and there is an acceptance that we all have important roles to play in delivering high-quality international standards that are adopted across the world. That’s the objective of all of us, and there is no argument or disagreement about that. 6. IFAC is actively promoting the development of coherent standards for ESG. Are there pitfalls as well as opportunities for accountants as these standards are developed? First of all, we need a truly international approach to ESG standards. At the moment, we have fragmentation with five or six bodies working on different elements of ESG standards. It isn’t joined up, and there’s no mandate to deliver. Like audit and assurance standards or accounting standards, we need a framework and structure to develop international ESG standards. Some time ago, we concluded that the IFRS Foundation had a role to play because it has credibility, capacity, resources, and a proven track record in delivering internationally accepted standards. IFAC put out a call to action in September, which outlined the importance of one body taking responsibility for setting standards. It cannot continue to remain in the hands of five or six independent bodies without the capacity, resources, funding, and authority to deliver. The paper called for a new sustainable standards-setting board under the umbrella of the IFRS to take responsibility for developing credible, international sustainability standards that can be adopted widely across the world. Why? Because there’s an increasing demand for all organisations to report against a consistent set of high-quality standards. The demand from society, investors, stakeholders, suppliers, customers and employees is that companies deliver against a set of high, internationally comparable standards. It goes back to the point of purpose. Whether in our profession or other professions, the next generation will want to work for companies that take this seriously. It’s one thing to say that we will deliver against the UN Sustainable Development Goals (SDGs), but the hard truth is: how do we know we’re getting there? Where’s the measurement, and against what measures? Are they consistent measures? How do we know that what a company is reporting is authentic, is accurate? That’s where our profession has an important role to play on both sides, both as preparers who help organisations implement the necessary processes and as accountants in practice who provide independent assurance over, and audit, what is reported to give credibility. As a profession, the pitfall will be if we aren’t up to the mark in helping organisations implement the reporting regimes to meet the new standards. If we don’t do that, somebody else will. That might be a pitfall, but I see it more as an opportunity – not necessarily a commercial opportunity, more an opportunity for our profession to play our rightful role in ensuring that organisations become more sustainable and helping society, in general, become more sustainable. This all links back very strongly to the concept of the public interest, which I have mentioned several times. Wherever you go, you will find a link to our role in the public interest – and this is a critical public interest role we must fulfil. That’s why I see it as an opportunity, but a pitfall if we fail. And if we fail, we have not fulfilled our public interest mandate and therefore don’t have a right to speak out on issues. 7. What other areas of focus would you like to bring to bear during your tenure as IFAC president? Beyond the important points I’ve already discussed, I have canvassed intensely for increased professionalism in the public sector. I was on the board of the UK Department for International Development for just over two years and during that time, I chaired the Audit and Risk Assurance Committee. That period really shaped my awareness of how higher levels of professionalism, particularly in terms of the accountancy profession, could make a massive difference to the public sector. It was an ‘aha’ moment for me, and I want to drive that agenda much harder during my presidency. And we are starting from a position of strength, as we now have great public sector representation on the IFAC board. When I joined I think there was one public sector member; we now have four out of 22 and many more on our advisory groups. Another area of focus is what I call ‘Save the SMEs’. Small- and medium-sized enterprises (SMEs) are critical to every economy, large or small. Big corporates get lots of attention, but we often forget that big corporates not only rely on SMEs, but a significant part of their supply chain is also made up of SMEs. The largest employer worldwide is the SME sector, so we need to save the SMEs by ensuring that they have access to high-quality professional accountants. We can do that by advocating to ensure that they employ professional accountants, and ensuring that the SMPs that support them have a high profile on our agenda. Who is Alan Johnson? Alan Johnson became IFAC President in November 2020, having previously served as Deputy President from 2018-2020 and as a board member since November 2015. He was nominated to the IFAC board by the Association of Chartered Certified Accountants (ACCA). Alan is a former non-executive director of Jerónimo Martins SGPS, SA, a food retailer with operations in Portugal, Poland, and Colombia, having completed his board mandate in 2016. He is currently the independent chair of the company’s Internal Control Committee. Previously, Alan was Chief Financial Officer of Jerónimo Martins from 2012 to 2014. Between 2005 and 2011 he served as Chief Audit Executive for the Unilever Group. Alan also served as Chief Financial Officer of Unilever’s Global Foods businesses and worked for Unilever for 35 years in various finance positions in Africa, Europe and Latin America. Alan was a member of the IFAC Professional Accountants in Business Committee between 2011 and 2015, a member of the ACCA’s Market Oversight Committee between 2006 and 2012 and chair of the Accountants for Business Global Forum until 2018. He was a member of the board of Gildat Strauss Israel between 2003 and 2004. Alan is the chair of the board of governors of St. Julian’s School in Portugal and chairs its Finance and Bursaries Committees. In October 2016, he was appointed to the Board of Trustees of the International Valuation Standards Council and chairs its audit committee. Between July 2018 and September 2020, he was a non-executive director of the UK Department for International Development (DFID) and chaired its Audit and Risk Assurance Committee. In January 2021, he joined the board of Imperial Brands plc as a non-executive director. Source: The International Federation of Accountants.

