Keeping your head up when the chips are down can be tough, but resilience is a learned skill and a valuable asset for entrepreneurs. Liz Riley talks to three members in business about how they stay resilient Just as the pandemic was easing and talk of an upswing in the economy had begun to lift spirits, the Ukraine invasion prompted fresh concern as rising inflation sparked speculation of impending recession. The uncertain outlook is a worry for everyone, but perhaps more so for business owners now tasked with revisiting strategic plans and rallying their teams to adapt to changing circumstances. Former Dublin footballer Bernard Brogan co-owns two businesses. PepTalk has developed workplace wellness software and Legacy Communications specialises in PR and sponsorship. For Brogan, the pandemic hit hard and fast in early 2020. “Legacy Communications is in the sports PR business, and the world of sport closed down for the guts of a year due to the pandemic. We had a real challenging time there,” Brogan says.  Colm Davitt, founder of Dental Care Ireland, also encountered difficulties in the weeks following the announcement of the first Government lockdown in March 2020. “We suddenly had no income or cash flow to meet our financial commitments. We had to lay off almost all our staff within a matter of days, which was very difficult,” says Davitt. For Sharon Cunningham, CEO and co-founder of Shorla Oncology, meanwhile, the onset of the pandemic presented her with the “biggest challenge” of her career to date. Cunningham had co-founded Shorla in 2017 in Clonmel, Co. Tipperary, to develop new cancer treatments for women and children. The sudden standstill in international travel brought huge disruption for the business. “There were delays associated with the US Health Authorities’ ability to travel overseas to complete our outsourced facility’s inspection, which ultimately delayed product approval,” explains Cunningham. “It was the biggest challenge of my career and required careful stakeholder management.” Best foot forward Despite these challenges, all three Chartered Accountants found the strength to push through, protect their businesses, and plan ahead. While the pandemic was a setback for Dental Care Ireland, not once was Davitt tempted to close up shop. He knew the company could come through the other side. “I was able to draw on my experiences from the 2008 recession to take decisive action. We had to lay people off in mid-March 2020, we started to re-hire in early to mid-May, so they were off for about two months,” he says. Brogan shares the same sentiment. “The Legacy team got together, we put our heads down and we hustled. It’s a word I use in sport, but it’s what we did,” recalls Brogan. “We hustled to create opportunities in different spaces. We worked on different COVID-19 plans and we fought through. The team showed massive resilience getting into the trenches together.” As Brogan sees it, team resilience like this is earned over time. “You need to have trust and clarity. It’s really important, especially in times of challenge, that everyone is clear on what the challenge is, where we are at, and the opportunities that can follow.” For Sharon Cunningham, resilience in the face of the deepening pandemic came down to changing course quickly and decisively. “Shorla faced tough challenges in terms of how we adapted the way we conduct our business activities,” she says.  “Embracing innovation and accelerating our digital transformation journey, particularly in sales and marketing, has positioned us for success in the new normal.” No matter what challenge a business is facing, communication is ‘everything,’ says Cunningham: “We make a big effort to communicate what we’re doing, how we’re doing it, and why we’re doing it. This ensures we stay focused on our vision and mission.” Building resilience While resilience may sound like a millennial term for ‘getting on with it’, the American Psychological Association (APA) defines it as much more. According to the APA, resilience is: “the process and outcome of successfully adapting to difficult or challenging life experiences—especially through mental, emotional, and behavioural flexibility, and adjustment to external and internal demands.” The pandemic, the war in Ukraine, spiralling inflation and the threat of recession—all pose potential challenge. According to Lynsey Hanratty, however, what really matters is how we respond. A business and life coach who works with female entrepreneurs, Hanratty says that resilience can be learned with practice and dedication. “Go back to basics. Are you getting enough sleep, exercise, and proper nutrition? Are you hydrated? Are you taking the time to get organised for the week?” asks Hanratty. “If the basics are working, you are in a better place to face any setbacks that come your way. That’s not to sound trite or to simplify a complex situation, but it’s a start on the road to resilience.” People who have overcome difficulties in the past are more likely to be resilient in their response to new challenges. “The people who suffer the most setbacks are usually the most resilient, because they have developed coping mechanisms to deal with their setbacks and traumas,” says Hanratty. “Learning from failures and mistakes instead of berating yourself for making them in the first place is a good start on the road to resilience. However, being willing to accept and tolerate a situation and work from there is also a great place to start.” Davitt understands this well. “I worked through the last recession from 2008 and, by 2012, I honestly thought it would never end. For several years, it was a constant cycle of cost reduction and restructuring and at one point in 2012, there wasn’t too much positivity around Ireland,” he says. “Thankfully, by 2013, things did gradually start to improve and move to a more positive note. The onset of the pandemic was massively challenging and quite stressful. However, as in 2008, we remained calm, came up with a plan and worked really hard to protect and save the company. “I feel the whole experience made us closer. Clear, objective, and regular communication throughout this time was critical. We have some very loyal and hard-working team members as a result.” Turning point Brogan believes his own resilience was cultivated during his years in football, and recalls a significant turning point during his career with the Dublin team.  “It was during a training game the Thursday before the match. The ball was kicked to me, and I went up to get it and I came down and ruptured my cruciate ligament… In my head, that was the end of my career. I thought I’d never play again,” he says. “I was absolutely devastated. We were on a big journey – the Dubs were after winning three [All-Ireland Championships] in a row and we were on course for history. I was trying to do my bit for the team.  “So, I made the decision: ‘I’m not done. I’m not finished yet’,” Brogan recalls. “I sat down with Jim Gavin in a hotel up near Dublin airport with a calendar and we counted back the weeks. I said, ‘If I get the operation this date, I’ll be five months on this date and coming into a super eight game. I can do this.’  “I circled the date of that game. My target was to get back for that game—five months and a couple of weeks.  “When I look back on it now, I’m kind of surprised I responded like that. I changed my mind in a day – I’m not going to lament on this. I’m not going to let this drag me down. I’m going to try to get back and get positive and get after this. “After the operation, I hit the gym with physio James Allen every second day for five months and got back out on the pitch against Roscommon on that day I had circled. It was only for five minutes – half dragging the leg – but I got back out. “To get back out running in Croke Park in front of 80,000 people, for me, is everything. I turned it around to make good decisions. I got back,” he says. Brogan’s story is a masterclass in resilience, not just in sports, but in life and in business. With enough practice, patient and dedication, resilience is a skill anyone can learn. 

Businesses in Northern Ireland are facing unprecedented levels of change as they continue to adjust to the new normal in the aftermath of the pandemic, writes Zara Duffy  The war in Ukraine and supply-chain challenges have led to inflation in the costs of fuel, materials and components. This means that businesses in Northern Ireland now need to review their pricing on a quarterly, if not monthly, basis.  Facing changing financing and cost structures, these businesses need professional advice on how to adapt and plan – advice they often see as another cost. Business and financial planning grant To help these SMEs, Chartered Accountants Ireland would like to see Invest Northern Ireland (Invest NI) reintroduce a Business and Financial Planning Grant similar to the scheme launched in October 2020 in response to the pandemic, which remained open for only a few months.  This scheme offered businesses up to £8,000 towards 80 percent of the eligible cost of engaging an external consultant to undertake a business and financial review to plan for their recovery.  If the scheme is reopened, we recommend that it be 100 percent funded up to the limit, and that it also be extended to non-Invest NI clients in a broader range of sectors across the economy.  We also recommend that the scheme be established on a permanent basis—particularly for micro and small businesses—and funded to include a follow-up review 12 months into the roll-out of the financial plan, with quarterly check-ins thereafter for up to three years.  The goal would be to ensure that financial plans do not just ‘sit on the shelf’, but become dynamic benchmarks, which are updated and adapted over time.  System of funding for SMEs As the positive effect of COVID-19 support schemes wanes, a longer-term, sustainable and mature system of funding is needed for SMEs in Northern Ireland—one that involves an appropriate mix of grants, loans and equity investment.  We want the Northern Ireland Government to prioritise SMEs and make more money available for funding, while also moving away from a ‘grants culture’ and towards the support of a vibrant business debt and equity market.  More private equity investors will be encouraged to enter the Northern Ireland market if they see the commitment of the Government and its agencies through the provision of part-funding.  This will create a self-sustaining ecosystem, as both investors and the State will get their money back and more, such as the creation of jobs. The hiatus with the Northern Ireland Assembly and Government has brought uncertainty to the three-year budget, including the allocation to Invest NI, a key agency for the region’s SMEs.  The indications are that the budget for Invest NI’s programme of supports and initiatives has been reduced from its previous level of £200 million.  Given Northern Ireland’s immense business potential, driven by its innovative start-ups and growing SMEs, it could be argued that at least £300 million should be made available from government sources for a ‘fund of funds’ for SMEs in the region. Chartered Accountants Ireland would like to see clarity on the quantum and focus of the budget allocation for Invest NI, for important programmes like Co-Fund NI, Tech start NI and the Small Business Loan Fund (SBLF).  We are concerned about the large gaps that are currently emerging in available funding, particularly given that money from the European Regional Development Find (ERDF) will begin to fall away from March 2023.  The business model for banks, the traditional source of SME finance, has changed. Low interest rates mean that margins are not there to take on risk, or at least not all of it. Government schemes are dwindling and even grants are not forthcoming.  This scenario is not ideal for an economy trying to recover from a pandemic, but it is good news that British Business Bank (BBB) has earmarked a £70 million fund for SMEs in Northern Ireland. We understand that more funding could be made available if the UK Government-owned BBB were to receive an appropriate proposal for an Enterprise Capital Fund. The Northern Ireland Government should at least match this commitment from BBB, if not exceed it to meet the potential of its business community.  With the right funding approach and leverage, there is an opportunity to create a more vibrant and self-sustaining SME sector in Northern Ireland.  We suggest benchmarking with other devolved nations and regions of the UK where this approach has worked—the Northeast and Midlands, for example. Equity investment & non-executive directors Northern Ireland accounts for just one percent of SME equity investment activity in the UK. There is potential for much more equity investment in the region, which would enable businesses to scale and grow.  As well as good corporate finance advice for SMEs, an awareness campaign using real-life case studies is needed to inform both business owners/managers, and their trusted advisors, about the benefits of equity as a source of finance. Equity investment provides more than just cash to a business. The investor also brings valuable expertise and experience, a new network of contacts, and strategic input, typically joining the board of the company as a non-executive director (NED). The perception that this involves unwanted cost and loss of control needs to be overcome. Chartered Accountants Ireland sees value in Invest NI’s Non-Executive Director Scheme and we believe its funding should be continued.  The scheme is designed to help SMEs strengthen their leadership capability, by supporting the appointment of an experienced independent NED. It also offers advice on the engagement of a suitable NED, and financial support of up to £15,000 or 49 percent of eligible costs, whichever is the lesser. There is some cost to the SME, but this serves to focus understanding of the value a NED will bring and the full buy-in of the business. More proposals by Chartered Accountants Ireland to create a better environment for businesses in Northern Ireland are presented in our annual position paper The Next Financial Year, published in July and available at www.charteredaccountants.ie

