You have had a successful career to date. You are either recently qualified or have successfully climbed the corporate ladder. Then, you encounter a funded, successful start-up and think it might be the one for you. It’s time for a career change – or is it? Rob Mac Tighearnain outlines the key considerations. First, let’s talk about the reality of a start-up. The truth is that all start-ups are the same – we are faking it till we make it. It’s the nature of the game, but what does it mean for you if you join? Once you step behind the pretty start-up exterior, you will either find nothing at all or chaos. The likelihood is chaos, and it’s not because the existing team is careless or incompetent. On the contrary, they are incredibly talented. The harsh reality is that start-ups run on a shoestring. It’s the survival of the most resilient, so when you join, you will likely be faced with a fragmented department trying its best to juggle everything and keep progressing at breakneck speed. As a result, things will be dropped and/or missed. But don’t let this daunt you. We will talk about how to navigate your first 90 days later in this article. Two years in one I tell everyone I meet that the work you do at a start-up isn’t necessarily the most time-demanding job in the world. However, it is some of the most intense and unrelenting work you will ever do. Every decision you make will materially impact everyone around you and likely affect the ability of the start-up to continue to move fast and, crucially, to scale. However, the following realities must be borne in mind: the data you have is likely incomplete; the issues you are trying to solve today are evolving continuously; when it comes to software, you may not have enough resources for a large implementation; what you do must be straightforward and understandable to those who need to know because they are busy solving their own challenges; whatever ‘it’ is, it must scale; and it must be able to support the organisation as it evolves and pivots rapidly. So, how do you make decisions in such an environment? Keep your finger on the pulse and make sure you know what is happening in other departments. If you know where other teams are going, you won’t make departmental decisions in a vacuum. To fail, or not to fail… If I’m honest, your chosen start-up will likely not be as successful as everyone hopes. Nine in ten start-ups fail, and even those backed by venture capitalists have a success rate of just 25%. So, go in with your eyes wide open. Financial reward aside, working for a start-up is, in general, incredibly career-enhancing. You will learn how to survive in a challenging, fast-paced and resource-constrained environment. Any company you join (after the likely failure or flatlining) will be lucky to have you with the experience and skills you have gained. Whom will you work with? At a start-up, your colleagues will probably be some of the most resilient, resourceful, and courageous people you’ll have encountered in your professional career to date. They will care deeply about the organisation’s success and go to incredible lengths to achieve it. Ensure that you gel with those you meet during the interview process, as there is no escaping anyone in a start-up. The team you join will be very lean and likely nowhere near as well-resourced as your previous corporate job. Having the right people on board is everything for a start-up. You move so fast that there isn’t time for ego or office politics. You need to know the culture you’re joining and that you can work with everyone, because the start-up will become your second family. Time to listen and learn By now, you have evaluated everything and decided that joining a start-up is the right decision for you. But now what? First, listen and learn – and then stop. You’ve just joined a business into which the founder (who is likely also the CEO) has poured everything they have. You have been evaluating the business for one week and spotted many issues and opportunities to put out fires. However, remember that the business has gotten this far; it doesn’t need you to get out the firehose and drown everyone. The key is to listen and learn for at least the first month. This is always harder in a start-up because there are always urgent issues, some of which might appear to be ‘company killers’. Solve those, of course, but keep resisting the urge to overhaul things too quickly. Once you listen and learn, you will understand the underlying business and what is deemed a priority. You will also know why specific issues remain unresolved and why others are dealt with quickly. This will help you formulate your goals and strategy, and your approach to the start-up’s issues will evolve dramatically. You will recognise issues that need immediate action and, most importantly, those that are bubbling beneath the surface. The main reason you have been hired isn’t to fight the fires that exist. It is to stop (over time) the fires from catching light at all. That’s why taking time to listen and learn at the outset is so crucial. Now, go and join Nothing is for granted, and everything comes with risk: so, should you really join a start-up? Absolutely. It will be the biggest, most all-consuming challenge of your professional life, and you won’t regret it. Rob Mac Tighearnain is Head of Finance at Tarabut Gateway.

Kevin Empey considers how we can “test and learn” our way through the aftermath of COVID-19 while creating a more informed and positive world of work. “The future is not quite what it used to be.” Quoted by numerous writers over the past 100 years, from Paul Valéry to Robert Graves, this phrase certainly has a new resonance today. Observers of the evolving world of work point to times in history when a significant change in the underlying economic and technological landscape triggered far-reaching changes to how we work and live. We are told, for example, that the exponential technology advancement in the last 20 years alone has moved us into the 4th Industrial Revolution, which is a game-changer for how, and by whom (or by what), work will get done into the future. The COVID-19 outbreak has further accelerated our thinking and practices regarding new, digital, remote and innovative ways of working. These trends were already well underway as part of the ongoing ‘future of work’ debate in recent years, but the pandemic has dramatically catapulted these practices into the mainstream. It is now an open question as to what the ‘zoomification’ of work will mean for employers and workers as we shape the post-COVID world of work. Like previous disruptions through the ages, the zoomification of work will likely bring many advances and upsides, but also risks and dangers. However, perhaps the lessons learned from our individual and collective COVID-19 experience will signal a more human and authentic world of work. A world where ‘good work’ is valued and a more mature and honest employment relationship is built on genuine partnership, empathy, trust, and servant leadership. Where technology serves as a toolkit for flexible working lives and as a final solution to some of the more outdated and inflexible work practices of the 20th century. Perhaps the next phase of work will be more human and not just about technological adoption and economic efficiency, which typified earlier cycles. The challenge now is to ‘test and learn’ our way through the immediate aftermath of COVID-19 while shaping a more informed, positive vision of work, culture, and leadership, which we will be forced to explore more radically and deliberately than ever before. The combination of skills acquired since March 2020, and those we have yet to develop as we adapt to the new hybrid world of work, will also serve us well in future-proofing our careers through the inevitable disruption that lies ahead. In Thrive In The Future of Work, we explored this evolving world of work from this more personal perspective. It is a research-based account of what we can do as individuals to navigate and thrive during all the changes that seem to be coming at us in greater frequency and impact than ever before. Kevin Empey is the Founder of WorkMatters and author of Thrive in the Future of Work: How Embracing an Agile Mindset Will Benefit You and Your Organisation.

Janis Heather explains how a change in career is likely to be the new norm in the future. People sometimes ask my seven-year-old daughter what she would like to be when she grows up – an answer I’m always intrigued by given my career in recruitment and also because the answer changes as often as the wind. However, the reality is that whatever career path she ultimately chooses, there is a strong possibility that this role does not yet exist. This may instil fear in someone just starting their career in what is considered a clear career path, such as accountancy or law. But instead, it should be welcomed as it presents a huge opportunity to diversify skills and experience in the future. Over the past couple of years, KPMG has hired for increasingly diverse roles and skillsets. This includes specific technology consulting experience such as applied intelligence and cybersecurity, digital transformation consultants, energy and sustainability expertise, and town planners – all roles that were not priority hiring demands for us just a few years ago. We have also seen an increase in demand for deal advisory professionals with experience in M&A activity, government and infrastructure, debt advisory, and strategy. But how do people end up in these roles? Very often, their careers didn’t start in such a specialism. Many people trained in audit, tax, or advisory in KPMG, for example, but they transitioned into another area of their choice on completing their professional qualification. Auditors have moved into strategy, risk consulting, transaction services and financial instruments teams. Tax professionals have transferred to regulatory and consulting teams. And employees in support departments, such as HR and IT, have moved into client-facing roles across the business. In some of these transitions, individuals had transferrable skills and were relatively comfortable with the move. However, there is a sense of nervousness and sometimes fear for many. When an individual moves to a completely different type of role, it is important to remember that change is supposed to feel uncomfortable; it is part of the process as we stretch and grow. Focusing on why you are changing roles (if by choice) and how you will benefit from the change can help with the first few weeks and months of that transition. Over the last year, many people have reflected on their work and how it marries with the type of work they would like to do. People seek meaningful work and are trying to focus on tasks that bring more joy to them daily. Career detours can sometimes be by choice or not, but I am a firm believer that high performers can apply themselves no matter what they do. For those finding themselves at a career crossroads, I would encourage you to look to your seven-year-old self, be brave and dream big. Janis Heather is Head of Experienced Hiring at KPMG Ireland.

Being proud of who you are is a wonderful feeling. But what if you had to constantly hide who you are out of fear? Éirénne Carroll tells us her story and what we can do to make the workplace more inclusive.  It’s officially Pride month, and with it, there are many ways to celebrate and show joy. But what if Pride isn’t a time of celebration for many? How do we move beyond celebration to inclusivity? I had the pleasure of sharing some of my story with members of Chartered Accountants Ireland at its virtual Pride seminar last week. I highlighted how my story shows the pitfalls of living visibly out, some of the barriers that still harm trans people in the workplace, and how allies and other LGBT people helped me feel safe at work and re-find my joy in Pride. I initially came out at work to a supportive community in a corporate marketing department in the south of the United States during the era of HB2, also known as the “Bathroom Bill”, in 2016. During that time, the friction caused by the presidential elections impacted my work, my life, and my ability to celebrate Pride. My identity was a hot button issue for me. And even now, six and half years later, my right to be visible at work, home, and in public is still debated on radio shows, in print, and in homes every day. For me, coming out was a potentially career-ending act, so it was difficult to see where Pride fit in. And that truth isn’t lost on other trans people at work, whether internationally or here in Ireland. According to Transgender Equality Network Ireland’s (TENI) research in Speaking from the Margins, 49% of all trans people in the country are either unemployed or underemployed. Getting your foot in the door as a trans person, or retaining your position when you come out, is a very tenuous struggle – even in an era when more and more organisations are building robust diversity, equity, and inclusion departments to support their businesses and staff. In my coming out story, I was able to find allies and to find my voice at work. I was lucky enough at the time to have a team that understood and supported me. Having allies that are willing to take the heat with you are so valuable. Having people you can depend on is imperative. And working in a place where you feel safe to be who are you is crucial. I’ve been out at work for six years, and I can say I now enjoy Pride. I thoroughly enjoy where the road has led me, and I have enjoyed the people I have met and worked with. I believe our society, and our businesses, are always better with more diversity and inclusivity that allows people to be who they are. Éirénne Carroll is the Chief Executive Officer of TENI.

