David Duffy highlights the latest VAT cases and discusses recent VAT developments. IRISH VAT UPDATES Finance Bill  The Finance Bill (as initiated) contained a small number of provisions in relation to VAT, which are summarised below.  As announced in the Budget, the Bill confirmed that the VAT rate for certain goods and services, mainly in the tourism and hospitality sectors such as hotel accommodation, restaurants and admissions to many attractions, will increase from 9% to 13.5% with effect from 1 January 2019. The 9% VAT rate will continue to apply to newspapers (and similar publications) and the provision of sporting facilities. The 9% VAT rate will also be extended to e-books and digitally supplied publications with effect from 1 January 2019. This follows an EU-wide agreement reached in October to allow member states apply reduced rates of VAT to digital publications. The other VAT-related provisions in the Bill include: a technical amendment relating to the VAT treatment of sales of residential property by liquidators, receivers and mortgagees; and the withdrawal of a VAT relief in situations where VAT has been charged on the supply of a telephone card, which is then used outside the EU. EU VAT UPDATES Share transaction costs The question of a taxpayer’s entitlement to recover VAT on costs in relation to share transactions has been the subject of much debate and case law in recent years. In recent months, there have been two further European Court of Justice (CJEU) decisions, namely Ryanair (C-249/17) and C&D Foods Acquisitions (C-502/17). Ryanair was a referral to the CJEU from the Irish Supreme Court. In its decision, the CJEU confirmed Ryanair’s entitlement to fully recover VAT on professional costs relating to its bid to acquire Aer Lingus. This was on the basis that, if the acquisition had been successful, Ryanair would have provided management supplies to Aer Lingus. Prior CJEU judgments had confirmed that the provision of management services by a parent company to its subsidiary is a VATable “economic activity” giving a right to VAT recovery. While Ryanair only acquired a minority interest in Aer Lingus and did not provide any management services to it, the CJEU judgment confirmed the entitlement to VAT recovery based on the intended taxable economic activity of managing the subsidiary. The C&D Foods Acquisition case, a referral from the Danish courts, bore similarities to the Ryanair case in that it related to an intended but uncompleted share transaction. However, in this case, the taxpayer intended to sell rather than acquire shares. The taxpayer was a holding company which was actively involved in managing its subsidiaries, but engaged various consultants to advise it on the sale of the shares in its subsidiary. The proceeds from the sale were intended to pay down a debt owed to a bank. The CJEU ruled that the VAT on consultancy costs relating to the proposed share disposal was not recoverable as the proceeds of the share sale would not be used for taxable business activities.  The two cases mentioned above highlight the ongoing complexity of the VAT recovery position on costs relating to share transactions and the importance of considering the exact fact pattern in each case. Hire purchase transactions In Volkswagen Financial Services Limited (VWFS) (C-153/17), the CJEU concluded that VWFS is entitled to partial VAT recovery on the overhead costs of its hire purchase business.  This was the case even though these costs were incorporated into the finance charge forming part of the hire purchase contract rather than the cost of the underlying goods. HMRC in the UK had sought to argue that there should be no VAT recovery. By way of background, hire purchase is treated for VAT purposes as both a taxable supply of goods (the initial handing over of the asset/vehicle) and an exempt supply of credit (i.e. the margin earned by the finance provider). Under consumer law, the hirer is required to disclose separately on the hire purchase agreement the price of the vehicle and the finance element. The CJEU first confirmed that the VAT treatment of hire purchase as separate supplies of goods and finance was valid. However, the principal dispute arose in relation to the recovery of input VAT on general overheads in running the VWFS hire purchase business. VWFS argued that the proportion of the input VAT recoverable on overheads should be based on the number of exempt and taxable transactions carried out, with each hire-purchase transaction counting as two transactions (i.e. a taxable supply of goods and an exempt supply of credit). On this basis, half of the general overhead VAT would be recoverable. HMRC argued that the residual input VAT was a cost component of the exempt transactions alone and, therefore, no VAT should be recovered. The CJEU did not accept HMRC’s position that no VAT was recoverable on general overhead costs of the hire purchase business. While it did not specify the exact methodology to use, it nonetheless confirmed that the taxable supply, as well as the exempt supply of credit, should be factored into the calculation.  As the hire purchase VAT rules operate similarly in Ireland to the UK, providers of hire purchase products may wish to review their VAT recovery position in light of the judgment. David Duffy is a VAT Director at KPMG.

Helen Byrne, Senior Tax Manager at EY Ireland, outlines the relevant compliance dates for December 2018 and January 2019. RELEVANT COMPANY DATES 14 December 2018  Dividend withholding tax return filing and payment date (for distributions made in November 2018). 21 December 2018  Due date for payment of preliminary tax for companies with a financial year ended 31 January 2019. If this is paid using ROS, this date is extended to 23 December 2018. Due date for payment of initial instalments of preliminary tax for companies (not “small” companies) with a financial year ended 30 June 2019. If this is paid using ROS, this date is extended to 23 December 2018. 23 December 2018 Last date for filing corporation tax return Form CT1 for companies with a financial year ending on 31 March 2018 if filed using ROS.  Due date for any balancing payment in respect of the same accounting period. Loans advanced to participators in a close company in the year ended 31 March 2018 may need to be repaid by 23 December 2018 to avoid the assessment (on the company) of income tax thereon. A concessional three-month filing extension for iXBRL financial statements (not Form CT1) may apply. For 31 December 2017 year ends, this should extend the iXBRL deadline to 23 December 2018. 31 December 2018 Last date for filing third-party payments return Form 46G for companies with a financial year ending on 31 March 2018. Latest date for payment of dividends for the period ended 30 June 2017 to avoid Sections 440 and 441 TCA97 surcharges on investment, rental and professional services income arising in that period (close companies only). Contributions made by employers to approved occupational pension schemes are tax deductible on a payment basis, as are charges on income (e.g. patent royalties and certain interest). Companies with 31 December year ends may wish to review their positions to maximise/ minimise deductions before the year end. A two-year time limit applies to some corporation tax group relief and loss relief claims. Potential claims for the period ending 31 December 2016 may need to be considered prior to 31 December 2018.  Research and development (R&D) tax credits in respect of R&D expenditure incurred in an accounting period ended 31 December 2017 must be claimed by 31 December 2018. A similar deadline applies to capital allowance claims for intangible assets.  Country by Country Reporting Notifications relating to the fiscal year ended 31 December 2018 must be made to Revenue no later than 31 December 2018, via ROS (where necessary). 1 January 2019 Controlled foreign company (CFC) rules in effect from this date. 14 January 2019  Dividend withholding tax return filing and payment date (for distributions made in December 2018). 21 January 2019 Due date for payment of preliminary tax for companies with a financial year ended 28 February 2019. If this is paid using ROS, this date is extended to 23 January 2019 Due date for payment of initial instalments of preliminary tax for companies (not “small” companies) with a financial year ended 31 July 2019. If this is paid using ROS, this date is extended to 23 January 2019. 23 January 2019 Last date for filing corporation tax return Form CT1 for companies with a financial year ending on 30 April 2018 if filed using ROS. Due date for any balancing payment in respect of the same accounting period. Loans advanced to participators in a close company in the year ended 30 April 2018 may need to be repaid by 23 January 2019 to avoid the assessment (on the company) of income tax thereon. A concessional three-month filing extension for iXBRL financial statements (not Form CT1) may apply. For 31 January 2018 year end, this should extend the iXBRL deadline to 23 January 2019. 31 January 2019 Last date for filing third-party payments return Form 46G for companies with a financial year ending on 30 April 2018. Latest date for payment of dividends for the period ended 31 July 2017 to avoid sections 440 and 441 TCA97 surcharges on investment, rental and professional services income arising in that period (close companies only). Country by Country Reporting Notifications relating to the fiscal year ended 31 January 2019 must be made to Revenue no later than 31 January 2019, via ROS (where necessary). PERSONAL TAXES 15 December 2018  Capital gains tax due in respect of any chargeable gains arising on disposals in the period 1 January 2018 to 30 November 2018 must be paid on or before 15 December 2018.  31 January 2019   Capital gains tax due in respect of any gains arising on any disposals in the period 1 December to 31 December 2018 must be paid on or before 31 January 2019. GENERAL 31 December 2018  Valuation date for 2018 domicile levy. Irish assets held on this date will be taken into account in ascertaining if the €5 million ‘Irish asset test’ has been met. A four-year time limit generally applies to repayment claims. A claim for repayment of corporation tax for the year ended 31 December 2014 must generally be lodged with Revenue by 31 December 2018. Claims for repayments of income tax for the year of assessment 2014 must also be submitted by 31 December 2018.  Termination of Home Renovation Incentive Scheme, with the exception of cases where planning permission is in place by 31 December 2018 and work is carried out by 31 March 2019. Expiration of young trained farmers stamp duty relief. 1 January 2019 Removal of five-year exemption from IREF withholding tax for disposals occurring or unrealised profits or gains recognised in the income statement on or after 1 January 2019. Employers will be required to report employee remuneration and PAYE to Revenue on a real-time basis. 8 January 2019        Under mandatory reporting rules, promoters of certain transactions may be required to submit quarterly ‘client lists’ in respect of disclosed transactions made available in the relevant quarter. Any quarterly returns for the period to 31 December are due on 8 January. Due date for submission of return and payment of IREF withholding tax in connection with the accounting period ended on or before 30 June 2018. Note: The above does not take account of Budget 2019 and Finance Bill 2018.

Burnout is a very real problem, but organisations can ease the burden with some simple adjustments.   Stress, pressure and deadlines are part of the everyday workload of managers. But when the common feeling of stress tips over into burnout it can be a serious problem, affecting not just your own health and performance but that of your team and organisation. Some researchers say that as many as 50% of medical professionals and 85% of financial professionals have been affected by burnout. Others say that as few as 7% professionals have been seriously impacted. While researchers may disagree on the numbers, they do agree that burnout is associated with many negative physical and psychological health outcomes such as depression, sleep disturbances, anxiety, and increased alcohol and drug use. Burnout is a psychological syndrome that is characterised by a negative emotional reaction to one’s job as a consequence of extended exposure to a stressful work environment. It produces feelings of inadequacy and alienation, which affects personal and professional relationships. Stressed people think they will feel better if they can get on top of the situation, whereas burnout is associated with the belief that one’s situation will never be rectified. How to spot the signs of burnout Burnt-out colleagues are not difficult to see. Once productive and engaged, the quality of their work will decrease; they will come in late to work; interactions with colleagues will become curt; and they will become prone to illness, thus absenting themselves from the office more frequently.  How to address burnout If companies look at their role in creating workplace stress, which inevitably leads to burnout, there is every chance they can eliminate the factors that lead to burnout. Recent research suggests that there are three steps leaders can take to address burnout in organisations: Reduce excessive collaboration The endless rounds of meetings and conference calls, which aim to include every stakeholder in every decision. Very often, this type of collaboration is required by corporate cultures, yet is far beyond what is required to get the job done. Burnout is also driven by the always-on digital workplace. Switching off a personal device lays the emotional impact at the individual executive’s door rather than with the company’s policy. Call off unnecessary meetings There is huge demand for collaboration in contemporary organisations with little in the way of technology and norms to manage it. Left to their own devices, most employees will manage their time in ways that reduce stress and burnout. Companies could also challenge the assumption that collaboration (two heads are better than one) and meetings are the best way to get things done. Recent research on introverts subverts this assumption and provides alternative methods (such as breaking work tasks into individual, pair and small group tasks) to capture the creativity and talent of all organisational members. Stop overloading the most capable employees The best people in organisations, at every level, are overwhelmed by meetings, emails and interruptions. They then cannot do the job for which they have been hired because they are busy collaborating with other people. Giving people the space and time to do their job may be the most important intervention companies make to address burnout and drive success. It is a win-win for everybody. Dr Annette Clancy is an organisational consultant and also researches organisational behaviour, in particular emotion in organisations.