As SMEs grapple with tough trading conditions, spiralling costs and mounting uncertainty, Michael Diviney looks at what they will need in The Next Financial Year The exit of Ulster Bank and KBC from the Irish banking market has reduced competition in business lending considerably. For too many SME owners and their advisors, this lack of competition is having a detrimental effect—a point made by Chartered Accountants Ireland in The Next Financial Year: Creating a Better Business Environment, our most recent annual position paper, published in July.  If a business is not granted a loan by one of the two remaining pillar banks in the Irish market, it may have no option but to go to the other and accept its terms. Is this good for business? Most would agree that it is not. What went wrong? Among the 50-plus recommendations we have outlined in The Next Financial Year is the suggestion that the Irish Government carry out a review examining the reasons why Ireland has lost both Ulster Bank and KBC. These reasons are likely to include the capital asset requirements of the Central Bank, regulatory costs associated with banking in Ireland, and the legal complexity of repossessing properties. So, what can we do? We believe that there is widespread support for creating a third pillar bank and this role could be fulfilled by Permanent TSB, given the apparent lack of interest by foreign institutions in the Irish banking market.  Permanent TSB announced a new €1 billion SME-lending fund earlier this year. Further investment is required to achieve the scale necessary to deliver the financial products and services needed by the SME sector, however.  This is particularly important for the short- to medium-term as the economy emerges from the pandemic. For the long term, we recommend that the State continues its policy of reducing its ownership in the private banking sector.  Supporting alternative lenders As well as supporting competition in business banking, the Government also needs to recognise the importance of next-tier alternative lenders, which provide much-needed funding to SMEs.  As it is, the non-bank funding market in Ireland is too small and requires state support to grow. In particular, the Strategic Banking Corporation of Ireland (SBCI) must continue to grow and develop its partnerships. There has been some progress here with the announcement of the SBCI’s risk-sharing partnership with Metamo Credit Unions, and a separate agreement with Finance Ireland to provide €75 million in low-cost lending. Now, the SBCI must continue to encourage niche asset financiers and non-bank lenders into the under-€1 million lending market, fuelling the competition needed to better benefit and support SMEs. Grants and other supports In addition to strengthening sources of SME funding, grant-aid and other supports also play a crucial role.  Enterprise Ireland and the Local Enterprise Offices (LEOs) offer both. The problem is that they are aimed mainly at the manufacturing or internationally traded services sectors. We suggest that the Government and its agencies consider widening the eligibility criteria for such grants to include the more ‘traditional’ industries and service sectors that are so important to local economies and communities. We also ask if it is time to adapt the policies under which many grants and supports are offered—and on which the success of Enterprise Ireland and the LEOs is measured, i.e. the creation of new employment.  In such a tight labour market, in which many people are working in the ‘gig economy’, are SMEs being excluded from important supports simply because they are not adding full-time equivalents?  Adapting policy to the reality of Ireland’s 21st-century economy, we believe that performance measurement should be more balanced and include money spent domestically by State-supported businesses, for example on professional advice to help them grow. Business financial planning grant We have been consistent in our praise for the COVID-19 Business Financial Planning Grant administered by Enterprise Ireland.  This scheme provides a grant to businesses of up to €5,000 towards the cost of engaging an approved external consultant to help them overcome challenges posed by the pandemic—but its design holds potential value beyond that. The scheme helps a business to understand its immediate liquidity needs, create a financial plan to secure the external finance required for business continuity, and avail of a framework to manage the finances of the business. We propose that the scheme be given a more permanent status, beyond COVID-19, to become the Business Financial Planning Grant, and extended to include a follow-up review after 12 months, and quarterly check-ins thereafter for up to three years. This would serve to improve levels of financial literacy among business owners and managers, and address gaps in the financial management knowledge and skills of Irish businesses.  Also administered by Enterprise Ireland, the Sustaining Enterprise Fund and Sustaining Enterprise Fund for Small Enterprises were both introduced to help businesses rebuild after the impact of the COVID-19 outbreak.  No sooner had the pandemic begun to recede, however, then Irish businesses were hit by the effects of cost inflation caused by a global supply-chain crisis and the war in Ukraine.  In the context of such geopolitical uncertainty, we propose that a Sustaining Enterprise Fund or similar be made available on a permanent rolling basis for companies impacted by current or future shocks outside their control—though with eligibility decided on a case-by-case basis.  Again, we suggest here that the eligibility criteria be expanded to broader sectors of the economy beyond manufacturing or internationally traded services companies. Capital tax reliefs The SME sector relies heavily on capital tax reliefs such as Retirement Relief and Revised Entrepreneur Relief.  Both tax incentives encourage entrepreneurs to invest time and money in their businesses—and both could be improved if the recommendations outlined in the external review, carried out by Indecon in 2019, were implemented. The report recommended that Revised Entrepreneur Relief be retained as a valuable entrepreneurial support; that the requirement for the claimant to hold a minimum of five percent of ordinary shares be reformed; and that the lifetime cap of €1 million be increased to €12 million for entrepreneurs reinvesting in a new business. Lowering capital tax rates Though asset values have recovered since the financial crisis of 2008, capital gains tax (CGT) and capital acquisitions tax (CAT) rates have increased, and the high yields from capital taxes that flowed into the Exchequer during the ‘Celtic Tiger’ boom years have not been matched in recent years. Is it time to consider lowering CGT and CAT rates? We think so, because this would likely lead to more private and commercial transactions, resulting in much-needed tax revenues.  A lower rate of CGT could incentivise innovation and risk-taking, which would drive investment activity, thereby improving returns for entrepreneurs. Chartered Accountants Ireland believes that a headline capital tax rate of 20 percent would be a more reasonable level of taxation on gains, gifts, and inheritances. Measures introduced in Finance Act 2019 to enhance the R&D Tax Credit, particularly for small and micro enterprises, continue to await approval subject to Ministerial Order.  These include: increasing the R&D Tax Credit rate from 25 to 30 percent; raising the limit applying to cash-refundable tax credits to double the payroll tax liabilities for relevant accounting periods; and extending availability of this tax credit to companies engaging in research and development before trading commences. Michael Diviney is Executive Head of Thought Leadership at Chartered Accountants Ireland

Social enterprises can empower ordinary people to bring positive change to their communities and society, but what are the options  and where do you start? Chris MM Gordon outlines what’s involved, and the invaluable support accountants can provide If the COVID-19 pandemic has taught us anything, it is the importance to society of the power and resilience of ordinary people and local organisations providing community services.  Some of our busiest times at the Irish Social Enterprise Network were in the opening stages of the crisis when it seemed that for every private profit-making business that shut its doors, a social enterprise was opening theirs.  Communities formed groups to raise money for meals on wheels or to manufacture personal protective equipment for front-line workers. All of this was organic and determined—and because ordinary people felt empowered to make a difference. Throughout that time, more people became interested in setting up social enterprises, to better manage volunteers or oversee any money that is being raised and spent.  There was an increased drive from communities to form social enterprises, make them sustainable and retain goodwill—and they turned to their professional advisors to help them set up these new entities.  What is a social enterprise? A social enterprise is the original ‘business for good’. Social enterprises sell products and/or services for a profit, which is reinvested for a social and/or environmental cause. The National Social Enterprise Policy for Ireland 2019–2022 provides a more detailed definition:  A Social Enterprise is an enterprise whose objective is to achieve a social, societal, or environmental impact, rather than maximising profit for its owners or shareholders.  It pursues its objectives by trading on an ongoing basis through the provision of goods and/or services, and by reinvesting surpluses into achieving social objectives.  It is governed in a fully accountable and transparent manner and is independent of the public sector. If dissolved, it should transfer its assets to another organisation with a similar mission.” Social enterprises differentiate themselves in several ways. I find it useful to think of a social enterprises in terms of its ownership, funding and social impact. Ownership: Social enterprises are generally held by, or in trust for, the people they aim to serve. Social enterprises might be democratically owned, as in a co-operative where one person has one vote. More commonly, they might be structured as a company limited by guarantee, the idea being that no-one can sell the organisation for their personal gain. (Social Enterprises in Ireland: Legal Structures Guide, published by the Thomson Reuters Foundation and Mason Hayes & Curran, discusses the legal structures available for social enterprises in Ireland.) Funding: While social enterprises must generate income by selling products and/or services, it is common for them to receive grants or other public or philanthropic funding to supplement their income and allow them to function fully. Funding can come in many forms, but some funding streams are available to social enterprises only if they are set up as a specific type of company.  Social impact: There must be some measured social (and/or environmental) impact – for example, reducing homelessness – and the money raised or spent by the social enterprise needs to positively affect that impact.  ‘Work integration social enterprises’ are organisations that employ those that are furthest from the labour market. These could be people with physical disabilities or mild, moderate, or severe learning difficulties. Such social enterprises are providing employment and opportunities that may not otherwise be available. Setting up a social enterprise The best approach to setting up a social enterprise will depend on the context and a variety of other factors, including the nature of the problem the community or individual is trying to solve. For the professional advisor, the first step is to understand this, ask the right questions, and to listen. Community or individual?  Is the social enterprise being set up for and by a community or an individual? While it often takes a single individual to get things started, having the support and buy-in of a wider group of people shows there is a real need for the enterprise. It also increases the diversity of opinion and expertise needed to make a social enterprise successful. An issue seeking an enterprise? Someone wanting to set up a social enterprise may want to solve a specific problem that is close to them. They may have a sibling with a learning difficulty for whom they want to create a full-time job, for example. Their sibling loves making coffee, so they set up a café. This is an issue (finding employment for those distant from the labour market) that is looking for a business model to make it sustainable (a café). An enterprise seeking an issue?   The same could be true for someone with specific skills, such as a business-minded barista, who would like to do more than simply sell coffee. They are also looking for a social purpose to invest in and decide to employ people that are distant from the labour market—in this case, people with learning difficulties. This is an enterprise (a café) seeking an issue (employment for those distant from the labour market). Legal structure There is no specific legal structure required for social enterprises in Ireland. However, in my experience, people setting up a social enterprise for the first time often think that it must be a charity, without being aware of what that entails.  Gaining and maintaining charitable status can be onerous for a start-up and may not be necessary, or even relevant, in all cases. Some sources of funding may require charitable status, however. Knowing the sources and requirements of initial funding is important for choosing the right company type for a social enterprise. It may be tempting to advise a client to set up a social enterprise as a private company limited by shares and to spend its profits on whatever social cause they choose. This company type does not suit all circumstances, however.  Social enterprises come in a variety of forms. The use of each type of legal structure should be suitable, considered on its merits and aligned with the aims of the enterprise.  Again, the source of the entity’s funding and related requirements often determine the choice of structure. Here is an outline of the types of company set-up available to social enterprises: Company Limited by Guarantee (CLG)   This company type is the one most often chosen for social enterprises and comes close to company types in countries that have specific legal structures for social enterprises. CLG with Charitable Status   While charitable status (by application to the Charities Regulator) can apply to several types of legal structure, it most commonly applies to CLGs, subject to certain changes made to the constitution of the company, such as directors not being paid. There are advantages and disadvantages to having charitable status. Caution should be exercised as to whether it is necessary. Co-operative   A co-operative is an enterprise that is owned and controlled by its members and operates for the benefit of its members. A minimum of seven members are required to register a co-operative. The law governing co-operatives is currently being reviewed and updated. It is hoped that more co-operatives will appear as their benefits become more apparent. Private Company Limited by Shares (LTD)   Although this is the most common company type in Ireland, social enterprises tend not to be structured as private companies limited by shares. Designated Activity Company (DAC)  While the designated activity company structure has been applied to some social enterprises, it is more generally associated with financial institutions. There are relatively few DACs in Ireland that are considered social enterprises. The role of the accountant Working with social enterprises as they succeed in making a difference is inspiring. Accountants are in a unique position to advise individuals and communities from start-up, setting them on a path for sustainable impact.  Accountants can help social enterprises choose the first door they walk through. Picking the right door is the challenge.  People setting up a social enterprise often focus on the type of company that is being formed. Having taken time to listen to the client and understand the problem they are aiming to solve, the accountant can ensure that all of the available options (and the pros and cons of each) have been considered, the finance requirements planned for and aligned, and ownership and governance issues anticipated before a legal structure is chosen. Chris MM Gordon is Chief Executive of The Irish Social Enterprise Network Useful resources The Social Enterprise Toolkit is a resource for communities and individuals setting up a social enterprise in Ireland. It is available to download for free at socialenterprisetoolkit.ie The Irish Social Enterprise Network is the national body for social enterprise in Ireland. It provides information on the sector and useful pointers for people setting up a social enterprise online at socent.ie Social Enterprises in Ireland: Legal Structures Guide (Thomson Reuters Foundation and Mason Hayes & Curran, November 2020) is available to download at trust.org BuySocial.ie is a growing online directory of social enterprises operating in Ireland: buysocial.ie. The Charities Regulator provides guides to setting up a company with charity status: charitiesregulator.ie The Irish Co-operative Organisation Society (ICOS) provides information on setting up as a co-operative: icos.ie/starting-a-co-op/intro.