Neil Gibson predicts fast growth, both for the Republic of Ireland and Northern Ireland. But lessons must be learnt, he warns. What a year 2020 was across the island of Ireland! Both economies faced severe disruption from the twin pressures of Brexit and COVID-19 that few could ever have imagined. Citizens, businesses and governments were tested and reacted at pace, with little planning. We saw amazing displays of resilience, adaptability and ingenuity as firms pivoted to new ways of working and into new products and services, while our public services responded to both the health and economic crises swiftly and effectively.Looking purely at the economic impact, it is heartening to see areas of real progress. The pandemic experience created skills and attitudes that will hopefully drive the economy forward in new, inventive ways. But before we get to those positives, let us first review economic conditions across the island at the start of 2021.How is the island economy performing now? Remarkably, the Republic of Ireland could end up being the world’s fastest-growing economy in 2020. That depends on Q4 data due in March, but with growth of 8.1% in the year to Q3, income tax receipts down just 1% on the year and corporation tax receipts up 9%, this suggests a high level of insulation from COVID-19 impacts. No such table-topping performance is evident in Northern Ireland, sadly, where the economy is expected to contract by around 12% in 2020, on a par with the UK and towards the more severe end of recorded contractions. Why the divergence? There are technical reasons, notably the way real government spending is measured. Also, Northern Ireland is predominantly a consumer and public sector-led economy, while the Republic of Ireland is more export-oriented. Key exports in the Republic of Ireland include pharma, ICT and food – the best sectors you could wish for during a pandemic. It is more accurate to say that the Republic of Ireland had a level of off-setting growth that Northern Ireland did not, rather than saying it was insulated. The domestic effects were very similar. Perhaps surprisingly, the labour market data look weaker in the Republic of Ireland than Northern Ireland. The published COVID-19 adjusted unemployment rate in the Republic of Ireland peaked at 30.4% and stood at 20.4% in December 2020. No equivalent measures exist for Northern Ireland. This measure is likely to be an over-estimate (again, for complex statistical reasons), but the true rate may well be north of 10% in the Republic of Ireland. Today, an estimated 460,000 people   are in receipt of the Pandemic Unemployment Payment (PUP), with 323,200 on wage subsidy as of 31 December in the Republic of Ireland. In Northern Ireland, more than 68,000 were on furlough as of 31 October. EY analysis shows that if we include self-employed support, the level of disrupted jobs (jobs lost or falling under full or partial government support) has been very similar, peaking at close to 40%. Government support has protected incomes to a large extent, and limited spending choice has created a considerable build-up in savings. Savings ratios for the UK and the Republic of Ireland (roughly speaking the amount of income available to save) rose to a historic high in the Republic of Ireland of 35.4% and 27.4% in the UK during 2020. Will this money flow back into the economy in 2021 when restrictions ease? The data from last year suggest that it will, but there may be a desire to save more and spend on imports like foreign holidays. However, the potential for a consumer boom is very real, a subject to which we will return.A word for the busy Much commentary in 2020 focused on those unable to work and the sectors most disadvantaged by the pandemic. It is important to also remember the sectors under colossal pressure, and for whom 2020 was one of the busiest ever – health workers, delivery drivers, agri-food workers and the pharma sector, for example. These workers are suffering different challenges, fatigue being the obvious one.A boom coming? There are many reasons to expect a very strong economic recovery in 2021. Government supports have protected incomes for many and there will be a surge back to eating out, sport, hairdressers and gyms when it is safe to do so. The evidence of last summer and autumn supports this hypothesis, which should be further bolstered by the vaccine rollout. The build-up of savings means there will be money to spend. The resilience of both stock markets and housing markets further support the consumer boom theory. Though both governments will need to address the escalating deficit, that will not be a major priority in 2021. There is plenty of global capital seeking good businesses to invest in, and many firms are looking to upgrade their systems and equipment – more positives for economic growth. Residual Brexit-related problems are impacting the island economy. Although many are expected to ease over time, disruption to supply chains and increased paperwork also produce opportunity and demand that will spur a degree of growth in 2021. Projecting the level of growth is something of a fool’s errand without knowing the length and depth of restrictions or the scale of fall in 2020. A growth rate of 5-7% is expected in Northern Ireland, which may well be higher than in the Republic of Ireland. However, that is simply a feature of the scale of 2020 contraction from which Northern Ireland must recover. Forecasters previously predicted unemployment rates settling at above 10%, but now the consensus appears to be moving closer to 8%. This is encouraging following disruption of such scale.Does every cloud have a silver lining? It is often joked that economists can find the cloud in every silver lining. Sadly, the prospect of a consumer boom does cause economic alarm bells to ring. My main worries for 2021 surround prices, debt, discipline, and inequality. A consumer boom, along with a fixed supply of products or services, could lead to price increases. In a high-debt environment, this is not necessarily bad if it does not become endemic (i.e. people start demanding pay rises to meet rising costs), but it does create inequality issues. Rising prices can be very damaging for those outside the labour market, and could exacerbate the ‘K’ shaped recovery, widening the divide between the ‘have’ and ‘have-nots’. There may be difficulties getting the same output for a given spend for both governments with ambitious plans for infrastructure spending and a clear need for health spending. Rising oil and commodity prices are further reasons to suggest that the end of very low inflation may be near. The Republic of Ireland deficit is projected to be around €19 billion. This is much lower than expected, but will nevertheless act as a headwind for spending. In the UK, the deficit could rise to £400 billion, an eye-watering amount creating much stronger headwinds for UK spending decisions in the March budget. Emerging from the last recession was very difficult across the island; austerity took a severe toll on citizens, public services, and society. However, what it does bring is a sense of discipline and focus on budgets and spending. The concern of the pandemic experience for longer-term prospects is the perception that money can be borrowed or, in the UK’s case, printed in any quantum for any issue. The Republic of Ireland’s fiscal council has already warned of several spending increases that are hard to trace back to ‘emergency need’. A consumer boom leading to rising prices and governments’ inability to switch quickly into countercyclical mode are the main risks for the second