Emotional intelligence and a high trust quotient are important attributes that result in more effective leadership and career success. How can you use your EQ and TQ to further your career in the New Year? A recent Harvard Business Review article, ‘What To Do If Your Career Is Stalled And You Don’t Know Why’, described how many talented executives careers stall or derail because of what they call ‘pandas’ – issues that may be perceived as innocent, but with powerful jaws that deliver a bite. The top three ‘pandas’ are executive presence, communication and peer-level relationships. Often, individuals are blissfully unaware of the existence of an issue that is blocking their progression.  As we consider our career trajectories going into 2019, it is essential that we familiarise ourselves with the story others tell about us. Having a career goal with insufficient self-awareness is like having a destination without a map of the terrain. Key areas to consider in this respect are emotional intelligence (EQ), our trust quotient (TQ) as well as our capacity to lead with agility. These concepts tie in with the most common pandas. EQ, TQ and agility Emotional intelligence relates to a set of competencies which impact how we engage with others (Table 1). There is a clear connection between these competencies and our levels of executive presence, communication skills and ability to build peer relationships.  TQ is a less commonly known dimension. It is a measure of an individual’s personal trustworthiness; a key to building good relationships. Being trustworthy and ethical may be considered a given in a profession such as accounting, however TQ is slightly different. TQ refers to how trustworthy your team, your peers or your clients find you.  Do they find you credible and reliable? Can they feel safe in trusting you with personal, confidential information and how much do we have their interest at heart versus our own interests? The higher our self-orientation, the lower our TQ.  The third element worth considering is leadership agility®. Leadership agility® is our ability to take wise and effective action amid complex, rapidly changing conditions. Many of us are trained to diagnose a situation and come up with the correct answer – that’s what experts are paid for! However, while expertise is highly valuable, sometimes we can rely on it too heavily and end up narrowing our field of vision and misdiagnosing an issue at hand. A black and white approach can lead to rigid thinking and peers, clients or team members may feel that their perspective is not considered or understood. 360 feedback If EQ, TQ and leadership agility® are areas to be navigated before creating a plan to progress your career in 2019, how can you find out what others say about you in relation to these dimensions? The most traditional way of getting such feedback is through a 360-feedback process. There are many 360 tools available in the market and all of them provide different information depending on the angle they take.  Another option worth considering is to identify some trusted individuals who have your best interests at heart and ask them a few questions: What do you consider to be my key strengths that I can use to build my career?  What could hold me back? If I were to pick one or two areas to develop, what should they be? What role/project would be an interesting next move for me, considering my strengths and areas of development? Career criteria Once you have opened up the conversation about your development, discussions about the next steps in your career will inevitably result. It’s a good time to explore what is important to you right now and in the year to come. Such considerations often include financial reward, career progression, flexibility/balance, learning experiences or meaningful work. Whether we prefer clearly defined career goals or to be opportunistic, having clarity regarding the important criteria for our careers is helpful when going into a new year.  In order for us to maximise our effectiveness and continued career success, it is important for us to understand the story others tell about us (including ‘pandas’) and reflect on the important criteria in our career. Once we have built this picture through conversations with others, we can establish the work we need to do to achieve our career aspirations through 2019 and beyond.Leadership Agility® is a registered trademark of ChangeWise. Eadine Hickey is Founder and Director at Resonate Leadership. QUESTIONS TO CONSIDER WHEN PLANNING YOUR CAREER MOVE IN 2019 As you consider your level of EQ and TQ, what do you believe are your strengths and what areas may require development? Is there a risk that you over-use your ‘expert mindset’ in certain situations and would benefit from taking a broader perspective on issues? Who could provide you with very constructive feedback on your strengths and development areas to support you in your career progression? What criteria and values are important to you as you consider your career for 2019 and beyond? Who could be of support to you in achieving your career goals (mentors, coaches, colleagues, friends)?

Lucinda Woods ACA, the 2018 winner of the Early Career Accountant of the Year Award, shares her success story. Describe your current role at The Restaurant Group plc. The Restaurant Group plc operates over 500 casual dining restaurants, pubs and concessions across the UK. It employs roughly 15,000 people and is listed on the FTSE with a market capitalisation of around £500 million. I’m lucky to have a very diverse role within the group. I work for the CEO, managing a team that spans group strategy, commercial decision support, customer and market insight, and M&A. The breadth of my role has enabled me to support many strands of the turnaround of our casual dining division, as well as run deals such as the £15 million acquisition of the 11-pub company, Food & Fuel Ltd., and work on business development opportunities in our concessions division, which manages foodservice operations at airports. I also served as Interim Chief Marketing Officer last year, which was a great development opportunity for me, landing outputs on digital, brand strategy and retail marketing operations. Describe your average working week. I get up at 4.30am on Monday to commute to London and I fly back to Dublin on Thursday evening in time to put my son to bed. Fridays are spent catching up on things at home, and the occasional visit to the gym! How did you feel when you were announced as the Early Career Accountant of the Year? Humbled. There was a strong bench of talent nominated for the award so to be called out amongst that was an honour.  What in your view gave you the advantage over your peers? A combination of factors have enabled me to pursue my career ambitions and constantly challenge the boundaries of my comfort zone. From an early age, my parents inspired me to seek out opportunities and my husband has always been very supportive of my career choices and travel commitments. I’ve been very fortunate in terms of the organisations I worked with earlier in my career – KPMG, Investec Corporate Finance and Paddy Power Betfair – as management across all three provided me with tremendous encouragement and support. In addition, I’ve been supported by superb peers and mentors including my boss, who has been generous with his time, always encouraged me to focus on the customer and areas where I can have the most impact, and shown faith in me to do that. I’ve also been lucky to have many talented people work for me, and from whom I have also learned an enormous amount. You have also studied at Harvard. What was that experience like? I was fortunate to do the MBA programme at Harvard Business School. The experience of being surrounded by so many diverse and interesting perspectives was invaluable. I was also taught by many outstanding professors, including Michael Porter and Clay Christensen. What’s next for you? Nappies and sleepless nights! Our family headcount is about to increase with a new baby due in early 2019. Lucinda Woods is Strategy & Business Development Director at The Restaurant Group plc.

Corporations are being urged to prioritise long-term value over short-term profit, but old ways of thinking must first be tackled. A number of academic papers published out of the University of Chicago in the 1970s and 1980s have had an extraordinary influence on corporate governance. These papers are based on mathematical formulae, which require extremely simplistic assumptions to solve the equations. Company managers are assumed to be motivated solely by self-interest, not by moral obligation (notwithstanding fiduciary duty). It is assumed that it is possible to eliminate self-interest using incentives, so that company managers will look after shareholders’ interests rather than their own self-interest. This perspective only considers two parties: shareholders and managers (otherwise, the mathematics would not work out). This way of thinking led Nobel laureate Milton Friedman to observe that the only responsibility of business is to make a profit. Thus, shareholders and profit maximisation became the imperative of business. Consequently, managers are incentivised to take excessive risks to generate returns at the expense of corporate resilience and long-term sustainable values. The thought police, especially in the US, will not countenance alternative assumptions and ways of thinking. Many top US academic accountancy journals will not publish papers based on alternative theories, with editors of those journals acting as gatekeepers to prevent expression of alternative perspectives. The damage is exacerbated by institutional shareholders, who are not the ultimate beneficiaries of investment returns. Most stock market capital is pensioner monies. Pensioner beneficiaries require long-term sustainable returns. Institutional investors have a short-term focus, exacerbated by end-of-year performance pay incentive systems. Institutional investors cannot be relied on to monitor company management or engage with their investees in a manner that will support long-term value creation. This perspective also ignores the law, specifically the fiduciary duties of directors to look after the company’s (not the shareholders’) interests. These theories have been embraced by regulators. They have therefore impacted corporate governance by requiring separation of chairman and CEO roles; majority independent boards; and acquiescing to incentive systems such as performance pay and stock options, for example. Accounting standards also reflect this perspective, with a heavy focus on providing users with useful information for decision-making purposes. Users are primarily shareholders making buy, hold or sell decisions. However, the tectonic plates are shifting. The Purpose of the Corporation, the Modern Corporation: Corporate Governance for the 21st Century and the Future of the Corporation projects are challenging these embedded notions. These projects argue that corporate governance should align with a socially beneficial corporate purpose. They conclude that corporate entities should aim to create long-term sustainable value for customers and shareholders while also contributing to societal well-being and environmental sustainability – objectives that can be mutually reinforcing. They advocate that company law should require companies to specify their corporate purposes. Companies should adopt structures that ensure they uphold the public good as well as their own private interests. In particular, companies that perform public and social functions such as utilities, banks and companies with significant market power should align their corporate and social purposes. In addition, the regulatory framework should promote an alignment of corporate purposes with social purposes and ensure that companies’ ownership, governance, measurement and incentive systems are appropriate for these objectives. Companies are urged to be more specific about the varied audiences for their corporate governance, customising their reporting for individual stakeholder groups. Methods of engaging stakeholders more effectively in corporate governance are discussed, including through representation and consultation. Alignment of corporate with social purposes will generate increased scrutiny on the social and environmental impact of companies, the design of incentive and control systems and their relationships with corporate strategy, the role of corporate reporting and, finally, the role of investors. These ideas are gaining traction. For example, the British Government recently agreed to introduce laws that will impose on pension schemes a fiduciary duty to protect long-term value by considering the environmental risks of the companies in which they invest. The new rules will push consideration of long-term value and environmental risks down the investment chain to investee firms. Prof. Niamh Brennan is Michael MacCormac Professor of Management at UCD College of Business.

