Rachel Hussey asks whether gender quotas really do their job in bringing equality to the workforce and boards.Sometimes change needs help and, in the world of business, what gets measured gets done. So, like many advocates for change, I joined the debate as to the merits of gender quotas or targets as an effective means to address the lack of gender balance on boards and at senior decision-making tables. Quotas provoke strong responses, both in favour and against. Unlike most debates, however, we are all agreed on where we want to go, we just disagree on how to get there. There is a subtle difference between quotas and targets. Quotas are generally mandated by an external force, such as government or regulatory bodies, and they operate on a pass/fail basis with penalties for failure to reach the quota. Targets are voluntary in nature and are typically set internally by the business or industry. While there may be internal or external peer pressure to reach the target, lack of progress has less punitive consequences.There is a considerable amount of evidence that gender quotas for boards may not bring about systemic and sustainable changes. Quotas tend to drive short-term changes that are reversed once the quotas are lifted. For example, Norway introduced a 40% quota for boards of listed companies in 2006. The quota was reached by companies, but the side effects were counterproductive. A number of companies delisted before the legislation was introduced, thereby dodging the requirement. However, the biggest problem was that in the rush to meet the quotas, companies no longer focused on the pipeline of women in their businesses, which is the key to sustainable success. The Norwegians’ own studies show that eight years after the quota was introduced, there were no women CEOs in the country’s 60 largest companies. There was also no evidence of higher pay or more career-advancing opportunities for the vast majority of women in the workforce. Having more women at board level did little to benefit women. On the contrary, it failed to attract more women to climb the corporate ladder and it failed to open up more mid-career opportunities and better pay.By contrast, in the UK in 2011, Lord Davies set a target for FTSE 100 companies to have 25% women on their boards by 2015 (from a starting point of 12.5%). Lord Davies may have had the threat of quotas in his back pocket, but the target set was reached and exceeded. The percentage of women on the boards of FTSE 100 companies by the end of 2015 was 26.5%. Today, across the FTSE 350, the percentage of women on boards is 33%. In contrast to the quota approach in Norway, there was no reduction in the number of listed companies and no reductions in the numbers of women moving up the corporate ladder. The more recent Hampton-Alexander review has now extended the idea of targets to C-suite roles to drive similar progress at the top table.In Ireland, the 30% Club’s goal is that women should make up at least 30% of boards and senior management, and we believe that this should – and can – be achieved by voluntary means. We do not support the idea of quotas and, instead, our members drive accountability for their own progress through target-setting, leading to a greater focus on pipeline talent and more sustainable progress. In 2018, the government established Balance for Better Business, which has set targets for Irish companies. Its first target, 25% of women on the boards of Irish plcs, has been reached. Likewise, the government’s own target of 40% of women on State boards has resulted in a substantial increase in the percentage of women on those boards.And finally, there’s still the question of targets versus merit. For me, there no debate on this question. Targets focus on greater diversity in appointments, but never at the expense of the potential to do the job. It is easy to dislike the idea of others being selected solely on the basis of their status, and if merit-based criteria are not emphasised, people assume that they are non-existent. This is both unfair to appointees and to the wider employee population. It is our job as leaders to show that targets and merit are inextricably linked and there is no place for the perception or reality of a free pass.Rachel Hussey is Chair of 30% Club Ireland and a Partner at Arthur Cox.

Sep 29, 2020

Cormac Lucey explains why, after decades of deflation, we could be on the cusp of a financial regime change.Falling interest rates have been the constant backdrop to my adult financial life. In late 1981, US 10-year government bonds yielded an annual return in excess of 15%. Since March this year, they have been yielding less than 1%. UK and Irish bond yields have followed suit, with gilts now yielding less than a third of 1% and Irish Government bonds offering a negative yield meaning you must pay for the privilege of lending to Micheál Martin, Leo Varadkar, Eamon Ryan et al. This development was not some mere technical development on arid financial markets. They have propelled property prices upwards – as a given rental stream is worth an even-greater capital sum if its cost of capital keeps falling. The same logic has pushed equity values higher and higher. The US stock market’s cyclically adjusted price-earnings ratio now exceeds 30. That level was only previously seen in the years around the tech bubble peak of 2000.I fear that we are now on the cusp of financial regime change. A recent study by Man Group, a London-based investment management firm, contends that prevailing economic regimes “reach their apotheosis, and then change, when the extreme conditions they have created lead to permanent policy change”. It then predicts that current extremes in deflation, inequality, debt levels and globalisation may lead to four major transitions in the next decade.There will be a switch in policy emphasis from monetary to fiscal. With central bank interest rates already at or about zero, there is little scope for further reductions as negative interest rates would only further weaken the commercial banking system without yielding generation of significant economic stimulus.The owners of capital have pocketed huge gains over the last four decades while the share of national income going to labour has steadily decreased. As inequality here in Ireland may have diminished over that time, it has increased in other states, especially in the US. That has helped breed seething political discontent. One way to abate that agitation is for politicians to favour labour over capital, the second big transition that Man Group predicts. The third shift that the report expects is one from globalisation to localisation. It has passed by almost unnoticed, but global trade as a percentage of global output peaked back in 2007/2008. Superimpose that on a trade war between the US and China, trade blocs seeking self-sufficiency in personal protective equipment and a scramble to pre-purchase possible COVID-19 vaccines and you can see why this prediction is already unfolding before us. The final prediction is a consequence of the others: it is a move from deflation (or, strictly speaking, disinflation) to inflation. According to the Institute of International Monetary Research, broad money has grown by 26.7% in the US over the last 12 months, a record in the US’s modern peacetime history. That is an international outlier, but strong money growth has also been evident in India (12.1% growth over the last 12 months), China (11.4%), the UK (11.3%) and the euro area (+8.9%). Nominal national output closely tracks broad money. Real national output has been hit by the pandemic and the consequent recession. Fast-growing nominal income combined with slow-growing real income suggests a noticeable (above 4%) rebound in inflation in 2021 and 2022.If Man Group’s four predictions come true – and I think that there’s a very good chance that they will – it will represent a complete regime change for financial markets compared to what has prevailed over the last four decades. Get ready. Cormac Lucey FCA is an economic commentator and lecturer at Chartered Accountants Ireland.