half of 2021.What should the approach be? There are counter views around policy plans – cut spending, raise taxes, or grow fast to balance the books? More radical solutions are being mooted about writing-off COVID-19-related debt, but this proposal faces reluctance given the precedent it sets for future challenges. Rapid cuts in spending would be unwise given the number of people either out of work or relying totally on government support to remain in employment. Cuts in public services would be counterproductive. That said, a serious national conversation is required in both economies regarding the cost and funding of public services. What can be done more efficiently? Who will pay? And who is best-placed to deliver the services? Encouraging consumer spending is unlikely to be needed, so I would not advocate any further cuts to rates or VAT reductions except, perhaps, for focused and time-specific local spending incentives. Investment will be required in re-training and re-skilling to ensure that the digital revolution creates more than it destroys, particularly for retail and other negatively impacted workers. As such, unemployment levels will still require policy attention. Supporting fast, tax-generating growth would be the most sensible approach. However, careful attention will be required for signs of escalating prices. To paraphrase a famous US economist: “Don’t worry about inflation until you can see the whites of its eyes”.Resetting, refreshing and refocusing In an era of bad news, it seems churlish to focus on problems in a boom that has not yet happened, so let us end on a more upbeat note. The experience of being shocked by the outcome of votes and elections should be a lesson that citizens (voters) do not view the world through the same lens as economists. P&L to a citizen means something very different from what it means to a corporate. It is as much planet and lives as profit and loss. The last year further focused the mind on what really matters: family, health, safety, and an understanding of what can be done. Rapidly developing vaccines, pivoting to new ways of working and living, lowering emissions and congestion – these are trends we will likely want to keep. There will be a reset in how we think about governments and the choices they must make. Perhaps now, the conversations about affordable childcare or healthcare reform and funding can happen in a less adversarial way. We must all realise that, although the saying is that the best things in life are free, the sad truth is that some are not. We may have to pay more or consume less, but we can now better understand what is at stake. The plan for both the UK and the Republic of Ireland will be to grow rapidly to solve budget problems, rather than revert to tax rises or spending cuts, so getting out and spending may be both a public duty and fun. We accelerated digital progress by a decade in certain organisations, and we can see its potential for ways of working. Equally, we have felt the importance of human contact as the period of isolation for many has been extended. A digital and personal future is in store, a hybrid model that will see many office workers adapt how and where they work. The outlook is for a strong rebound. As Brexit frictions settle and COVID-19 hopefully becomes less disruptive, 2021 will feel very different from the terrible year we have just endured. There will be fresh challenges to face – there always are – but somehow, dealing with fast growth and excess spending seems rather more pleasant.Neil Gibson is Chief Economist at EY Ireland.

For businesses and SMEs, a big fraud threat is invoice redirection fraud. While this is not a new type of scam, it is one that has increased during the pandemic. Niamh Davenport looks at how this scam works and how businesses can protect themselves from falling victim. Organisations of all sizes are open to fraudulent attacks, but SMEs can be a particular target as their security systems may not be as robust as those of larger organisations, and with new systems and processes being implemented quickly during the pandemic, there may be gaps in the chain that fraudsters will use. Keeping security systems and devices protected with official and reliable software and backups can assist greatly in keeping fraudsters out of your business. It is also important to be aware that you may be at risk of fraud indirectly if a fraudster compromises a supplier’s system and sends you emails from their accounts to defraud you. Invoice redirection With the ongoing COVID-19 pandemic driving both our working and social lives online, fraudsters are taking advantage of the current climate by adapting their scams; one such example is invoice redirection fraud. This is usually done by using a spoofed email address. The fraudster emails someone in the organisation posing as a supplier. The email address used will mirror an address regularly used by your supplier, including logos and signoffs. The email contains information about a new bank account and instructions that all future payments should go to the new account. When the next legitimate invoice is received from the real supplier, payments are made to the new fraudulent bank account. Generally, it is only when the reminder to pay the invoice comes in that the organisation realise there has been a fraud committed. There is no guarantee a recall on the payment through the bank will prove successful – fraudsters are quick and will move money as soon it’s received. Protecting your small business There are three ways organisations can keep themselves secure against fraudsters: Be informed Ensure employees are fraud-aware and understand the controls and procedures in place that your company currently employs to prevent fraud. Have a verification process in place before changing saved bank account details of your suppliers or service providers. Provide cyber security training for staff to include guidance on links in emails and the importance of password protection. Don’t assume you can trust caller ID. Phone numbers can be spoofed so it looks like a company is calling. Be alert Fraudsters can change an email address to make it seem as though it comes from somebody you email regularly. Look out for different contact numbers and/or a slight change in the email address (e.g., .com instead of .ie) as these may differ from previous correspondence. Fraudsters may already have basic information about you or your business (e.g. name, address, account details); do not assume the caller is genuine because they have these details. Be wary of payment requests that are unexpected, irregular or require changes to bank account details, whatever the amount involved. Be secure Ensure security and software is regularly updated and maintained using official and reliable software and that your system is regularly backed up. Always exercise caution when forming new relationships with potential customers, and undertake appropriate due diligence. Don’t allow yourself to be rushed. Take your time and do the relevant checks. Remember, implementing processes to prevent fraud does not have to be costly. In fact, low-cost measures can prevent most fraud from taking place in the first instance, such as verifying new payment details verbally. If you fall victim to a scam or have noticed unusual activity on your account, contact your bank immediately. The sooner the bank can investigate potential losses, hold funds in accounts and place recalls on transfers made in error, the better. You should also report the incident to your local Garda station. Niamh Davenport is the Head of Digital & Fraud Prevention at BPFI.