When it comes to meetings, the advice of Sir John Harvey-Jones is worth heeding – particularly if a serious dispute is involved. Sir John Harvey-Jones was a renowned UK businessperson in the 1980s and 1990s. A best-selling management book, Making it Happen – Reflections on Leadership, preceded a successful ‘Troubleshooter’ series on BBC television. He became the executive chairperson of an ailing Imperial Chemical Industries (ICI), then the largest company in the UK and Europe; now long split into different entities. I met with Harvey-Jones on a number of occasions. An interesting comment he made was that not long after he took over at ICI, he was talking to a shop floor worker in an ICI paint factory. The worker made a useful observation. Harvey-Jones followed it up, leading to a curiosity as to how many management layers existed between the worker and the executive chairperson. There was 11. Harvey-Jones rescued ICI by reducing the number of layers to six. Internal company meetings Harvey-Jones’ advices were pragmatic and he was a master of using wit to make things happen. Layers of company management created its own bureaucracy of meetings. It also meant turf battles as to who was responsible for what and created a temptation to push a decision up or down the ladder, rather than make a decision at all. His general mantra was that there were too many meetings and/or too many people at them. One of his witticisms was that if you wanted to know the length of a meeting, allow 20 minutes for every person present; and if the chairperson is a ditherer, make that 30 minutes. In the ordinary way, the purpose of internal company meetings is a mix of disseminating information and, more importantly, making decisions. Stating the obvious, management’s job is to manage and a meeting is only necessary when the matter requires the input and/or approval of others. Management time is expensive and meetings are disruptive. The temptation is to set regular meetings. These often become talking shops and, in many cases, repetitive. For example, there is only so much comment that can be made on a routine set of financial figures of one kind or another. An assessment as to the usefulness or otherwise of regular meetings does not go amiss. The rule of three Meetings that are specific to difficult circumstances are different. Here, Harvey-Jones reminded me of the ‘rule of three’. This relates to managing the trajectory of meetings in strained or confrontational circumstances, such as a serious dispute of some kind, a matter gone badly wrong, strong disagreement on policy direction, and so on. Harvey-Jones said to recognise that it will take three meetings to achieve resolution and one should effectively manage the trajectory on that basis. The first meeting is grief all round from the opposing or factional parties. Position-taking, allegations, half-baked facts, egos out of joint and nobody listening except to themselves. The meeting goes nowhere but, most importantly, a smart operator ensures that a further meeting is scheduled before breaking up. The second meeting will likely be the grief expressed all over again but this time, the participants have largely run their course and the repetition has little impact. There will usually be some prepared rebuttals or clarifications following the first meeting. The validity or otherwise of competing positions will likely be better understood. Some tentative steps or overtures, dressed up as trying to understand a rival position or viewpoint, may emerge as everyone knows that the repetitively expressed grief is going nowhere. Again, a smart operator ensures that a further meeting – the third meeting – is scheduled. The third meeting gets there. The facts and positions are known, strengths and weaknesses exposed, all have had their repeated say. People want out of the room. The meeting makes real progress if at least one of the participants, or maybe a mediator or chairperson, circulates written outline proposals. All at the third meeting, probably with a sense of relief, start looking at the proposals paper as an accepted focus. Disagreement on any aspect therein necessitates putting forward an alternative proposal and possible resolution gathers pace. Maintain momentum Harvey-Jones’ point was that if parties break up in disarray, it takes a long time to assemble everybody all over again. Momentum is lost, the underlying difficulties may worsen and individuals become entrenched. Do not leave a contentious meeting without scheduling another. This too can work in resolving legal-related disputes.   Des Peelo FCA is author of The Valuation of Businesses and Shares, 2nd edition, published by Chartered Accountants Ireland.

Businesses must engage with education providers to ensure that tomorrow’s game changers are equipped with the right skills. Employers in Northern Ireland anticipate a shortage of highly skilled workers over the next three to five years with 76% of firms not confident that there will be sufficient people available to fill skilled roles, according to the November 2018 CBI/Pearson Education & Skills annual report. Other findings in the study include: Aptitude and readiness for work is a high priority for employers when recruiting school, college and university leavers; Employers view the promotion of STEM subjects, awareness of career options, and IT and digital skills as the top three priority areas for action in secondary schools; 92% of employers want to play a greater role in supporting schools and colleges; and 65% of employers are experiencing, or are anticipating, difficulty recruiting individuals for apprenticeships. Gone are the days of safe bet ‘lifers’. No sector will escape the transformation of the workplace environment. Come 2035, the oldest working generation will cease to be the largest and after that, things will change. Millennials have a fresh outlook on life and don’t particularly like outdated corporate cultures. The dominant viewpoint of the workforce is increasingly becoming ‘why should I choose to work for you? What can you offer that is better than your many competitors?’ And because the skilled are in demand, they have the luxury of naming their price. That said, it is up to the employer to ensure that they are fostering a culture and brand that will attract and retain the brightest and best. Given the hiring difficulties that businesses are experiencing, it makes sense for employers to optimise their ability to retain existing team members. Providing positive leadership, a strong brand, a good working environment, a culture of respect, investing in training and development and empowering employees to fulfil their potential all have an important role to play in this regard. Where businesses are losing employees, exit interviews can be a useful way to gain insight into aspects of the organisation and culture that may need to be improved. While performance reviews provide the opportunity to seek formal feedback from employees on how they feel about their current role and how they would like to see their career progressing, regular informal chats and ongoing communication with employees are just as important to ensure that we, as employers, have our finger on the pulse so timely corrective action can be taken. Brand attractors For many millennials, personal development ranks ahead of professional development. Keep in mind that coaching, mentoring, continuing education, career progression and volunteering opportunities are highly valued by millennial workers whereas salary and/or flexibility may be more sought after by other workers. The ability to balance work and home responsibilities allows some individuals to continue working when they might otherwise not be able to. Flexible working was one of the issues highlighted by UK Business Secretary, Greg Clark, recently when he announced a series of new measures as part of the Government’s Industrial Strategy. While many companies are embracing flexible working and the benefits it brings, some employees face barriers in raising this issue with their employers. The Government may create a duty for employers to consider whether a job can be done flexibly, and oblige them to make that clear when advertising. With Brexit-related uncertainties including future trading relations and what shape the UK migration system might take, along with major changes in global technologies (artificial intelligence, robotics etc.), our priorities as employers and business influencers must include working closely with education providers to harness the power of business to ensure that today’s education and skills training equips tomorrow’s game changers.   Teresa Campbell FCA is Director of People & Culture at PKF-FPM Accountants Ltd.

As talk of another property bubble abounds, it’s time to assess whether house prices reflect fundamentals or froth. Are Irish property prices overvalued? Since they hit bottom in March 2013, residential property prices have risen by 82.8% to September of this year, according to data from the Central Statistics Office. Since bottoming in February 2012, residential prices have risen by 96.1% in Dublin. According to a recent edition of The Economist, Dublin’s house prices are overvalued by 25%. To gauge whether house prices reflect fundamentals or froth, The Economist compared them with rents and household incomes. It used the average ratio over the past 20 years as “fair value”. But does it make sense to expect house prices to hold a constant relationship to rents and incomes? I don’t think that it does, for such an analysis ignores two key developments that should cause us to expect higher house prices relative to incomes and rents. Interest rates All other things being equal, house prices would rise relative to incomes and rent levels as a result of a fall in interest rates. The very first element in the Capital Asset Pricing Model formula for cost of equity is the risk-free rate of interest. If the risk-free rate falls, we would expect the cost of equity to fall. If the cost of equity and the cost of debt both fall as a result of reduced interest rates, we would expect the cost of capital to fall. If the cost of capital falls, we would expect a given stream of expected cash flows to attract a higher capital value independent of whatever might be happening to income and/or rents levels. Consider the eurozone’s benchmark risk-free rate, the average yield on 10-year German government bonds. Twenty years ago, it was 4.2%. A decade ago, it was 3.9%. Today German 10-year government bonds yield less than 0.4%. Consider also the prospect that this big fall in interest rates is unlikely to be reversed any time soon. Instead, it is likely that we face a lengthy period before we see interest rates back at 2008 or 1998 levels. Population The other big factor influencing residential property prices is our population. At the height of our economic boom, in 2007, the population of Ireland was 4.34 million. Last year, in 2017, our population reached 4.78 million, an increase of around 440,000 compared to a decade earlier. I should say that these are official estimates of our population. When the census was last carried out, in 2016, it was reported that there were 9,575 Chinese nationals staying here on Census night. I reckon that this figure is a very considerable understatement of the actual number of Chinese resident here. I would therefore guess that Ireland’s actual population growth has been even stronger than official statistics indicate. Strong population growth and strong economic growth together with low levels of construction of new dwellings explains why Daft.ie’s latest quarterly report indicates that rent levels are now 30% higher than in 2007.  Discounted cash flow model The best way to get a handle on residential property prices is to analyse them using a discounted cash flow model. This takes into account interest rate variations and changes in rent levels. Such models are subject to very considerable uncertainty because of the difficulty in accurately estimating key input variables. My model of Irish residential house prices does not suggest any significant deviation from fundamental value. That’s not to say that a recession mightn’t cause prices to dip, but it doesn’t support notions that residential property prices have returned to bubble levels – especially not with mortgage credit levels down 40% compared to a decade ago. Cormac Lucey FCA is an economic commentator and lecturer at Chartered Accountants Ireland.

While social media has made it easy to express one’s views, our electoral process deserves more consideration. Almost every hour of the day, there is some electronic device asking us to like or dislike, to swipe left or right, to make a comment or express a view. But do we run the risk of forgetting that marking a ballot paper in a voting booth is of far more consequence to liking a sentiment expressed in a tweet whose provenance we barely know? Elections are important, but the conduct of this year’s presidential election in Ireland suggests to me that we might be treating our democratic process less seriously than we should. First of all, the two major parties decided not to field a candidate. One of them didn’t field a candidate in 2011 either. What does that say about the significance of a national poll, presidential or otherwise? Accountability What does it say about the electoral process if local government representatives can nominate, but afterwards have so little accountability over the campaign or conduct of the candidates on the ballot paper? That doesn’t happen when candidates are nominated through the political party system. The end result was that we ended up with a campaign and an election that was hard to take seriously. I have no quibble with any of the individual candidates; rather with the quality of the debate. Over the course of the campaign and the televised debates, it seemed to me that the candidates barely touched on the primary duty of the president, which is to protect the constitution. Instead, we focused on matters that are entirely peripheral to the function of the highest office in the land. Surely one of the most democratic countries in the world (according to the Economist Intelligence Unit) can do a bit better than that. Poll surge It is hardly surprising that one of the main talking points was the dramatic rise of the candidate, Peter Casey, over the course of the campaign. In the space of a few days, Mr Casey’s share of the vote went from 2% (in an opinion poll) to the actual result of 23% of votes cast, leaving him in second place in the contest. A 20% surge in polls just doesn’t happen in elections involving established candidates or political parties. Even in the 2011 general election, held in the wake of the financial crisis and which was by general election standards an outlier event, the swing to Fine Gael was just 9%. Candidate selection If we are to have seriously elected representatives, the process begins not at the hustings, but at the time of candidate selection. Like any profession, political tradecraft has to be learned. It is perhaps unfair to expect any candidate to show seasoned political skills without having served an apprenticeship in local government or another form of elected office, or alternatively having been involved with a political party in campaigning for others. A merit of the party political system is that it has a structure which can provide a route to higher elected office, and then can support those who attain it. There are currently six elected representatives in the Oireachtas who are Chartered Accountants representing three political parties. Many of our members have a direct entitlement to vote in Irish Seanad elections by virtue of their University qualifications. The Institute itself, along with a number of organisations such as IBEC, ISME and other institutes and voluntary bodies, has the power to nominate candidates for Seanad elections. Perhaps this same power should be extended to nominating candidates to presidential elections. If nothing else, it might help focus future campaigns and provide a reminder to the political parties and councils that national elections are indeed of consequence. Dr. Brian Keegan is Director of Public Policy and Taxation at Chartered Accountants Ireland.