Sep 29, 2020

Des Peelo explains the one pertinent question business leaders should ask before making any major decision.Better information means better decisions, which, in turn, means better outcomes. The critical point here is that understanding what the information is, and what it is not, makes for a more informed decision.Concerning major decisions, what is the most dangerous word in the vocabulary of politics, economics, or business? Most people would say ‘risk’, meaning that the result could go wrong, have a poor outcome, and/or have an unexpected adverse effect.Major decisions arise in many circumstances. Directors consider a significant business acquisition or seek to confront a crisis; a politician is pressed on a problematic public issue; an economist is asked to advise on substantial infrastructure spending. All involve risk. The human instinct is to avoid risk or at least minimise it.There is a more dangerous word than ‘risk’, however. That word is ‘assumption’. I have witnessed several difficult circumstances or court hearings where the evidence, written or verbal, involved statements like “I assumed…” or “the assumption was…” In other words, something has gone wrong in using an assumption. As Albert Einstein said: “Assumptions are made, and most assumptions are wrong”.Assumptions are higher up in the decision-making tree than risk. In fact, assumptions create risk. Decisions are made to create an outcome in the future. That purpose, by definition, means making assumptions as to the components necessary to make that decision. An understanding and assessment of risk, therefore, means evaluating the validity of the assumptions.There can be a pyramid of underlying assumptions in a situation. Take, for example, the view that investment in an improved rail network is a ‘given’ good idea (an assumption in itself). Assessing the viability of such an investment necessarily involves assumptions as to passenger volumes, fare prices, capital costs, timescale to completion, availability of finance, and so on. It is instructive to witness the debates about the development of public transport around Dublin, such as an underground rail service and airport link. On differing assumptions, any such capital expenditure can be justified or debunked.Assumptions are not facts, though often presented as such. Indeed, most assumptions are reasonably benign and have a historical comparison or rational basis. But assumptions are made by people and often reflect perceptions, prejudices, and biases. They are seen as valid if they conform to already held views or experiences.Even further back in the assumption analyses are demographics (i.e. the breakdown of the population as to age, location, birth rates, and so on). Almost any significant political or economic decision necessitates knowing and understanding the influence of underlying demographics. The three phases of life – education, work, and retirement – have evolving characteristics and interpretations. Statistics are endless and often challenging to interpret as to trends and reasons why, yet they likely influence significant decisions.Back to the decisions. An insistence on knowing and understanding the key assumptions is the obligation of those tasked with making decisions. For instance, the avoidance of subsequent large cost overruns in capital projects can only be addressed through a prior rigorous assessment of the underlying timescales, cost estimates, comparisons with similar projects and, most critically, a testing of the individuals and/or firms on their capabilities in making the assumptions.The history of major business acquisitions is littered with casualties. The cause is often later identified as being a lack of informed reasoning in making the acquisition in the first place, the underlying assumption being that it must be a good idea because the advisers said so.The pertinent question to ask before a major decision is, therefore: please list in order of importance or risk the top ten specific assumptions in making the project/circumstance work. But remember: vague assumptions (such as a “buoyant economy” or “no change in interest rates”) do not count as specific assumptions.

Sep 29, 2020

Annette Hughes discusses the root causes of Ireland’s housing affordability and supply problems, and the possible solutions.Successive governments have had housing and the restoration of a properly functioning housing market as a priority for many years. Despite numerous initiatives, policies, and reports highlighting the persistent problems in the market, EY-DKM’s new report, Putting Affordability at the Heart of the Housing System, has found that the issues are many and complex and there is no single, quick fix.The report, which was prepared for the Irish Home Builders Association (IHBA), highlights the structural defects in the market that have led to rented accommodation costing more per month than a mortgage. Our analysis also shows that there is a significant affordability gap for first-time buyers (FTBs), as their income is insufficient to purchase the median FTB property in 13 mainly urban areas out of 34 areas examined.The report also finds that the deposit required is a significant barrier to homeownership. The average deposit paid by FTBs is 14% of the property price, with many getting support from parents. The cost of the average deposit varied widely, however, as did the time taken for first-time buyers to save it. Saving periods ranged from nearly two years in Kilkenny to more than 15 years in Galway City, Wicklow, Waterford City, Cork City and Dublin City due to differences in income, expenditure, and house prices.36,000 new homes are required each year over the next 21 years to meet housing demand in Ireland but this is unattainable if urgent action is not taken to address affordability issues.A series of measures could reduce the delivery cost of residential development. These include direct financial supports for FTBs, a root and branch reform of the planning system, waiving development levies, accelerating the servicing of zoned lands, actions to address the cost of funding for builders, a full assessment of the impact of new regulations, and the introduction of tax incentives to stimulate development in key locations.The increased tax relief for the ‘Help to Buy’ scheme announced in the July Stimulus should be extended to 2025 and a State-backed shared equity scheme for affordable units on private lands, supported by a Government-funded equity loan of 25-30% of the price, should be introduced.The State takes an estimated 20% of the average delivery cost of a new home. The report, therefore, suggests that consideration should be given to reducing this component for FTBs.A key recommendation is restructuring the planning process to enable, where appropriate, outline planning permission to be obtained early in the process. This would reduce the time frame for delivery, which could, in turn, reduce the cost of financing. The cost and availability of development finance are also covered, with the suggestion that Home Building Finance Ireland (HBFI) should consider accessing EU loans to provide funds at more competitive rates.The quality of new homes in Ireland is much higher than in the past, reflecting new regulations and higher building standards – all of which have a cost. Estimates suggest that these policy-imposed costs account for around 20% of the total delivery cost of a new home. The report recommends that any new regulations under consideration should be carefully evaluated against their impact on the viability of residential construction and subject to a cost-benefit analysis.Under tax considerations, the Government is urged to consider expanding the scope and duration of tax relief available under the Living City Initiative to include newly constructed apartments in designated urban areas to provide a buy-side incentive to encourage their construction.This report is intended to support the Government in achieving the stated objective of putting housing affordability and homeownership at the heart of the housing system. The solutions, while varied, need not be complicated. The early adoption and implementation of even a small number of the recommendations could make an almost immediate difference to many homebuyers and developers, and set Ireland on the road to meeting its housing requirements for the next two decades and beyond.Annette Hughes is Director at EY-DKM Economic Advisory.