At a time of rising conservatism and regressive thinking, the EU’s progressive approach to ESG reporting is raising the bar on climate change action and it will have an impact far beyond the boardroom, writes Dr Brian Keegan  Bad law, like the British legislation overturning the Northern Ireland Protocol, and bad judgments, like the US dismissal of Roe v Wade, don’t just change the rules. They disrupt attitudes within a society. A disruptive change in attitude can be more damaging than any one piece of repressive law or legal interpretation. Some people speculate that we are seeing a return to the protectionist thinking of the 1980s, given the resumption of the Cold War and soaring inflation. The evidence suggests that the reset is more dramatic than that, however.  Disregard for the rule of law in international treaties and women’s welfare points, not to a 1980s outlook, but to a medieval way of thinking about the world. Against this backdrop of toxic conservatism and protectionism leading to international conflict and rising inflation, the management of climate change is slipping down the list of international priorities.  Shepherded through the EU institutions last month by Mairead McGuinness, Ireland’s EU Commissioner, the new Corporate Sustainability Reporting Directive is looking to address this slippage.  Reporting standards traditionally address shareholder concerns and what is material to them. Now the EU has taken this idea a step further by insisting on what it is calling “double materiality” — reporting not just on what is directly material to shareholders, but also on what is material to the wider community and society.  Double materiality is a concept that remains highly subjective, and expert groups within the Institute are working through how it can best be interpreted.  Critical also for this profession is the recognition within the directive of the role of auditing firms in assuring both the “traditional” financial report and the environmental, social and governance aspects.  Chartered Accountants Ireland lobbied hard to ensure that this recognition was included in the text of the directive, because it was by no means guaranteed at the outset. International accounting standards currently under development by the International Sustainability Standards Board (with the blessing of the G7) are committed to the notion of single materiality, albeit recognising that it is usually in the interests of shareholders that the environment be preserved too. About 50,000 larger companies within EU member countries will be directly caught by the new directive. They will have no choice but to adopt these new reporting requirements as the directive will have the force of national law.  The profession will, therefore, have to adopt additional standards for reporting and assurance, and draft standards are already in the public domain. This adoption will come at a cost, for the companies themselves and the firms that audit them. Are these costs worthwhile? I hope so. The Corporate Sustainability Reporting Directive will have a greater practical impact on climate change than any number of impassioned Thunburg-esque speeches from quangos, or government white papers as high on aspiration as they are thin on funding.  Voluntary codes and practices won’t deliver climate change management, but a legal requirement on corporates to declare progress or failure can. However, the real benefit of the Corporate Sustainability Reporting Directive is the way it will change attitudes on sustainability and the public attitude towards the accountancy profession as assurers of sustainable change over time.  A new legal framework doesn’t merely reflect existing attitudes in society – it changes future attitudes. This directive is a piece of modern thinking at a time when thinking has been turning distinctly medieval. Dr Brian Keegan is Director of Advocacy and Voice at Chartered Accountants Ireland

As Shannon Foynes Port Company advances plans to become a global leader in offshore floating wind energy, CEO Pat Keating outlines his ambitious vision for the Shannon Estuary The Shannon Estuary is primed to become a renewable energy leader and global hub for floating offshore wind farms as Shannon Foynes Port Company advances plans to harness the power of its close proximity to the Atlantic. “Ireland’s potential for floating offshore wind generation off the West Coast stands at 70GW, which is 12 times our current installed wind capacity on land,” said Pat Keating, FCA and Chief Executive of Shannon Foynes Port Company (SFPC). “The potential is enormous. It is all there, and it could play an enormous role in enabling Ireland’s transition to a low carbon economy, but, without the right infrastructure, all that potential energy will be going nowhere. Now is the time to plan ahead and make the right decisions.” SFPC recently appointed Bechtel, the US engineering firm, to revise Vision 2041, the development masterplan it published back in 2013. “Bechtel is assessing the entire potential of the Shannon Estuary for us, from an engineering point-of-view, so that we can plan out the roadmap of deliverable supply chain investments required to assemble these floating wind turbines and transport them out to sea,” said Keating. Ports like SFPC could act as a crucial focal point in the manufacturing, installation, and operation of large-scale offshore wind farms, while also supporting crucial local supply chains, Keating said. “The port infrastructure is critical, but there is a lot more to it. We are looking at other critical elements like how we can accommodate the offshore grid along the Shannon Estuary, so that this renewable energy has a route to market.  “We’re looking at the potential to produce eFuels from the wind energy resource, like hydrogen ammonia and sustainable aviation fuel.  “We won’t see wind turbines in the Atlantic until 2030 at the earliest, but if we don’t plan now for all of the different infrastructural and supply chain elements that will need to be in place, we may not even make that deadline.” As Keating sees it, Shannon Foynes Port Company is well-placed to play a leading role in the roll-out of such a strategy, with its most recent annual report, released in July, revealing record earnings in 2021 with profit before taxation exceeding €5.2 million for the first time. SFPC is Ireland’s largest bulk port company and second largest port operator. A commercial semi-state company, it is responsible for operating Foynes and Limerick ports and has statutory authority over all marine activities along the estuary, stretching from Kerry to Loop Head and Limerick city. “Our ‘harbour’ is the entire Shannon Estuary, the largest and deepest watercourse in the country, which consists of 500 sq. km. of water with channel depths of up to 32 metres. That is a unique asset in its own right,” said Keating. “Now, we want to use this unique asset to harness the renewable energy asset we have here in the Atlantic.”  Climate Action Plan If realised, Keating’s ambition to develop the offshore renewable energy resource off Ireland’s West Coast could potentially exceed targets laid out in the Government’s Climate Action Plan to achieve 5GW in offshore wind energy by 2030, rising to 30GW by 2050.  As it stands, Phase One projects currently in development under the plan mainly comprise fixed-pile developments situated off the East Coast. These include the Codling Wind Park co-development between EDF and Fred Olsen off the Wicklow coast, Oriel Windfarm – a joint venture between ESB and Parkwind NV in Louth – the RWE Renewables and Saorgus Energy-led Dublin Array Project, and Statkraft’s 750MW North Irish Sea Array. Only after these Phase One projects have been completed is the focus expected to shift to the floating offshore wind developments Keating is envisioning, in the deeper waters off the West Coast. Currently, offshore wind infrastructure in Ireland is markedly underdeveloped compared to other EU countries. The 25MW Arklow Bank Wind Park in the Irish Sea off the coast of Wicklow is our only existing operational offshore renewable energy project, but recent developments suggest significant change ahead. Offshore wind history “The Arklow Bank Wind Park goes back to 2004 and it was actually one of the largest offshore wind farms in the world,” said Noel Cunniffe, Chief Executive of Wind Energy Ireland. “At that point in time, Ireland was regarded as a world leader in offshore wind, but then we put the brakes on, mainly I think because offshore wind was seen as prohibitively expensive to develop.” In the years since, Ireland has been overtaken by the UK and a clutch of European leaders in offshore wind energy, among them Denmark, Germany, Holland and Norway. “We have definitely fallen behind, but there is an upside,” said Cunniffe. “The cost of developing offshore wind energy has come down massively since the early 2000s and Ireland is now in a strong position to take the learnings from Britain and our EU neighbours, so that we can hit the ground running at a much faster pace.” Policy and legislation The Irish Government has made substantial progress over the past 12 months in introducing policy and legislative measures to support the ramping up of offshore energy development. The National Marine Planning Framework was published by Taoiseach Micheál Martin on 1 July 2021, followed late last year by the Marine Area Planning Act. “The National Marine Planning Framework is Ireland’s first comprehensive marine spatial planning framework, and the Marine Area Planning Act provides the legal and administrative underpinning for a new planning regime in the maritime area, facilitating the development of offshore energy,” explained Rebecca Greene, Energy Tax Policy Leader with PwC Ireland.  A regulatory agency has also been announced to enforce the new planning regime and manage the relevant Maritime Area Consents (MACs) and foreshore licensing requirements.   The Maritime Area Regulatory Authority (MARA) is expected to be operational in 2023, while the first batch of MACs are expected to be issued soon to selected Phase One projects. “All of these developments are critical to paving the way forward for our offshore wind sector and making Ireland an attractive location for renewable energy investment,” said Greene. “At a fundamental level, Ireland’s maritime area is seven times the size of our landmass, so we have access to significant marine renewable energy resources, such as offshore wind, but also wave and tidal.” Renewable energy export The Programme for Government set out targets of 70 percent renewable energy by 2030, underpinned by 5GW of offshore wind.  Thereafter, the plan is to commission at least 30GW of floating offshore wind by 2050, turning Ireland into a significant exporter of energy to other markets.  Speaking recently at the National Economic Dialogue in Dublin Castle, Tánaiste Leo Varadkar, TD, highlighted the country’s potential to one day generate enough green energy to sell excess supply overseas. “While weaning ourselves off coal, oil and gas is a global challenge, it also presents incredible opportunities for Ireland, specifically in the area of electricity generated by offshore wind, backed up by mega-batteries and interconnection, and of course, green hydrogen,” Varadkar said. “I believe, in a few decades, we can go from being an energy importer to being an energy exporter,” he added, “with all the benefits that come with it – greater energy security and price stability, employment and regional development.” Surplus energy produced in the future would be transported through purpose-built interconnectors or existing gas infrastructure converted for the purpose. It could also be converted to green hydrogen stored in Ireland for energy security purposes. “Under the new planning system, we expect to see the first planning application submitted for a new offshore windfarm in the first half of 2023, and the government is also working on the ancillary infrastructure needed to cater for offshore wind energy,” said Cunniffe. “The Department of Environment Climate and Communications is currently working with Eirgrid to work out the cable infrastructure plan for connecting offshore wind farms to the electricity transmission grid around our coastline.” Route to market The route to market for new projects in the pipeline, meanwhile, will be handled initially via a series of auctions under the Offshore Renewable Energy Support Scheme (ORESS). Delivered by the Department of Environment, Climate and Communications with the support of Eirgrid and the Commission for Regulation of Utilities, the ORESS auctions will see offshore wind developers bid for capacity, receiving a guaranteed price for the electricity they generate.  “The most competitive projects will get contracts and they will then enter into construction. The first auction will open before the end of the year and we expect the bidding to take place around April 2023,” said Cunniffe. In addition to planning, licensing, and commercial supports, investment in the ancillary infrastructure for the developing offshore wind energy sector will be crucial in the years ahead, according to Greene. “We need to invest significant amounts in port infrastructure, supply chains and workforce requirements. Doing so will enable us to meet our climate objectives, but it will also create huge opportunities for economic prosperity across our economy and society,” she said. Cunniffe agreed that a “major recruitment drive” would be needed to support anticipated growth in the sector. “It is really great that we now have a planning system in place for offshore wind energy with the introduction of the National Marine Planning Framework and Marine Area Planning Act, but what we don’t have enough of are the skills we’ll need to support this,” he said. “There is definitely a shortfall in the number of marine ecologists, biologists and planners we will need to process the quantity of applications we’ll see over the next few years.  “We’re also going to need a lot of electricity transmission grid reinforcement around our coastline, so that we have sufficient capacity to move offshore power from where it’s being created to where it’s needed.” Budget 2023 As we await the announcement of Budget 2023 on 27 September, PwC is calling on the Government to prioritise measures that will support private investment in offshore wind and other renewable energies. “From a tax perspective, developers and investors in the Irish energy sector – and, in particular, the offshore wind sector – require certainty and stability in the tax regime given the significant investment involved. Minimising the administrative burden they face is critical,” said Greene. Among the recommendations outlined to the Government in PwC’s Pre-Budget 2023 Submission for Climate Action is the introduction of accelerated capital allowances for investment in port infrastructure, and the extension of the capital gains tax participation exemption to pre-trading ventures, including renewable energy developers. “We would like to see a broad exemption for infrastructure projects extending to Irish companies investing in renewable energy projects, even if they are not directly involved in the project,” said Greene.  “We’d also like to see the pre-trading expenditure window increased from three to seven years and would welcome clarity and confirmation from the Government with regard to the qualifying nature of grid connection costs.” The R&D tax credit regime could be improved to support green innovation and the development of climate technologies, Greene added. “We are also recommending that the Government reintroduces the relief for investment in renewable energy generation (s486B TCA 97), which ceased in 2014, in order to encourage corporate investment,” she said. “And we would also like the Government to amend the Relevant Contracts Tax regime to enable non-resident contractors with good tax standing to avail of the zero percent rate, and allow for monthly VAT returns to improve cash flow for projects at development or construction phase.”