Many professionals are beginning to feel overwhelmed by homeschooling while working full-time. Paul Kelly has five helpful tips that should help relieve the pressure of being both parent and worker. Parents of the class of 2021 are being asked to shoulder an extensive load, as they fulfil their professional responsibilities alongside the mammoth task of homeschooling their children in preparation for the leaving cert in a format of which remains to be seen. With work deadlines looming and studies to be completed, how can parents manage it all? Control the controllable  Map out the week ahead and limit the decisions to be made. Meals can be planned, and dedicated work/study times set out – this is particularly relevant if your internet is problematic, or you are sharing a workspace.  Agree the family’s collective priorities for the coming week, whether it is a work presentation or an assignment deadline. Communication is key – knowing what everyone is focusing on will help you work as a team to get everything over the line, and it will help you to pre-empt or address any concerns your child may have.   Set joint longer-term goals Are you working towards a specific goal at work? Share it with your family and ensure they understand how it will benefit them. Similarly, for your leaving cert child, their chosen college course is not a solo goal, it is now a shared goal for the family. Maintain levels of motivation by starting a bucket list of things you’ll do and places you’ll go when the leaving cert exams are over and restrictions lift.   Practice discipline Try to keep as much normal structure to your days as you can. Set your alarm for a consistent time with everyone up and dressed, ready to start the working day at 9am. Keep tidy, dedicated workspaces and stick to normal break times. Outline your working times, and ensure you actually work while you are at work. This will help you to switch off from work when you are back in parent-mode.  Reset and refresh Make sure everyone switches off and look for ways of breaking up the mundane. It can be hard with teenagers who are missing social outlets, but a family takeaway or movie on a Saturday night gives everyone something to look forward to. Make sure you look after your own headspace by limiting time spent reading the news. Instead, try to get out for a walk in the fresh air once a day and encourage your children to do the same.     Seek out support Whether it’s asking for support in work or getting your child some extra assistance with their studies, if things are becoming too much, look for ways of getting help, within the confines of the restrictions. These are unprecedented times, try to understand your own limits and be kind, both to yourself as well as your children. This, too, shall pass.   Paul Kelly is the Director of Teaching at Homeschool.ie which provides an online grinds service for primary and secondary school students.

It is claimed that practising a skill for 10,000 hours can make you an expert – but what do the studies say and what does it mean for organisations? Kevin Hannigan analyses the research.  Much has been written in the last number of years of how 10,000 hours of practice can confer expertise. If this is true, then any of us should be able to become an expert at anything with enough practice. But is this really true? Is there a causal relationship between the figure of 10,000 hours of practice and expert performance? How long does it take to form new habits? Research by Phillippa Lally in the UK suggests that new behaviours can become automatic, on average, after practising them for 18 to 254 days. The research studied volunteers who chose to change eating, drinking or exercise behaviours and tracked them for success.  Analysis of all these behaviours indicated that it took 66 days, on average, for this new behaviour to become habit. However, the mean number of days varied by the complexity of the habit, as follows: Drinking: 59 days Eating: 65 days Exercise: 91 days Although there are a lot of limitations in this study, it does suggest that it can take many repetitions for new behaviours to become a habit. Therefore, creating new habits requires tremendous self-control to be maintained for a significant period of time before they become more “automatic” and performed without any real self-control. For most people, it takes about three months of constant practice before a more complicated new behaviour gets set in our neural pathways as something we are comfortable with. The nature of practice If we accept that it can take three months of constant practice to set a new behaviour in our neural pathways, can the type of practice improve the performance of this behaviour? In The Cambridge Handbook of Expertise and Expert Performance, the authors conclude that great performance comes mostly from two things: regularly obtaining concrete and constructive feedback; and deliberately difficult practice. On top of this, new research from a group of UCLA researchers, using brain imaging called functional MRI, discovered that connectivity of specific regions of the brain were strengthened using interleaved practise (varied and random) versus repetitive conditions. Interleaved practise enhances skill learning and the functional connectivity of frontoparietal networks. These results strongly hint that if you want to develop better skills, memory and psychomotor performance, it is really better to spice up your deliberate practice with variety. Expect your practice sessions to be bad but, over time, your performance will significantly improve. What does this mean for professionals? First, developing complex new habits, physical or behavioural, takes an average of 60 to 90 days. Therefore, our focus cannot be solely on one training event for our teams to learn a new skill or behaviour in this changing work environment and, instead, management must focus on how new habits are supported and reinforced over a period of time. Second, great performance is not just a function of the quality and frequency of practice but also the quality of the feedback. Constructive, supportive feedback will enhance performance over time. Finally, the quality and difficulty of the practice impacts performance and skill retention positively. So, whether we are seeking to develop new skills to further the business, creating a more inclusive office culture or focusing on an employee’s individual performance, incorporating task difficulty and randomness into our development efforts will enhance performance. 10,000 hours of practice on its own will not develop expertise. If we are truly serious about transforming the way we work, we need to create the time to support new habits, provide constructive feedback, and ensure that the quality of practice is sufficiently diverse and challenging. Kevin Hannigan is Head of Talent Consulting at HPC.

It's hard not to feel gloomy about 2021's economic outlook, what with tight restrictions in place and a slow vaccine roll-out. Andrew Park encourages us not to lose hope, however, as estimates indicate that GDP will grow despite the setbacks. 2021 was the year we had all hoped would allow us to return to some ‘normality’ following the COVID-19 pandemic, thanks to the development and roll-out of multiple vaccines. However, with infection rates rising at a rapid rate prior to Christmas, the Irish Government introduced tougher Level 5 restrictions. Under these restrictions, the Irish Government enacted a de facto national lockdown, reinforcing the work from home message, restricting non-essential travel, as well as the closure of schools and a move to remote learning in addition to the closure of ‘non-essential’ retail. Each round of ‘stop-go’ that easing and raising restrictions delivers is worsening the economic damage. These current Level 5 restrictions, which may ease in early March, will have a profound impact on the economy. Where optimism was emerging, as evidenced via sentiment surveys, restrictions caused that to ebb away. Q1 2021’s outlook is seeming more downbeat than previously expected. The immediate impact will be felt through the labour market and, more specifically, the live register. Using data from December 2020, when the introduction of the Level 5 restrictions began, we can see the initial introduction caused the COVID-19 adjusted unemployment rate – which includes both the live register and Pandemic Unemployment Payment (PUP) recipients – to reach 20.4%, up from 15.9% in September 2020 prior to the Level 5 introduction. A similar trend can be seen through the number of PUP recipients. 219,913 people were in receipt of PUP for the week ending 6 September. Following the introduction of increased restrictions, the number of PUP recipients increased to 335,599 PUP for the week ending the 3 January, representing 13.6% of the total labour force. These adverse labour market impacts, in conjunction with business restrictions, will result in a lower level of economic growth in Q1 2021. Although, estimates for Q1 2021 economic growth have yet to be published, we can say with some certainty that it will be significantly down on the bounce back growth Ireland was seeing at the back-end of last year when Q3 2020 recorded growth of 11.1%. While the immediate economic outlook looks ‘gloomy’, the outlook for 2021 as a whole looks more promising, with the roll-out of the COVID-19 vaccine and agreement on a free-trade deal between the UK and EU impacting on prospects. Initial estimates, produced by the ESRI’s Quarterly Economic Commentary, suggest GDP will grow by 4.9% in 2021, underpinned by a free-trade deal between the EU and UK as well as Level 5 lockdown lasting only six weeks. Although restrictions and slower than hoped vaccine roll-out is hampering the economy now, the overriding sense is one of hope. If we can navigate the next few months successfully, there is significant pent-up demand ready to be unleashed into the economy. Andrew Park is a Manager in the Economic Advisory team at Grant Thornton.