Insolvencies are low right now, but that doesn’t mean businesses are safe. Declan de Lacy explains why the number of insolvencies could rise in the future. Is the current low rate of insolvencies like the sea retreating before a tsunami? This is the worst-case scenario envisaged by the European Systemic Risk Board in its recent paper on preventing and managing many corporate insolvencies. Ordinarily, soaring unemployment rates and collapsing economic output are accompanied by rapidly increasing liquidations. The absence of this since March 2020 suggests that the Irish Government’s business supports have been effective. However, recent reports by the Central Bank and the Central Statistics Office suggest low numbers of liquidations are not a sign of robust corporate health but, instead, reflect the delayed transmission of the economic shock through to insolvency rates. The Central Bank reports that 26% of SMEs have made losses since the pandemic began and that 16% are in financial distress. More worrying is data from the CSO indicating that more than 16,000 businesses (7% of those surveyed) had their entire staff laid off since April 2020. Although restrictions directly prevented some businesses from resuming trade, it is likely that among those 16,000 businesses, economic viability prevented re-opening of some. As time passes, it becomes increasingly unlikely that this latter group will ever resume trading. The recent decision to extend government schemes including the Employment Wage Subsidy Scheme, COVID Restrictions Support Scheme, and tax warehousing until the end of the year gives businesses affected by the pandemic additional time to assess their position and take remedial steps before supports taper off. It will be essential for businesses to revert to a viable business model based on sustainable costs and revenues during this period. When the economy fully re-opens, many businesses will be viable on a day-to-day basis. However, they will have insufficient profit or liquidity to make good on debts incurred before or during the COVID-19 crisis. These debts are likely to include rent arrears and taxes warehoused during the pandemic. As creditors revert to more normal collection models, the survival of these businesses will depend on their ability to either restructure or reschedule their obligations. Historically, there has not been a viable process for SMEs to restructure their debts. However, the Small Companies Administrative Rescue Process, which will be introduced before the summer ends, is expected to provide a fast and fair rescue process for distressed SMEs. It is incumbent on accountants to familiarise themselves with this process and recommend it to clients for whom it is necessary. In the last recession, many companies had to be liquidated because they had incurred large debts to finance credit to customers who ultimately did not pay. To avoid this happening again, businesses that advance credit must manage their exposure to customers whose viability is uncertain. It is inevitable that as supports taper off and debt collection becomes more muscular, many companies will be unable to continue trading. The true number of companies fatally impacted by the pandemic will not be revealed until this happens. Declan de Lacy FCA is an insolvency practitioner and leads the advisory and restructuring practice in PKF O’Connor, Leddy & Holmes Limited.

For organisations to thrive in a modern Irish society, serious work needs to be done on fostering diversity and inclusion in business organisations. Sandra Healy explains an evidence-based approach. Today people want to work with organisations where they feel respected and valued, no matter how diverse they are. In Ireland, we have the youngest population in the EU, with one in eight people from a migrant background. This young, diverse population expects organisations to have supportive, inclusive cultures that reflect the society we live in. Additionally, all over the world, regulators, shareholders and investors are demanding fairness, transparency and a customer-led approach to doing business. While many employers have positive intentions regarding equality, diversity, and inclusion, it can be challenging to know where to begin, what to prioritise, and how to make progress in building an inclusive culture. Branding vs supporting Some organisations get behind diversity and inclusion (D&I) initiatives for employee resource groups (ERGs) through external sponsorship or brand campaigns. Externally, it demonstrates to customers, shareholders, and potential talent that your organisation values diversity. For D&I initiatives, it can be a powerful way to amplify reach. However, the external investment must be accompanied by a commitment to fostering inclusion and diversity within your organisation. Evidence for change Building an inclusive culture takes time, resources, focus, and commitment. To make progress, it is important to understand what challenges exist and where. An evidence-based approach takes the guesswork out of culture and ensures that actions are meaningful, impactful, and make a difference. A very relevant and important example of this is gender pay gap reporting, which will commence in Ireland in 2022. A lack of representation at senior level will be an issue and a reputational risk for those that are not prepared when the time comes. Organisations need to plan now by examining their data as it relates to gender, position, and pay scale and understanding the barriers that exist for female progression. In addition to external reputation, employers must consider how the pay gap information will land internally and whether there is a potential risk in terms of current female talent exiting the business when the time comes. Organisations have the information they need to take action now and make a commitment to improving gender representation. Furthermore, those that get ahead will be able to control the external and internal narrative when the time comes – thus avoiding unnecessary fallout.   Going beyond gender As examined above, the gender pay gap is just one example of where and how organisations can use data and evidence to deliver meaningful change. However, organisations must also consider the levels of diverse representation beyond gender at all levels. If organisations are willing to commit and focus time and resources, there is much that can be done to enhance and improve wider diversity across areas such as race, age, neurodiversity, sexual orientation and disability – to name just a few – building more equitable and inclusive cultures for all. Retaining diverse talent requires an inclusive, supportive culture where people can be who they are. Research shows that more diverse and inclusive organisations deliver better customer outcomes, foster more innovation, and have better reputations. Ireland is a young multi-cultural society, and we have a great opportunity to get it right. Organisations are competing globally for talent and if employers are not proactive in building inclusive workplaces, they will lose out to those that do. Sandra Healy is the CEO of inclusio and Founder of the DCU Centre of Excellence for Diversity and Inclusion. inclusio puts science into culture change so organisations can build workplaces where people want to work by levelling the playing field for employees. 

Hybrid working is on the cards for most offices, but how can organisations successfully implement it? Moira Dunne has three top tips to help plan for the new way of working. Pandemic restrictions are easing, and businesses are preparing to return to the office. Many employees have enjoyed the flexibility of working from home, and a ‘hybrid’ working model will likely be the new way of working. Hybrid working is a mix between remote and office working. Ideally, the model provides the best of both worlds. If successful, employees and employers can benefit from the flexibility of working from home while also collaborating in the office. To make this happen, it is important to plan for the new way of working. Here are three tips for successful hybrid working. Reset This is a good time to reflect and reset. Due to the sudden onset of the pandemic in 2020, people adjusted quickly to homeworking. Hybrid working will continue to involve homeworking, albeit part-time. So, it is important to review the following: Do I need a better routine when working from home? Can I optimise my workstation and equipment? What distractions cause me to lose time and focus? This review can help people optimise their home working environment, boosting productivity and comfort while not in the office. Plan To get the most benefit from hybrid working, consider how to split work between home and office. Consider the time and location dependency of the work. Is there a requirement to support others at set times? Is there a need to access office-based files or systems? Which tasks are independent of time and location? Tasks that require a high level of focus are more suited to a quiet home environment. Time in the office enables group work, such as problem-solving, innovation or coaching. Each employee can plan the: time-dependent tasks that must be done during core hours; location-dependent tasks that require access to files or systems in the office; collaborative tasks that require interaction in the office; and solo tasks that can be done individually, independent of location or time. If a team gets together to plan their schedules, they can create a rota to cover all responsibilities. They can also optimise collaboration time in the office. Deliver Successful hybrid working happens when each person takes responsibility for delivering in their role. This can build trust and help remove the residual stigma about remote working. It helps shift assessment of performance away from presenteeism. Both employees and managers have a part to play in delivery. Productivity is improved when: employers provide clarity about what needs to be delivered. This helps people work independently at home; employees seek clarity if they are not clear about expectations. They report on progress and discuss any issues that arise; and there is open communication. This is beneficial in any working environment, but it is particularly important in a hybrid working model. Hybrid working offers benefits for both the business and employees. There is a collective responsibility for making it work, but it may take time for the new model to settle. It is new territory, so it is best to take an iterative approach. Encourage people to adopt a continuous improvement mindset. By trying the model, reviewing, modifying, and improving it, you will have a successful hybrid working situation. Moira Dunne is the Founder of BeProductive.ie. You can find more tips about successful hybrid working in her webinar.

A responsive ransomware incident plan is critical for organisations. Carol Murphy and Ross Spelman outline what the plan should include and how to respond in the case of an attack. Every organisation should have a ransomware incident response plan in place, and this should be regularly tested, reviewed, and updated. This plan should include roles and responsibilities for all stakeholders, including IT, legal, compliance, human resources, operations, communications, and end-users. The response effort should focus on key functional areas, including IT, information security, legal, and communications. The teams looking after these areas should share information in a central location and establish clear communication channels with regularly scheduled incident update sessions. IT Ransomware is a technology problem and, once detected, the first step is to disconnect any infected or suspected systems from the network and shut down non-infected systems to protect them from infection. Once that is complete, available backups should be identified and evaluated. It is critically important that backups pre-date the attack. If a system cannot be cleaned and brought back to a secure, operational state, the system must be rebuilt or restored. The restoration process should follow a clear, prioritised sequence based on business criticality and risk exposure. For example, critical production servers or systems providing email/collaboration services may come first, followed by business-critical workstations supporting payroll and other critical areas of the business. Depending on the priority, general user workstations may come last. Information security The information security team should attempt to identify the type of ransomware that has infected the system and, if possible, pinpoint the criminals responsible for it and then determine if a decryption key or remediation software is publicly available. A forensic investigation should be undertaken to determine whether any data was stolen, how the network was accessed, the particular systems accessed, and what activities took place on them. Devices and equipment which appear to be non-infected should be examined for evidence of hacker activity as a matter of routine. Once the investigation is complete, the team should work with IT to fix the vulnerabilities used by the criminals to access the network. It is not good enough to fix the root cause(s) or vulnerabilities exploited by the attacker: the organisation should strengthen multiple layers of security controls and improve/adopt a defence-in-depth approach to security. Legal and communications Depending on the criticality of the incident, company officers and employees may need to be notified immediately. Business partners and key external parties should also be informed at the earliest possible juncture and kept informed as the investigation progresses. The legal and communication teams should prepare a statement to inform the broader public of the incident. They should also work with IT and Information Security to develop and implement temporary workarounds for impacted critical functions, including email, payroll, and customer portals. The team should also prepare for regulatory or compliance reporting requirements such as those covered by GDPR. No ransom We do not think you should pay ransom demands for a variety of reasons. Paying ransoms will only fund continued criminal activity. Payment could also expose companies to legal risk with no guarantee that the criminals will make good on their promise to supply a decryption key or other means of recovering data. Indeed, companies that pay ransoms may find themselves vulnerable to re-infection by the same criminals or their associates. No organisation can afford to be without a cyberattack or ransomware response plan. The plan should be subject to periodic review and set out the role of all appropriate sections of the organisation in the response and recovery process. Particular emphasis should be placed on the investigation phase as this will assist in the prevention of future attacks. When an organisation recovers from a ransomware incident, it should emerge much stronger. Carol Murphy is Consulting Partner and Head of Risk Transformation at EY. Ross Spelman is Cybersecurity Director and Lead at EY.