Technology is shaping the future of financial services and creating exciting opportunities for innovative professionals at the heart of the fintech revolution As Chief Executive of Swoop Funding, Andrea Reynolds occupies a unique position at the nexus of fast-changing trends in financial services, emerging technologies, and the evolving role of the financial professional. The Chartered Accountant established Swoop in 2017 with Ciarán Burke, the company’s co-founder, to develop software that could help accountants identify the best funding options for SMEs. “The platform has been used now by 75,000 businesses to access funding, ranging from equity and grants to loans and tax credits. That’s given us an interesting overview of how much technology is changing the world of finance,” said Reynolds. Headquartered in Dublin, Swoop was founded in the UK where Reynolds had been working as a management consultant with KPMG in London before deciding to go into business with Burke. “At the time, everyone was moving to cloud accounting and open banking was coming down the line with the EU’s Revised Payment Services Directive (PSD2). We were seeing these new fintech lenders emerging, offering alternative funding to businesses and consumers,” she said. “In accountancy, you are trained to solve a problem by breaking it down into smaller elements, and that’s basically what I did with Swoop. I built a platform that could bring all of these funding options together in one place and do the heavy lifting for accountants advising SMEs.” Five years on, Swoop is on course for expansion in North America and other markets, having recently raised €6.3 million in Series A funding. “Finance is increasingly data-driven and borderless and that creates opportunities for fintechs like us, but different markets also have different strengths and weaknesses,” said Reynolds, pointing to her experience launching her own start-up in Ireland and the UK. “The idea for Swoop originally came from my experience navigating the funding system for SMEs in the UK, which is a lot more fragmented than the Irish system,” she said.  “The flipside is that the UK has been much more open to alternative finance, as have other European countries. That’s meant a lot more activity in non-bank lending, whether that’s crowdfunding, or loan finance from the likes of Wayflyer, Clearco or Youlend.” By comparison, Ireland is in ‘catch-up mode’, but it is catching up fast, said Reynolds. “Wayflyer is a huge fintech success story and there are other alternative lenders in the Irish market, like Linked Finance, Flender, and Accelerated Payments.  “Ireland already has a very strong fintech base in regulatory technology, anti-money laundering, ID verification, and Know Your Customer (KYC) technology. Where we still have to build up momentum is in the area of open banking.”  Automating auditing For David Heath, FCA, it was his early experience training as an auditor that sparked the idea for Circit, the fintech venture he co-founded in Dublin in 2015. “I trained with Grant Thornton, and it was a really great experience because the firm was so ambitious and the clients so varied, but as an entrepreneur, your starting point is always ‘what is the problem and how can we solve it?’  “For me, it was a case of thinking back to those early years in my career and digging into the processes that were the most challenging,” said Heath. “Auditors typically have a good relationship with their clients but getting the information they need from third party evidence providers is a big pain point.  “You have to verify the information your client gives you with an independent source—usually a bank, law firm or broker—and that process can take anywhere from three to six weeks.” Heath saw an opportunity to solve this problem with the advent of PSD2, using the EU’s open banking regulation to create a digital verification platform for auditors.  A cloud-based open banking platform, Circit connects auditors to their clients’ banks, solicitors, and brokers, allowing them to verify information within seconds.  Circit is approved by the Central Bank of Ireland as an Account Information Service Provider (AISP) under PSD2. It works with more than 300 accounting firms in Ireland and overseas and recently closed a €6.5 million funding round. “The funding will help us to increase our footprint and build out our open banking and regulated products, leveraging the license we have from the Central Bank of Ireland,” said Heath. “The problem we’re addressing may be niche, but it has global application.” Global ambition This global ambition is a common trait among Ireland’s most promising fintechs, according to Matt Ryan, a director in the Financial Services Consulting Group at Deloitte Ireland. “The ones to watch—the ones that do well quickly—tend to be thinking globally from day one. They have the talent and the funding, but they also know that Ireland is a very small market, so they are thinking in cross-border terms from the get-go,” said Ryan. Ryan points to Transfermate and Wayflyer as two such Irish fintech ventures whose global vision is paying dividends. A business payments infrastructure company founded in 2010, Transfermate closed a $70 million funding round in May, valuing the Kilkenny fintech at $1 billion. Wayflyer secured $300 million in debt financing in the same month following a $150 million Series B funding round, closed in February, which earned the Dublin start-up a $1.6 billion valuation and coveted ‘unicorn’ status. The pandemic effect The speed with which Wayflyer’s revenue-based financing and e-commerce platform succeeded globally reflects a wider trend in fintech. “The pandemic really accelerated the development of the sector as businesses and consumers suddenly moved online en masse,” said Ryan.  “Fintech was already a fast-growing market, but COVID-19 has made digital and contactless payments the norm and that has catapulted financial technology into a new era of growth.” While fintech awareness among consumers tends to centre on high-profile digital banks like Revolut and N26, the fintech sector globally, and in Ireland, is far more diverse.  “People usually think of full stack providers like Stripe and Revolut when they think of fintech, but that’s really not the whole story,” said Ryan. “Equally relevant are the technology companies selling services and solutions to financial institutions. “There are some very successful Irish companies in this space, such as TansferMate and Fenergo, which specialises in KYC technology for banks.” Fintech in Northern Ireland The established financial services sector is equally important to the fintech ecosystem in Northern Ireland, according to Alex Lee, Executive Chair of Fintech Northern Ireland (Invest NI). Figures published last year by Fintech NI found that there were 74 fintech companies in the region and 7,000 people employed in fintech jobs. “The financial services sector here has a good track record of attracting foreign direct investment (FDI), particularly over the last 15 to 20 years,” said Lee. “Large institutions like Citi, Allstate, CME, TP ICAP and Liberty Mutual have all established a meaningful presence here.” Together, these US multinationals form ‘the foundation’ on which Northern Ireland’s fintech sector has continued to build, Lee said.  “Attracting big international players has helped to grow out our fintech expertise and talent pool, because most of these companies have global technology development centres running out of Northern Ireland, and that has contributed to the rise of some really successful homegrown fintechs,” he said. FinTrU is one such success story. Founded in 2013, FinTrU develops regulatory technology for investment banks, ranging from legal, risk and compliance, to Know Your Customer (KYC). The Belfast-headquartered company employs 1,000 people and, in July, announced plans to create a further 300 jobs at a European Delivery Centre in Letterkenny, Co. Donegal. Another scaling success story in Northern Ireland is FD Technologies (formerly First Derivatives).  Founded in 1996, the Newry-headquartered data firm employs 3,000 people at 13 offices in Ireland and globally and recently announced plans to create 500 jobs at a new technology hub in Dublin. Northern Ireland is also continuing to attract FDI. In June, the Bank of London announced plans to establish a Centre of Excellence in Belfast, creating 230 jobs by 2026.  “We are making strides now and my hope is for a homegrown fintech ‘unicorn’ to come out of Northern Ireland. We’re not quite there yet, but I would like to see this ‘poster child’ for the sector emerge soon,” said Lee. Decline of the unicorn Such is the pace of growth in the fintech sector globally, however, that even the much sought-after ‘unicorn’ moniker is losing its lustre.  “In developed markets at least, I think there is a view that ‘unicorn’ status has lost some of its cachet,” said Ian Nelson, FCA, Head of Financial Services and Regulatory at KPMG Ireland, and a member of the board of the Fintech and Payments Association of Ireland. Even Stripe—perhaps the best-known ‘unicorn’ with Irish origins—has outgrown the label.  Established in Silicon Valley in 2010 by Limerick brothers Patrick and John Collison, the online payments giant’s $95 billion market capitalisation has soared beyond the $1 billion unicorn requisite. “Stripe is really now a ‘centicorn’, if you like, and there are numerous other fintechs in the same sphere, and ‘decacorns’ valued at $10 billion coming up behind them,” said Nelson. “At $1 billion, becoming a ‘unicorn’ has less meaning for fintech start-ups in developed markets, but it will continue to be an important building block for start-ups in emerging markets and less mature fintech hubs.” Among the other trends Nelson is keeping an eye on is the role technology will play in supporting environmental, social, and governance (ESG) capabilities in business. “Since COP26, we have seen a lot of attention directed towards fintechs with ESG capabilities,” he said.  “This really reflects the growing prioritisation of ESG in financial reporting and financial services generally. ESG is going to be a really important play in fintech. “We can expect to see more fintech companies focused on climate change, decarbonisation and the circular economy, and more jurisdictions setting up incubators specifically focused on ESG solutions.” Digital innovation in financial services Already a leader in payments globally, Ireland is now shaping the business environment for digital finance, writes Seán Fleming TD, Minister of State at the Department of Finance As Minister of State with responsibility for financial services, I lead the whole-of-government strategy for developing international financial services in Ireland, titled Ireland for Finance. I very much welcome this timely report on fintech.  In recent years, new entrants and long-standing financial institutions have looked to capture the opportunities presented by digital technologies.  Ireland is well-placed to benefit from the application of new technologies in the financial services industry. We have both a well-developed financial centre and a renowned technology sector.  This makes Ireland a centre of excellence for start-ups and big-name companies that want to establish operations in the European Union.  Ireland has shown leadership in shaping the business environment for digital finance. Important to this is Ireland’s education system, which has produced some of the finest innovators in the world. These graduates are leading the development of cutting-edge technologies.  The Government has an ambitious agenda for education. Two out of 15 Cabinet Ministers are dedicated to education and skills. Consecutive Governments have invested substantially in education, making it a cornerstone of Ireland’s economic strategy.   This economic strategy has created a strong mix of multinationals that have chosen Ireland as a place to do business. We have been very successful in supporting high-potential start-ups, with over 200 Irish fintech firms at various stages of development. Ireland is a leader in payments, and a number of firms have substantial development operations here. The digital finance ecosystem has expanded in recent years to include institutional financial services providers that have chosen Ireland to help them develop their fintech capability. The importance of fintech is reflected in the Ireland for Finance strategy. I identified Fintech and Digital Finance as one of the five themes in Action Plan 2022.  The Department of Finance’s Fintech Steering Group leads the cross-government approach with other departments and state agencies, and with representatives of the financial services and information technologies industries, and third-level researchers. Financial Services Ireland, the Ibec sector representing financial services companies, recently identified the future talent pipeline as being critically important. Particular areas they identify are fintech, digital finance and the environmental, social and governance agenda. I will shortly be publishing the updated Ireland for Finance strategy and fintech will be a key theme, and it will be at the centre of our work in the coming years.