2020 presented leaders and their teams many challenges, making boosting morale more important than ever. Learning how to praise your staff is an essential skillset. Fiona Flynn tells us how. Giving praise might not be the first thing that comes to mind when considering business leader duties, but praise has been shown to have a direct impact on business results. A Gallup poll found that people who received “recognition or praise for doing good work” are also responsible for a 10% to 20% difference in revenue and productivity. Employees who reported that they are not adequately recognised at work were three times more likely to quit in the next year. As we move through Q1 and into Q2 of 2021, many managers and organisations are completing the annual review process. This can be a painful or powerful task. Unfortunately, managers can unknowingly undermine employee performance during this process. According to research from the Corporate Executive Board, line managers directly influence many key drivers of employee’s performance, improving or destroying performance by up to 40%. Giving praise authentically has many benefits for the indivdual, team and organisation. It creates a positive workplace climate with higher levels of trust, improved problem-solving and innovation and a postive impact on the customer experience and net promoter score. How to give praise There are a few things to keep in mind when acknowledging employee accomplishments and giving praise. Be genuine Ensure the message is delivered with genuine conviction and authenticity. Be specific Clearly articulate what behaviour is being recognised – solving a problem, using their initative, collaborating with another department. Recognise how the behaviours reflect company values, purpose, and business. Be consistent Use praise as part of regular one-on-ones between you and employees, and not just once a year at the review. Be spontaneous When you receive feedback from others about your employee, or see a positive behaviour – pass on the praise. You don’t need to wait for a one-on-one or review session. Send the email or talk to them immediately. Recognise behaviours Don’t just focus on the end results of great performance – praise the behaviours that contributed to that result, as well. Smart actions on the part of the employee won’t always end up as a business win, but you want to reinforce that what they did was the best option. Ask open-ended questions and listen Encourage and praise employees for sharing their insights – this encouragement can cultivate discretionary behaviour and problem-solving culture within the whole team. Offer praise, even amidst failure Praise your team members even when, despite their best efforts, things don’t go as planned.  It is at this time that praise can have the most impact. It can boost morale and get the employee’s mindset back on track. Use it as a coaching and learning opportunity. Review the process and identify what they did well, what they learned and what they would change the next time. Set clear goals and expectations Be sure that the goals given to the team, as well as your expectation in meeting those goals, are clear. This ensures that praise is transparent, and people don’t feel excluded. Praise is a powerful tool that can be used to support and stretch team members. It will improve their self-confidence and morale. It is a particularly useful technique when implementing change – new processes, systems, etc. Identify and praise the individuals who are leaning in and adopting the change. That can have a ripple effect to encourage others to also do well. Fiona Flynn is a Director of Montauk Consulting.

Career conversations can be nerve-wracking at the best of times; adding the pandemic and homeworking into the mix makes it even more challenging. The way to crack this, says Louise Molloy, is to think through the problem rather than just about the problem. It’s that time of the year when career discussions abound. While this is always an anxious time, with COVID-19 and working from home added to the mix, I’m hearing about fear of being seen as negative, complaining or not supportive when there are legitimate concerns about promotions and upward mobility. This results in frustration and disappointment as teams fail to have the conversations needed. Having sat in both the reviewer and reviewee’s seat, and now coaching clients in this area, I’m reminded of Simon, an ambitious and capable guy who was keen to progress. His boss was relatively new to the organisation and, while he met targets, he struggled to get buy-in from the team and their stakeholders. Simon was full of ideas on how to restructure the team to allow more room for collaboration and creativity, and he was willing to take on more responsibility to deliver this. Previous discussions were taken as personal criticism by his boss, so Simon felt unable to raise the issue again without being seen as unsupportive. Sometimes when situations get emotional and we feel scared or rejected, we fail to see it objectively. He told me that the company needed results, innovation, and good engagement. So, putting on that company ‘hat’, Simon had to consider a few things: How can I contribute more? What is the work that needs to be done – for the company; for the team; for me? The key here is to be honest with yourself and ignore experience or everything you think you know about the company/culture. Imagine I’m the team leader – what do I need to achieve? What am I afraid of? What is my biggest challenge? What allies do I have and need? Really think about your team leader as a person within a system and how it feels to be in that situation. How do I need to present my view of how I could contribute and the work that needs to be done to meet my boss’ priorities and challenges? Reframing what you want to say in this way helps build trust and buy-in, showing you recognise and respect your boss’s position. What do I want to achieve in the session? This conversation is only the beginning, not the end. Share observations on where projects didn't go well (with supporting evidence). Make constructive suggestions, such as starting a working group with different people from various departments, so you can ensure alignment and best ways of working. After considering the above four points, Simon decided to put together a working group comprising members of his own team as well as people from other departments. By doing this, he revised the reporting process, improving quality, freeing up resource time for more innovative insight sharing. He got great feedback, leading to more delegation from his boss. It took a while to get promoted, but in the meantime, his working life had changed. He was happier, more influential and had a clearer view of how he could move his career forward. The questions above are designed to challenge you to think the problem through rather than just think ‘about’ it. This, in turn, will change how you will feel about the conversation ahead. Rather than a battle, it will feel more like you and management are in it together. Remember, if you always do what you always did, nothing changes. So, give it a go. Challenge yourself to answer those questions and see where it leads you. Louise Molloy is a director at Luminosity Consulting.