Over the last number of years, ESG has become increasingly important to investors. By dedicating time and resources to ESG now, companies can reap greater rewards in the future. Edel O’Reilly explains. In my organisation, I act as a conduit between many publicly listed companies and the global investor community, and I have witnessed first-hand how important the issue of environmental, social, and governance (ESG) criteria has become to that community in recent years. Increased regulation, societal demand, underlying customer demand and perhaps, most importantly, improved investment outcomes are the key issues that have fuelled this change, and global investors and lenders now see the adoption of ESG practices as a crucial driver of value creation. This has been reflected in an acceleration in engagement levels between companies and their investors on the key issues.  What are investors looking for? So, what do investors care about and what are they looking for? I regularly organise corporate governance and ESG roadshows, and investors are intensely focused on corporate governance as a key indicator of evaluation. Why? Because good governance underpins strong business performance without excessive risk-taking. Investors focus their attention on board members, the processes in place to support adequate oversight, and board accountability. Board chair and members For allocators of capital, it is critical that the board chairperson is independent, while a diversity of skills and additional board experience are important criteria for board members. And, as the world becomes ever more digital, investors like to see board members who have cybersecurity and IT skills. Processes and oversight When it comes to governance architecture, best practice dictates that there should be three board committees: A nominations committee to ensure board balance; An audit committee to oversee the financial reporting aspects; and A remuneration committee with responsibility for proper alignment with executive pay. Investors want to see balanced compensation packages for management teams that reward performance but that are also related to long-term goals. Investors assess potential long-term value by judging the quality of policies and processes in place and the board’s diligence and care in overseeing their implementation. Accountability Critically, good governance can’t stand still and, as a company grows, it should have governance in place for each stage of its maturity. There must be continual reviews of whether the board structure and policies in place are fit for purpose at every stage of development and growth phase of the company. A formal external evaluation process and response plans to any gaps identified are important steps and initiatives that investors like to see.  Companies that demonstrate a strong commitment to ESG best practices will benefit from greater access to debt and equity capital at competitive costs. Any company seeking a loan or equity investment will potentially be screened through an ESG lens, which will determine access to – and the cost of – such capital. So, the drive for good corporate governance has never been more important.  Investors are rewarding companies that can prove they are legitimately committing resources to sustainable goals – good governance is an essential part of this journey.  Edel O’Reilly is Head of Investor Relations at Goodbody and a member of the Chartered Accountants Ireland Sustainability Expert Working Group.

Tax policy is essential for carving out a green future post-COVID-19. Peter Reilly outlines four key areas where tax policies can really make a sustainable difference. Climate change is one of the greatest challenges of our generation, requiring wholescale transformation of every sector of our economy, unprecedented innovation and committed leadership. Tax policy will play a major role in not only influencing behaviour towards a sustainable economy, but also encouraging investment and creating jobs in the right areas while boosting a green COVID-19 recovery. There are four key areas where tax policy can play a critical role in Ireland’s decarbonisation journey: Supporting renewable energy adoption, particularly an underdeveloped offshore sector  The Climate Action and Low Carbon Development Bill 2021, once ratified, will put targets including 70% renewable electricity by 2030 and a net zero emissions economy by 2050 on a statutory footing. This target may be further increased to 80%. Offshore wind in Ireland, in particular, is underdeveloped and presents huge potential, including the opportunity for additional capacity to be exported. This, in turn, would directly and positively impact Ireland’s economic prosperity. A range of potential tax measures would support the adoption and deployment of renewable energy projects, such as the introduction of capital allowances on grid connection costs. Opportunities are abundant in the areas of investment and divestment of projects, reviewing the R&D tax credit, as well as the cash flow considerations within the VAT and relevant contracts tax regime.    Environmental taxes and incentives  Environmental taxes, such as excise taxation, act as a key deterrent to behaviours that are contrary to our climate action goals. On the other hand, environmental tax incentives, such as accelerated capital allowances for energy efficient equipment, are a very valuable cash flow benefit for businesses.  Building on the progress made in Budget 2021, the further expansion of existing regimes to support a reduction in greenhouse gas emissions and promote investment in energy efficient equipment by businesses could be a smart initiative. For example, Government could consider extending the Biofuels Obligation Scheme to other sectors where mineral oils are utilised, e.g. to the heating sector where the use of fossil fuels is high. Promoting Ireland as a ‘green finance hub’ An environmental, social and governance (ESG) focus is propelling growth in the financial services sector. For example, 100% of global asset managers with operations in Ireland (confirmed in a PwC Ireland hosted webcast) that ESG investing will change the global economy in the next three to five years. With over 37,000 people in financial services in Ireland, the sector has the people with the skillset, initiative and drive to position Ireland as the leading international centre for ESG products and investments – a ‘green finance hub’.   There are a range of tax measures that could positively impact the establishment of ESG funds in Ireland in addition to measures that would encourage investment from both Irish and international investors in these Irish-based ESG funds. These measures would be subtle, but would be impactful in positioning Ireland as a centre of excellence for ESG innovation. Incentivising positive housing and mobility consumer behaviour Despite retrofit grants available, there are many reasons why households in Ireland may be deferring improving their home’s energy efficiency, not least due to the high upfront costs. A focused approach to retrofitting homes (including associated upskilling) would not only stimulate economic activity, but would also help provide for much more healthy, ergonomic and energy efficient workspaces for the new wave of remote workers. Ireland’s approach to retrofitting should be reviewed to include a ‘Help to Insulate’ scheme to incentivise retrofitting properties.  Further, more specific measures and expansion of existing measures in the areas of tax relief for public transport costs, taxation of hybrids and electric vehicles as well introducing a tax deduction for commuting expenses and reintroducing tax relief for investment in park and ride facilities must be strongly considered by Government. Peter Reilly is a Tax Policy Leader at PwC. This highlights PwC Ireland’s Green Pre-Budget Submission.

With many organisations still formalising and organising their remote working arrangements, there is a chance to really get the balance right when it comes to the next evolution of work. Fiona Dowling and Tom Armstrong explain. When it comes to remote working, one size will not fit all – there are significant differences between age groups, which reflect family circumstances and stages in life. The next phase of reopening society and workplaces will raise issues, concerns, and opportunities as yet unknown. Constant review and an open approach based on emerging themes will be required. In a recent survey, respondents were asked a series of multiple choice and open-ended questions about their working-from-home experience. Based on these findings, here are the eight elements management should keep in mind as working situations evolve over the next six months. Flexible working arrangements When asked what they would like their organisation to continue with after the pandemic, more than half of respondents (60%) said flexible working arrangements. This includes requests to work from home or remotely, as well as requests to control start and finish times with a greater emphasis on outcomes as opposed to hours worked. Physical sense of people Many are feeling the loss of being near other people brought about by remote working. Almost 93% of respondents expressed negative sentiment when asked how their connections to colleagues were affected. It’s good to remember that our people still need other people. Gender needs While everyone has experienced the same event, a standout divergence is that in relation to every statement in the survey, men consistently report a more difficult experience. Speak to the whole of your workforce to get a better sense of their needs and note that the needs of one group might be different than the others, and take note of emerging trends. Boundaries It’s important to remember that many employees want to feel the difference between their home and work life, especially when remote working, and boundaries around the right to disconnect need to be set. Many have expressed issues with the expectation of being available after normal working hours, exclusively working from home and the need to be mentally “always on”. Generational differences In the survey, the 18 to 24 age group have indicated the highest negative sentiment of all age groups. The 25 to 34 age group had the second most negative experience. The group that indicated the most positive or least negative experience is the 35- to 44-year-olds. The significant differences in sentiment between age groups clearly reflect the different needs at different stages of life and family circumstances. Providing practical support Organisations must take into account that while their work force is working remotely, they still need the same amount of technical support, office equipment and reimbursement for costs incurred because of home-working. Be sure to build these considerations into your budget going forward. Collaboration and problem solving Ability to collaborate, generate ideas, innovate and problem solve during enforced remote working experienced a bit of a slump. When moving to a new way of working going forward, organisations should continue to foster a culture of collaboration to aid in the business’s future success. Not only do you want to implement new ideas, so do your employees! Fun and morale As is this case when working from the office full-time, employees still want more time to socialise, informal staff meetings and enhanced social interaction. Make sure your staff are empowered to set aside time for the fun stuff without it having a negative impact on their day-to-day work and productivity. Tom Armstrong is an Executive Coach, Facilitator, Mentor and Chartered Accountant. Fiona Dowling is an Accredited Executive Coach, Career Strategist, and Leadership Facilitator.