Organisations considering outsourcing in a tight labour market will need to get to grips with the relevant legislation. Shona O’Hea talks us through the current guidance The increasing digitisation of the workforce, changes in business models, globalisation, and remote working capabilities have led to a new approach to the delivery of services. These changes, coupled with the pandemic and rising demand for employees, have led to an acceleration of outsourcing solutions. Organisations typically outsource activities for several reasons. It could be to gain efficiencies, focus on core business activities, a need for specialist expertise, to deal with a business change, or to tackle a problematic delivery cycle. In all cases, it is helpful to know what requirements are needed when considering going down the outsourcing route. Updated guidance The Central Bank of Ireland (CBI) recently published new guidance regarding outsourcing. Issued in December 2021, the Cross-Industry Guidance on Outsourcing (CIGO) aims to equip regulated firms with the knowledge to assess outsourcing risks better. In essence, regulated entities need to ensure effective governance and risk management processes are established to allow for effective oversight of outsourcing. CIGO, which supplements existing sectoral legislation and regulations, has come into effect immediately and applies to all regulated financial service providers in Ireland. Sub-outsourcing and offshoring risk The guidance outlines the CBI’s expectations on specific risks, such as sub-outsourcing and offshoring, along with key considerations managers should know to mitigate risk when entering into outsourcing arrangements. The CBI recognises the increasing trend for outsourcing arrangements to be spread across different physical and geographical locations. Offshoring presents great opportunities for regulated entities to expand services and teams. If not set up and governed correctly, however, offshoring can hinder visibility and a regulator’s super-visibility of the activities that are being performed. Section 5.5 of the CBI’s guidance outlines the steps required to ensure the most effective and appropriate approach to offshoring. When considering or engaging in outsourcing to offshore jurisdictions, the CBI expects regulated firms to: Evaluate the particular risks associated with the country or countries to which they are planning to outsource activities, ensuring that their outsourcing risk assessments pay sufficient attention to 'country risk' and document the assessment; Ensure that contracts for outsourced arrangements, including those which are offshored, stipulate that regulated firms and the CBI must be given access to carry out all necessary quality assurance and supervisory work; Ensure that there are minimum standards for risk appetite at the outsourced service provider (OSP). These must be aligned to the regulated firm's risk management expectations and requirements to mitigate reputational risks or regulatory breaches; Ensure that country risk assessment issues identified are also considered as part of the regulated first disaster recovery and business continuity management; and Pay particular attention to complications that might arise in insolvency (e.g. recovery of data and records, protection of intellectual capital), termination and/or recovery and resolution actions. Restrictions to offshoring Restrictions to offshoring may occur where the CBI deems that super-visibility is severely constrained or non-existent. Other concerns include having a memorandum of understanding, the level of contact with the regulator in the offshoring jurisdiction, the location of the offshoring, and excessive operational risks associated with the offshoring of particular activities. Understanding and applying outsourcing legislation is essential if your business relies on outsourcing services. It is also worth noting that the CBI may update or amend its guidance or provide supplemental advice. Keeping up to date with these changes is crucial. Shona O'Hea is Partner of Financial Accounting and Advisory Services at Grant Thornton

With the cost-of-living crisis looming and the remnants of the pandemic still having an impact, now is an important time to think about the future of your business. Geraldine O’Connor outlines six areas to consider For managers and business owners, the summer months can give you time to prepare your accounts, clients and staff, for the end of the year. Here are six critical areas to focus on before the autumn rush begins. Inflation Rising costs are on everyone’s mind – energy, supplies, transport, staff costs, or simply the cost of living. So, how do we manage the impact on our bottom line? A critical step is to understand what you’re spending. Now is the time to analyse your costs, both to look for potential savings and to spot problems that, if left unattended, could mean that you run into serious trouble later in the year. If do you think you may run into difficulty, keeping the lines of communication open with your bank is essential. Remember, your credit history will affect your future ability to raise finance, so address issues as soon as they are identified. Budgeting will be more important than ever this year, and inflation needs to be factored in when you analyse and forecast your variable costs. Time Are you making the best use of your time? What do you spend most of your time on? Chances are you spend a lot of your time answering questions from clients and staff. Identify time-consuming tasks you can delegate to a staff member or outsource to a service provider. Remember, any time you get back can be used to enhance your wellbeing and effectively manage your team and business. If you charge for your time, it’s important to quantify its worth. Pressure Consider whether there are things that can be done now that will take some of the pressure off later in the year. For example, do you need to update job specifications? Are there ways to streamline processes and work more efficiently? What can you do now to prepare for forthcoming changes like the introduction of statutory sick pay, remote working and pensions auto-enrolment?  If you took advantage of debt warehousing during the COVID-19 pandemic, have you agreed on a payment plan with Revenue? If not, now is the time to do so. If you are a sole trader, check that you have the correct information for your tax return. Pipeline When was the last time you looked at your sales pipeline? What incomings do you expect next year, and how will inflation affect your input costs? Have any prospects fallen off your list? Can you identify new opportunities? The more realistic your projections, the better your forecasts will be. Service providers Are you getting what you need from your service providers? If not, why? Could it be that your provider doesn’t understand your requirements? Have you outgrown them? If they don’t have the required skills, it is time to start looking for alternative solutions. Systems Work patterns changed during the pandemic, putting pressure on systems and resources in some areas and highlighting opportunities in others. Do your systems highlight opportunities to improve cash flow, increase profit, flag risks, and produce meaningful reports to help you run your business more efficiently? If you aren’t getting value from your systems, now might be the time to seek advice and invest in some training. We’ve come through a very disruptive period that accelerated the pace of change in many businesses and put pressure on resources. Soon, we’ll be facing a hectic time for business owners while finance teams will have filing deadlines and quarter- and year-ends on the horizon. Now is the time to plan and position your business to move forward confidently in the months ahead. Geraldine O’Connor is Senior Bookkeeper at GroForth

There are a lot of widely held beliefs about the UK’s Patent Box relief scheme, but how many of them are true? Carrie Rutland debunks the myths surrounding the scheme for businesses in the United Kingdom The UK’s Patent Box scheme (Patent Box) is a tax incentive designed to encourage businesses to develop and commercialise patentable Intellectual Property (IP). While many will know the headline benefit—namely, that Patent Box claims reduce the effective rate of corporation tax paid on eligible profits to 10 percent —there are several misconceptions about how the scheme works. Here are some common myths regarding the Patent Box – and how businesses can benefit from it. 1. Patent Box relief is only for manufacturing and technology companies While businesses in the manufacturing and technology sectors do benefit from the Patent Box, there is no reason why companies in all sectors cannot use the scheme. Any business with patent-derived income can make Patent Box claims, provided they meet the qualifying criteria.  2. Patent Box only applies to goods Patented processes or technology that enable services to be provided can qualify for Patent Box relief. For example, a computer-implemented method for time stamping a transaction – where systems document a time of payment to authenticate a user – could be patentable. 3. The whole product needs to be patented Many products and services now contain various components that are essential to how they work. If you have a patent over one critical element, the whole of the income derived from the product or service can qualify for relief. Helpfully, profits arising between patent submission and grant can be included in a Patent Box claim once the patent is granted. 4. Software cannot be patented In recent years, companies have successfully applied for patents regarding software platforms. Where the software provides essential support to a service offering, income generated from that service can qualify for relief. Suppose a business makes a successful claim for research and development (R&D) tax relief on software or other technology. In that case, it is worth seeing whether a component of that technology or software can be patented, thereby gaining access to Patent Box relief. 5. The patent must be owned to be claimed Patent Box can be claimed if there is an exclusive licence over the qualifying IP right. A valid claim can be made if the company actively manages the IP and another company in the group has undertaken the qualifying development activities. 6. You can’t have R&D relief and Patent Box relief on the same thing Yes, you can. In fact, you must have carried out R&D on the patented item to be able to claim Patent Box relief. The amount of any Patent Box claim is adjusted by the ‘R&D fraction’ to limit relief where you have acquired the patent or subcontracted out the R&D leading to its creation to another group company. 7. The ‘R&D fraction’ is frozen in time The amount of qualifying R&D spend counted for the R&D fraction adjustment is not limited to the R&D carried out before the patent was granted. Later R&D work to apply the patented item to your products or services counts as a “good” expenditure for the R&D fraction – so, the more R&D you do to develop the patented application, the more Patent Box relief you can claim. 8. It’s not worth the hassle of trying to stream revenues and track costs Making your first Patent Box claim can be time-consuming, but it is worth remembering that once a system for calculating the qualifying profits has been set up, compiling the details for subsequent years will become a relatively straightforward process. 9. Intragroup sales don’t count as relevant income All sales revenue that arises from patents can qualify, including licence fees paid by members of the same group to use a patent, e.g. patented software or other technology. 10. In practice, the benefit of the Patent Box is too small to be worth the effort of claiming Patent Box claims can be highly beneficial – namely, reducing corporation tax payable on qualifying income by 47 percent (60 percent from 2023). The actual benefit will depend on how your product and service offerings are structured. For example, if you have a patent over something sold as an add-on to a core product, it may be worth reconfiguring that product in the future so that more income is ‘patent dependent’.    Carrie Rutland is Partner of Innovation Incentives at BDO UK Claire McGuigan is Tax Director at BDO Northern Ireland