"Ah, sure, it'll be grand" is an expression widely use in Ireland. Sometimes, however, your staff really do need help. Damian McCourt emphasises the importance of listening to your employees and offering support when they need it. “This is ridiculous,” I said, staring at the influx of work in dismay. “I’m never going to get through all this.” It was 2013, and I was a project manager with far more work than was good for me. I was feeling panicked. My manager looked across at me, shrugged his shoulders in a what-can-you-do sort of way, and announced, “it is what it is”. I put my head down, kept my mouth shut, and proceeded to work myself into a burnout. I didn’t realise it at the time, but I had just been ‘minimised’. Talking about our mental health is never easy. Even if your workplace encourages open discussion on mental health, the desire to appear capable, competent and – above all – strong can be a severe deterrent to asking for help. As a result, it often falls to the manager to ask if someone is okay. This is difficult even at the best of times. It requires planning, privacy and a careful, non-judgmental approach. Try doing this over Zoom with your locked-down kids, and you have a genuine challenge. The good news is that if you’re a careful listener, you won’t even need to initiate this conversation. People ask for help all the time – they just don’t make it obvious. Seemingly off-the-cuff comments on energy levels, mood and workload sometimes hide a call for help, and you can respond in one of three ways: Shift the conversation to you “Oh, I’m up to my eyes too! Wait ‘till I tell you what I had to deal with last week…” Shifting the conversation back to you isn’t helpful but it’s an easy mistake to make as a manager, especially if you’re feeling slightly stressed yourself. Do it often enough, and people will stop talking to you. Minimise the situation “Ah, it’ll be grand. We’re all in the same boat. That’s just the job. Man up and get into it.” Minimise is a put down, pure and simple. Everyone else is OK so you should be too. Pipe down and get on with it. For someone who is already worrying about their ability to cope, you’re doubling their anxiety by dismissing their concerns. Not only are you being supremely unhelpful, you’re giving yourself a harder conversation later on. Offer support “Are things really bad? Anything I can do to help?” We would all like to think that we’d be the one to offer support, and yet we all live with our own concerns and priorities. It’s easy to miss an opportunity to help. Remote working tools can actually make monitoring the health and wellbeing of your staff easier. Keep an eye on your Teams chat and watch for clues in email conversations. It’s easier to ask if someone needs help than if they are okay, and your offer of support might make all the difference. Damian McCourt is a freelance trainer and consultant specialising in workplace resilience, productivity and sensible leadership.

Good companies have always invested in upskilling their employees, but this has been propelled exponentially over the last year due to the pandemic. Dearbhla Gallagher tells us why. The COVID-19 pandemic has had a major economic impact on every business sector in Ireland. Some sectors, such as retail, tourism and hospitality, have been particularly hard-hit, with the ongoing closures of restaurants and other hospitality outlets leaving many unemployed and others at risk of losing their jobs. In these circumstances, the need for organisations, and employees, to become more adaptable and innovative has become evident. Developments in technology have brought about great benefits, but have also added extra urgency to the need to acknowledge the changes that are coming in the world of work. This was the case even before the pandemic. In 2019, the ILO Global Commission on the Future of Work stated that “today’s skills will not match the jobs of tomorrow, and newly acquired skills may quickly become obsolete”. The Commission strongly recommended that governments, employers, and workers invest in education and training. Fast forward a year and the COVID-19 pandemic has arrived on our shores. Few could have predicted how quickly the need for upskilling and reskilling would come to pass. In response, many organisations worldwide have reacted quickly by taking steps to address critical skill gaps in order to maintain business operations. A 2020 LinkedIn report found that employees spent 130% more time learning in March and April of that year, compared to January and February. However, more action may be needed to prepare for changes in the future. Now for tomorrow The big challenge for today’s leaders is to recognise where jobs have been, or could be, lost because of the pandemic and other global developments, and to waste no time in upskilling and reskilling employees to deal with future disruptions. Currently, training courses are online to keep employees safe and the last ten months of online learning has demonstrated that it is both feasible and effective. Investing in training sends a strong signal that the company cares about supporting its employees. It also fosters employee confidence and loyalty. Studies have demonstrated that investments in upskilling and reskilling employees can boost productivity, improve employee engagement and retention and help to attract new talent. In a survey by the online learning platform Talent LMS, 66% of respondents expressed appreciation at the opportunities provided by their employers to acquire new knowledge and develop new skills. More importantly, it can help organisations to deal with the ongoing impact of the current COVID-19 crisis. For many businesses, managing costs has never been more crucial and, therefore, upskilling and reskilling the existing workforce may make more sense than recruiting new staff. Finally, companies that are actively engaged in upskilling and reskilling their workforce will also help to develop resilience skills among their employees. Many employees have been afflicted with anxiety, stress, loneliness and burnout as a result of the pandemic. An employee with updated skills will be more resilient, more confident and better equipped to perform in the job. Dearbhla Gallagher is the Learning and Development Manager at Baker Tilly.