As the ‘future of work’ debate continues, leaders can take three practical steps to future-proof their business.   Every week brings new stories about how the world of work is changing. Driven by forces such as advances in technology, global inter-connectedness and growing consumer expectations, new disruptions and innovations are appearing across virtually every business sector at a faster pace than ever before. But surely the world of work has always undergone constant change? Indeed, authors such as Charles Handy have been writing about this ‘new’ world for many years. Haven’t we, as humans, always adapted and continued on our way? The general consensus seems to be that the digitally empowered period we are now moving into, labelled loosely as ‘the future of work’, will undergo as fundamental a transformation as was experienced after the first Industrial Revolution. While robots, automation and millennials continue to grab the headlines, there is a fundamental shift in the very nature and structure of the world of work – a shift that business leaders and policy makers need to address before they get left behind. So what does the ‘future of work’ really mean for those leading organisations today? Making sense of ‘the future of work’ Early adopters point to the need for organisations to be more strategically responsive and adaptable, more organisationally agile and also more comfortable in dealing with constant change. Organisations need to be responsive to fundamental changes in how work can now be delivered and organised, and to the emergence of a new employee and a multi-generational workforce with different (and sometimes not-so-different) expectations regarding work and the workplace. The ability to sense and respond to these challenges will be essential for long-term success. Commonly quoted essentials such as embracing new technology, dealing with continuous change and managing diversity are now accepted as ‘business as usual’ realities rather than anything new. But what should leaders do in the short-term to prepare for this new environment? 1. Set the right strategy Given the wide range of topics, from artificial intelligence and digital technology to gig working and the changing workforce, it can be hard to make sense of the challenges and opportunities at an organisational level. Filtering all the hype from the real and material issues for your own situation is an important first step. To assist in that process, we use a scenario planning tool called SCOPE (Figure 1), which guides leaders through the main considerations specific to them and their business. Different organisational scenarios are tested for the future, from incremental change to major disruption. Standing back to consider key themes – from strategic flexibility to how the organisation’s culture, structure and processes are aligned and the type of workforce it needs for the future – this quick diagnostic helps executives explore the key questions and likely scenarios to help them get a handle on how their business is strategically placed for the future of work. Organisational agility, for example, is a common theme that emerges from any review of strategy in the context of the future of work. Agility is well-established as a critical organisational competency that has helped organisations adapt to complex and rapidly changing business environments. For high-profile cases, just look at what Netflix and Amazon have done with their business models over the last 10 years. The compelling argument is that if business leaders can improve an organisation’s agility and build it into the organisational culture, structure and processes, they will have gone a long way in preparing their organisation for future challenges and opportunities. 2. Evolve your leadership style It may sound obvious, but reflecting on the role and appropriate approach of leaders is also critical in helping the wider organisation thrive in the future of work. Writers such as Lurie and Fisk suggest that the digital economy requires a new kind of leader from before – one who can lead people in a direction that involves an increasingly diverse set of customers, employees and stakeholders. The outlook of digital leaders must also reflect the characteristics of their business environment (i.e. open, fast-paced, connected, non-linear, virtual and technology enabled). These writers and others contend, for example, that organisational leaders must develop agility as a core leadership capability so that they can respond effectively and calmly to the uncertainty and ambiguity of the modern marketplace. As Martin Goldsmith, author of What Got You Here Won’t Get You There, puts it: “Leadership agility is probably the most important competency for leaders to have in today’s rapidly changing world”. But what is an agile leader? Most models of leadership and leadership development today point to a shift in emphasis from traditional ‘command-and-control’ leadership styles to more transformational, ‘servant-based’ and agile leadership approaches.  In their book, Leadership Agility, William Joiner and Stephen Josephs define the natural and progressive development stages of the ‘agile leader’. From the traditional, tactical and problem-solving orientation of the “expert leader” to the more strategic and outcome-oriented “achiever leader” and then the more visionary and facilitative/empowering “catalyst leader”, Joiner and Josephs describe the practical skills of progressively leading in a more agile way. This helps to call out typical leadership development stages through the lens and language of modern agile principles and practices. Self-awareness and clarity of language and behaviour is helpful for any organisation seeking to be more deliberate and mindful in developing such skills and the working culture associated with organisational agility.   These future of work nuances required for leadership today, combined with what we already know about the more age-old and enduring qualities of simply being a good leader of people, will help leaders thrive in the new landscape and will also allow others in their care to do the same. 3. Build your best team  Armed with a sense of the strategic direction required to face the future of work and being aware of the leadership approach required, leaders should also look at who they hire, promote and keep within their future organisation. No leader can succeed alone, so having the right talent at all levels is a critical theme for leaders as their organisations evolve and grow. New business and organisation models challenge many of our assumptions regarding traditional talent strategy and HR management. Many aspects of talent management will themselves require disruption and new thinking. For example, if an organisation is to be re-configured to take advantage of the business and cost benefits of a ‘blended’ mix of suppliers, outsourcing partners, free agents, automation and a core, full-time workforce, it follows that a new work design and workforce planning strategy will be needed to map out the organisation’s short-term and long-term talent needs. Indeed, the management of the non-core workforce will become a highly strategic function and consideration must be given to how the different parts of the organisation will work together to deliver optimum service to the customer. Once the work design and workforce planning aspects are worked through, the rest of the talent life-cycle processes need to kick in and align. For example, recruiting for the right skills also needs to account for likely and possible changes in skills requirements further down the line. Therefore, attracting people with the right attitude and a learning mindset could arguably be as important as their immediate skills. Training and development will need to be continuous and provided through a mix of mobile, online, on-the-job and formal methods that align with changing business needs as well as the different learning styles of a modern workforce on the move. Rewards will be more flexed and individual, with a “consumer standard” employment experience demanded by different generations of employees. Even how we exit employees is changing, with employers seeing their alumni network as a talent pool for the future as well as important social advocates for their organisation when they leave. Meanwhile, the physical (and virtual) workplace is changing to accommodate new ways of engaging staff working and collaboration. Central to this new talent management story is a clear picture of what the organisation’s desired culture must be. There is a risk that some employers will promise the earth to attract sought-after employees only to find that they cannot deliver on their promises as new work models and skill requirements change the employment prospects of employees and their jobs over time. These new talent management realities will present both challenges and opportunities. We therefore need to re-think what we demand from our leaders and front-line managers, and what qualities they need to succeed. These qualities are possibly quite different to what organisations have hired and trained for in the past. Where do we go from here? We may not have all the details about what our organisations will look like tomorrow, but the one thing we can do today is basic scenario planning that considers different prospects for our own organisations ranging from incremental change to radical disruption. We can then set about designing a talent management strategy that puts the right leaders and people in place to deal with the inevitable changes as they continue to emerge and develop. Kevin Empey is Founder of WorkMatters, a consulting firm that helps business leaders prepare for the future of work.

Why should you care about the future of work? In short, your employability depends on it. There are huge similarities in the approaches being taken to both the future of work and climate change. It’s out there, we know it’s happening; but we are too busy in our daily work to give it sufficient time and thought, thereby limiting our capacity to adapt before it’s too late. Most readers will be familiar with Stephen Covey’s time management quadrant. The future of work is in quadrant two: not urgent, but important. We tend to focus on the urgent to-do list and the reality of meeting deadlines. In this article, I will outline the importance of investing time in your future employability and explain why everyone should care about the future of work. Why should you care? The average life expectancy of a Fortune 500 organisation is just 15 years, so individuals can no longer assume that employment is for life. Business competitors no longer come from within your industry sector; they mostly sprout up and scale at speed to grab huge market share. Airbnb was not started by hoteliers, Uber was not founded within the taxi industry, Netflix was not started within the media industry. This speed of change will catch you unaware if you are busy with your head down. Accountancy firms compete fiercely to hire entry level graduates. However, they will need fewer graduates in the future as an increasing variety of manual tasks become automated. As accountants, you learned your trade as juniors by conducting audits in industry. You got to see and understand how businesses operate in real life. How will graduates get this experience if and when the work is automated? Change is required in the education and integration of accounting graduates into the future world of work. While Ireland is in the midst of an employment boom, we are witnessing the rise of corporate outplacement programmes as finance and accounting roles become automated. These roles, along with administration and middle management, featured consistently in the Harmonics Global Future of Work Study as the top three roles in decline. The work you did in the past is changing rapidly. Almost every organisation is undertaking a lean transformation or robotic process automation project of routine manual-entry tasks to achieve greater scale, speed and cost efficiency. As an example, Revenue’s move to real-time data as part of its PAYE Modernisation programme eliminates the need for the P30, P45 and P60 forms, along with end-of-year returns. Digits on a spreadsheet are easily mapped into software applications, which takes the pain away and simplifies work. PwC recently launched a digital fitness app for employees worldwide to accelerate and upskill the digital knowledge of its people across a range of domains. Digital acumen is now a lifelong endeavour, which needs to be embraced to stay employable. Big data is valuable and business intelligence dashboards offer real-time data on key business metrics. Artificially intelligent machines will provide answers, but our potential in the future of work is in the questions we ask. Think about a calculator – we’ve all used one to do a quick calculation. The next stage was Googling a simple question to get an instant answer. Now, imagine inputting a complex accounting scenario into a computer programme, and back come your options. In this scenario, massive computational power has replaced manual effort. Indeed, computing is increasing in power and reducing in price – in 2023, it is expected that €1,000 will buy you computational power equivalent to that of the human brain. A recent World Economic Forum report estimated that total work tasks in 2018 were 70/30 in favour of humans over machines. This will evolve speedily to 60/40 by 2022. We are not far off equilibrium in terms of the ratio between human and machine tasks in the workplace, and this demands change on our part. Like our organisations, we too have new competitors for our work – smart machines – and we need to learn how to work with them, rather than compete with them, into the future. The smart machines I speak of are software bots that are learning 24/7 and replicating the work we currently do on our computers. The organisational impact The hierarchical organisation chart that once created vertical career ladders in a functional silo no longer makes sense. This is a major challenge for future organisation design. The organisation chart of the future is organic and constantly evolving. Work architecture needs to be broken up like Lego and reconfigured into human and machine pieces. Organisations are neither resourced nor ready for such an eventuality. Like Lego, the work pieces will need be broken down and reconfigured for every new business challenge. This will lead to the demise of rigid functional silos and will require agile and cross-functional networked systems that evolve to meet specific customer needs. What can you do now? You can prepare by letting go of the past – something we, as humans, find very hard to do. We like routine, certainty and security. Accounting roles are transitioning away from day-to-day number crunching to focus more on interpreting data, building financial models aligned to company strategies/initiatives and project-based work with key stakeholders and other departments. I speak about the nine critical human skills needed in my new book, Future Proof Your Career, which will be available soon on Amazon. The future of work will demand lifelong devotion to the development of critical human skills including critical thinking, communication, creativity, consulting, commercial acumen, collaboration and embracing new cultures – all of which will need to be complemented by ever-changing digital skills. It is not only a skillset shift that is required, but a mindset one. If you have a fixed mindset, resist change and are unwilling to upskill, then your job and your future employability is in jeopardy – but this is within your control.  Finally, I invite you to take part in our global future career readiness research project. It is aimed at working professionals to honestly evaluate how future-ready you are. The Future Career Readiness Index is a powerful instrument that allows you to quickly test your future career readiness in five key areas. It takes less than 10 minutes to benchmark yourself against others in your sector and profession. On completion, you will receive a free downloadable Future Career Readiness report to accelerate your future career. You can access the report at www.futurecareerreadiness.com. My parting career advice is this: disrupt yourself before you are disrupted. John Fitzgerald is Managing Director at Harmonics Group and serves on the Board of OI Global Partners.