June has rolled around and all the grand goals we planned in January are still sitting there, waiting to be achieved. Damian McCourt outlines five ways to help you get back on track. January is the month for grand goals, big ideas and hopeful change. February tends to be the month for keeping your head down, getting through it, and trying not to think about the grand goals lying in ruins at the end of January. By June, we might still have those goals in mind, but if you have abandoned them, they are hard to pick up again. Here are five tips to get yourself back on target. Was the goal for you or someone else? This might seem obvious, but a lot of the time the goals we set aren’t really ours. Do you want to lose weight because you’d like to be able to enjoy more physical activities (goal for you) or because you’re afraid people won’t find you attractive (goal for others)? Are you going for that business qualification because you’re interested in it or because you’re afraid your colleagues won’t see you as competent? Goals based on fears rarely succeed. Think hard about this one, because it’s the most likely reason you’re not achieving your goal. Was the goal realistic? Most of us don’t look at context when we make goals. “Learn Portuguese in six months!” might be realistic, but not if you’re also working long hours, bringing up three kids and trying to keep in touch with your friends. You need to figure out the daily time requirement for your goal and see how it fits in with your life now. It might be less than you think, and daily repetition is the key to achieving your goals. Did you figure out what daily change would lead to success? Organisations are good at long-term change because they can break down broad, long-term goals into medium-term, strategic targets and then into short-term, operational changes. If you’re trying to change something about yourself, you need to do the same thing. This is something many struggle with, and scaling is a great way to manage this. Score yourself on a scale of one to ten on the thing you want to change. Maybe it’s physical fitness, and you’re only a three at the moment. Now, what one thing could you change each day to move yourself to a four? Maybe it’s getting off the bus two stops early and walking the rest of the way each morning, or taking a ten-minute walk at lunch. It doesn’t have to be a huge change; in fact, it’s better if it’s not. You are just moving that scale, one point at a time. Are you trying to multitask? Despite the fact that multi-tasking is lauded as a critical business skill, most of us just can’t do it well. About one in fifty people have the genetic wiring to genuinely pay attention to several things at once without losing focus. For the rest of us, we work best when we focus on one thing at a time. Goals are no exception. Pick one goal you want to achieve more than any of the others, and make it the primary focus of your life until the daily changes required to make it a reality have become automatic. You don’t even have to have reached your goal; you just need to be on the way without having to direct willpower towards it each day. Did you set a due date? Don’t! This one is controversial. You might think having a goal date will spur you on, but what it really does is give you a failure state. “I didn’t achieve my goal in the time I set for myself” can easily turn into “I just can’t change!” after a few missed deadlines. Focus on daily changes, one at a time, and on making each one a habit. You’ll have scaled up to a 10 out of 10, goal achieved, before you know it. Damian McCourt is a freelance trainer and consultant specialising in workplace resilience, productivity and sensible leadership.

Dawn McLaughlin knows first-hand that a problem shared is a problem halved. And that is why she is utterly convinced of the positive impact of peer-to-peer networking and collaboration in professional services. Sole practitioners are no different to any other business owner. Shoulders not big enough to carry the weight of the world, they are afraid to show weakness by sharing problems. They make decisions in isolation and hope they get it right each time. They are a jack of all trades, and fire-fighting is a crucial skill developed over the years. Time is limited, and the to-do list grows longer with each passing day. This will undoubtedly strike a familiar chord with many readers. Some years back, our Institute championed the idea of bringing us together by encouraging us to establish local network clusters throughout Ireland. Accountants getting together – well, that was a challenge! The only time we spoke to our competitors was possibly over a coffee at a training session, if at all. I went to a group session in Derry with anticipation, and it was the beginning of a long relationship between like-minded individuals. As a closed group, we learned to trust one another. We shared experiences, knowledge, how-to tips, and valuable connections. Sales leads were passed for services we did not provide ourselves. Those relationships have stood the test of time. There was comfort in knowing that others feel the same and share similar issues daily. Your problem had probably already been solved by another member, and we all benefited from these relationships. Even something as simple as a group moan where we put the world to rights was therapeutic. This cluster approach proved vital during the pandemic when so many found themselves isolated. In our Chamber of Commerce, members join a sector cluster and benefit in a similar fashion. Collaboration, alliances, knowledge transfer, innovation, and synergy abound. The benefits of clusters impact each and every one of us. As a Chamber board, we provide a lead director for each cluster, a direct link with benefits flowing both ways. Accurate, timely, and relevant data flows from each cluster on skills gaps, challenges, and opportunities. As an organisation, this gives us evidence-based data to lobby on their behalf. It provides the Chamber with a stronger voice and is vital in the drive to get relevant support to where it is needed most. The benefit of clusters was evidenced locally when one of our board members identified a significant skills gap in his cluster. Welders were in short supply, and the local engineering companies were suffering. Every effort went into determining the need, getting buy-in from the local companies, and lobbying the educational establishments to develop relevant courses. A course was then created, so we had a win-win for the local college, the employers, and – more importantly – for the young people who signed up and went on to get guaranteed jobs at the end of the course. Over the years, I have witnessed many successes emanating from clusters and shared working, and I am totally convinced of their positive impact. I would encourage organisations and networks of all kinds, shapes, and sizes to develop their own clusters for the benefit of their members. For those Chartered Accountants not already connected, why not start up your own network locally? The impact can be hugely significant, and we all benefit from collaboration and sharing our experiences and knowledge. Dawn McLaughlin is Founder of Dawn McLaughlin & Co. Chartered Accountants  and President of Londonderry Chamber of Commerce.

Four members in business review the challenges and opportunities of the past year, and explain how their organisations have successfully navigated the fall-out of the COVID-19 crisis thus far. John Graham  Managing Director, Andrew Ingredients The speed of the recovery in business after the first lockdown took us by surprise. As sales began to recover, I realised that we needed to start refocusing again on future growth and what we needed to do to support that. That made me reflect on my role, as covering the operational demands of the business was starting to limit my ability to focus on our long-term growth ambitions. As a result, we have just recruited a Head of Operations who started this month. This is a new role for the business and one we couldn’t have imagined creating this time last year. Now we are coming out of the worst of the pandemic, we are pushing ahead with our planned investments to give us the platform for future growth. This includes an extension to our warehouse (adding 50% more space) and the implementation of a new warehouse management system that should improve our efficiency and allow us to take advantage of future advances in technology. We also hope to get back to a full schedule in our WorkWith collaboration hub, where we work with our customers on new product development, trends, and market insights. However, there are still barriers in the way. Brexit and navigating the Northern Ireland Protocol has been a big challenge over the last six months, and that is unlikely to improve in the short-term. The bureaucracy it has created is sucking valuable management time from the business. Hopefully, the EU and UK can find some practical solutions to make the Protocol sustainable over the longer term. Despite Brexit, we believe there are great opportunities for the business, including the continued growth of Andrew Ingredients in Scotland, which is a new market for us, and bringing exciting, new ingredients to the Irish market. Wai Teng Leong Director of Finance – Financial Reporting, Tax & Treasury, Moy Park 2020 had been a truly unprecedented year, and no one anticipated the way the pandemic would change our lives and the way we work. Working from home presented enormous challenges initially, but I am incredibly proud of my team’s strength, resilience, and commitment during this time. As managers, we had to ensure that our teams performed at the high standards expected of a corporate function while finding innovative ways to motivate our people and keep up morale. We hold weekly social calls every Monday morning and arrange regular team-building events, which have ranged from baking cupcakes to book folding art craft. It is essential to take a light-hearted time out when working remotely to fit in social interactions. The rapid actions of our IT department enabled working remotely possible. For the first time in my career, we carried out quarterly and year-end audits remotely – virtual stock-takes were undoubtedly a novelty! Technology and innovative ways of working have enabled us to carry on with business as usual. Over the last year, we have held large virtual conferences (with goody bags delivered to delegates) and introduced e-learning modules to ensure that people development continues to be a priority.  The biggest challenges are inducting new team members and imparting knowledge, as these used to be carried out sitting side-by-side in an office environment. Project work such as ERP implementation also poses similar challenges. It is, therefore, important to be organised and keep a constant flow of communication. I believe that the events of the past year have made us all better managers. Looking ahead, flexible working will lead to a better work-life balance. Still, we also need to ensure that we do not lose sight of the importance of face-to-face interaction to support mentoring for career progression, creativity, and building relationships. As lockdown eases, I am optimistic that we will find a solution that combines the best of both worlds. Jason McIntosh EMEA Finance Manager, Seagate Technology It’s fair to say that how we work has changed significantly over the past year! As a key manufacturing site within our global supply chain, our work has always been very office-based. That shifted for a lot of us overnight. My whole team across the UK has now been working entirely remotely for over a year.  As we have continued to operate, we have maintained a significant on-site presence throughout the pandemic, too. One of the biggest challenges has been enabling continued collaboration between our factory and remote teams while maintaining a culture of innovation and development.  How we work together in finance has also changed considerably since last year. Whereas before we had face-to-face meetings and ample informal collaboration opportunities, now all our interaction is virtual. Having said that, I spend more one-on-one time with my team (via Teams) than before.  We have always worked as part of a global team, particularly in finance. My boss, although Irish, is based in Amsterdam, and I work closely with colleagues in locations like California and Thailand daily. We already knew how to work together virtually and while we had to adapt locally, we already had that experience. If anything, remote working is easier locally because you don’t have time zone challenges.  Making sure that everyone in our team invests in their wellbeing has been vital. I’m proud that our company has invested so much in employee wellness programmes, and I’m confident that they have helped us navigate challenging times for everyone. In the second half of 2021, I expect to see more of our team returning to the office (at least part-time), provided it is safe to do so. The most significant barrier ahead is undoubtedly the uncertainty that remains. Several countries around the world are still under some form of lockdown. When and how we emerge into some sort of ‘steady state’ will shape how we work in the coming years. Like all businesses, we have learned plenty of lessons during the pandemic that will create the opportunity to be more collaborative on a global scale going forward.  John Morgan Finance Director, BT Enterprise  Having just secured a role as Finance Director for a newly formed business unit in BT with a management team primarily based in London, I was geared up to spend a couple of days per week in London, commuting from Belfast. Little did I know that my last day in London would be my final interview in February 2020 and I would spend the next 15 months mainly working from home.   COVID-19 hit our business unit relatively hard for certain revenue streams. For example, mobile roaming revenue turned off overnight and call revenue reduced considerably as offices shut.  If anything, the pandemic has made us look to accelerate some of our existing medium-term plans instead of fundamentally changing our whole business strategy.  Within BT Finance, we had already adopted flexible working. We have found flexibility a key driver of engagement and a differentiator in the recruitment market. COVID-19 has taken this to another level, however. Trust is a massive enabler for this; if you trust and are trusted, it doesn’t matter where people choose to work. I sense that we will remain flexible. While individuals will have different preferences, I envisage the team working around two to three days a week from home. We are lucky in that we are about to embark on a significant property refurbishment in our prime site in Belfast and the team are pretty excited to be moving into leading-edge office space by early 2022.   There are still barriers in the way in our industry, however. The UK telco industry is one the most competitive in the world, and downward pricing pressures are significant. That said, we believe new strategic initiatives such as 5G allow us to differentiate ourselves and add value for our customers. 