Over the duration of a successful career as a Chartered Accountant, Suliyat Olalekan has learned the value of hard work, commitment and, above all, kindness From as far back as she can remember, Suliyat Olalekan wanted to become a Chartered Accountant. “I was really good at maths from a very young age and I was always very certain that I wanted to have a career as an accountant,” says Olalekan.  “I didn’t want to be an academic, studying mathematics or statistics in a university. I wanted to apply my skills in the real world. Accountancy seemed to me to offer a lot of possibilities, but I can’t say I had any real sense back then of what the role would actually involve day-to-day.” Born in southwestern Nigeria, Olalekan was raised in a tight-knit family in Ibadan, the capital of Oyo State. One of five siblings, she moved to Ireland as a teenager, settling in south Dublin, and went on to study Leaving Cert Accounting.   Though Olalekan had “absolute conviction” about her career aspirations, acclimatising to the Irish way of life after relocating from Ibadan as a young teen came as a culture shock. “I found the education system in Ireland fantastic, but it was very different to the education I had experienced in Nigeria, which was highly academic,” she says.  “When I started secondary school in Ireland, I was ahead of the syllabus so it was an easy transition starting out. I was able to focus instead on integrating socially and learning about the culture and way of life in this new country that was so different.” Learning to adapt at a young age has stood to Olalekan over the course of an accomplished career as a Chartered Accountant that has taken her from practice to industry, and from Dublin to London. “It is so important to do your research in any profession. This is my go-to approach when I am considering a potential new role, or finding my feet in a new job, and it’s the reason I think I’ve been able to adapt well to new roles and responsibilities,” she says. “I reach out to people and lean into my network, so that I can find out as much as I can about a new role on offer—and not just the role itself, but the organisation, and the wider industry. The same goes for how I approach my work day-to-day. I always try to learn from other people who are experts in their role, their field, or sector.  “If I need advice on a tax issue, for example, I will go to a tax expert—and I never jump into anything. When I start a new job, I stand back and take stock of what is happening around me; what the dynamics are; how things work. I never dive in. I take my time and I do my research. This balanced approach has worked well for me in my career.” Now Chief Accountant at SFL Corporation, an international NYSE-listed maritime company, Olalekan manages a team in London and Oslo responsible for accounting and reporting on US Generally Accepted Accounting Principles (US GAAP).  She began her career in practice, training with Deloitte in Ireland after graduating from Dublin Business School in 2007 with a first-class honours degree in accounting and finance. “I knew I wanted to train with a ‘Big Four’ firm and I really enjoyed my time with Deloitte. Joining their Audit Graduate Programme was a really wonderful start to my career and they sponsored my Master of Accounting at UCD Michael Smurfit Graduate School of Business. “From there, I went straight into the Final Admitting Examination (FAE) with Chartered Accountants Ireland in 2012 —and then I reached a point where I wasn’t quite sure what I wanted to do next.” Rather than mapping out a strict career plan, Olalekan instead decided to hang back and gain more experience where she was, before deciding on her next move.  “A lot of my friends and peers around that time were moving to Australia, the Cayman Islands, Bermuda — and thinking ahead to ‘what’s next?’ I was happy enough where I was though, so I stayed with Deloitte, moving from Audit Senior on to Assistant Manager and then Manager.” It was when Olalekan was offered a secondment with Bank of Ireland that she got her first taste of working life beyond practice. “I got this fantastic opportunity to see what it was like on the ‘other side’ working in capital investment, and I found I really enjoyed it,” she says. The experience prompted Olalekan to look further afield and, when she decided to relocate to London in 2014, she found herself open to a move into shipping – a sector she had no experience in at the time. “It was my brother who told me about this job as Group Reporting Manager with SFL Corporation and, straight away, I was intrigued,” she says. “I knew nothing about the maritime sector at the time, but shipping is such a traditional and tangible industry. I thought ‘that’s how food gets to my table and how furniture gets to my home’.  “SFL Corporation is also listed in the US, which meant I could get experience in US GAAP. I already had experience in UK GAAP and International Financial Reporting Standards (IFRS) in Ireland. I thought US GAAP would be a challenge that would really stand to me.” Olalekan was promoted to her current role as Chief Accountant with SFL Corporation in London in 2017. “They have been very persuasive in keeping me, and I really enjoy the work I do here because it is just so interesting,” she says. “My day-to-day can go from journal approvals on really important qualitative items to filing statements to the US Securities and Exchange Commission’s EDGAR [Electronic Data Gathering, Analysis, and Retrieval] system. “I’m involved in preparing financial data for press releases, and in constantly reviewing and ensuring the accuracy of the information we make available to the public. I advise our commercial and operational teams on the accounting implications of new business contracts and potential transactions. My role is so varied and I find that incredibly rewarding professionally.” As her career has progressed, Olalekan has settled into an open, approachable leadership style centred on building strong relationships with the people on her team, as well as those she reports to and colleagues in the wider organisation. “There are many ways you can approach leadership and different styles work for different people—but I have always leaned into genuine, positive relationships and that continues to work really well for me to this day. “I make sure that I am seen as a ‘can-do’ person; someone people won’t hesitate to approach to ask for help. This has been very beneficial because people know I don’t shy away from work and that I’m not afraid of challenges.  “In any new role, you can’t know everything straight away. That is what growing and learning as a professional is all about. If you are seen as a positive can-do person who can be relied on to work hard, it is more likely that you will be offered promotions because your managers will trust that, even if you are not 100 percent ready, you will rise to the occasion, learn, and do what is needed.” Approachability, and a willingness to help others and collaborate to solve problems, is equally important for managers who want to support, encourage, and get the best from the people on their team. “Just as my managers know they can trust me, my team learns the importance of trustworthiness from me. It creates a positive chain reaction,” says Olalekan.  “They know they can come to me with problems and challenges, and that means they are also more likely to come to me with ideas, insights and solutions that can benefit the business. That is very rewarding for me as a manager.” A mother to two young children, Olalekan still finds time outside her work and home commitments to support her profession. A committed member of the London Society of Chartered Accountants Ireland, she was among four members recently elected to Council. “I am honoured to have been elected and to have the opportunity to give something back to the profession that has been so good to me in my career,” she says. “We train people to be robust, to be intimate with numbers, to be able to analyse the data and make sense of the figures. You don’t need to be the CFO of a FTSE 100 to be a success in this profession.  “My own ambition now is to add value to the organisation I work for, and support the people I work with. Even though I was so sure so young that I wanted to be an accountant, I couldn’t have known then how fulfilling my career would turn out to be. I am exactly where I want to be.”  

The Government’s Summer Economic Statement sets out plans to tackle inflation and rising living costs in Budget 2023. Susan Kilty digs into the details. The Summer Economic Statement released this month outlines the broad measures we can expect to see in Budget 2023 against the backdrop of rising public debt prompted by the cost of the government’s numerous pandemic support schemes. Until recently, Ireland – like many developed economies – could borrow interest-free in the eurozone. Currently, however, we are facing significant inflationary pressures across the eurozone. In the case of Ireland, inflation is estimated by Eurostat to have reached an annual rate of 9.6 percent in June, higher than the figures predicted by most economic forecasters. These inflationary pressures and the expectation of tougher monetary policies from central banks have led to higher interest rates and borrowing costs. Tackling inflation, and supporting those struggling with increased costs, lies at the heart of the Summer Economic Statement. The Government is also facing an ongoing housing crisis, a scarcity of public health services, an ageing population and a physical environment that is increasingly showing the side effects of climate change. In the Spring of 2022, tax revenue for 2022 was projected to total €75.8 billion, up almost 11 percent annually. One of the primary drivers of this revenue growth is the strength of corporation tax receipts, which amounted to €15.3 billion last year. Half of these receipts are attributable to just ten large taxpayers, however. This means that our corporate tax-take relies largely on the continued presence of these taxpayers in Ireland, alongside other multinationals paying significant tax relative to indigenous businesses. The Government intends to use these corporation tax receipts to rebuild its fiscal buffers in the years ahead, and not for day-to-day spending. The Summer Economic Statement projects core expenditure of €85.8 billion in 2023. Core expenditure relates to ongoing permanent expenditure on public services and capital expenditure on health services, education and social support. This core expenditure includes an overall budgetary package of €6.7 billion, comprising additional public spending of €5.65 billion and tax measures amounting to €1.5 billion.  In terms of spending, the €6.7 billion figure represents a 6.5 percent jump on the year prior – greater than the five percent growth predicted in last year's budget. This increase is aimed at tackling the impact of inflation while also protecting the provision of core public services. Of the €6.7 billion figure, €3 billion will be aimed at these core public services. The remaining €3.7 billion will be allocated on Budget Day. The Government is also providing for an overall taxation package of €1.05 billion next year. This is double the amount set out in the original strategy and, once again, reflects the need to adjust the parameters given the higher-than-assumed level of inflation. One of the critical objectives of taxation policy in the forthcoming budget will be to prevent workers from having to pay additional tax purely because they have moved into higher tax brackets because of inflation. Overcoming challenges The proposed allocations demonstrate an adaptive approach by the Government, which has expressed the need for additional funding to balance the provision of public services to prevent excessive spending resulting in an overheated economy. The Government also appears to be mindful of the precarious nature of its current corporation tax receipts and is looking to make the most of the high tax take from this source. More broadly, it recognises the turbulent state of the global economy and a willingness to provide the necessary resources to support Irish society through this challenging time. In my view, there is a clear need to balance budgetary measures to ease the inflationary impact with more long-term measures, which would help Ireland weather the challenges of housing supply, an economic downturn, climate change, ageing demographics, and digital transition. Sound management of the economy is needed to boost productivity, attract investment (particularly in the green and digital space) and support indigenous businesses. Susan Kilty is Head of Tax at PwC.

Despite efforts to balance gender, most organisations have a disproportionate number of men in senior roles. Dawn Leane explains how we can redress the balance by focusing on what women really need. The importance of gender balance in the workplace is well established. Yet, despite much discussion and policy development, a significant gender imbalance persists at senior level in most organisations. Information and insight are both critical to developing interventions, which can address this imbalance. Much of the available research does little more than compare men and women in the workplace, however. While this approach does have value, it is only one aspect of a highly complex issue, as explored in Women in Business: Navigating Career Success, published in 2012 by Fiona Dent and Viki Holton. Rather than contrasting their experiences to those of their male counterparts, the book focused on women's experiences and examined the factors that either encourage or inhibit their progress. In one part of the research, Dent and Holton asked participants what career advice they would offer other women. Respondents highlighted the following: Early opportunities to be visible (such as leading a key piece of work or project); Support from a variety of sources (including a coach or mentor, colleague, family or friends –  87 percent identified their manager as a critical source of career support); and The need to be ambitious and intentional. Early opportunities Women often get fewer opportunities than men to take on significant assignments. They can also find that their ideas are less likely to be heard and recognised. As such, women can miss out on meaningful developmental feedback. The Accenture report, Getting To Equal 2018: Young Leaders, revealed that women aged 30 and under will experience several barriers to their advancement within their first five years of working. This result is supported by McKinsey and LeanIn.org’s Women in the Workplace 2021 report, which found that for every 100 men promoted to manager, only 86 women are promoted. McKinsey termed this phenomenon 'the broken rung', which leads to an unbalanced talent pipeline. Women must close the early gaps in hiring and promotion, improving their visibility by stepping forward to take on key projects and assignments. Available supports Dent and Holton identified that women avail of various supports inside and outside the workplace. For example: Sponsors: senior leaders of any gender who act as sounding boards and advocates, often facilitating the development of key network connections. Mentors: colleagues who support and guide based on their experience, offering a safe environment to ask questions and get advice. Mentors can be of any gender and exist inside or outside the organisation. Executive coach: this person takes a non-directive role. A coach helps women develop strategies and action plans by unlocking their self-awareness and capabilities. The skills and behaviours developed through executive coaching are enduring. Networking: Women often don't have access to a network early in their careers. As networks are usually vital sources of information, this can limit their opportunity to make essential connections. Women must invest in building and maintaining strategic network connections. Being ambitious and intentional The key for women keen to increase their visibility and support in the workplace is to develop a ‘professional brand.’ This is what others say about you, and it is often overlooked by women. To change this and improve your chances of getting ahead in the workplace, I recommend that you start to think strategically about the messages you want to convey to colleagues, what these messages represent, and who your 'brand ambassadors' should be. Dawn Leane is Founder of Leane Leaders and Leane Empower. This is the first article in a series about women in the workplace.