Valarie Daunt discusses how the preferences of millennial workers are driving changes in the workplace. When it comes to the attractiveness of a potential employer, the 2018 Deloitte Millennial Survey found that while financial rewards and benefits are the top priority for millennials in Ireland, this is followed by flexibility, a positive organisational structure, opportunities for continuous learning, and well-being programmes and incentives. The changing expectations of our workforces is one of the major forces re-shaping the future nature of work. By 2030, millennials will make up 75% of the workforce. It is therefore time to sit up and take note. So, what trends will we see as a result of these millennial preferences?  From careers to experiences With technological and demographic trends disrupting traditional career paths, organisations need to reconstruct job profiles and career models, and rethink the coaching and development of employees from entry-level staff through to executives. 21st century careers can be viewed as a series of developmental experiences, each offering the opportunity to acquire new skills, perspectives and judgement. In this environment, organisations need to look at alternative ways of upskilling employees to achieve an agile and responsive workforce. Companies leading in this space are finding ways for employees to learn from others as well as providing learning programmes and on-the-job training. Today’s employee seeks responsibility and leadership roles earlier than heretofore, yet many organisations are unprepared for this change. More than one third of Irish respondents to Deloitte’s 2018 Human Capital Trends Survey stated that, in their organisation, career paths generally progress up a traditional hierarchy, with little flexibility to accommodate individual worker interests or desired career paths. More than half (57%) stated that they only occasionally get the opportunity to work on assignments outside their assigned business line or manager and one third stated that their organisations are only somewhat effective at empowering employees to manage their own careers. Given that the wants and needs of today’s workforce are evolving quickly, talent practices need to support employees in developing a suite of adaptable and agile skills that can be deployed across many areas of the organisation. Only 35% of Irish respondents rate their organisations as being ready to build the 21st century career model, despite the fact that 82% rank this as important. Well-being as a strategic priority As the line between work and life blurs, organisations are investing in well-being programmes to drive employee productivity, engagement and retention. However, there is often a significant gap between what companies offer and what employees value and expect. It is no longer enough for organisations to offer traditional benefits and remuneration such as medical assistance programmes and once-a-year reviews. Today, the focus is on providing programmes that not only protect employee health, but actively boost social and emotional well-being. This includes innovative programmes and tools for financial wellness, mental health, healthy diet and exercise, mindfulness, sleep and stress management, as well as changes to culture and leadership behaviours that support these efforts. Expanding well-being programmes to encompass what employees want and value is now essential for organisations to treat their people responsibly – as well as to boost their social capital and project an attractive employer brand. The Human Capital Trends Survey shows that 50% of Irish organisations rate themselves as “ready” or “very ready” to offer holistic well-being programmes while 37% of Irish respondents state that their organisation offers well-being programmes beyond the traditional offerings. From front-line staff right up to executive leadership, there is a consensus that these programmes promote employee productivity and support employee retention. If an organisation wants to keep its most promising talent, it needs to give employees a reason to stay. The hyper-connected workplace Millennials’ preference for a positive organisational structure is interesting, and is no doubt connected to the fact that there are massive changes underway in how we connect. Social media and collaborative communications tools are transforming the world of work. Today, instant messaging tools such as Slack and Trello, which can be tailored for a project team’s use, have introduced new ways of working. They allow ideas to be bounced off colleagues on a regular basis, without having to wait for scheduled team meetings. They can also provide exposure to leaders and experts, which we know appeals to the millennial cohort. In Ireland, as elsewhere, these new technologies and tools are changing how we communicate at work. 68% of Irish respondents to the Human Capital Trends Survey said this is having a positive impact on productivity and 75% envisage increased use of online platforms as a communication channel in the next three to five years. While a majority of respondents rank this trend as “very important”, Irish organisations have displayed a somewhat conservative approach to adopting emerging communication channels and tools, with more than four in 10 either only permitting the use of well-established tools or requiring tools to be carefully reviewed and approved by their IT departments. Only 6% identify emerging tools and promote their use among employees. Organisations will need to adopt a holistic approach, taking into account different working styles and introducing rewards to promote take-up while also ensuring that the workforce is prepared and willing to use these tools. An important aspect of this strategy is to audit the tools in the marketplace and ensure that they are satisfactory from a risk and IT perspective before introducing them into the workplace. Once approved, collaboration tools should be embedded in day-to-day processes where possible, so as to actively promote adoption among the workforce. As social media and collaborative communication tools migrate from personal lives to the workplace, organisations must apply their expertise in team management, goal-setting and employee development to improve performance and promote collaboration. For the hyper-connected workplace to improve productivity, procedures, workspaces and leadership styles will need to be capable of capitalising on the power of these tools while at the same time managing any potential negative impacts. Conclusion There are many drivers of change impacting on the future of work, and the preferences of millennials is just one of these drivers. However, the impact will be great and there are some gaps to be bridged. Irish businesses now need to begin taking stock of the implications of these drivers of change. Valarie Duant is Partner and Head of Human Capital Management at Deloitte.

Employers face a host of challenges as they seek to future-proof both their people and their businesses. The future of work can be both exciting and worrying depending on your perspective. Will robots, machines and artificial intelligence take all the jobs? Or will they support workers and produce many new jobs while improving working conditions for all workers? The future rarely turns out the way we imagine. In 1899, the head of the US patent office was quoted as saying: “Everything that can be invented has been invented”, so predictions may make us look foolish. However, that should not stop us considering the opportunities and threats for business and how we can future-proof our organisations. Here are three issues businesses should consider as they prepare for the future of work. Workplaces Technology allows us to work from pretty much anywhere in the 24/7 global workplace. Companies are rapidly moving to agile workplaces and hot-desk environments with more flexible working arrangements. The challenge for organisations has little to do with technology capability; the willingness – or lack thereof – of executive and management teams to support employees who work remotely is arguably a more pressing issue. This is a particular challenge for managers who prefer to see their team in person but, more worryingly, reward those in close proximity and ignore those who work remotely. There is also a reluctance to use the gig economy – a market of independent workers available for short-term engagements – within more traditional organisations. Innovation Hyper-growth companies have one thing in common: an innovative culture. Innovation is something organisations can cultivate, but most companies are risk-averse. Innovative employees take risks and break the rules, and they need to be supported while doing so. Without making mistakes, trying out new ideas and working on new disruptions within their own sector, companies will not be able to build new, innovative products and services. To achieve this, you must have the right people in the organisation and provide continuous learning for staff. Many jobs will go and it is critical that employers encourage their staff to be more flexible and self-directed in their learning so that they can contribute to the company’s ongoing success – even if it means moving regularly within the organisation. Such internal moves can be an excellent way for organisations to share information and work in a less siloed manner. Technology overload The final point relates to the dangers technology can pose for employees. The proliferation of smartphones and screens has led to dysfunctional behaviours. Email, a tool that purports to make us more productive has become a huge burden in organisations. Screen and smartphone notifications interrupt staff on a constant basis, giving them very little time to perform deep and meaningful work. We are busier than ever, but probably much less productive. Even the bedroom is now overrun by smartphone technology, which is spawning a multitude of over-tired and under-productive employees. One insurance company is actually paying a bonus to staff who have 30 good nights’ sleep in a row, as it recognises how critical sleep is to performance. Summary Governments will have to tackle work displacement for older generations as automation, digital platforms and other innovations change the world of work. On the plus side, careers we couldn’t even envisage today will soon become reality and this will provide myriad opportunities for those armed with the right skillsets. Our key job is to support the next generation coming into the workplace – those who were born into the internet and smartphone generation. We need to build on their human skills as these will be critical to their future success. Peter Cosgrove is an expert on the future of work and author of Fun Unplugged, a book to engage children without the use of screens.

The sooner the future trade agreement becomes clear, the sooner businesses can begin to adapt to the new reality.   Uncertainty continues to cause problems for businesses across the island of Ireland as the end of the year approaches. Within Northern Ireland’s small- and medium-sized enterprise (SME) community, there is frustration that a lack of political leadership has left businesses in a vacuum. As Institute President Feargal McCormack said at an IAASA Brexit event in October, it is disappointing that there is no functioning Northern Ireland Executive to put forward a collective and cohesive perspective on behalf of the people of Northern Ireland. Across the island of Ireland, businesses face complex and far-reaching issues from supply chains, employment and access to labour to certifications in markets, health and safety, insurance, tax, legal structures, duties and the additional administrative costs of doing business. In the Republic of Ireland’s agriculture sector, clients anticipate World Trade Organisation tariffs of up to 25% on ingredients imported from the United Kingdom (UK) with similar tariffs imposed on produce exported to the UK. Farmers are seeking alternative suppliers to mitigate this impact with some setting up in dual jurisdictions and/or forming strategic alliances. Uncertainty reigns In a meeting with the House of Commons’ Exiting the European Union Committee in October, Declan Billington, Chair of the Northern Ireland Food & Drink Association, said the viability of the dairy sector is being brought into question and that Northern Ireland’s sheep farmers are wondering whether to breed for the coming year as 40% of their livestock is exported to the Republic of Ireland. “If we’re cut off from the European Union (EU) market that is being serviced from Northern Ireland, the UK market does not have the demand for the products so prices will crash,” Mr Billington said. Aside from the agribusiness sectors, it isn’t necessarily the amount of customs duties to be reintroduced that will pose problems for businesses north and south; it is the disruption that will result from customs checking at the border and the subsequent increase in administration. I see no hard evidence that businesses should prepare for anything other than the reintroduction of tariffs and quotas on imports and exports between the UK and the EU. This, in turn, means tariffs and quotas on cross-border imports and exports. A difficulty facing most owner-managed businesses is that they do not have the resources to hire customs agents. Feargal highlighted this at the recent IAASA event when he said: “We will need people to deal with the additional customs clearance requirements and organisations, and to advise businesses on what their new obligations are. We also need people who can advise and help implement the plans which are needed to avoid disruption of supply chains, who can assist in business restructuring, in currency hedging, and even help in the relocation of people and facilities if and where that is required.” Contingency planning In preparing for border checks between Ireland and Great Britain, Northern Ireland firms are ahead of their UK counterparts according to a recent British Chamber of Commerce (BCC) survey. The research found that only 37% of BCC members in the UK who trade with Ireland are preparing for possible changes at the border or checks between the island of Ireland and Great Britain compared to 59% of firms in Northern Ireland. These findings mirror PKF-FPM’s experience. In the last three months, we have seen a significant increase in businesses actively preparing contingency plans. Many clients are getting ready for a ‘no deal’ outcome and availing of the InterTradeIreland voucher for €2,250/£2,000 to obtain professional advice. Funding support for Brexit preparations is also available from Enterprise Ireland, whose Brexit grant of €5,000 is 50% funded for Enterprise Ireland clients. In addition, the Strategic Banking Corporation of Ireland has a Brexit loan scheme for Republic of Ireland businesses. Clients who have prepared a Brexit report find that this supports customer retention. It affords comfort by quantifying the potential impacts and demonstrates that plans are in place to mitigate them. Another positive is that companies engaging in the planning process are picking up new opportunities from businesses looking to onshore their supply chain.  Firms on both sides of the border are looking at two site locations, either through joint ventures or by acquiring sites where set-up costs are not prohibitive. Similarly, the Chief Executive of Manufacturing Ireland recently told the House of Commons Committee about one Manufacturing NI member who purchased a site in Co. Mayo for £500,000 and another who has bought five acres of land in Co. Donegal. Brexit guidance Meanwhile, the EU continues to issue “preparedness notices” describing the consequences of the withdrawal without a formal, ratified agreement. These notices cover many different business sectors. Two that are particularly relevant for Chartered Accountants are a notice issued earlier this year on statutory audit and, more recently, a notice on EU VAT rules issued on 11 September 2018. For Ireland and the UK in particular, if reciprocal audit rights are not in place between the EU and the UK, then members of the profession who could freely practice throughout Ireland and the UK – and across the island of Ireland in particular – may now find that considerably more difficult after Brexit. It will be important that the UK regulatory system is regarded as equivalent to the EU regulatory environment. On VAT, the UK has said that in the event of a no-deal Brexit it will introduce the postponed method of accounting, which will mean that VAT will not arise immediately on imports. Chartered Accountants Ireland has asked the Irish Government to implement the same measure regardless of whether there is a deal or not, as VAT will be a new immediate cost for traders who import from the UK. Guidance documents are also being published in the Brexit area of the UK Government website. The HMRC partnership pack, for example, provides guidance on preparing for a ‘no deal’ outcome with a promise of more detailed guidance to follow. In advice for Northern Ireland’s businesses, HMRC states: “We would recommend that, if you trade across the land border, you should also consider any advice issued by the Irish Government about preparations you need to make, in addition to the guidance set out by the UK Government.” Elsewhere, customs guidance has been published by Chartered Accountants Ireland in Taking the Lead – Chartered Accountants and Brexit, which provides easy-to-follow commentary on how the EU customs system works. Many traders in Ireland and the UK will be dealing with these customs for the first time and for them, this information is critical. At the time of writing, it remains to be seen whether the proposed ‘deal’ between the EU and UK – which covers Britain’s financial settlement with the EU, post-Brexit rights of EU citizens in the UK and British citizens on the continent, and a mechanism to prevent a hard border on the island of Ireland – will be finalised by the EU Council and whether Prime Minister Theresa May will be able to get it through the House of Commons. So, the uncertainty continues. The sooner we know the likely form of future trade agreements between the UK and the EU, the better we can prepare businesses in both Northern Ireland and the Republic of Ireland for the changeover and whatever new challenges and opportunities it may bring. Michael Farrell FCA is Director at PKF-FPM Accountants Ltd., a service provider for InterTradeIreland’s Brexit Advisory Service. Key dates in the Brexit timeline 25 November 2018 Potential European Council meeting to finalise the Withdrawal Agreement. 13–14 December 2018 European Council meeting. This may be the last opportunity for an Article 50 divorce deal to be signed off by Britain and the EU. 21 January 2019 Cut-off date for a deal to be presented to Parliament. January/February 2019 Date by which the House of Commons must approve any deal agreed with Brussels. A Withdrawal Bill setting out the terms of Brexit must then be put forward. 21–22 March 2019 European Council meeting. Up to 29 March 2019 Timeframe within which any Brexit deal must be approved by the European Parliament. 29 March 2019 Brexit Day. After 30 March 2019 Trade talks and transition begin. 31 December 2020 Transition period ends unless extended. 31 December 2021 UK wants any “temporary customs arrangements” introduced as part of the backstop to end by this date. However, the EU says there should not be a time limit on the backstop.