Sep 29, 2020

Economists may have a plethora of letter-named predictions for the post-pandemic recovery, but Chartered Accountants are depending on a ‘B-shaped’ comeback. Dr Brian Keegan thinks we need to look to Brexit and the US general election for any real answers.Professions are notorious for using jargon, and different professions have preferred styles for their jargon. Doctors tend to abbreviate the ailments they treat, like the “flu”. Accountants tend to prefer acronyms such as IAASA, IFRS and FRC. Economists, on the other hand, use labels, often with reference to the chief protagonist within the economic phenomenon, hence “Laffer curve”, “Keynesianism” and, even at a stretch, “Pope’s children”.Creeping into the commentary at present is an alphabet soup of labels to describe the nature of the post-pandemic recovery. At the outset, we all hoped for a “V-shaped” recovery, denoting a rapid fall-off in activity matched by an equally rapid recovery. Then, more creative economic types, possibly channelling medical concerns over a second surge of the pandemic, started talking about a “W-shaped” recovery. This way, things will start to get better, lapse again and then recover more fully. The latest commentary talks about a “K-shaped” recovery, whereby some sectors of the economy will recover quite quickly, but others will continue to decline. However, judging from our most recent members survey, there is an expectation among Chartered Accountants of what could be termed a “B shaped” recovery, whereby over time most sectors will loop back to their level of activity post-pandemic. Almost all of our respondents thought that business activity would eventually get back to something resembling pre-COVID-19 days. The main area of disagreement was the amount of time this might take, with our members in the Republic of Ireland expecting a quicker recovery than our members in Northern Ireland. The expected difference in recovery time between the north and south of the island is borne out by the ultimate truth serum of economic status, which is the analysis of tax receipts published each month. Counting money will always give a more accurate picture than counting questionnaire responses. Not only that, because of the recurring nature of tax payments, it is possible to trace a coherent and reliable set of comparisons. Tax receipts in Ireland overall have remained remarkably stable, despite the impact of the pandemic. Yet, tax receipts in the UK are showing a serious decline year-on-year. One reason for the difference is down to timing. Ireland counts tax receipts from 1 January; the UK from 6 April by which time, of course, the pandemic was in full surge. However, the differing financial years do not fully explain the disparity. Consumption has fallen in both countries, as evidenced primarily by VAT receipts, but production, as evidenced by income tax and corporation tax receipts, has not shown the same decline in Ireland as in the UK.Resilience in production over consumption could prove to be critical in the coming months since coronavirus is only the first international crisis of 2020. Despite the behaviour of the respective governments, we are all paying too little attention to the impact the end of the UK’s transition period with the EU in December will have on Irish business. There is also insufficient attention being paid to the economic policies of the two main contenders in the US presidential election, nor much being discussed on how the outcome of that election could shape US trade, international corporation tax policy and foreign direct investment because of the focus on the country’s civil discord.The recovery prospects on the island of Ireland will indeed be B-shaped in 2021, but not because of the shape of the economic trajectory. Think instead about the impact of Brexit, and whether or not there is a Biden presidency. Dr Brian Keegan is Director of Advocacy & Voice at Chartered Accountants Ireland.

Sep 29, 2020

In a new world where change is so fast-paced, how can businesses avoid rash decision-making? By adopting a flexible and holistic approach to working, we can move smoothly to the 'next normal', says Melíosa O'Caoimh. The journey to the ‘future of work’ has no definitive end as we are in a constant state of change. However, there are points of inflection where the change either alters course or is greatly accelerated. The Business in the Community Ireland (BITCI) Worker of the Future Sub-Group was established in 2018 to develop a view on the responsible business approach to the challenges presented by future-of-work scenarios.These challenges were accentuated when the COVID-19 pandemic struck, accelerating change beyond our expectations. However, this speed of change now could lead to risks of rushed decision-making and groupthink. The Sub-Group sees the need to reflect on the change that has occurred and on what needs to be retained and developed as we transition to the ‘next normal’.As with many other countries, digital channels became, for a while, the primary source of engagement in the retail and education sectors in Ireland. In every sector, workers were called on to be agile – to move from one part of the business to another, to take on extra responsibilities and to envisage how their roles could be fulfilled in a much-altered environment.For many office workers, the most disruptive development in recent months has been the scaling of remote working at a pace never envisaged in most future-of-work scenarios. For some companies, remote working was already core to their way of working and announcements have been made indicating no return to offices in the coming year, perhaps longer. For many more, remote working has meant scaling on an ad hoc approach, which has effectively meant home working, regardless of circumstances.These changes will have lasting impacts and will potentially trigger the next wave of innovation around workplace design and practices. Many decisions are currently being made in Ireland as some offices re-open, and while there are risks, there is also great opportunity if the worker experience is put at the heart of decision-making. It is worth reflecting on where we want to be in the coming months – what challenges have we faced and what guiding principles will underpin our wanted state? What examples of best practice are emerging? What businesses should ultimately be asking themselves is this: what is our vision and how is this reflected in our work culture, in the evolution to a learning organisation, an inclusive workplace, and an environment where the physical and mental wellbeing of all is core to how we do business?The challenge now for responsible business is to take the holistic approach in moving to new ways of working and ensure that what is good for business is good for the worker and for society. At this time of uncertainty, the challenge is to keep looking outward and not become too insular. Questioning the future impact of decisions now being made is essential. Melíosa O’Caoimh is Country Head, Northern Trust Ireland and Chair of the BITCI Leader Sub-Group on The Worker of the Future. You can download BITC’s Shaping the Future of Work publication here.

Sep 25, 2020

Rebuilding your business can seem daunting, but with a well-equipped business plan, you can be sure to bounce back stronger than ever before, says Siobhan McCreesh.In business, it is often said that the comeback is stronger than the setback.While the last six months have been difficult, lockdown has shown what businesses can achieve when they take control of a situation. Already, the world around us is adapting to the ‘new normal’. Health, wellbeing, physical, emotional and mental fitness have all come to the fore in the fight against COVID-19 and more people than ever are working remotely.Many of the changes forced on us are here to stay. Many of us are looking at further restrictions of our movements and businesses. As businesses plan their road to recovery, none will be too big or too small to respond smarter, rebound stronger and reflect clearer in the months ahead.Focus on the positiveWhile overcoming road-blocks on the path to recovery will test emotional and mental fitness, it is important to prepare for this and avoid being consumed by the challenges that arise. As each challenge emerges, try to ‘flip’ it by switching your focus from what you have lost to what you need to do to survive. Focus on identifying and planning how you can:diversify and rebuild; deploy staff into new, exciting roles; and source new opportunities for customers, suppliers and markets.Stay true to your ‘why’When plotting your road ahead, it is crucial to remain true to your business’s reason for being – your ‘why’. Keeping this why at the core of the business recovery plan will help established businesses refocus on their original purpose and give younger businesses a clear path to follow. Communication is also important. If you allow your ‘why’ to be miscommunicated, this can isolate loyal staff, customers and suppliers which, in turn, can have a damaging ripple effect across your business.Be realisticYour recovery plan needs to be achievable, focusing both on your personal goals and your business aspirations. It also needs to be flexible so that it can adapt quickly to the rapidly changing environment we are in. Bill Gates famously said most people overestimate what they can do in one year and underestimate what they can do in ten years. Make sure that your projections are realistic and that your recovery plan is split out into measurable phases. Short-term goals are important but mid- and long-term goals also need to be accommodated.Remember to ensure that you have the correct staff mix, systems, processes and financial resources in place to drive your business forward. Currently, various supports are available to help businesses recover from the impact of the COVID-19 pandemic.As lockdown restrictions come and go, and businesses adapt to the reality of trading with COVID-19, this is the time to make the connections you need to help your business, recover, survive and thrive. Siobhan McCreesh is an Associate Director at PKF FPM.