Capital allocation and investment appraisal is a senior management team’s most fundamental responsibility, but it is easy to overstate prospective rates of return. Cormac Lucey explains. The goal of corporate investment should be to convert inputs – including money, things, ideas, and people – into something more valuable than they would otherwise be. After ten years in the position, a CEO whose company invests 10% of its existing capital stock each year will have been responsible for deploying more than half of all the capital at work in the business. This makes capital allocation and investment appraisal a senior management team’s most fundamental responsibility. In financial terms, that means that investments should generate an after-tax rate of return greater than the company’s cost of capital. Management will generally use Discounted Cash Flow (DCF) analysis to test whether a project is likely to achieve this goal. Two specific DCF measures can be estimated. If a company’s cost of capital is 7%, its investments need to generate a rate of return of at least 7% to adequately compensate investors for the risk they are exposing themselves to by investing in a company of that particular size, operating in that particular country, and in that particular sector. If the investment generates an 8% return, value is created. If the investment generates a 6% return, value is destroyed. By discounting projected future cash flows into their equivalent present values using the corporate cost of capital, net present value (NPV) quantifies the boost to shareholder value that an investment should generate. The other key DCF measure is the Internal Rate of Return (IRR). For any given set of project cash flows, IRR quantifies the cost of capital that would generate a nil NPV. The IRR measures the average annual rate of return that the project expects to generate over its life. If a project’s IRR exceeds the cost of capital, it will be expected to boost shareholder value. But there is an assumption implicit in DCF mathematics, which can lead to IRR significantly overstating a project’s prospective rate of return. The IRR approach assumes that intermediate project cash flows generated by the project (i.e. those generated after the initial investment period and before the project’s end) are themselves reinvested to generate a rate of return equal to the project’s IRR. If a company’s cost of capital is 7% and the project’s rate of return is 14%, this assumption means that surplus cash flows generated mid-project are themselves expected to be reinvested and to generate a 14% rate of return. This assumption is questionable: why should returns on surplus cash be higher just because they were generated by a high-return project? Modified Internal Rate of Return (MIRR) applies exactly the same approach to evaluating a project as IRR, except it assumes that intermediate project cash flows generate a rate of return equal to the cost of capital (rather than the project’s IRR) when reinvested. This will generally be a more realistic assumption than that underpinning IRR. Having already calculated IRR, it is a simple matter to estimate a project’s MIRR using Excel’s ‘=MIRR’ function. The difference in the measured rate of return between IRR and MIRR can be significant. Consider a simple example. Suppose we invest €1,000 today, and it is expected to generate annual after-tax cash flows of €140 for each of the next ten years, after which the project ends and we get our €1,000 investment back. The IRR of this project is 14%. But, if our cost of capital is 7%, the MIRR of the same projected cash flows would only be 11.4%. Bottom line: IRR can systematically overstate prospective project returns with its unrealistic reinvestment rate return assumption. MIRR corrects this. Cormac Lucey is an economic commentator and lecturer at Chartered Accountants Ireland.

In response to requests from charities and their lead bodies, Benefacts produced a special report on Irish charities last May. Patricia Quinn explains the findings. In Ireland’s charity sector, just as across the rest of the economy, the COVID-19 pandemic cast a long shadow. A sector of predominantly small and micro entities, charities experienced the full gamut of disruption to their not-for-profit businesses in 2020, ranging from temporary closure to rapid adaptation to digital working and developing new solutions to meet the needs of vulnerable people in local communities. For some – especially providers of hospital, hospice, residential care, and homelessness charities – the impact for their staff and served communities was a matter of life and death. Other charities – especially in emergency relief, mental health, local development, and social care – experienced increased demand for their services. In some sectors such as the arts, heritage, and museums, charities without the capacity to move to digital working methods could not operate, or only to a minimal degree. They report staff cutbacks and other cost-saving measures, but most have limited reserves and cannot avoid fixed costs. Fundraised income, which is a significant proportion of the revenues of some Irish charities, was expected to take a severe hit. In some sectors that rely predominantly on traditional fundraising, including door-to-door or church gate collections, charity shops, fun runs and other event-based approaches, this has been the case. Where charities were already geared up to appeal to donors and collect gifts digitally, or transitioned successfully to online giving, some reported an increase in income from this source. What do we know about charities? Charities form a subset of all non-profits in Ireland, which number more than 32,000 if you drill down to the level of local clubs, societies, and associations. The 11,405 charities on the Register of Charities today include just under 3,600 primary and secondary schools. For practical purposes, they are regulated elsewhere. The Register also includes about 2,700 unincorporated associations, trusts, and non-incorporated bodies that file accounts to the Charities Regulator which – for various reasons – are not published on the Regulator’s website. Anybody wanting to study the financial and governance profile of the charity sector therefore relies mainly on the CRO (Companies Registration Office) filings of incorporated charities, of which there are about 5,000. These form the basis for a new benchmark report on the charity sector in Ireland released by Benefacts last month. Benchmarking the state of the sector There has never been a time when current, reliable data was more relevant to charities. In boardrooms around the country, trustee directors have been grappling with tough choices. Even the best risk register was unlikely to include a worldwide pandemic involving the near-total shut-down of whole sectors of the economy. And most charities are particularly ill-equipped to cope with financial adversity; by definition, they have no equity, no investors, and limited capacity to trade their way out of financial trouble. Few charities entered 2020 with significant financial reserves. Although the aggregate reported value of reserves in the sectors under review in the Benefacts report was €3.73 billion based on available data for 3,628 incorporated charities, most of these reserves (€2.5 billion) are held by just 80 larger charities – in particular, voluntary hospitals and social housing providers. The remaining €1.2 billion in reserves is distributed across smaller charities, primarily in local development, social housing, health, and services for people with a disability. Moreover, charities’ assets – unlike most commercial organisations – typically cannot readily be liquidated as they are essential for delivering services or may be of a heritage or highly specialised nature. When reserves are converted to the number of weeks of average weekly expenditure (using data from full accounts), our analysis found that more than one-third of charities have fewer than ten weeks’ reserves, with arts charities particularly heavily exposed. Not all bleak In preparing its report, Benefacts reviewed more than a dozen surveys and other reports prepared by sector lead bodies, policy-makers, and regulators. Many positive effects have been reported. These include heightened public awareness of the value of charities’ work, better engagement across geographic divides, cost and time savings, a better quality of life for staff, and the adoption of more diversified fundraising solutions – especially digital ones. In fact, it appears that a small percentage of charities that were already well-geared for digital fundraising will be reporting 2020 as a better year than usual. Philanthropists stepped up in response, especially to pandemic-related causes, and social enterprises were encouraged to bid for new additional funding. The State permitted some charity employees to avail of pandemic unemployment benefits and allocated additional funding to address areas of acute need. Using financial reporting data shared with us in advance of the publication of their own financial statements by the nine State bodies that are the principal funders of charities, we were able to identify a 10.7% year-on-year uplift in funding for charities – mainly in health, social care, arts, and culture. But in 2020, there were nearly ten pandemic-free weeks at the start of the year and lockdowns were partially lifted mid-year. Additional State support will undoubtedly have sustained some charities that might otherwise have gone under. But there’s already a recognition that 2021 – with the exit from full lockdowns only starting in the middle of the second quarter – will be a tougher year, and 2022 probably tougher again. Planning for better The last 30 years have seen considerable professionalisation in the charity sector. The 5,000 charities whose financial statements form the basis for this new report employ more than 101,000 people. Fundraising, a critical discipline in the 273 charities that rely on this as their principal source of income, has become highly specialised. The larger charities now have professional staff to manage their volunteer supporters. Even the voluntary directors of charities themselves are increasingly recruited using the kind of competency framework approach that would have been unheard of in this sector 20 years ago. And perhaps it’s as well, since understanding the drivers of charity business success is a crucial function of charity boards. Contingency planning will surely come to the fore, as well as a searching review of some of the fundamental assumptions about funding. Benefacts has already received queries from charities trying to understand their position relative to their peer organisations in a given sub-sector, anticipating perhaps an even more competitive environment in the future. Audited financial statements are a hugely valuable source of granular data that makes up the picture of any sector and its component entities. Like analysts in commercial sectors, Benefacts relies on charity company disclosures as the bedrock on which we build a profile of the charity sector and its sub-sectors. Common financial reporting standards bring consistency and reliability to the data that can be used to create a picture of the whole sector and track changes year-on-year at the level of individual charities and sectors such as hospice care, addiction support, or animal welfare. Thanks to its database, augmented each year with more than three million new data items harvested from non-profit company disclosures, Benefacts has been able to provide charities, funders, policy-makers and other stakeholders with a powerful knowledge asset to help them navigate uncertain times. The impact of regulation The range of data underpinning our analysis of this multi-billion euro sector suffered a setback with the new Companies Act reform in 2014. For the first time, small non-profit (limited by guarantee) companies could avail of the same exemptions from filing full accounts as commercial companies. While this is only fair and equitable on the face of it, it has diminished the public disclosures of thousands of charities that rely on public donations, state funding, or both to support their operations. Unfortunately, the Charities Act 2009 did not foresee this change and exempts charity companies from filing their accounts to the Charities Regulator to avoid the burden of double regulation. Again, fair and equitable – except for the unintended side effect of making the financial disclosures of thousands of charities less transparent to the very people on whom they rely for income and something more precious – trust. Here are the numbers: of the 3,628 charities that have already filed their 2019 accounts, 36% have filed abridged accounts and 26% have filed unaudited accounts. 106 of these charities receive funding from the State. This means that their unaudited accounts breach the reporting standards for any body receiving State funding set by the Department of Public Expenditure & Reform (Circular 13, 2014). Rules are there to be obeyed, and over time, the compliance authorities will surely iron out these wrinkles in the provisions of the various legal and regulatory frameworks. But charities are not like other small businesses. The principle rather than the letter of the legislation regulating them is one of transparency. To that, I would add informed self-interest. Sector lead bodies preparing a brief for their board or a presentation for an Oireachtas Committee hearing are often disappointed to discover that Benefacts analysis of their members is missing some critical dimension – especially an analysis of their income. That is because so many of the source documents lack an important few pages: the income and expenditure account. This is all the more galling as funders require the full accounts to be provided to them. We therefore experience a double standard – full accounts to go in the State filing cabinet, abridged ones for the rest of us.