Putting the brakes on travel has been hard for passengers and the industry. But is there a light at the end of the tunnel for aviation companies? Dick Forsberg explains. The disruption caused by COVID-19 will have unprecedented consequences for the airline industry, including significant and permanent structural changes. At the same time, record numbers of investors are lining up in anticipation of finding real value in distressed aviation-related transactions, arguably for the first time in over a decade, and according to PwC’s Aviation Industry Outlook 2021, capital should be available in scale as the recovery trajectory becomes better defined. IATA predicts that the airline industry will have lost US $118.5 billion in 2020 and a further US $38.7 billion in 2021. The extensive government support provided, estimated to be at least US $180 billion to date, has played a major role in saving a number of weak carriers from collapse, but in doing so has created a long-term unlevelling of the playing field. Airline casualties According to the report, the extraordinary levels of additional indebtedness taken on by the airlines will permanently realign the finances of the industry. Airlines will need ongoing access to emergency liquidity – including government support – for the foreseeable future. There will be more airline casualties ahead and, for those that survive, the ability to thrive will be more challenging. In order to survive and thrive in the post-COVID-19 world, airlines will have to fundamentally rethink their fleets, their business models and their finances. This will not always lead to change, but for most, a return to business as usual is not going to be a viable option for several reasons, such as: there are too many aircraft in the system, and the market of 4.5 billion passengers will not return quickly; the market has become uneconomic, and airlines cannot easily return to the service they provided before March 2020; a heightened duty of care towards customers and front-line staff will reshape customer service; and the crippling debt burden that is building across much of the airline industry will require root and branch restructuring in order to bring long-term solvency and profitability. In many cases, drastic surgery will be needed to right-size fleets, restructure business models and recapitalise airlines. Fleet rationalisation acceleration It is expected that in 2021, the fleet rationalisation process that is already under way will continue and accelerate. Few airlines are looking to add capacity. 2020 ended with 30% of the global passenger airliner fleet inactive – more than 8,500 idle aircraft – and 5,000 aircraft may be surplus to requirements. Demand remains muted, making lease extensions and placements more difficult and Original Equipment Manufacturer (OEM) production rates may not return to 2018–2019 levels before 2025. 2020 is expected to have been the low point in the current cycle for aircraft deliveries, requiring an estimated US $50 billion of finance, half of the 2019 volume. Lessor restructuring and M&A activity Managing liquidity will continue to be challenging for the airlines. Pressure on lenders, lessors, OEMs and other stakeholders will also extend well into 2021. As the crisis continues, an increase in lessor restructuring and M&A activity is expected. Incremental liquidity from a growing number of investors considering a role in the sector will be key to the continued ability of airlines to finance their aircraft and related assets. Aircraft with the most efficient technologies will be the preferred fleet choices for airlines as they seek to minimise operating risk and cash outflows, and their residual values are unlikely to experience permanent reductions. Conversely, the largest and least efficient aircraft types will remain underutilised for longer with a higher risk of permanent value impairments. Environmental issues and sustainability may have taken a back seat as airlines deal with the pandemic, but they have not gone away. The industry has set some extremely challenging green agenda targets and the actions required to make real progress on this front need to be woven into the plans rising from the wreckage of COVID-19. Resilience Once the virus is sufficiently tamed, passenger demand will slowly return. There is already evidence that the desire to travel is firmly embedded in our DNA and, given the opportunity and the confidence to fly again, the majority will do so. The industry has demonstrated its resilience many times in the past and will survive and thrive again, albeit with some sorely needed changes to its structure. Dick Forsberg is Senior Aviation Finance Consultant at PwC.

Sustainability and ESG initiatives are a hot topic for 2021. But how can companies successfully implement them? Judith Kelly outlines four new roles on the market that bring sustainability to the forefront. Climate action is now a priority item on every board agenda. In 2020, we witnessed a dramatic escalation in activity and real urgency from every sector to plan and implement the relevant sustainable finance and Environmental, Social and Governance (ESG) initiatives. Further, the Irish government continues to position Ireland as a hub for green finance as part of the ‘Ireland for Finance’ strategy. Investors are increasingly using non-financial factors such as ESG standards as an important part of their investment screening process. The challenge for us is to understand what new positions are being created, and how we source relevant candidates when established and experienced talent pools do not already exist. By working closely with key stakeholders within client companies – including boards, executive management and investors – to understand recruitment needs, we have been able to identify four main roles and several related positions that you can expect to see this year. Chief Sustainability Officer The Chief Sustainability Officer will become a key leadership role within every organisation of sufficient scale. The office will sit alongside Risk, Finance, Treasury, Corporate Finance, and Internal Audit as a key corporate function. The office will be responsible for building sustainability frameworks and programmes across all parts of the business and embedding people to manage and setting a proactive and positive sustainability culture across the organisation. ESG Strategy Director Large corporates from all sectors are aiming to build sustainable practices into every part of their business from procurement, to supply chain and operations, to manufacturing, to packaging. You will also see a call for ESG Integration Director/Managers. ESG Investment Director/Manager/Analyst With financial services firms looking to ramp up sustainable investment research and product offerings, many need investment managers with sustainability knowledge and expertise. Similar roles such as Head of Sustainable Investment and ESG Finance Lead will also feature in 2021. Chief Impact Officer/Director This role is to oversee the measurement, verification, management, reporting and improvement of the company’s social and environmental impact and the value that these will deliver to stakeholders. You could also see listings for ESG Reporting Manager as well. Judith Kelly is a Director at FK International.