The Institute’s latest member and student research shines a light on the critical issues that will shape the organisation’s strategy into the future. Every two years, Chartered Accountants Ireland surveys its members and students to benchmark levels of satisfaction, relevance and attitudes regarding our various products and services. This year, three separate research studies were undertaken, comprising surveys and focus groups, to get a more refined understanding of the most important issues affecting members and students, and to inform our future strategies. Member survey Our biennial member research was conducted by independent research agency, Coyne Research, in late April. All members who had provided an email address to the Institute were invited to participate. 1,700 members completed the survey and overall the results were positive. Satisfaction Member satisfaction ratings increased by five points since 2012. Encouragingly, business members registered the most significant increase, up three points to 66% since 2016. However, satisfaction ratings from members in practice have slipped back to 65%, down five points. Perceived relevance to business needs has increased significantly, up four points across the membership. In addition, strong agreement with statements such as value for money (39%, +5%), market leader (64%, +1%) and lifelong learning (58%, +5%) all saw an increase. Net promoter score Since 2012, Chartered Accountants Ireland has adopted the net promoter score (NPS), which measures members’ likelihood to recommend the qualification. The Institute’s NPS remains very strong at +41 (+42 in 2016). However, as always, the devil is in the detail and within an overall strong NPS result, there has been a drop in the NPS from members qualified in the last six to 10 years. Member ‘deep dive’  The biennial survey provided a representative view of members who respond, but what of the views of less engaged members who tend not to complete surveys? And how could we delve deeper into the lower NPS rating from members? More nuanced insight was required, so we connected with less engaged members to understand their attitudes, needs and insights in more depth. Further research was commissioned and focus groups composed of members aged 50 and under, and representative of varying degrees of NPS scores, were convened in September. Five groups met across the island, one in London and an online discussion forum was established for the first time to engage with a sample of overseas members. Results Taken as a whole, members were extremely proud of their professional qualification and had positive perceptions of the Institute. Its status as a distinguished and prestigious qualification is unquestioned. Members frequently talked about the effort and sacrifice made to achieve the qualification, such that having the Chartered qualification is undoubtedly a badge of honour. That said, members across all categories and locations gave an honest and balanced appraisal of the value of membership, how they interact with Institute services and the future of the profession. Championing students When members talked about their likelihood to recommend the profession in the future, they reflected on the challenging path to qualification and some questioned whether the programme as currently constituted would attract the most talented candidates in the future. Some participants called on the Institute to offer more support to students during their studies. Members also cited the critical need for the Institute to adapt to future professional needs, while still ensuring a strong grounding in the basics of accountancy. Many felt that the Institute should place a greater focus on the impact of technology in career development, and that future technology be placed at the centre of our student education programme.  Power of network Participants were in no doubt as to the power of the professional network to which their qualification allows them access. Many felt that more could be made of this on a local and global level. There was an appetite for more targeted member network events, activities and CPD courses that reflect the variety of roles and sectors in which members are employed, particularly from members in business. Finally, there were consistent messages about improving the content, relevance and frequency of member communications with a preference expressed for clearer signposting of the ability to opt in to communications. Student research Separately, student research was undertaken, with surveys in the field in May. The 2018 survey was conducted among a sample of 655 Chartered students. Like the focus groups and member survey, the student survey was also conducted by Coyne Research. Net promoter score The research found that there has been a significant increase in the student NPS, up 14 points since 2016. While the increase was across the board, it was particularly notable among CAP1, Northern Irish and recently qualified FAE students. Furthermore, two out of three students stated that they had actually recommended the qualification in the last 12 months. However, the 2018 research also indicated that the Institute must continue to work to emphasise the unique benefits and attributes of the Chartered qualification with our student cohort. Choosing Chartered Respondents said that the decision to choose the Chartered qualification was driven by the long-term career and salary prospects, with high pass rates and the quality of in-house education delivery also seen as important factors in the decision-making process. It is also encouraging to see a growing awareness and consideration of the Flexible Route among current students, with two in three claiming to be aware of the Flexible Route and one in five current students having considered it. Of those pursuing the Flexible Route, one in three students now agree that they would recommend the Flexible Route to those looking for a flexible route to accountancy, an increase of +16%. Conclusion Institute Chief Executive Barry Dempsey welcomed the depth of insight generated from this year’s research projects. “It’s clear that while the overall research findings are very positive, there are specific challenges from both members and students that the Institute will need to address. The Institute has already presented an initial response and action plan to Council and I look forward to reporting on progress on a range of initiatives in the months to come.” Bernie Coyne, Managing Director of Coyne Research, commented: “Coyne Research was pleased to have worked with Chartered Accountants Ireland over the past year to provide this schedule of research projects and to have delivered a comprehensive understanding of members’ and students’ principal concerns. “The research has highlighted the positive impact of initiatives to improve relevancy and satisfaction over the past number of years, with consistently high NPS figures reported. These findings compare very positively with other Irish businesses and brands, and highlight areas of focus for future-proofing the qualification and membership services.” The 2019 research has been discussed by the Institute’s management team and presented to the Members Board and Council with critical actions identified and included in the development of the 2019 business plan.  Brendan O’Hora is Director of Communications and Marketing at Chartered Accountants Ireland.

The 2018 FAE results provide interesting insights, which will inform the ongoing evolution of the Institute’s syllabus. The FAE 2018 summer examination results were published in late October and were well-received. This is always a milestone in the Institute’s calendar annually and this year was no exception. Following on from the results, some interesting statistics and insights have emerged. Return to percentage-based marking The FAE underwent noticeable changes this year. Marking and adjudication returned to a percentage-based marking methodology in the 2017/2018 academic cycle. This was a departure from the competency-based marking methodology, which was adopted in 2009. The purpose of the change was to provide more clarity on the interpretation of the examination result. One of the limitations of the competency-based marking methodology was its vagueness in terms of the extent to which a candidate had passed or failed. This was further complicated by a traffic light system of scoring at FAE Core. Although the marking methodology change was communicated to all key stakeholders over the last number of years, there was considerable anxiety around the return to percentage-based marking. It should be noted that while the marking methodology changed, there was no change to how the FAE examination papers were structured or presented. Indeed, the syllabus and weightings have remained broadly similar year-on-year.  Some stakeholders were concerned that the marking changes would cause confusion and impact adversely on examination results. The FAE Committee was pleased to note that there was no material change to the overall results at FAE in 2018. The overall pass rate at FAE 2018 was 80%, which was the same as the 2016 result. Interesting statistics Other interesting statistics have emerged from the FAE 2018 results related to individual candidate performances throughout the year: The best predictor of a candidate’s final end-of-year examination result is their performance in their relevant interim assessment (AAFRP being the FAE Core interim assessment and the Elective interim assessment). There is a direct correlation between the performance level in these assessments and the FAE examination. It is therefore imperative that candidates engage as soon as possible with the education programme and approach their interim assessments very seriously as part of their overall study programme; The FAE Core final examination is currently held over two days with FAE Core Comprehensive on day one and FAE Core Simulations on day two. The results recorded by candidates over the two separate days had very strong levels of correlation. Indeed, the level of correlation was much higher than expected with the overwhelming majority of candidates displaying a difference in performance of +/- 3% over the two days. While the two days of examinations related to three separate case studies and multiple diverse industries, candidates clearly displayed strong business acumen and consistent application of their skills on both days.  Chartered Accountants Ireland is very pleased to see candidates continuing to display strong competencies in key areas. The syllabus is evolving to ensure that the next generation of Chartered Accountants will continue to excel as business leaders long into the future. This is not something that should be taken for granted and doesn’t “just happen”. It involves a huge volume of work from the committed stakeholders of the Institute, to whom the Institute is very grateful for their continued support. Future-proofing the profession To consolidate and future-proof the position of the Chartered Accountant, continued syllabus change is required to stay ahead of the external challenges and technological changes facing all sectors of society. One thing is certain: Chartered Accountants Ireland is committed to rising to any future challenges, as it always has, with a dedicated executive team of professionals working in tandem with its invaluable and supportive stakeholders. Ian Browne is Head of Assessment & Syllabus at Chartered Accountants Ireland.