Sep 25, 2020

Innovation is essential for a company’s development and growth. How, then, can this be achieved? Taking advantage of R&D tax credits and incentives will go a long way to boost RD&I, write Ken Hardy and Eoin McCarthy from KPMG’s R&D Incentives Practice.It is well established that the creation and exploitation of new ideas are critical to a company’s development and growth. A clear example of this is in the tech industry, where the persistent development of new ideas is a core element of the business, very much built into their day to day culture. This strive for innovation has seen many of the tech giants of today make rapid ascents to the top in a relatively short period of time. In a broader sense, innovation is a key economic driver across most industries, enhancing commercial profitability and improving the landscape for consumers. So, how is innovation assessed, measured and compared?The Global Innovation IndexMeasuring innovation within global economies is led by the World Intellectual Property Organisation (WIPO), who publish the Global Innovation Index (GII) annually. The GII provides detailed metrics about the innovation performance of 131 countries across roughly 80 indicators including research & development (R&D), infrastructure, market and business sophistication, political environment, and education, as well as the impact and diffusion of knowledge and technology outputs.Ireland’s performancePublished in September this year, the 2020 assessment has Ireland at number 15 in the global rankings, slipping two places from last year. Although this may appear concerning at first, Ireland remains an innovation leader and scores highly in multiple critical economic drivers. For example, we rank first for FDI outflows, ICT services exports, knowledge impact and knowledge diffusion. This shows our strength in translating innovation investment into realisable, tangible returns, which is in part a reflection of the national support mechanisms from the IDA, Enterprise Ireland (EI), Knowledge Transfer Ireland (KTI) and R&D Tax Credits. Indeed, the KTI is highlighted within the GII 2020 report for developing a successful model to assist businesses in handling their intellectual property (IP) within complex situations.Opportunities to maximise innovationInnovation and R&D are very much complementary. The precursor to innovation is commonly R&D, of which Ireland is ranked in the top twenty globally. Our high ranking is a result of extensive FDI from large multinationals in the pharma and tech space, in addition to strong investment in highly skilled researchers. Companies based in Ireland can maximise the benefit from their R&D activity through the R&D Tax Credit, a valuable tax based incentive of 25% credit on qualifying R&D expenditure in the science and technology areas. Although not specifically captured in the GII report, SMEs are a key stakeholder in our economy, and represent 54% of the R&D Tax Credit claimed in Revenue’s latest report. Introduced in Finance Act 2019, SMEs may claim an R&D Tax Credit of 30% on qualifying R&D expenditure. (These measures are subject to a commencement order.)Within the rankings, Ireland’s strength in knowledge and technology outputs is marked by ranking first in both knowledge impact and knowledge diffusion. IP generation is a key indicator that feeds into these metrics and is commonly born from R&D activity. In generating IP from qualifying R&D activity, a company can claim the Knowledge Development Box (KDB) incentive, which provides a 6.25% corporate tax rate for income generated from commercialising certain IP. However, in general, the KDB is underutilised, with only a small number of companies availing of it. This does not reflect Ireland’s high ranking in knowledge and technology outputs, and companies may be missing an opportunity to claim the KDB.The path from an innovative idea to profitable exploitation can be extremely challenging. Industry sectors such as semiconductors, biopharma/pharma, and medical devices require significant investment in physical infrastructure, as well as highly skilled personnel before an idea can be realised. It can also take a long time to move through the stage gates of development, especially in highly regulated industries. For example, it takes on average 10 years to develop a new drug. For SMEs, there is the dreaded ‘valley of death’ in the development cycle, a critical period where the probability of failure is highest and attracting funding can be hard to come by. RD&I Grants can be leveraged from the IDA and EI to support companies during this phase.What does the future look like?In the current environment, many companies are focused on short- to medium-term sustainability and, in some cases, survival. This will be reflected in the cadence of innovative activity. For example, the pharmaceuticals and biotech sector will likely experience growth in R&D because of the renewed focus on health. In the medical devices sector, there may be a shift in developments towards respiratory applications and remote diagnostics. Generally, companies will seek to diversify their supply chains to de-risk future unpredictable events. Moreover, accelerated development of Industry 4.0 (the Fourth Industrial Revolution) is likely to enable remote or autonomous control capabilities.When considering the future, we learn from events in the past. Historically, business R&D expenditure moved in parallel with GDP, slowing during economic downturns. Although this may not be the case across all sectors (pharma, med-tech and ICT being the exceptions), there is an expected contraction in expenditure on innovation, and as business innovation expenditure declines, government may strive to counteract that effect through expenditure boosts to innovation, via mechanisms such as the R&D Tax Credit, KDB and RD&I Grants.Ken Hardy is a Partner and Eoin McCarthy is a Scientific Consultant in KPMG.

Sep 25, 2020

In a world that is getting more complex, how can leaders navigate the constant changes? Managing our responses and developing our thinking and learning is integral to overcoming these challenges, says Patrick Gallen.We live in a time when change and disruption are constant and being able to navigate change is an indispensable leadership trait.There is a fundamental difference between seeing the challenges posed by change as one of navigating the complicated versus navigating the complex.Complicated challenges may be demanding but, with enough information, we can leverage experience and expertise, observe patterns of cause and effect, apply rules and processes and then solve them. This approach is probably no different from the many challenges you face as an accountant in business or practice. As one of my old bosses used to say, we often over-complicate business problems and then must simplify things to solve them.Complexity, on the other hand, should be navigated differently, because complex systems and environments are made up of a mosaic of diverse yet interdependent elements that interact in unexpected ways. When we look at mechanics and engineering, we find highly complicated systems, like a jet engine.  When we look at nature, we can see highly complex systems, like a coral reef or a natural woodland.Some of our work may be complicated, but we do that work in a complex environment.Complex systems do not always follow patterns, and so past behaviour of a complex system may not predict its future behaviour. In a complex system, there is no centre or top from which to direct.  Empowered and self-directed teams ideally can resolve challenges in different parts of a complex system, almost akin to what the various university and pharma teams are doing around the world in the search for a vaccine for COVID-19. When you look at the biggest change challenges you are facing in business or practice, do they resemble the complicated or the complex?  We know that we cannot exercise complete control in a complex world – the environment is always changing, and we cannot lead people back to the way things were before. We can, however, manage our own response, develop our own thinking, and learn. Under stress, it can be tempting to fall back on our experience and expertise – to get consumed with the details and to narrow our focus.  Leading in a complex system requires us to take a wider view of our firms, our roles, our service lines and our teams, and to see them as part of a much bigger system.  This then has implications for the way we lead as a profession and as accountants, in whatever field we operate.Patrick Gallen is a Partner in People and Change Consulting in Grant Thornton.