Encouraging discretionary effort should be a primary objective in any employee engagement strategy, writes Paul O'Donnell. “Discretionary effort” is the contribution an employee chooses to make over and above what is expected of them in their role. It comes in the form of unseen effort, but can boost a team’s performance, sometimes yielding an otherwise unattainable result. While good management, clear goals and effective systems enable satisfactory output from employees, the door to a person's discretionary effort is locked from within. Once unlocked, however, it can help teams to deliver on better customer service, higher sales, repeat business, more profit and improved shareholder value. Here are four leadership behaviours that can help managers tap into and leverage employees' discretionary efforts. Invite employees to disagree  Listen to your employees' contributions by asking them to qualify their suggestions and re-work thoughts and proposals where gaps arise. Leaders may be worried that this will create tension. In fact, it reduces tension, as it allows employees’ thoughts and ideas to emerge more freely. Allow your employees to influence Allowing your team members to realise their potential can be a powerful force. Coaching them in how to interact with and lead others on a task or project offers high-value learning. By making them feel valued, your team’s responsibilities and commitment are given room to grow. Resist the impulse to solve problems Ninety percent of a solution implemented correctly is better than the full solution executed poorly, and a leader's primary objective should always be to ensure the best outcome. This is achieved when the leader does not directly undertake a task, but instead coaches others so that they can take the lead on a project without direct input. It also leaves the leader free to explore ideas from other team members, which can help to enhance performance and output. Strengths-based approach to leadership Too often in formal feedback meetings the focus is on how to address performance gaps. A strengths-based culture seeks to align employees to tasks and projects based on their skillsets, helping to build their confidence. Instead of assigning work, ask your team who wants to take on different aspects of a project. As their self-belief grows, encourage them to take on additional tasks that require similar competencies so that they can widen their skillset. Ultimately, this is all about leaders demonstrating growth and respect. Engagement is a positive for any organisation, though it comes in many forms. Being transparent, encouraging respectful debate, and providing opportunities for personal learning and growth can all help to boost performance. Paul O'Donnell is CEO of HRM Search Partners.

Gone are the days when the responsibility for keeping your business secure from cyber security threats rested exclusively with your IT team. This burden now also falls to the CFO, says David Steele. Cyber criminals are no longer lone rangers couched behind their laptops in dark rooms. Today, cyber-attacks are designed by highly organised and profitable organisations. Many of these are powerful multi-million euro firms. As a result, your business needs buy-in from every individual in a leadership role to contribute to your cyber security plans, and not just the Chief Financial Officer (CFO) – although this role is integral to excellent cyber security. More than budget approval The CFO is in an essential role when it comes to mitigating the risk your business faces from cyber threats. Managing costs is a requirement for any business. However, penny pinching when it comes to keeping your business cyber secure is the fastest way to make yourself vulnerable to data breaches and system hacks. It is the CFO who will ensure that the investment your business makes in cyber security aligns with your company-wide infrastructure. Rather than being viewed as a cost drain, protecting your business from cyber threats needs to be viewed as an investment. The CFO is the leader in the boardroom who can recognise the devastating effect a cyber-attack would have, both financially and reputationally. However, the CFO plays a bigger role in your firm’s cyber security team than simply approving the budget for new software solutions. CFOs who are aware of the full spectrum of cyber threats are strategic in a few ways. Understanding the cost The technology and human resources required to keep your business safe from cyber threats come with a cost, but the cost of not having them in place is far higher. In 2022, the cost of a data breach for SMEs in Ireland was on, on average, €17,000 – double the cost from 2021 – but rose as high as five million in the most severe cases, according to Hiscox Cyber Readiness Report. The CFO is well placed to understand that the cost of reliable cyber security is lower than the cost to an organisation to fix issues arising from an attack. Long-term stability To win new clients, you need to show your business is diligent and trustworthy, and cyber security plays a massive part in securing an organisation’s reputation. Your existing clients are becoming increasingly savvy about how their data is looked after, and CFOs need to ensure their teams can demonstrate that the organisation’s data protection policies are strong and implemented—or risk losing out to competition. Your cyber security credentials will also reassure your shareholders and vendors. A hit to your organisation’s reputation because of a cyber-attack could mean a hit to its finances. Risk management framework It’s the CFO’s responsibility to allocate finance to areas that are business-critical for your firm. Cyber security protects your company’s assets, and so should be embedded into every element of your organisation. However, the CFO does not need to be a cyber security expert. Instead, it’s time to acknowledge that protecting financial data is essential to the CFO’s role. The CFO’s risk management skills are critical to asking the right questions around where data is stored and who can access it. As a result, there is a lot the CFO can add to cyber security best practice in your organisation. At the end of the day, it is important to remember that the CFO does far more than sign checks when it comes to cyber security. Instead, the role is critical to the strategic protection and sustainability of your organisation. David Steele is Managing Director and Principal Security Consultant SecuriCentrix.

Change can be difficult, especially for experienced professionals and established functions within an organisation. So, how can you persuade the nay-sayers to get on board with digital transformation? Laurent Charpenter explains. The term ‘digital transformation’ has been bandied about so much that it has almost lost its meaning, but the concept is simple. Digital transformation involves the use of technology to automate outdated, often manual, tasks and give corporate stakeholders better access to important data so that they make more informed and effective business decisions. The pandemic forced many organisations to adopt digital transformation by integrating video calls, video conferencing and remote working into their daily business practices. Not every finance professional is sold on operating smarter with technology, even if they really need to, however. Some are happy to stick with tried-and-true practices. So, how do you sell change to people who don’t necessarily want it? First, you need to get to the bottom of this resistance. Reluctance to change Several factors could explain a reluctance to embrace digital transformation. In accounts payable, for example, it is common for organisations to put off digital transformation because of the time needed to implement and train everyone up on the new processes. Some organisations fear the changes needed to automate will be too costly, especially when more ‘pressing’ challenges should take priority. At the same time, others might feel that they have been the industry leader for so long that they don’t see any immediate benefit to changing a process that has been proven to work. Getting buy-in Getting buy-in at all levels in an organisation can help to ensure a smooth digital transformation. The support of those who will use new technologies and processes regularly is crucial in gaining approval from the top decision-makers, because these everyday users are key influencers in the process. If you are introducing a new automating accounts payable system, for example, you will need complete buy-in from the finance team. As a finance team leader or CFO, it’s your job to educate the end-users first by talking through their existing problems, then providing valuable free resources such as white papers and industry reports to start conversations around how new technology can be beneficial. Digital transformation needn’t involve a significant change or the complete overhaul of a process in order to be effective. Organisations resistant to change can start small by targeting a department or function that is struggling, or one with the most potential to deliver a high return on investment. The organisation – and the people who oversee these processes – need time to recognise the benefits of the digitisation of one process or function, before proceeding to a complete digital transformation. By taking small steps, you are more likely to get buy-in as you progress. Making the leap Change can be hard sometimes, especially when making a technological leap. Some organisations will resist more than others. The leaders most likely to succeed are those who believe in the transition, and can educate those above and below them in the organisation about the benefits of digital transformation. Laurent Charpentier is CEO at Yooz.

The sun is out and people are heading off on holiday, leaving some businesses short-staffed at a busy time. So, what can they do? Rachel Gray gives her advice on how to overcome summer staff shortages. As a prime annual leave period, the summer months can be a tricky time for businesses reliant on seasonal business. This can put pressure on small- to medium-sized companies, in particular, as they struggle to balance increased demand with reduced team capacity. The loss of key team members can be detrimental to a business, even for a short time. A study published in the Harvard Business Review found that 78 percent of new business goes to the first responder, and Forbes reported that 96 percent of customers would leave because of poor customer service. Unanswered emails and queries can lead to a loss of potential new business opportunities, resulting in poor customer satisfaction and a damaged reputation. As companies grow and face busy periods, the client experience must not dip below their expectations. However, there are simple and cost-effective ways to maintain productivity and customer satisfaction during these busy holiday periods. Here are some tips to help keep business on track during the summer months. Automate Set an automatic reply to all emails to let clients know that you will get back to them within a specific time frame. This is worth doing even when staff members are not on leave as it maintains important communication with clients. The email can also direct people to your website or social profiles, where they can find the information they need. Plan ahead Be aware of your team's holiday schedule and ensure clients are informed of who their point-of-contact will be during this time. This might sound like obvious advice, but you would be surprised how often it is overlooked by busy managers at times when they are overstretched or understaffed. Hire smart By ‘hire smart,’ we don't mean replace or add to your full-time team. What we mean is that, by outsourcing jobs to fill in the gaps key employees leave during holiday periods, businesses may be able to save costs in the long run. Subbing experienced team members in for those on annual leave will help to maintain a seamless service for clients, making them feel valued. While outsourcing the company's everyday tasks to temporary personnel can cost a little upfront, it could also help to maintain relationships with clients during the leaner summer months. Answer the phone In a survey conducted by PwC, 78 percent of respondents noted their preference to interact with a human when they ring an organisation, especially as technology improves and clients are often forwarded to an answering directory. To ensure all clients' needs are met, consider hiring an answering service to cover the desks while operating with limited team members. Rachael Gray is Founder and CEO of Call Pal.

Ireland’s economy is highly reliant on Foreign Direct Investment from the US. But with labour costs and housing prices on the rise, can we continue to attract US multinationals? Feargal de Freine discusses. The fundamental importance to Ireland’s economy of Foreign Direct Investment (FDI) from US multinationals is difficult to overstate. US companies in Ireland employ 190,000 people directly and a further 152,000 indirectly. These companies — close to 900 in total — spend more than €12 billion on payroll, €8.8 billion on goods and services, and €6.5 billion on capital expenditure each year. They are responsible for an estimated 60 percent of Ireland's corporation tax income. Ireland’s continued appeal to US multinationals will be critically important to our future prosperity. So, how are we faring in these uncertain economic times? Fortunately, according to EY's latest European Attractiveness Survey, Ireland is maintaining its position as one of the most attractive countries in Europe for FDI. Ireland continues to punch well above its weight when it comes to FDI investments. A total of 152 FDI projects were recorded here in 2021, giving Ireland a three percent share of the FDI market among the more than 40 European countries surveyed. This result places Ireland in the top 10 locations in Europe for FDI and in first place when it comes to projects per head of population. The strength of the relationship between Ireland and the US is highlighted in the survey by the fact that American companies accounted for 59 percent of Ireland's FDI projects in 2021. With competition for investment intensifying, the question arises as to whether Ireland may be over-reliant on the US for FDI, however. While we must maintain and strengthen our attractiveness for FDI from all markets, it is crucial that we do not make the mistake of weakening our well-established business relationship with the US in our efforts to attract FDI from other countries. The attraction of Ireland Our survey of Irish decision-makers drilled down into the factors that make Ireland attractive for FDI generally. Unsurprisingly, top of the pile was our tax regime, highly-skilled and educated workforce, quality of life, and business-friendly environment. Thirty-nine percent of our survey respondents said that current and planned tax policies would improve Ireland's attractiveness. Labour costs and the affordability of housing were among the least attractive factors identified, however. No surprise here, but the findings highlight the importance of finding practical solutions to the housing crisis and avoiding a damaging inflationary wage spiral as the Government seeks to combat the rising cost of living in Ireland. Other areas that need to be addressed, according to our survey results, include: government prioritisation of the geographic rebalancing of the economy; increased investment in international connectivity; skills development; lower business taxes and; decarbonising the country's energy system. The high ranking given to international connectivity isn’t perhaps surprising, given that our survey respondents were drawn mainly from the multinational community. Recent events at airports across Europe highlight the fragility of international connectivity, however. As an island nation heavily dependent on inward investment and international trade, Ireland must redouble its efforts to enhance connectivity, particularly with North America. The FDI market is intensely competitive and highly dynamic. American companies do not choose to locate in Ireland for sentimental reasons. They do so because it makes sound financial and business sense. Countries worldwide are constantly seeking to improve their offering to inward investors. Ireland must preserve its existing strengths and build on them if we are to retain our position as one of the most attractive locations in Europe for US FDI. Feargal de Freine is Assurance Partner and Head of FDI at EY.