I have so much work to do to grow my practice, but I keep getting sucked into day-to-day stuff. I have employed some good people, but the problem hasn’t gone away. Time management gets a bad rap because people think it’s all about to-do lists and tasks. In fact, it’s about strategic decision-making: there is never enough time to do everything, so we need to choose. Urgency creates a compelling gravitational pull, and you need to create an alternative centre of gravity by focusing on added-value work. The next time you find yourself sucked into operational issues, reflect on what is missing (for you or your team). Is it: Something about relationships? Think about patterns, trust, introductions, network. Something about infrastructure? Think about technology, systems, processes, templates, supplies, check-lists. Something about development? Think about information, knowledge, skills. Something about approach? Think about attitude, planning, reflection, focus. Spending time in these four areas allows you to build capacity. But we work on them one at a time, so choose one ‘fix’ that is achievable but would make a big difference, such as training your staff or creating a database. When that’s done, choose the next one. Above all, plan the week ahead on Friday afternoon and look at your week with your ‘capacity building’ glasses on. What opportunities arise? Overall, I’m happy with my team. They are good performers and we get on well. I have one particularly good person on my team; he’s clever, hard-working, and great with clients. The problem is his relationship with the rest of the team. He seems to look down on them. At team meetings, he is obviously multitasking. He never says anything offensive, but his eye-rolls and head-shakes speak loud and clear. I don’t want to lose him, but he is having an impact on morale. This is a familiar story: the high performer with poor behaviour, the rest of the team feeling undermined, nobody talking about it. Hoping the behaviour will go away is not going to work. Anybody could walk. Actually, this guy is clearly communicating with you – just not in words. You need to get curious about why this is happening; it’s great feedback for you. Find a good time to play his behaviour back to him (use “I notice” to describe behaviour and be careful not to judge). Invite him into a conversation with open, solution-focused questions like: What might be a more useful response? What might be useful for the team to hear? What would you like from the team? Such questions will help him explore the impact of his behaviour and take responsibility for changing it. As time passes, if you notice more supportive behaviour from him, quietly acknowledge it. If the poor behaviour continues, you may need to be more direct and ask him to behave differently. Julia Rowan is Principal Consultant at Performance Matters, a leadership and team development consultancy. To send a question to Julia, email julia@performancematters.ie. 

Daniel O’Donovan and Siobhan Orsi summarise the main changes in the Ethical Standard (Ireland) for Auditors, the International Standards on Auditing (Ireland), and the International Standard on Quality Control (Ireland) 1. In November 2020, the Irish Auditing and Accounting Supervisory Authority (IAASA) issued revised ethical and auditing standards in a bid to support the delivery of high-quality audit and strengthen confidence in audit in Ireland. The revisions build on changes made to the standards in 2017, which implemented the requirements of the EU Audit Regulation and Directive. These new amendments, which were the subject of a formal consultation earlier in 2020, are effective for audits of financial statements for periods beginning on or after 15 July 2021, with early adoption permitted. This article summarises the main changes in the Ethical Standard (Ireland) for Auditors, the International Standards on Auditing (Ireland), and the International Standard on Quality Control (Ireland) 1. Revisions to the ethical standard IAASA’s aim in amending the ethical standard was to simplify and restructure the standard to ensure a better understanding of the ethical requirements. It also introduces more prohibitive requirements, including removing the exemption for SME-listed entities that were not subject to many of the prohibitions applied to listed entities. These concessions, offered in the 2017 IAASA Ethical Standard to entities of this nature, have been removed. Other key changes to the ethical standards include, but are not limited to, the following: Third-party test: the new standard sets out a clearer and stronger definition of the “objective reasonable and informed third-party test”, which is a core element of the ethical standard. It requires audit firms to consider whether a proposed action would affect their independence from the perspective of public interest stakeholders rather than another auditor. Additional guidance has been inserted to assist in application. Internal audit services: firms will no longer be able to provide internal audit services to audited entities or their significant affiliates. IAASA’s view was that the provision of internal audit services to audit clients created a risk, both real and perceived, to independence that needed to be addressed. Recruitment and remuneration services: the standard incorporates amendments that now prohibit auditors from providing recruitment and remuneration services or playing any part in management decision-making. Gifts and hospitality: the requirement to establish policies on the nature and value of gifts, favours, and hospitality that may be accepted from and offered to other entities has been extended to apply to those entities that are likely to subsequently become audit clients. Enhancements to the ethics partner’s authority: new provisions incorporated into Section 1 of the ethical standard highlight the increased importance placed on the ethics partner. Enhancements include a requirement for reporting to those charged with governance where an audit firm does not follow the ethics partner’s advice. Partner rotation: the cooling-off period for engagement partners on public interest entity audits has been relaxed and amended from five years to three years, as was the requirement in the EU Audit Regulation in 2014. The change has also been applied to listed entities. Clarification has been added that when the engagement partners rotate off an audit, they cannot have significant or frequent interaction with senior management or those charged with governance during the cooling-off period. A new requirement has been introduced so that, where audits and those providing audits move from one firm to another, any rotation “on periods” for partners and staff include any time before they and the audit changed audit firms. Reporting breaches of the ethical standard The extant Ethical Standard for Auditors (Ireland) 2017 requires auditors to respond to all possible or actual breaches of the standard and keep records of any contraventions. A requirement has been introduced in the new ethical standard for auditors to report breaches of the ethical standard on an annual basis to IAASA, the relevant recognised accountancy body for auditors of public interest entities, and the relevant recognised accountancy body for non-public interest entity auditors. Such reports are to be submitted at least annually. IAASA indicated in its feedback paper on the consultation that it will issue guidance to auditors regarding the format of reports to be submitted. It also stated that any action taken by IAASA or the relevant recognised accountancy body in response to such reports will vary on a case-by-case basis depending on factors such as the nature of the breach, the appropriateness of the firm’s response, and the firm’s regulatory history. The new ethical standard permits firms to complete non-audit service engagements that were previously permissible provided they were entered into before 15 July 2021 and for which the firm has commenced work, while applying appropriate safeguards. IAASA did not introduce prohibitions on contingent fees for non-audit services, loan staff assignments, and tax advocacy services – all of which were proposed in the consultation paper. In addition, IAASA made changes to specific auditing standards: ISQC (Ireland) 1 and ISAs (Ireland) 210, 220, 250, 260, 600, 620, 700, 701 and 720. Hereafter, we will briefly discuss the most significant changes auditors and entities should be aware of for audits of financial statements with periods beginning on or after 15 July 2021. Revisions to ISAs IAASA has revised ISA (Ireland) 700, Forming an Opinion and Reporting on Financial Statements to extend the requirement for auditors of public interest entities to explain the extent to which the audit is capable of detecting irregularities and fraud to audits of listed entities also. There has been a significant expansion of the application guidance to the standard in relation to this requirement, which guides auditors to provide more detailed and granular explanations tailored to the entity being audited. IAASA acknowledged in the feedback statement that, in some situations, legislation (e.g. ‘tipping-off legislation’) would prohibit auditors from disclosing certain information in the audit report. ISA (Ireland) 600, Special Considerations – Audits of Group Financial Statements (Including the Work of Component Auditors) has been revised to clarify that the work of component auditors used for the purpose of a group audit must be evaluated and reviewed by the group engagement team. Application guidance has been added to the standard to assist group engagement teams in determining whether the nature and extent of such evaluations and reviews of component auditor work are appropriate in their professional judgement. ISA (Ireland) 220, Quality Control for an Audit of Financial Statements now requires the engagement quality control reviewer (EQCR) for audits of group financial statements of public interest entities to perform their quality control review over each component for which work has been performed for the purpose of the group audit, and to discuss the results of the review with the relevant key audit partner. This is a significant enhancement of the quality control review required for such entities. ISA (Ireland) 701, Communicating Key Audit Matters in the Independent Auditor’s Report has been revised to require that the auditor’s report specify the threshold for performance materiality and explain the judgements made in determining performance materiality tailored to the circumstances of the audit.  This package of revisions to the standards is designed to enhance audit quality and public confidence in audit in Ireland. However, for group audits of public interest entities in particular, there is likely to be significant incremental associated effort and cost in complying with the new requirements. Chartered Accountants should familiarise themselves with all changes to the standards, which are available on IAASA’s website. Daniel O’Donovan is Principal in the Department of Professional Practice at KPMG Ireland and Chair of the Institute’s Audit & Assurance Committee. Siobhan Orsi is Associate Partner at EY Ireland and a member of the Institute’s Audit & Assurance Committee.