Sep 18, 2020

2020 has been difficult for everyone. Business and personal plans have gone awry and we're constantly readjusting to accommodate everything. Moira Dunne offers some tips to reset and refocus for the end of the year.September is a great time to reset and refocus after the summer months. With schools reopening, it is a chance to draw breath and set priorities for the last four months of the year. This year, we need to reset more than ever. 2020 has been a time of huge change and uncertainty due to the COVID-19 pandemic. Business plans created in January were suddenly paused in March. Day-to-day operations stopped for many businesses. And, as companies pivoted to survive, plans from January may be irrelevant in Q4. Here are some tips to reset and refocus for the end of the year.Even though we are still living with COVID-19, this September brings hope as we see the reopening of schools around the world. The virus is still here, but we are all getting on with our lives and our business. How great would it feel to achieve some important goals and finish your year on a high?1. Reset your prioritiesStart by looking at the goals you set in January and assess what has been completed and what needs to be added. Identify the most important things you want to achieve by the end of 2020. Then ask the following questions:What are the goals?What work needs to be done to achieve those goals?Is help or input required from anyone else?2. Make a planHaving a plan helps you achieve more as it provides structure, focus and motivation. To figure out the work to be done, it helps to break large goals into smaller sub-goals. Then brainstorm each sub-goal to identify the tasks or actions required.Using a flipchart or whiteboard really helps the brainstorming process as space frees up your mind. If you work with others, you can arrange an online session over Zoom or Teams and use the whiteboarding feature to help spark ideas.Once you have a list of tasks, start looking at the following:What needs to be done when?Do some tasks depend on the completion of others?What are the milestones to be achieved along the way?Then transfer all the tasks into a planner. 3. Be realisticYou are probably already busy, so be realistic about how much time you have. It is better to under-plan than over-plan. Start small, complete some tasks to achieve a sub-goal. This will motivate you to keep going.Build in some contingency time, some “slippage” for the unexpected. Because if 2020 has taught us anything, we know that we need to expect the unexpected!4. Track your progressAs you work through your tasks, track your progress by capturing the date each one is completed. If you miss a target date, readjust any remaining dates that may be affected.Rework the plan if you find you are not getting enough time to work on your goals. Extend your timeline if necessary.5. CelebrateIf you achieve your goal, then you will want to celebrate. If you reach the end of Q4 without completing all the work, you still have a plan and you know exactly what needs to be done in 2021.And by following this process, you have also gained some valuable project management skills. What an achievement in these uncertain times!Moira Dunne is Founder of beproductive.ie.

Sep 18, 2020

What is the best way to handle post-COVID recovery? Leaders should see the recovery process as a spectrum of options, argues Valerie Daunt, and adapt accordingly.As a result of the COVID-19 pandemic, an estimated 2.7 billion people, or more than four out of five workers in the global workforce, have been affected by lockdowns and stay-at-home measures. Business and government leaders have been challenged to both respond to the crisis quickly and rethink their workforce strategies in real-time.It is important to realise that recovery won’t be static. It will not occur on a specific date. COVID-19 is unlikely to end suddenly given the lack of available therapeutics and the uncertain prospects and timing of a vaccine.Most organisations’ priority has been crisis response and emphasising health, safety, essential services, and the virtualisation of work and education. Now, as organisations begin to emerge from this response phase, leaders are focusing on the next set of challenges as they plan for recovery. There are three phases that leaders will likely face:Respond: How an organisation deals with the present situation and manages continuity Recover: How an organisation learns and emerges stronger Thrive: How an organisation prepares for and shapes the “new normal”Many organisations are planning for multiple scenarios and time horizons as they shift from crisis response to recovery. Many are also planning for the possibility of multiple waves of the pandemic and its continuing global and uneven footprint. As a result, we expect it will be a gradual transition from the respond phase to a new reality. Organisations must prepare for different outcomes of the pandemic – mild, harsh, or severe – and recognise that the recovery should be adaptable to different situations within different countries and industries worldwide.To do this, it helps to think of this recovery process as a spectrum of options. Some organisations are hiring or expanding and others contracting. Some may bring more employees back to the workplace, while others are still working remotely, perhaps permanently. Other organisations, especially those that expanded during the crisis, may reduce their workforce or adapt to new environments. Leaders should ask how they will integrate additional workers in the future, what services might be added or changed as a result, and what other operations may be maintained in a remote capacity. The answers to these types of questions will help organisations redefine their workforces and set the direction to thrive in the aftermath of the pandemic. It is not essential that leaders have a detailed blueprint of the new working landscape at this stage, but they should start to actively envision it and work toward it. In sharing our insights on how to approach workforce recovery strategies, business leaders should begin with a sense of priorities and direction for their future. The future of any organisation’s DNA, and critical guideposts for workforce recovery, should include its direction on organisational:Purpose: integrating the well-being and contributions of individuals in the organisation’s mission and work; Potential: for what can be achieved by individuals and teams; and Perspective: with a focus on moving boldly into the future.It’s not simply a return to old ways of doing business. The pandemic has created an imperative and an opportunity for organisations to reengage with the workforce and reinvent their workplaces. The biggest challenge organisations will likely face in recovery is the tension between preparing for a return to previous activities and routines – getting back to work – while also embracing a new reality – rethinking work. While many workforces have demonstrated resiliency in the face of crisis, it is important to remember that transformative change can be difficult and unsettling for many workers. While some may prefer working from home, others may be uncomfortable or unproductive outside of traditional work settings. How leaders accommodate and balance these divergent expectations will help define the future of trust in their organisation. Despite the uncertainty, one thing remains clear: customers, workers, suppliers, and other partners are watching. How organisations handle the recovery may define their brands with both their workforce and their customers, establish their reputations for years to come, determine their future competitiveness, and ultimately define whether they are truly operating as a social enterprise.Valarie Daunt is a Partner in Consulting in Deloitte.