The war for talent is fierce and recruiters are struggling to get ahead of the Great Resignation, so why not look beyond the active job market to professionals outside the workforce? Niamh O'Brien explains. Faced with the global war for talent and the Great Resignation, employers are grappling with staff shortages and accountancy roles, in particular, are featuring prominently in job ads. So, what can employers do to attract more qualified staff? While we are in a competitive recruitment market, there are still some largely untapped pools of talent that could help to fill the gaps. One potential source is the pool of qualified and experienced accountants who exited the workforce for family commitments, sabbaticals, early retirement, or career breaks. According to the most recent CSO survey, the total rate of participation in the active workforce in Ireland is 65.1 percent. When you drill down into the numbers, you find that male participation is higher at 70.3 percent than for women, at 60.1 percent. This means that there is a significant number of women who are choosing not to work. Some are qualified and experienced yet choose to remain outside the workforce, but why? In some cases, managing family commitments while working full-time can prove to be an insurmountable challenge. With increased flexibility, hybrid work options and a greater focus on facilitating work-life balance, however, the working environment has never been better at facilitating a return-to-work for this group. Benefits of 'returners' For employers, developing a talent attraction strategy that targets ‘returners’ offers numerous potential advantages in addition to a bigger talent pool.   Many returners are women who have taken time out of their career because of family commitments, but now want to re-join the workforce at a mid- or senior management level. These women are often overlooked because of the gap in their CV, despite their experience. Tapping this pool of women returners can help to even out gender pay gap issues within an organisation. Early retirees are also returning to work, so organisations could potentially see better generational, as well as gender, balance. Attracting returners Employers who have emerged from COVID-19 embracing the benefits of flexible working will be in a solid position to lure experienced professionals back into the workforce. BDO has carried out research on the essential elements needed to ensure success for this group of returners. Unsurprisingly, flexibility is their biggest priority, but financial reward and a sense of purpose are also common themes. The research also shows that creating an inclusive and supportive working environment is critical to the success of both attracting and retaining returners. Those that have been out of the workforce for a long period are concerned about the support network they will have when they return. Providing mentoring and coaching programmes for these employees is, therefore, essential during the transition period. Our research also shows that bespoke training for IT and technical skills, as well as guidance with softer skills, such as confidence and self-esteem, are desired by returners. In return for accommodating these supports, employers stand to benefit from access to a valuable, and largely untapped, talent pool. Niamh O'Brien is Talent Management Director at BDO Ireland.

By asking the right questions now, private business leaders can navigate the rocky months ahead while also ensuring long-term success, writes Colm O’Callaghan. COVID-19 has accelerated global disruption on numerous fronts, influencing the key issues and challenges facing private companies. Digitalisation, workforce planning, cybersecurity, environmental, social and governance (ESG), and the intergenerational transfer of wealth — these issues will set the agenda for private business in the medium- to long-term. Recent developments globally have also given rise to immediate challenges, however, and business leaders must respond to these challenges while also thinking ahead to broader strategic plans. There is a lot to juggle. To help you get the right balance between immediate needs and long-term priorities, here are five questions you should ask yourself as you begin to plan ahead: 1. How can you put out fires while maintaining a long-term view? A good way to illustrate this question is to consider the short-term impact of the so-called ‘great resignation’ alongside the long-term issue of right-sizing the workforce. Workforce planning has been a key long-term priority for many business leaders for quite awhile. With the rise of artificial intelligence (AI) and other technologies, they have had to consider whether the size and structure of their workforce is aligned to their long-term business strategy, and plan accordingly. Businesses worldwide now must deal with the short-term impact of ‘the great resignation’ and the resulting need to recruit staff. Instead of responding with a short-term mindset and replacing ‘like with like,’ now is the time to adopt a longer-term approach to workforce planning. Think ahead to the skills you will need in the future and start replacing leavers with new hires who bring new skill-sets to the business. 2. Who in your business will own the big issues? When it comes to big issues, many businesses struggle to identify the natural ‘owner’ internally. Listed companies may have a Chief Sustainability Officer to manage the company’s ESG strategy, or a Chief Technology Officer to oversee technology investment and implementation. Private businesses may not see the need, or have the budget, to make such appointments, however. For some issues, there is a natural home. For others — ESG, for example — it’s not always clear who should take ownership. The upside here is that such issues offer an excellent opportunity for people to take on new leadership responsibilities. 3. Where will you obtain expertise? One of the disadvantages private businesses may face, compared to listed companies, is access to expertise. Take managing the effects of inflation as one example. Listed companies will often employ macroeconomists who have studied inflation and can develop strategies to address it. In contrast, leaders in private business may not have prior experience of inflation and may struggle to respond. This raises the question of where to access the expert insight needed to inform smart decisions quickly. Here is a good opportunity to consider the different ways in which skills can be contracted. One of the advantages private businesses have is that they are often embedded in their local communities. Using this network –  local business associations or academic institutions, for example — they may be able to uncover talent that was previously unavailable. Finally, when considering untapped skills within the organisation, look to ‘next gens’ for their digital expertise. Millennials and Gen Zers are digital natives. They have learned digital skills that are invaluable and may be underutilised. 4. How do you ensure your digital investments are good ones? Blockchain and cryptocurrency have come of age as challenges relating to speed, scalability and energy consumption are addressed. Electric vehicles have gone mainstream as car manufacturers prepare for an electric-only future. Doing business in the cloud has had the dual advantage of enabling a new generation of start-ups (some unicorns) and simplifying back-office processes for well-established businesses. One of the advantages private businesses have when it comes to technology is their licence to operate with a long-term perspective. Unlike listed companies, private businesses are not forced into short-term, sometimes kneejerk, decisions in response to the demands of stakeholders associated with the public markets. The ability of a private business to take a longer-term view can make it easier to invest in technology that supports innovation without having to immediately justify the return. 5. Where and how can you find the diverse leadership to address challenges? When considering the composition of the board or senior leadership team, private business leaders must identify their own strengths and appoint others who can complement them. Find someone who can respect the past while also deciding what needs to be modernised or retired, for example. Source an innovator who recognises that innovation does not always have to mean ‘brand new,’ but should instead be consistent with – and build on – a company’s history and traditions. These complementary strengths and perspectives will help you to protect your business today and plan for tomorrow. Colm O'Callaghan is Tax Partner of Entrepreneurial & Private Business Practice at PwC.

Karen Flannery and Níall Fitzgerald consider the critical points in the revised Chartered Accountants Ireland Code of Ethics, which came into effect on 1 March 2020. The revised Chartered Accountants Ireland Code of Ethics took effect on 1 March 2020. The revised Code was necessary to increase alignment with the International Ethics Standards Board for Accountants (IESBA) Code of Ethics, which underwent a significant restructure in recent years. While there are no changes to the fundamental principles, Chartered Accountants familiar with the previous Code of Ethics (effective September 2016 to 29 February 2020) will find the look and feel of the revised Code significantly different. While additional sections and emphasis were included, others were removed. This results in greater clarity and ease of navigation. Figure 1 provides an overview of the revised Chartered Accountants Ireland Code of Ethics. Added emphasis on fundamental principles The five fundamental principles of the Code of Ethics remain unchanged. These include integrity; objectivity; professional competence and due care; confidentiality, and; professional behaviour. The conceptual framework that describes the approach used to identify, evaluate and address threats to compliance with the fundamental principles also remains the same. However, there is now a heightened emphasis on the fundamental principles and the use of the overarching conceptual framework underlying each section of the Code. Before, much of the narrative was contained in a single section of the Code. Responding to non-compliance with laws and regulations New sections were added concerning non-compliance with laws and regulations (NOCLAR) for professional accountants in practice (Section 360) and professional accountants in business (Section 260). These bring the NOCLAR provisions of the IESBA Code of Ethics into the Institute’s Code. A vital feature of the NOCLAR provisions is the specific in-Code permission to breach the principle of confidentiality in the public interest. This permission has been explicit in the Institute’s Code for several years and so, the NOCLAR provisions can be seen as a change of detail rather than of substance. The new sections outline the required actions when NOCLAR is discovered and provide additional guidance in this area. Key points to note concerning the NOCLAR provisions are: The first response to identified NOCLAR is to raise the matter, and seek to address it, at the appropriate level within the relevant organisation (internally); Where NOCLAR is not dealt with appropriately internally, the professional accountant considers whether to report to an external authority in the public interest. The decision to report externally is (as it always has been) a complex one; and Where a report is made in the public interest and good faith, there is no breach of the confidentiality requirements of the Code of Ethics. However, there may be legal implications for the professional accountant to consider. Revised layout The most obvious change is the revised layout of the Code of Ethics, which now mirrors the structure of the IESBA Code of Ethics with additional material for members of Chartered Accountants Ireland. A new paragraph numbering format was introduced and as a result, sections were restructured (e.g. what was “Part C” (Professional Accountants in Business) is now “Part 2” in the revised Code).The revised layout facilitates more natural referencing and distinguishes between the Code’s requirements (in bold text and denoted by the letter ‘R’) and application material or guidance (indicated by the letter ‘A’). Complexity has been reduced by simplifying sentences and language in parts. Also a new ‘Guide to the Code’, explaining how it works, has been included. Other content changes Table 1 highlights other notable developments in the revised Code of Ethics and suggests where you might focus your attention depending on whether you are a member in practice or business. Retained Institute ‘add-on’ material Where existing Institute ‘add-on’ content created important additional requirements beyond the IESBA Code, these ‘add-on’ requirements are retained in the revised Code of Ethics. Such requirements include: Specific requirements regarding communicating with the predecessor accountant (Section 320); Particular obligations regarding transparency around the basis for fees and dealing with fee disputes (Section 330); and Agencies and referrals (Section 331). No new ‘add-on’ material was created. Additional support for members The Institute’s online Ethics Resource Centre is updated regularly with a range of supports and guidance for members. Additional information included in the old Code of Ethics, but removed in the revised Code and still considered useful, has been reproduced in a series of new Ethics Releases. The Ethics Releases are not a substitute for the requirements of the Code, but they do provide additional support for members in particular scenarios, including: Code of Ethics and changes in professional appointments; Code of Ethics and confidentiality; Code of Ethics and marketing of professional services; and Code of Ethics and corporate finance advice. Future updates The last substantial change to the Institute’s Code of Ethics was in 2016. While the Code does not change regularly, there is a significant body of work happening behind the scenes to ensure it remains appropriate, precise and effective in the context of the issues affecting the accounting profession. Members can, therefore, expect amendments from IESBA in the coming years; for example, considerations addressing the impact of technology-related ethics issues on the accounting profession. For members who are insolvency practitioners, a new Insolvency Code of Ethics is imminent. The current Code of Ethics for Insolvency Practitioners, appended as Part D of the Institute’s old Code of Ethics for members, remains in effect until then.  Actions speak louder than words It was evident from the Ethics Research Report, published by the Institute in January 2019, that members hold their professional and business ethics in high regard. While the Code of Ethics does not change regularly, it is a hallmark that establishes a minimum standard which is signed up to and shared by all members of the profession. It is useful to be familiar with its requirements and to remember that it is individual member actions that express commitment to the Code of Ethics in addition to a member’s personal ethics. The revised Code is available via the Institute’s Ethics Resource Centre.   Níall Fitzgerald FCA is Head of Ethics and Governance at Chartered Accountants Ireland.  Karen Flannery FCA is Head of Professional Standards Projects at Chartered Accountants Ireland.