When monitoring third-party risks, it is important that entities focus on value creation as well as value protection. Outsourcing is an increasingly a key strategic decision for many businesses, allowing them to focus on core corporate activities. However, when things go wrong in third-party relationships, companies may be exposed to significant reputational, regulatory, strategic and financial risks. There are two notable recent examples of high-profile third-party failures in Ireland: The Central Bank of Ireland imposed fines on financial institutions in relation to the governance and control of outsourced services delivered by third parties; and In 2018, a restaurant chain in the UK was forced to close more than 560 of its 900 outlets as “operational issues” at a new distribution partner left deliveries “incomplete or delayed”. This is estimated to have cost the restaurant chain in question £1 million per day in lost sales. In 2016, the Central Bank of Ireland warned that poor management of third-party relationships is putting banks at risk, citing “very serious failings” in relation to the governance of these arrangements and brandishing some cases as “astonishing”. Specific criticism related to poor management of outsourced arrangements, lack of oversight and a lack of engagement and challenge from boards. Extended enterprises The operational environment of many companies has expanded to include third-party service providers. Taken together, these third parties constitute what we term “the extended enterprise.” We continue to see companies struggle to identify, measure, report and monitor third-party risks within their extended enterprise. This has led to companies being exposed to a variety of risks and failing to maximise the upside of third-party relationships. The challenge for businesses is to formulate an extended enterprise risk management strategy that proactively manages the risks associated with the extended enterprise while also driving performance. In our experience, the answers to this challenge lie in expanding one’s view of third-party risk management to incorporate value creation as well as value protection. For companies to leverage their risk management processes to improve performance, it is critical that they develop an end-to-end approach for sensing risks systematically throughout the extended enterprise so that vulnerabilities can be addressed proactively. We term this approach ‘extended enterprise risk management’ (EERM). Extended enterprise risk management EERM is the practice of anticipating and managing exposures associated with third parties across the full range of operations, as well as optimising the value delivered by third-party relationships. The risk management landscape is often fragmented and decentralised. Many companies have not agreed and documented their risk appetite. They may approach third-party risk management on an ad hoc basis, addressing prominent areas such as cyber risk and regulatory compliance as they arise. Crucially, many companies do not have a broad pan-company view of all current third-party engagements and the associated risks. A common theme that emerges here is a lack of ownership of risks across the company. For example, despite the increasing focus on risk management, some companies still do not have a dedicated risk officer. Additionally, many companies are not appropriately utilising the three lines of defence to manage risk and drive performance across the extended enterprise. The first line of defence is the business unit, which owns the third-party relationship and is accountable for managing associated risks in alignment with policies and procedures. The second line of defence is a centralised governance programme for extended enterprise risk management, which is responsible for establishing and enforcing policies/processes to ensure that third parties are managed consistently by the business. The third line of defence is internal audit, which is charged with administering a robust audit programme aligned to the most critical extended enterprise risks and controls as well as performing independent assessments. In addition to underinvesting in the three lines of defence, many companies focus excessively on quantitative metrics – contract income and expenditure, for example – when engaging a third-party. When assessing third parties, companies should always include appropriate qualitative metrics – vendor quality, technical capabilities, vendor risk profile, control environment, and ability to drive performance, for example. By not having a defined EERM framework in place, many companies are concentrating on firefighting rather than maximising the benefits that can arise from well-managed third-party relationships. Driving value  Companies increasingly need to move toward a holistic approach to EERM that emphasises value creation as well as value protection. This typically involves establishing a systematic and proactive approach to managing risks across the third-party lifecycle and, in so doing, unlocking value and improving business performance. An operating model for implementing and integrating the various components of risk management across the third-party relationship lifecycle forms the foundation of this approach. To be fully effective, such models must be aligned to the company’s overarching risk appetite and risk management framework. The model should link the individual components of risk management to agreed and documented business objectives and the company’s risk registers. Four cornerstone capabilities  Many companies believe they cannot take an end-to-end approach to managing the extended enterprise because securing executive sponsorship and getting people to take ownership can be an uphill battle. Additionally, many businesses think that the task is too vast and they do not have the expertise and resources to build, execute and sustain a comprehensive third-party oversight programme. In our experience, these barriers are more perception than reality. It is neither necessary nor possible to do everything at once. Companies should consider some practical steps to take toward establishing an EERM programme or evolving an existing one. Many companies can get a sense of what those steps might be by considering the extent to which they have developed the following cornerstone capabilities. Strategy and governance This involves the creation of an agile and flexible governance model: Is there a defined and documented strategy and governance model for managing third-party risk? Is there a defined policy to assess third-party requirements prior to entering into relationships? Are third-party risk management activities linked to value drivers agreed and documented? Have you identified, agreed and documented critical key performance indicators (KPIs) for all third-party relationships? Have you agreed and documented how third-party KPIs will be reported and monitored? Are there defined processes in place to identify new and emerging third-party risks?  People This involves managing relationships, compliance and regulations: Is senior management sufficiently invested in EERM? Are the employees charged with responsibility for third-party risk management receiving sufficient and appropriate training? Is there sufficient investment in the three lines of defence to deliver effective monitoring of third-party risks? Are there defined and documented roles for managing third-party risk across the extended enterprise? Process This involves navigating events that shape the extended enterprise: Are there appropriate contracts in place with all third parties? Do monitoring processes allow for the reliable assessment of third-party performance? Does the company react to third-party events or actively seek to prevent them? Are risk management processes standardised across the company and integrated with tools and data? Is sufficient consideration given to how evolving technologies, market trends and disruptive forces present opportunities and challenges to third-party relationships? Technology This involves using data and analytics to make informed decisions: What tools and technologies are employed to make informed decisions about third-party performance? What transactional data are you entitled to access? Does the company’s IT and systems support KPI monitoring, reporting and performance assessment? Factors to consider in assessing your third-party risks   The complexity of the extended enterprise and resource constraints are no longer sufficient reasons to avoid taking an integrated approach to third-party risk management. Wherever your company stands at present in relation to EERM, some practical steps can be taken now to establish an EERM programme or to move your existing risk management model to the next level. The following factors should be considered. Strategy and programme This involves the development of EERM solutions to assess, design and implement a strategically aligned extended enterprise programme. These may include: Conducting an enterprise-wide strategic third-party risk assessment; and Developing the governance and operating model for EERM including KPIs, reporting and monitoring mechanisms. Evaluation and continuous monitoring This involves the selection and application of a suite of solutions to measure third parties and proactively sense and respond to extended enterprise risks and opportunities. These may include: The selection of quantitative and qualitative metrics/KPIs; Third-party risk assessment processes; and Contract compliance mechanisms. Technology enablement This involves the selection and application of technology solutions to transform and continuously enhance EERM. These may include: Systems design and deployment; Data analytics; and Reporting protocols. Conclusion Effective EERM programmes allow companies to align third-party risk management to strategic objectives and deliver enhanced returns on investment by emphasising value creation as well as value protection.  Crucially, there is no ‘one size fits all’ EERM model or programme. Each company faces unique challenges and therefore, EERM programmes tend to be bespoke by nature. Time spent on EERM programme design is rewarded in the longer term. Finally, successful EERM programmes are continuously re-assessed to ensure that the model being applied remains appropriate at all times. Jimmy Crowley is a Senior Manager in Risk Advisory in Deloitte Ireland.

Let’s take a deep-dive under the iceberg in search of unhelpful ‘mental models’ in the workplace... We noticed that people’s inability to collaborate wasn’t just about their misunderstanding of the strategy, it was because they didn’t understand their own unconscious motivation.” This is a quote by leadership coach and Zen Buddhist chaplain, Claire Genkai Breeze, in a recent interview for Coaching at Work magazine. It echoes some of our own observations when working with leaders and their teams across a variety of professional environments. Unconscious motivation – it’s a biggie. In the same article, she continues: “Part of our job as coaches is to help people spot what is habitual and what the consequences are, nested against the business strategy”. Again, this is something we would identify as constituting a big part of our own work.  Helping people spot patterns both in their own behaviour and within their working system in general creates a significant part of a coach’s value to an organisation. Identifying patterns is a key element in the work of uncovering both individual and organisational unconscious motivation. We uncover the stuff that derails meaningful collaboration and, in so doing, help create a space in which creative and sustainable new ways of working together can emerge. One of our team recently worked with a director on the ‘partner’ track in a London firm. She turned up 55 minutes late for a two-hour coaching session. In the world of systemic coaching, we call that ‘an event’. An occurrence that gives some insight into the current reality of an individual’s working world. Or, possibly – as the ‘systemic iceberg’ graphic seeks to demonstrate – an insight into that individual’s wider systemic organisational culture. On probing into the event in some depth, our coach began to uncover some interesting stuff (another important technical term!) both about our client and the organisation in which she worked; stuff that had very real consequences when ‘nested against’ the firm’s business strategy. Systemic coaching is all about leveraging our observations into ‘maps’ that will help our clients create a vision, strategies and tactics with which to reach their desired future; and also, to understand the level to which current organisational structures are producing dominant patterns of behaviour. One of the most helpful of these ‘systemic maps’ is the ‘iceberg’ that we’ve illustrated. It looks for patterns of behaviour occurring across an organisation – either in the moment, or across the organisation’s history – and interrogates the most dominant of these patterns in a way that uncovers both the systemic structures that produces them as well as the prevailing assumptions, beliefs and values that sustain those structures. Systems coaches call these assumptions, beliefs and values ‘mental models’, and the challenging and subsequent reshaping of organisational mental models has become big business in the leadership development world these last few years. So how was all this relevant to our late arriving director? What unhelpful organisational mental models lurking under the firm’s waterline surfaced during the truncated coaching session that ensued? And how did the coach go about helping his client to uncover them as they carried out the conversation? First, he listened closely to her story; seeking to understand her world rather than criticise her behaviour. “I’m so, so sorry,” she began, “I was getting ready to come over to the session when the relevant partner called a project team meeting to go over some issues around the billing situation, and I couldn’t get away.” “Do these ad hoc meetings occur often?” the coach asked. “Does the partner expect everyone to immediately change their business plans on a whim to discuss the current state of the work in progress?” See, he was looking for patterns; we’re subtle like that. Having established that a partner calling unscheduled meetings about billing wasn’t a hugely regular occurrence in itself, the coach might have been forgiven for moving the focus of the session onto more personal terrain – time management, expectation setting, communication skills, or any other of her shortcomings that had come to light through the whole ‘55 minute-gate’ heel-kicking experience she just put him through. But his instinct was to dig deeper – another important facet of the coaching conversation – and to follow his curiosity into different aspects of the director’s working experience. “Was there any way you might have been able to ask one of your senior managers to represent you at the meeting?” he asked. “I mean, had this been a client meeting, would you have been able to make me wait for 55 minutes while you discussed a billing issue? Do you ever do that?” And in asking this question, the coach exposed a pattern of behaviour in this aspiring partner. “No, had you been a client, that would have been a suitable reason to hold the work in progress meeting at another time, but unfortunately you aren’t – so there wasn’t much I could do. And as for delegating to a senior manager, I don’t have anyone I can delegate that level of work to. I need these meetings to go well. Actually, I’ve had to cancel quite a few non-client meetings last minute because of update meetings about certain projects.” And there we have the pattern. “But don’t you guys have protocols around who can represent whom when there is a conflict of interest like this?” asked the coach. By interrogating the structures, he was hinting at the possibility of designing an alternative structure that might allow for a more effective approach to getting things done. He was digging to uncover some assumptions, beliefs or values that might be prevalent in the organisation – prevalent and creating an environment in which it seems reasonable to keep a paid external coach waiting for 55 minutes out of a relatively expensive two-hour session. Without dragging this out too much, we can tell you that in the short ensuing conversation, the coach layered more probing follow-ups onto the ‘protocols question’ noted above. The client was able to identify several of these unhelpful mental models that were present in her organisational system. She identified them; understood why they were stumbling blocks to the firm’s espoused vision for the future; considered how they needed to be challenged and changed – at least in her own head and in her own sphere of leadership within the firm if she was going to make a meaningful impact in her journey towards becoming a partner. By elevating the conversation from events to systems structure and beyond, experienced executive and team coaches can help leaders make clearer sense of their own experiences and use those experiences to formulate more effective solutions to the problems at hand. Mastering systems thinking can dramatically help leaders move their organisations away from what is known as ‘the trajectory of what is’ (that place of believing that an organisational future is always predicated on what has gone before) and onto ‘the trajectory of what could be’ (a space in which teams and organisations can create their own future, unrestricted by fears, habits and out-dated practices from the past or present). And then, with their own unconscious motivations exposed, challenged, reflected upon and perhaps rewritten, colleagues can begin to meaningfully collaborate on creating something magnificent and special within their organisations. SÎan Lumsden and Ian Mitchell are co-founders of Eighty20 Focus, a real-time executive coaching organisation.