Sep 18, 2020

Cyberattacks have always been around, but recently they've been on the rise, especially when it comes to third-parties. What is the best way to safeguard your company against these risks? Pat Moran gives five practical steps on the best way to manage third-party cyber-security plans.Cyberattacks and data breaches are rarely out of the news, and when they do occur, they have wide-ranging impacts. In response to an ever-evolving cyberthreat landscape, many Irish firms have made significant investments to strengthen their cybersecurity capabilities. I’ve seen clients deploying new technologies, developing new capabilities, and implementing new security processes, all to increase the cyber-resilience of the organisation.However, focusing on what's inside your company is only part of the challenge. Any firm's security posture is only as strong as its weakest link. And very often, the weakest link exists outside your organisation.While it's not a new concept, more and more firms are engaging with third parties to reduce costs, enhance performance or avail of a specific skill set that they don't have. The term 'third party' can be used interchangeably with 'vendor', 'supplier', 'partner' or 'outsourced provider'. Regardless, they mean the same thing: an increased risk of cyberattacks for your organisation.The COVID-19 crisis has only reinforced how dependent most organisations are on an interconnected ecosystem of third parties to run their business. We've seen firms across all sectors struggling to get visibility on the resilience of their supply chain to ensure that the lights can be kept on. Suppliers are facing the same challenges of getting their workforce connected securely, adhering to security policies and maintaining a culture of cybersecurity awareness. All of this is against the backdrop of a heightened threat landscape. Opportunistic cyber-thieves are looking to take advantage of the uncertainty created by the crisis.When you're operating in an interconnected environment with third parties, the attack surface is expanded for cybercriminals to launch an attack.You can outsource almost everything but accountabilityPwC’s Global Economic Crime and Fraud Survey 2020 highlights that one in five respondents identified vendors and suppliers as the source of their most disruptive external fraud.  Half of the respondents lacked a mature third-party risk management programme and 21% had none at all. This highlights the size of the challenge faced by firms. And when a third party has an incident that impacts the security of your customers' data or impacts your ability to deliver a service, your customers don't see the distinction. You can't outsource accountability.To compound the matter further, all of the above is happening in the face of the pressures of reducing costs and improving efficiency, along with increased regulatory expectations.To navigate some of the above challenges, below are some practical steps your organisation can establish to manage the risk of cyberattacks caused by engaging with third parties.1. Establish your operating modelDeveloping your operating model and framework is the foundation of effective third-party risk management. The operating model should outline the governance and reporting requirements over your third parties, how to determine the criticality of each third party, and what technology can be leveraged. For mature or regulated entities, a centralised program likely already exists, but the security team should be active participants. For less mature organisations, the security team might be the driver.2. Identify your inventoryCreating a complete and accurate inventory of your third parties is a prerequisite for effective risk management of your supply chain, including your fourth and fifth parties (also referred to as chain outsourcing).3. Plan before you engageBefore you bring a prospective third party on board, invest time in understanding their security posture. Do they meet your minimum security expectations and standards? If not, do they have other mitigating plans or processes that will give your organisation more comfort?Not all products or services lend themselves to outsourcing, so make sure to develop a robust planning process, where assumptions can be challenged, to ensure that outsourcing or engaging a third party is not outside the risk tolerance of the firm. Security requirements should be baked into contracts and service level agreements.4. Monitor, monitor, and then monitor some moreThe most time- and resource-consuming activity is typically your ongoing monitoring and governance. The security team should be included in weekly or monthly operational meetings for critical third parties, and risk assessments should be performed at least once a year for all your third parties. Tooling and ratings services are now common on the market to support this.5. Exit gracefullyWith all the right intentions and robust processes in place, surprises still happen. Be prepared with a backup plan if services cannot be provided by a third party, or if you need to exit the arrangement with little notice.Pat Moran is a Partner in PwC.

Sep 11, 2020

The impact of COVID-19 has left many businesses across the Irish economy vulnerable and uncertain about their future. Tom O’Brien and Hilary Larkin say this may be the ‘calm before the storm’.We are seeing companies who are experiencing a decline in activity levels and have been sustaining themselves through this period by availing of the various supports which have been in place since the onset of the virus, such as the deferral of tax liabilities, bank forbearance measures, wage subsidies and rates freezes.These measures have greatly assisted many companies, but it is what happens when they are ultimately removed that is worrying. Many businesses are accumulating significant liabilities over this period and when these supports are removed and businesses have to stand on their own feet again, there will be capital difficulties and liquidity issues.Looking into examinershipDespite the negative outlook, there are options for those in financial distress. Given the prevailing trading conditions and the nature of the liquidity issues which will face many companies, examinership may be an appropriate restructuring option to consider. There will likely be an increase in the number of examinerships over the coming months and into next year as companies seek to come to terms with the new normal and address pent up liquidity issues. The COVID-19 situation may also have highlighted other areas that can be actioned as part of the examinership process, such as property arrangements that are now onerous or surplus to requirement.There are many advantages to the examinership process such as the company continuing to trade, jobs being maintained and preserved, and creditors faring better than they would if the company were placed into liquidation. It is, in many cases, a positive outcome for everyone concerned.Examinership is not only an option for larger companies. Companies that meet the definition of a small company are capable of availing of examinership through the Circuit Court. This process has not been availed of as widely as was expected when it was first introduced – maybe due to lack of awareness or perhaps a perceived stigma around the process – but, given the economic forecast, smaller companies will be more likely to avail of it going forward. LiquidationWhile many eligible companies will go down the examinership route and emerge ‘at the far side’ completely restructured and with appropriate working capital and funding to sustain themselves into the future, there will inevitably be others that are not viable and may have to look at liquidation. Examinership is not suitable for all businesses as some will be beyond saving. In these circumstances, it is important that directors and business owners move in a timely manner to protect all stakeholders – employees, creditors, banks, and the directors themselves.From a governance perspective, directors must be able to demonstrate that they have acted responsibly, showing that they have properly assessed the options open to them including taking independent legal and financial advice, formally recording meetings of directors and management and being careful not to expose creditors to further losses in the period preceding the liquidation. Obviously, great care should be taken with any payments from the business to ensure that issues of preferment do not arise.This is all very important as in the final analysis, the liquidator is required to review the conduct of the directors over the period leading up to the liquidation and report to the ODCE on this. Directors should be able to demonstrate that their conduct was responsible and appropriate in the circumstances.Stay positiveDespite all the negativity surrounding financial distress, it is also important to be positive and take the right steps. Banks have been very supportive and are willing to try and assist customers to restructure and get through this period. Companies should be encouraged to seek independent and competent advice as soon as possible. Don’t bury your head in the sand – talk to your bank in a proactive manner, and don’t leave things until you are really under pressure.Tom O’Brien is a Partner and Head of Advisory Services in Mazars.Hilary Larkin is a Partner in Financial Advisory in Mazars.