The need for structured, robust, and reliable business intelligence has mushroomed in recent years. As an increasing number of businesses grapple with the issue, Paul Cullen  explains the critical elements for implementation success. Data volumes within businesses have increased dramatically in recent years, primarily driven by cloud-based data solutions. Many companies struggle to harness this data in a way that enables them to focus on the key drivers of their success and to know if the strategies they have executed are having the desired results. Proper and well-planned implementation of a business intelligence (BI) solution can give management the real-time information they need to maximise commercial opportunities and ensure organisational coherence to deliver on agreed performance metrics. Why Excel just doesn’t cut it for BI Accountants have always loved Excel, and it still has a pivotal role as an analytics tool. However, when it comes to flexible reporting and giving end-users the ability to dive beyond the headline numbers to get to the ‘why’, Excel falls short in several key areas: Model maintenance headaches: in a 50-tab reporting workbook, any change to the layout can be very time-consuming (and often error-prone). I frequently encounter client reporting workbooks riddled with errors because one sheet has a misaligned row, which results in an incorrect aggregated summary. The dreaded invisible F2 edit: how many times have you spent hours pouring over an Excel workbook trying to figure out why the individual tabs don’t agree with the summary, only to eventually discover that someone has keyed in a manual F2 edit in a cell? Distributabilty: so you have built this all-singing, all-dancing Excel reporting pack, but it’s 70MB and cannot be shared via email. You also realise that some information needs to be segmented so that specific users can only see select slices of the data. These issues usually mean that multiple Excel models must be maintained, amplifying the risk of error and potentially compromising data integrity. Limits on row numbers: Excel’s sheet row limit has increased to one million in recent years. While this sounds more than adequate, you can easily exceed this limit if you include transactional data. Housing data in this way within Excel will usually result in slow, large file-size models. Usually dependant on one key user: there is typically only one key person who knows how to run and maintain a reporting model. Therefore, reporting quality, outputs, and cycle time rely to a worryingly large degree on one individual. The need for structured, robust, and reliable BI has mushroomed in recent years. As a result, dedicated BI platforms like PowerBI, Tableau, Qlik and ZapBI have evolved to address these shortcomings and provide analytics visualisations and end-user self-service reporting that goes far beyond Excel’s capabilities. Key obstacles to getting good BI Master data Many finance professionals underestimate just how unstructured their data is. I often hear clients say: “Yes, but we use NAV/Dynamics 365, so our data is really good”. They often fail to understand the inconsistencies across the company in how transactions are coded or recorded by staff. These inconsistencies make life difficult when you need to connect transactions across different platforms. For example, say you want to connect salary data for an employee from an HR system with data in a time-recording system. The employee ID is, say, PCULLEN250 on the HR system but CULLP on the time-recording system. This is just one example of the data-mapping tasks that must be undertaken for BI to succeed. I have seen this to varying degrees in every BI project I have delivered because, for many years, siloed teams have had their own ways of doing things. They simply didn’t realise that there would be a future requirement to bring all this data together at a transactionally-connected level. Historical processes or ways of working The ways in which your teams have historically coded transactions on source systems will almost certainly present challenges in initially setting up your new BI platform. I once worked with a ship management group with 1,000 ships under their control. Management wanted to get to ‘vessel profitability’, and we knew that cost allocation would be a challenge due to the complexity of the company’s operating structures. However, we were surprised to find that revenue for each vessel wasn’t available from the ledgers because the company issued just one monthly invoice to each carrier, even though some had more than 50 vessels under management. Furthermore, payroll costs for vessel crews were recorded by office location, not by vessel. Both of these historical processes gave rise to significant re-analysis work and new process design to enable the required analyses. Similarly, one healthcare client wanted to understand their profitability by treatment type. They believed that everyone across the more than 100 clinics they owned used roughly the same few hundred treatment type codes. In fact, there were over 6,000 live treatment codes in use and in some instances, clinics could even create their own codes at will. So expect to change some of your ways of working as a result of embarking on a BI implementation. How far back to go? Once it becomes clear to key stakeholders just how much insight a good BI implementation will bring, there is typically a desire to have as much history loaded into the model as possible. This is often the case where the company is private equity-owned, or a sale is planned. My advice here is the old 80/20 rule. Yes, it might be nice to see this new level of insight going back five years. But if your company is one of those where a lot of re-analysis will be required, you have to ask: is it worth it? I instead recommend that older historicals should, where possible, only be incorporated in aggregate. You should then ensure that the new data processes are designed and implemented so that future analytics are both robust and reliable. How often is too often? When implementing a BI platform, the next consideration is how often the data and outputs should be refreshed. It’s tempting to think: “Great, I can see what the sales team are doing every morning and then follow-up to discuss what’s going on”. However, this approach can quickly create a situation where staff have to spend time each day figuring out what just happened. And this, of course, can lead to ‘paralysis by analysis’. Be judicious about how often BI data should form the basis of a trading or operations conversation, and otherwise use it to indicate the company’s direction of travel. Introducing a new performance management BI tool will initially strain your executives and managers as they sift through a deluge of new and revealing information. This takes me to the following consideration: the need for culture change if a BI solution is to work correctly. Warning! Culture change approaching Imagine you are a sales or production manager, and you wake up to a new, live, web-based BI portal that shows everyone in your organisation where things might not be going so well on your patch. Senior management must avoid using the BI solution to shame or berate colleagues. Instead, it should be seen as a tool to identify opportunities and enhance performance across the business. Tread carefully here and avoid the ‘big bang’ approach of rolling out BI. You want your teams to embrace this new way of working, not run away from it or, worse still, seek to discredit it. With all this new performance management data at your fingertips, you may wish to consider redesigning your legacy compensation and bonus systems to ensure that these insights drive the right behaviours across the organisation. Embedding a robust BI solution in your organisation can be the catalyst for undoing the traditional silo mentality that can arise when different functions perform to their own narrow targets. Factors affecting implementation speed The following four issues will affect the length of time it takes to build and roll out your new BI platform. Poor data mapping: it is critical to understand how different naming conventions are used across your systems. You should conduct a thorough data-mapping audit to ensure that independent systems can be bridged on common field names (by employee ID, customer ID, or product ID, for example). Doing this during the development of the BI solution is time-consuming, but products like Caragon Flex can make the process much more manageable. Organisational readiness: prepare your team for the effort required to clean up your data and, more importantly, how this information will be distributed and reviewed once it is live. Having a new suite of detailed analytics can be overwhelming for data consumers if it is not clearly understood what it will be used for. Also, inform your colleagues that they are not expected to understand every data point that surfaces in the reports. Absence of a project champion: projects that should take weeks often take months due to the lack of an internal project champion. It is vital to appoint one and empower them to ‘herd the cats’ to ensure the project is delivered on time. Unclear output requirements/moving targets: consider what you want to get out of the new BI platform and be ruthless in identifying the key reports and key performance indicators you will need at the outset. Solution providers will typically build a proof-of-concept model to illustrate the art of the possible. This is a good time to agree on the minimum requirements for Phase 1 – but don’t bite off more than you can chew. Some processes must change As the earlier examples show, digging deep on data to build robust processes across multiple systems will invariably highlight process weaknesses that, if not remedied, will compromise the integrity of any BI platform. Therefore, it is essential to understand at the outset that go-live and the ultimate success of the project will be contingent on staff being adequately trained in the new ways of working. This might, for example, mean retraining payroll staff on payroll coding so that the correct costs are tagged to the relevant activity. Similarly, invoicing processes may need to change to ensure that revenue can be appropriately tagged to achieve the desired level of reporting granularity. You should also introduce tighter controls on crucial data fields across your systems (customer codes, product codes or employee IDs, for example). In my experience, this is best achieved by having a data governance standing group, to which all data changes (or new data field creations) must go for approval and communication to other potentially affected users. In conclusion A BI implementation is an exciting journey for a company. To get the most from it, here are my top four tips: Appoint a data champion and BI steering committee to ensure the project both gains and sustains momentum, and the business is prepared for what’s coming. Take the time to fine-tune your data mapping processes. Phase your BI roll-out in bite-size chunks to avoid overwhelming the organisation. Create a sense of ‘new frontiers’ within the business as it embarks on its data-empowered journey. Paul Cullen FCA is CEO at 1Truth, a Belfast-based management information solutions provider.

Reform of the public sector accounting process to an accruals-based system of accounting is gaining momentum, but don’t expect the transition to be total in the short-term, warns Dr Brian Keegan. Last month, the Institute launched a report by Queen’s University Belfast academics, Prof Ciaran Connolly and Dr Elaine Stewart, into the modernisation of public sector accounting. Ireland has long managed its public finances on what essentially is a cash basis of accounting. Modernisation would migrate the State to an accruals basis for accounting for public spending. The fact of the matter is that government over the years has simply gotten bigger. There are 50,000 more people employed in the Irish public service than in 2011, and annual spending has almost doubled in that time. Despite the constant carping from opposition politicians and the commentariat, we have better education, better transport infrastructure, better regulation and governance, and better health services than we used to. All of this demands even more rigorous financial management. Recent surveys by the Chartered Institute of Public Finance and Accounting and the International Federation of Accountants note that 25% of countries worldwide have already migrated to an accruals-based system of accounting. There is an expectation that this will rise to 65% in the next few years. The UK is already operating an accruals-based system of accounting. The Minister for Finance, Paschal Donohoe TD, announced in 2019 that, in part due to OECD prompting, Ireland would undertake a similar public sector changeover. Nevertheless, as the Connolly and Stewart report notes, even the successful adoption of accruals accounting has its pitfalls. A cash-based system of accounting often suits politicians and civil servants alike. It is more difficult to explain away misspent funds or fudge budgeting processes if everything has to be tied up in neat, unaccrued bundles at the end of each year. In Ireland, these pitfalls may be particularly pronounced because we are not good at multi-year politics. Perhaps the most obvious instance of this is pension reform, where there have been at least as many reports and policy papers as there have been governments in recent times. Multi-year capital investment programmes can also fall by the wayside. The 20-year National Spatial Strategy, devised in 2002, seemed to run out of room. Both attempts to establish rainy day funds this century have yielded empty kitties. Constant change is both the glory and the weakness of the democratic process. Introducing an accruals-based accounting system will undoubtedly result in benefits in expenditure management. However, the multi-year budgeting and planning process is a different matter entirely, inextricably linked as it is with the political cycle. The process of change already underway seems to have considerable momentum, and Ireland will have better public accounting systems within the next few years. Even before the 2019 announcement, there was a process of improvement underway with the introduction of a Budget Oversight Committee and a Parliamentary Budget Office. The latter organisation does excellent work in explaining the shape of the public finances. Yet, the complete transition to the accruals basis will have to be phased in, with a long journey towards total change that will include staff training and the typically painful wrangling of recalcitrant IT systems. Arguably the most important stakeholders in this process are government ministers. They stand to benefit most from improvements in the financial management of their departments. However, great plans for long-term investment or reform too often fall by the wayside when the responsible minister loses their job at the polls. The prospects of re-election frequently depend on immediate policies with immediate spend and immediate results. It will be harder to run a political campaign on accruals accounting principles. Dr Brian Keegan is Director of Advocacy & Voice at Chartered Accountants Ireland.