The days of traditional accountancy careers are over. Companies are looking to Chartered Accountants to combine their qualification with skills outside of the typical accountant’s remit to accommodate the evolving workplace. Traditionally, accountants and other professionals had a job for life. In recent years, this has started to change. Chartered Accountants, in particular, have an increasing range of options open to them. This has been accelerated in recent times with the fast pace of change in the workplace, much of which has been driven by technology. Embracing career-broadening opportunities in a constantly changing workplace is essential to ensure career success. The emergence of the hybrid career As the global and Irish economies evolve, so too has the job market for many professionals. What has emerged is a new generation of job and career options. These are commonly referred to as ‘hybrid’ careers. A hybrid career is one that essentially combines two or more roles; areas of specialism or sets of competencies that complement each other and have the potential to add real value in the context of what is happening in a fast-paced, knowledge-intensive market. The focus is on the synergies between the different disciplines and how those different skillsets have a real impact in an organisation. For Chartered Accountants, it serves to make their roles more interesting and, indeed, challenging. Job specifications are expanding to include skills and competencies that, up to now, would have been standalone roles in their own right. What a hybrid career looks like Hybrid roles combine traditional soft skills with high-level professional and technical expertise. There are examples of hybrid roles arising in the area of IT audit, business transformation, cybercrime as well as within the financial services sector. Accountants can combine law and accountancy in the area of compliance. Engineering, project management and accountancy are proving to be a combination sought after by employers, not just in the IT sector, but in the manufacturing and pharma sectors as well. The Project Management course offered as part of our CPD Programme is currently our bestselling course, demonstrating that these skills are now very much in demand in the workplace.  A world of opportunity The options are endless if you are willing to be imaginative, creative and can demonstrate to an employer how your core skills and competencies as a Chartered Accountant can blend with other talents, skills or interests that you may have. It provides you with the opportunity to follow your passion and enables you to potentially transform how an organisation operates. For example, I recently met with a member who has gained a wide range of experience in the areas of audit and assurance, IT implementation and project management. This member had recently made a strategic career move into a rapidly growing accountancy IT solutions provider. This exciting new opportunity will allow them to use their qualification as well as their project management experience in an area where they have a genuine interest and where, due to the unique combination of their skills and experience, they have the potential to enjoy job satisfaction and excellent career development potential. They will also be developing an entirely new range of skills in the areas of client relationship management and business development, thereby increasing their marketability for the future. Another real example of the growth of hybrid career paths has arisen in the area of big data where IT and finance skills combine to create highly analytical finance roles that require competencies in both accounting and IT. This has resulted in organisations being able to access data that was previously not available to them and, consequently, the ability to interpret and analyse that data. A Chartered Accountant can add to this development by transforming the data and analysis into insights and quality strategic decisions. There is also strong demand for IT auditors. The combination of strong auditing skills and expansive technology acumen is highly sought after in the Irish market. If you are in a smaller SME organisation, why not indicate to the Managing Director that you want to become more operationally involved in the business? This could be as simple as starting and owning an employee eco-business project or a customer satisfaction programme. It’s all about wearing another hat. Don’t fall behind To keep pace with the changes that are taking place, it is imperative to develop new areas of expertise, bolt on new specialisms and develop your soft skills as your career progresses. Companies like to see a strong desire to learn and an enthusiasm to embrace change along with a natural intellectual curiosity that drives you to keep up with developments.  One way to develop the skills required for new hybrid job opportunities is through projects or consultancy roles. Exposure to key projects and initiatives can help hone, develop and broaden your skillset. For example, many projects such as implementations, process re-engineering and outsourcing will require you to use and develop not only your finance and IT skills, but your soft skills – such as communication and influencing capabilities – as well. Enrol on training courses that dovetail with projects you are interested in getting involved with. Explore and discuss how to hybridise your skillset with your mentor and learn how they diversified their skills and competencies to advance their career.  Overview There is no doubt that we are at the beginning of major changes that will see the role of a Chartered Accountant evolve and change. This obviously presents great opportunities and it is essential to ensure that you have the skills and competencies to position yourself to make the most of the career potential that emerges. You must focus on continuous learning and development, embracing change with enthusiasm and the willingness to take on a new challenge. Ultimately, Chartered Accountants are well placed to lead the way and leverage their skillsets to benefit not only their own careers, but their workplace and organisations.   Karin Lanigan is the Manager of the Career Development and Recruitment Service at Chartered Accountants Ireland.  Dave Riordan is a Recruitment Specialist and Career Coach at Chartered Accountants Ireland.

IAASA’s Observations document highlights key topics management, directors and audit committees should consider when preparing and approving 2018 financial statements.   IAASA published its 2018 Observations document, the eleventh such document, last September. The document aims to assist in the production of high-quality financial reports by emphasising some key financial reporting topics to be considered by management, directors and audit committees when preparing, approving and auditing financial statements. IAASA’s Financial Reporting Quality function examines the annual and half-yearly financial statements of equity issuers, debt issuers and closed-end fund issuers to ensure that they are compliant with the relevant financial reporting framework. IAASA’s financial reporting supervision remit is limited to Irish companies trading on the regulated markets of European stock exchanges (issuers). However, the Observations document may be relevant to a broader range of companies when preparing year-end financial statements. The matters included in IAASA’s Observations document derive from a variety of sources including, but not limited to: The risk rating assessment for individual issuers from IAASA’s risk matrix, which is used to select specific reports for examination; The outcome of overviews performed on preliminary announcements and annual/half-yearly financial reports; Topical issues such as supplier funding arrangements, new IFRS guidance and media commentary; Issues identified at the European Enforcers Co-ordination Sessions (EECS), which is organised by the European Securities and Markets Authority (ESMA). EECS is a forum for European accounting enforcers; Peer issues – matters identified in an entity’s periodic financial report that may be relevant to a wider group of issuers; and Financial reporting issues identified by IAASA’s audit inspection teams. The primary audience for IAASA’s Observations document is the preparers of financial statements. However, it should also help users of those financial statements to understand the significant judgements and estimates made by management in their preparation. Financial reporting environment Entities face unknown economic, political and social threats and uncertainties because of Brexit and heightened protectionist policies, particularly in the USA. The UK is leaving the European Union on 29 March 2019. The details of any Brexit agreement may be clearer by the time entities are finalising their 2018 annual financial reports during the first quarter of 2019. Brexit will affect different entities in different ways and to different extents. Depending on the terms of any Brexit agreement, entities’ ability to conduct business on existing terms may be disrupted (e.g. supply chain, access to the single market, access to the Customs Union, the impact of cross-border and cross-channel trade, and the impact of euro-Sterling exchange rate volatility). Against this ongoing uncertainty, impacted issuers should monitor the likely impact Brexit will have and consider disclosing the financial reporting implications. Some comments on the key topics covered in the Observations document are set out below. Impact of recently issued standards  The quality of disclosures of the impact of new accounting standards effective for the first time in 2018 (IFRS 9 and IFRS 15) in issuers’ 2018 half-yearly reports has been variable. Similarly, the quality of disclosures regarding IFRS 16 (effective 2019) has been mixed. IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors sets out the required disclosures for the initial application of an IFRS [IAS 8.28] and for a new IFRS that is not yet effective [IAS 8.30-31]. The Observations document highlights the requirement to disclose the impact of the initial application of IFRS 9 Financial Instruments. These include the requirements to disclose re-classifications of financial assets and financial liabilities upon initial application of IFRS 9 and a reconciliation of the impairment allowances under IAS 39 Financial Instruments: Recognition and Measurement and under IFRS 9 disaggregated by measurement category [IFRS 7.42I-42S]. IFRS 15 Revenue from Contracts with Customers is effective for accounting periods beginning on or after 1 January 2018. IFRS 15 requires entities to disclose more information about contracts with customers and to disclose disaggregated information about revenue. IAASA indicates that, as the application date of IFRS 16 Leases and IFRS 17 Insurance Contracts nears, entities are required to provide more qualitative and quantitative information about their impact. Significant judgements and sources of estimation uncertainty  IAS 1 Presentation of Financial Statements requires disclosure of significant judgements [IAS 1.122] and sources of estimation uncertainty [IAS 1.125]. IAASA expects entities to: Clearly distinguish these two separate requirements; and Avoid the temptation to provide an extensive list of such items that do not meet the IAS 1 criteria. Complex customer and supplier arrangements and factoring These arrangements can vary greatly from entity to entity, both in terms of their nature and impact. IAASA encourages disclosure of such arrangements and, in particular, the cash flow treatments thereof. Identifiable intangible assets In applying IFRS 3, issuers should consider whether intangible assets should be separately recognised and disclosed on the basis of the separability criterion of IFRS 3 [IFRS 3.B33]. Alternative performance measures Entities’ compliance with ESMA’s Alternative Performance Measures Guidelines has been varied. IAASA reminds entities to endeavour to fully comply with the guidelines and, in particular, to provide explanations where an alternative performance measure is changed or is no longer presented. Consistency of key assumptions IAASA calls on entities to “‘sense check” the consistency between the key assumptions used for the fair value measurement of intangible assets acquired in a business combination with the subsequent intangible asset assumptions used elsewhere in the financial statements. Individual intangible assets Entities with material individual intangible assets should ensure that the disclosure requirements of IAS 38 Intangible Assets, dealing with the disclosure of information about material individual intangible assets, are provided in full [IAS 38.122(b)]. The Observations report can be downloaded at www.iaasa.ie. Maurice Barrett is Senior Financial Reporting Manager in IAASA’s Statutory Reporting Quality Unit.