Sep 11, 2020

We all know a financial storm is headed our way, but how do we cope when it does hit us? Graham Reid gives us twelve steps that can be taken to navigate the perils of post-COVID economic recovery.After the storm comes rebuilding. And there’s a lot to do. COVID-19 has profoundly affected the norms of business across every industry and geography. From new ways of going to work (or not), long-lasting shifts in customer psychology and behaviour, and radically transformed operational networks and business portfolios, the world in the second half of 2020 is very different from the start of the year, for better as well as for worse.The only thing that’s certain about the recovery is that there’s still a huge amount of uncertainty about what form and how long it will take, with different countries – even different regions within countries – continuing to be impacted in different ways, and no certain cure for COVID-19 yet in sight. What should the working world expect from the pandemic recovery period? How is it best achieved? Outlined below are steps organisations and individuals need to take, not just to get back up and running, but also to become stronger and more resilient in the process.1. Reimagine and transformThe world is slowly adapting to the impact and waking from the nightmare of COVID-19. But getting back up and running requires more than just business as usual. It’s a two-geared process, a balancing act between transitioning safely into a new working world and taking steps to engage in the transformation of working conditions and practices that COVID-19 has unleashed. 2. Address client anxietyThe behaviour and decisions of consumers are what keep the business world ticking. But COVID-19 has dealt a massive – and potentially permanent – blow to the way they interact with businesses. As just one example, 44% of global consumers indicated they would be more likely to do grocery shopping online as a result of the pandemic. Firms looking to survive will understand this and will adapt accordingly. 3. Rethink the workplaceSome businesses have been able to opt to continue remote working practices for the foreseeable future, but for many others, a swift return to work is vital to remain financially viable. To do this safely for their staff and customers, organisations need to prioritise cooperation, communication and accountability, and supplement with cutting-edge technologies and working processes, including crowdsourcing, risk apps and collaboration platforms. 4. Maximize your people’s potentialConcern for the wellbeing of your workforce isn’t just about a duty of care – it's a business imperative. Led by an integrated Human Resources response, rebuilding will mean effectively engaging with the workforce, understanding and reacting to employee expectations of the care provided by employers and the ability to match workforce capability to financial and risk considerations. 5. Identify legal issuesEven if the worst of the crisis may seem to be over, with interim regulatory measures still in place in much of the world, the full aftermath is yet to hit. As the world moves on from the peak of the crisis, from cancelled contracts to employee class actions, COVID-19 is likely to leave a range of legal turmoil in its wake. Modelling potential outcomes, identifying potential risks, and capturing relevant data is critical for businesses looking to weather an anticipated storm of litigation. 6. Learn lessons from those a few weeks aheadWhen re-opening, it can be instructive to look at what has happened during reopening elsewhere – both in other industries and markets. China was the first country affected, and at the beginning of May, it became one of the first to re-open. Here we can look at key lessons from its experience, from assessing supply chains to preparing for future virus spikes. 7. Adapt operations, increase resilienceEven before COVID-19, business was facing pressure to act more responsibly, and the crisis will only accelerate that. As we look to an uncertain recovery, likely to be more saw-toothed than smooth, the pandemic presents us with a chance as much as a challenge. With such a significant economic and social impact, radical changes in how we operate are not just possible, but necessary. This is a chance to segue from a growth economy to a value-based one, prioritising long-term value and resilience and the needs of multiple stakeholders over short-term growth. Flexibility has always been a business advantage, but it will now be critical to survival. 8. Forecast more effectivelyMaking smart financial decisions post-COVID-19 is critical and, in such a radically changed world, only companies with effective forecasting and scenario planning strategies can do so with any confidence. However, in a webcast survey by EY, only 9.2% of respondents were very confident in these areas. 9. Adapt to shifting expectationsFor good or ill, what consumers expect of companies is changing. As we move from crisis to whatever comes next, businesses need to be ready to adapt to changing customer attitudes and needs: reshaping their portfolios for new business realities, creating new and responsive digital customer journeys, and taking the right steps to ensure transparency moving forwards. 10. Identify the right divestmentsIn the wake of the 2008 financial crisis, firms proactive about reviewing and strategically divesting their portfolio outperformed their peers. The same may well prove true of the COVID-19 aftermath. 11. Encourage inward investment in your regionCOVID-19 hit Foreign Direct Investment (FDI) hard. While 23% of investors surveyed indicated an intention to delay investment plans entirely, 51% expected minor delays in FDI plans. 12. Stabilise the economyReassuring and supporting individual customers in the immediate crisis is one thing, and something all businesses can work toward. But banks will have a particularly important role to play in the longer-term, post-crisis stabilisation of the global economy. Businesses will need to build close relationships with their banks to manage the inevitable risks of an uncertain environment and secure ongoing access to the capital that will be essential for their long-term recovery and growth.Graham Reid is Head of Markets in EY Ireland.