Attracting and retaining talented people is always a challenge, but there are specific features of family businesses that deserve special consideration. Liam Lynch reflects on how family businesses can attract and retain the brightest and the best. Talented people are the backbone of any great business. Having the right people in place is the difference between mere survival and success. A significant challenge that faces many family businesses as they plan for sustainable growth is the ability to attract and retain executive and managerial talent.  Competing in the ‘war for talent’ As a family business grows, the appetite to tap into skill sets that are outside the family is also likely to expand. In a high employment economy, the competitive experience of engaging in the ‘war for talent’ is intense. Many family businesses find that the ability to attract and retain the skills needed throughout their business is now one of their main concerns. The competition to hire and retain good people can be fierce. While family businesses must navigate the same ‘war for talent’ environment faced by all employers, finding people with both the right skills and the right cultural fit can feel like an overwhelming barrier. The vast majority of families are committed to maintaining family ownership of the business. The structure of remuneration packages on offer to attract talent can be more limited than businesses with other ownership forms. Share-based remuneration incentives can tend to be off the table, and even if they are not, the exit mechanisms can be both complex and uncertain. Therefore, it is essential that the business effectively builds and communicates its value proposition to prospective employees; what it means to be a family business and why it’s a good thing to work for one. This might include, for instance, the commitment of a community embedded family business to both its staff and, by extension, the local community. This commitment might be demonstrated by higher levels of investment in training and corporate responsibility, as well as the prospect of relatively fewer redundancies during tougher times. Common recruitment issues Proper planning can help family business owners put a framework in place that not only addresses common business issues but may also prevent potential disputes within the family. With the right policies, practices, and strategy, the sky’s the limit for attracting the best talent and retaining great people, while at the same time preparing the next generation of leaders within the family. Consider some of the following common issues in developing a broad-ranging strategy to attract and retain the best talent: Compensation – Are you offering competitive compensation? Ensure that your reward packages, including remuneration plans, are based on market-driven data. Do family members enjoy opportunities or bonuses not available to other employees? Training – Do you have adequate training in place to prepare the next generation to take over leadership roles and responsibilities? Does every employee have access to the same level of training and development for their role, regardless of family status? Decision-making – Who is involved in designing compensation packages or making hiring decisions? Do those in decision-making roles have the qualifications required and the independence needed? Governance – Is your board of directors made up of family and non-family members? Do you have an adequate succession plan in place? Have you identified all the areas of risk for your business – from economic to competition, loss of talent and cyber security? HR policies – Are there clear performance review frameworks for both family and non-family employees providing opportunities for development and progression for both? Are the policies, standards, and expectations the same for all employees? Is the workplace an equitable environment overall? Communication – Is information communicated clearly and to all levels within the business? Are there cases of perceived unfair treatment, where only certain people are ‘in the know’ in relation to decisions or plans moving forward? Blending in non-family members – How are you competing with businesses that offer share based or equity rewards as part of their compensation plans for new talent? What can your family business offer in place of equity, including the certainty of cash which can be more attractive to many employees? Are there opportunities for advancement for employees who are non-family members? Implementing an effective people policy may require tough discussions and negotiations that go beyond established family expectations and reform longstanding practices. Overall, family businesses face particular challenges that require balancing the needs of the business with the expectations of the family. By making sure that your business has a strategy to develop and retain people with the right skills and fit for your business, you can create an equitable environment where everyone has the opportunity to thrive and build a sustainable foundation for both your business and your family. Liam Lynch is Partner and Head of Private Clients in KPMG.

The past year has seen the fast digital growth of businesses. With it, however, comes the added risk of cyber-attacks. The best way to defend against these attacks, says Sarah Hipkin, is to invest in and plan your cybersecurity strategy. After a year of accelerated digital transformation and increased cyber-attacks, it’s time for organisations to plan their Cybersecurity Strategy and Roadmap for 2021 with critical security lessons in mind. With this rapid, unplanned shift to digital channels and changes in consumer and business behaviour, a cyber criminal’s playground has just expanded. Current cybersecurity challenges Digital transformation changes an organisation’s cybersecurity threat and risk landscape. Current cybersecurity challenges faced by organisations include: critical information assets (e.g. bulk sensitive personal data or public-facing website) could be targets of attack; motivations of cybercriminals and type of cyber threats are not fully understood; and incident response teams taking too long to reconstruct cyber-attacks and take action to stop them. Regardless of the type of nefarious activity an organisation may face, if a cyber threat materialises, a security incident can have a significant impact on an organisation in terms of cost, productivity and reputation. Being adequately prepared to detect and quickly respond to the changing nature of incidents will help to stop an attacker from inflicting further damage. Cybersecurity strategy planning 2021 is the time to plan your cybersecurity strategy with these critical security challenges in mind. The strategy should ensure alignment between threat intelligence activities and business risks. Key activities will need to cover the following: Identify critical information assets which are essential to business operations, including underlying infrastructure. Collect information on adversaries’ motivations and intentions. What type of attacker may target your most valuable information assets? While most of the bad guys want to make money, whether stealing personal data, bringing down a website or shutting down critical services, their intentions will vary. Develop knowledge of cybercriminals’ tactics which includes malware and tools for sale, sale of personal data and exchanges of new exploits. Evaluate current effectiveness of systems security, including policies, processes, security training and staff capabilities to monitor, detect, analyse, and respond to cyber-attacks. The largest gaps in defences to protect critical information assets should be prioritised in the roadmap for improvement. Prepare a strategic cybersecurity roadmap which outlines each recommendation, detailing: the effects of losing or impairing the asset in costs, revenue losses, fines, reputational damage; likely adversaries who have attacked similar organisations; current deficiencies in defence layers; and associated technical and business risks amount to be invested and its associated benefits. Test response plan Cyber-attacks can impact an organisation of any size and will often occur at a time that catches everyone off guard. Under pressure, an individual’s decision making can become clouded. Scheduling a tabletop exercise with senior management and key operational staff to understand the realities of how a cyber incident would impact an organisation is critical. It will ensure everyone has a clear understanding of their role in responding to a cyber-attack and the organisational response, especially Board members who would likely be representing the organisation in the media. Sarah Hipkin is Director of Consulting IT and Cyber at Mazars.