Aoife Donnelly and Thady Duggan explain how the role of the chief financial officer will evolve as digital change continues apace. As chief financial officers (CFOs) continue to take on more responsibility for strategy and execution, and for the sustainable future of the enterprise, they must build technology strength to unleash breakthrough speed. Doing so is the way to drive breakout value across the business. Accenture’s recently published report titled CFO Now: Breakthrough Speed for Breakout Value identified themes common to a select group of CFOs who deliver significant value to their organisations. We found that, aided by digital transformation, the pace of change is greater than ever before. This was further accelerated by the pandemic, with 79% of CFOs surveyed compelled to ramp up organisational transformation due to the effects of the past year. As chief executive officers (CEOs) embrace speed by accelerating their digital transformation, they turn to finance for guidance. The pace at which finance can support business leaders in real-time is critical and has resulted in the accelerated adoption of digital technologies in the finance function. CFOs said that 60% of their traditional finance tasks have been automated in our CFO Now research, up from 34% three years ago.  Some CFOs are delivering real value from their digital transformation. Our research identifies several key characteristics of these ‘winners’ – finance teams that can provide the business with insights to drive transformation with speed and agility. Economic guardians Compared to their predecessors, the breadth of responsibility and expectation faced by today’s CFO is increasing. To thrive with this increased responsibility, the finance function must transform itself to enable CFOs to support the rest of the business effectively. The pace of technological change in recent years has opened opportunities within finance. Huge strides have been made to optimise processes, maximise the capabilities within existing enterprise resource planning (ERP) systems, and implement other technology enablers. However, this is using today’s technology to fix yesterday’s problems. Timely, accurate, and complete reporting is important, but it should be considered a mere hygiene factor for a high-performing finance function. The business needs informed guidance to navigate the present and anticipate the future, not comfort for the past. That’s where the most significant shift is occurring in the role of CFOs as economic guardians. High-performing finance functions can and should provide predictive insights, but less than half (43%) of CFOs surveyed have used advanced financial modelling in the past two years to identify future risks and opportunities. How can CFOs be economic guardians if they don’t have a perspective on what tomorrow will bring? High-performing CFOs use internal and external data with advanced models to better understand leading indicators of demand well ahead of trends that might show up in the company’s profit and loss account. Others, however, are not sure how to maximise the benefits of digital transformation – only 21% of CFO Now respondents have used operational data to identify new sources of value, and only 20% have used macroeconomic data to support their forecasting. Cloud architectures offer a whole new world of possibilities to the CFO, allowing for much faster decision-making. Yet, only 23% of CFOs use the cloud to provide new insights and only 16% use it to identify new sources of value. Combined with this data and technology utilisation comes a renewed focus on aligning and nurturing talent within the finance function. According to Accenture’s latest CxO Pulse Survey, 75% of CFOs believe that their company is on a course to redesign how people work and reinvent their culture to support new behaviours and mindsets. CFOs understand that finance professionals can’t be left out of this talent revolution. Our CFO Now research shows that they are acting by re-prioritising the skills needed in their functions. Traditional finance and accounting skills are still important but, along with general management skills, are now among the lowest priorities. The top skills being actively introduced are data exploration and analysis (41%), followed by scenario planning and horizon scanning (38%), innovation (37%), and storytelling (34%). Architects of business value CFOs have always played an important role in the organisation, but they now increasingly influence and direct value creation across the enterprise. This enhanced role requires increased collaboration between the finance function and other parts of the organisation, with 86% of CFOs surveyed increasing the frequency and scope of collaboration across the C-suite. The current pandemic and the strains it has placed on business has changed mindsets at the C-suite level, turning what was once a competitive environment into a more collaborative one that enables the CFO to deliver on their expanded role. Leading CFOs understand the power of technology to support these efforts and take appropriate action to ensure that they play a significant role in any major technological decisions. Indeed, 72% of respondents said they have the final say on the technological direction of the enterprise. Catalysts of digital strategy The modern CFO needs to champion digital transformation across the enterprise to support the central theme of our research – breakthrough speed for driving breakout business value. Outside their own function, there are three key areas where the impact of digital strategy are most striking. Business models: our research shows that 41% of CFOs are driving new business models within their organisations. That’s a great start, but it still falls short of the 72% of CFOs who thought their business would need to completely re-think processes and operations to be more resilient in the face of impending disruption. Throughout the past year, organisations had to reconsider their business model and its resilience for the future. Irish companies have used this crisis as an opportunity to reassess their ambitions, using the shift to digital to re-evaluate their global ambition and identify business lines, markets, and other opportunities that were not considered possible before. Security: the most cited barrier preventing CFOs from realising their full potential as drivers of strategic change was concern about cybersecurity. Yet only 28% of finance professionals are engaged in managing risk through data security to a meaningful degree. In many organisations, chief technology officers and chief risk officers report to the CFO. Given this responsibility, it is incumbent upon the CFO to better understand and become more actively engaged in data security. Environmental, social and governance criteria: one striking finding from our CFO Now research was the extent to which CFOs are seen as responsible for their company’s environmental, social and governance (ESG) policies. In fact, 68% of respondents said that CFOs take ultimate responsibility for ESG performance within their enterprise. Driven by the growing concern about the global climate crisis, Irish CFOs are also trying to understand their role in any future ESG reporting requirements. The impact on the finance function The role of finance within the organisation is evolving and expanding. The enterprise expects more, and at greater speed, from the finance function. To deliver this, the function must change. One enabler of this change is the accelerating adoption of digital technologies. This impacts the speed and type of finance activities being performed. Leveraging technology to perform more of the mundane tasks allows the CFO and the finance function to spend more time planning, analysing, and advising on the growth agenda, thereby better serving the enterprise’s changing needs and expectations (see Figure 1). Given this shift, a significant change in the skills being introduced to the finance function makes sense. CFOs know that their teams must gain insights from data and then, crucially, communicate these insights to the business. In conjunction with the shift in the type of work performed by finance teams, the composition of the workforce is also changing with fewer people using more technology to deliver better insights (see Figure 2).  The combination of enhanced capabilities within finance, improvements in technology enablers, and the explosion in data offers an amazing opportunity. To maximise the benefits from this digital transformation, the finance operating model must evolve (see Figure 3). Corporate: group-level functions, the scope of which differs from entity to entity but may include activities such as finance governance, tax strategy, treasury strategy, investor relations, internal audit, and others of a similar nature. Intelligent finance operations: the engine room where both transactional and non-transactional finance activities such as purchase to pay (P2P), order to cash (OTC), record to report (RTR) and significant components of management reporting take place at scale to maximise technology enablers. Business unit finance: direct support to the business, often in the form of finance business partnering, operational planning, and forecasting. Working closely with other teams within the finance function and the business to provide actionable insights to the business unit. Centre for value optimisation: instead of having static groups working on the same thing for months at a time, we see teams with multidisciplinary skills assembling for several weeks to take on short-term projects with defined goals and outcomes. Once work is completed, these teams then disband and new teams with different members tackle the next initiative. These teams are not finance-specific and will typically include non-finance partners. The work they do is supported by the data and analytics hub, where they work with experts to develop recommendations for business leadership. Data and analytics hub: the hub has the dual responsibility of ensuring the veracity of finance data and augmenting the teams in the centre for value optimisation with data scientists, who run multiple models to prove or disprove hypotheses. If the value optimisation squads are the ‘brains’ of the function, the data and analytics hub is the ‘heart’, pumping much-needed blood in the form of data to provide the brain with the fuel required to do its magic. Many of our Irish clients have established the first three components of this operating model. However, they are only starting to fully investigate the potential benefits of multidisciplinary teams that use a single source of truth to identify opportunities and drive insights. What does this mean for Chartered Accountants? The remit of the finance function will continue to expand, and its influence will grow in the coming years. 76% of respondents claim that the pandemic highlighted the valuable role finance teams played in feeding early warning insights to the CFO. Finance will become even more critical to future success as it delivers data-driven insights and guidance at speed. However, to do this, CFOs need to consider all the capabilities within the finance team and any potential future capabilities that may be required. Here are three things to consider. Become more technology-savvy and data-savvy. Become technology-savvy to enable finance leaders to make informed decisions on the organisation’s technology strategy; to understand the tools that can optimise the processes in the function and allow leaders to manage teams in which these tools perform a significant portion of the activity. And become data-savvy to understand the opportunities presented by data to make informed decisions that can drive profitable growth; to understand the fundamentals of analytics to challenge the insights generated by analytics teams, if not actually being part of those teams. Get better at communicating financial insights to non-finance leaders. As the role expands and continues to become less about reporting prior financial performance and more about identifying future opportunities for the business, finance leaders need to convert analysis into a compelling story that business leaders can understand and act upon. Consider how to train and upskill the whole team. The shift to a technology-enabled, data-driven finance function is becoming even more pronounced. Trainee and newly qualified Chartered Accountants must gain enough exposure to ‘traditional’ finance activities to understand the fundamentals of finance management while working in a function where these traditional finance activities are increasingly being automated. This is a challenge that must be solved in the years ahead. Aoife Donnelly FCA leads Accenture’s Finance Strategy & Consulting practice in Ireland. Thady Duggan FCA is a Senior Manager in Accenture’s Finance Strategy & Consulting practice in Ireland.