Sep 11, 2020

Innovation requires investment. But what are the best areas to invest in? Matthew J. Moberg details five growing platforms that companies should think of as investment opportunities. Innovation can be found in any part of the economy and people seek to invest wherever innovation occurs, regardless of sector classification, market capitalisation or geographical location.There have been significant breakthroughs in many sectors. To organise the change occurring in the economy, here are five major evolving platforms of growth. Global e-commerceGlobal e-commerce is an arena of tremendous opportunity. Estimated global sales were only 14% penetrated by e-commerce pre-COVID-19. Today, with the new reality of COVID-19, we have seen estimates of between 22–25% penetration.Even in the United States, so-called “highly” penetrated industries, like travel, books, office supplies and media are, on average, only 41% penetrated. There are many more industries—like groceries and global transportation—that are only modestly penetrated by e-commerce.Other opportunities include business-to-business (B2B) procurement and software that enables brick-and-mortar companies to have an online presence. The common perception may be that global e-commerce is at a late stage in the innovation cycle. In my view, there is so much further to go.Genetics breakthroughsThe sequencing – or decoding – of the gene is one of the greatest accomplishments of our era. The gene was discovered in 1953 but first sequenced during the Human Genome Project in 2003 at a cost of US$2.7 billion. The cost of gene sequencing has fallen rapidly in recent years. We believe the industry is on the cusp of creating meaningful diagnostics and therapeutics and, as a result, wealth creation. These opportunities may go beyond human gene therapeutics, to agricultural and even artificial intelligence applications.Intelligent machinesArtificial intelligence or machine learning is permeating every layer of product development. From using simulation tools to advanced graphics to designing products and getting immediate feedback as to points of weakness in a structure, or real-time intelligence on wear and tear that can feed back into new designs – smart machines are involved.If the last 30 years were spent organising data with mainframes, personal computers and mobile phones, the next 30 years could be set up to take that data and change our lives in the physical world. There could be opportunities in companies that intelligently design, manufacture, transport and maintain physical machines, in addition to investing, of course, in the machines themselves. New financeAccess to capital is one of the fundamental differences between developed and developing countries – the grease that allows efficient transfer of value. I believe there are three vectors that drive access to capital.The first is the concept of what constitutes money. In the past, people bartered for goods and services, which can be very inefficient. We have moved from barter to precious metals – backed by their own innate scarcity – to fiat currency backed by the full faith and credit of a government. Today, we are talking about currencies backed by algorithms.Similarly, the other two vectors, efficient pricing and methods of exchange, have also significantly evolved. In the past, the better barterer determined the price of your goods and services; then it was a loan officer at a bank with all their intrinsic biases.Today, we are increasingly using data to appropriately price risk, allowing us to allocate capital in more efficient ways. Methods of exchange are also evolving with the trends in e-commerce, allowing mobile payments and digital wallets to gain traction.Exponential dataUnderlying virtually all our investment themes is the constant of data. Without data, none of these platforms can be successful. But data isn’t virtual—there is a physical component to data that is often ignored. We need to clean the collected data, then store and deliver the same data. That requires massive amounts of data centres, fibre-optic cable, and cell towers, among other supporting infrastructure. To use data for something like artificial intelligence, computing power and memory are crucial. Graphics processing units, central processing units and field-programmable gate arrays represent some of the many components necessary to process that data more efficiently.The creation, cleaning, storage and delivery of data will lead to new applications like augmented and virtual reality, artificial intelligence and machine learning, software as a service, and the sharing economy. There are many investment opportunities in companies that play critical roles all along this value chain. Some have postulated data is becoming the oil or gold of the new economy. Matthew J. Moberg is Vice President Portfolio Manager at Franklin Templeton. This article is the sole opinion of the author.A version of this article was first published in The FM Report.

Sep 04, 2020

Innovation is high on the government’s agenda. But how can companies invest in R&D given the current economic conditions? Establishing an innovative culture in your organisation is the key to success, says Barrie Dowsett.When it comes to innovative research and development, it is easy to picture a lab – one in which a large technology company is working on something amazing, like a robotic arm. You’re likely to think of pharmaceuticals as well, especially given that Ireland is renowned for its thriving medicine industry.But, actually, innovation is happening all around us.Research and development (R&D) is simply about seeking a scientific or technological advancement or overcoming a challenge that could not easily be solved by a professional in the field. From developing new products, services, or processes from scratch, to improving those which already exist, R&D is likely to occur in your business more often than you think.The state of R&D in IrelandThere has been a significant rise in the amount of investment in R&D from Irish businesses in recent years and that has coupled nicely with the fact that innovation is high on the government’s agenda.Recent data released by the Central Statistics Office show that the total expenditure on innovation projects in Ireland totalled almost €5.5 billion in 2018, an increase of 18.2% just two years prior. The main reason behind this leap is the 39.4% increase in expenditure for in-house R&D, totalling €3 billion in 2018 up from €2.2 billion in 2016.This information from CSO goes deeper too and shows that in 2018 the acquisition of machinery, software, and equipment represented 20.7% of the total spend at €1.1 billion. Embracing an innovative cultureAll businesses will approach R&D differently. Some have an innovative culture in place from the start. Others, however, take time to instil it. There are other variants to consider as well, like company structure, size, and ability to claim.Take size as an example. Businesses looking to create brand new products and services tend to be larger, more established, and better able to meet the demands of extensive market research and production. However, small- and medium-sized enterprises are more likely to work on improving existing products rather than creating new ones, as a development from scratch can be prohibitively expensive. Some companies will be able to set up their own R&D department, while others will outsource their efforts to gain the skills and knowledge required. Furthermore, with the effects of COVID-19 being acutely felt across the Irish economy, many companies simply feel unable to give R&D priority at the moment, with statistics showing that 85% of Irish businesses have scaled their operations back or even shut their doors entirely.R&D and the Irish economyHaving a well-defined and funded R&D strategy isn’t just about showing off amazing products, it’s also about staying ahead of the game. Marketplaces are becoming more competitive and companies are in direct competition with each other to offer something bigger and better to retain their customer base. Although investing in R&D often requires some generous financial outlay, the rewards can also be significant.Another big benefit of investment in R&D lies in the ability to claim R&D tax credits, with the government recognising the benefits it brings to the wider economy through job creation and growth. The incentive is lucrative too, covering up to 25% of R&D expenditure over and above the standard rate of 12.5%, meaning Irish companies can obtain as much as 37.5% of R&D costs back, either as a corporation tax reduction or as a cash lump sum. Creating or developing products and services, both for commercial purposes and within a company, can lead to great pay-offs. But innovation can’t happen without some element of risk, and for many companies meeting the costs involved can be daunting.However, there is a range of national and EU schemes available to help mitigate the costs in addition to R&D tax credits, like Enterprise Ireland funding supports, Horizon 2020, EUREKA Eurostars, and more. Whatever size and sector the company is in, a well-executed and funded R&D strategy is essential to survive and thrive.Barrie Dowsett is the CEO and owner of Myriad Associates.

Sep 04, 2020

Burnout has been creeping into our workplaces and greatly affecting our lives, even before COVID. Noel O’Callaghan outlines how you can identify burnout and manage your work-related stress.Increasingly, we are hearing about how workplace stress is on the rise, especially where work and life both feel uncertain and unpredictable. In a new survey from the Department of Work and Employment Studies at the Kemmy Business School, 60% of employees in Ireland are feeling more stressed since the onset of COVID-19. As we become so ingrained in the day-to-day routine while meeting the needs of employers or customers, we can miss the alarm bells warning that what was a somewhat natural and manageable stress is now morphing into burnout, something considerably more serious. Work culture seeks to identify and label what they call ‘high achievers’ but, unfortunately, delivering more and more with less and less is often the only criteria needed to earn the distinction. Day to day, month-end to month-end, quarter-end to quarter-end, the relentless pace of work makes it seem impossible for someone to put their hand up and say, “Stop. I need to rest”. If you combine this with a personality that is wholly-committed to doing a good job, has a fear of failure, or is unsupported either at work or at home, then you have a recipe for disaster when it comes to excessive stress or burnout.Signs of burnoutWhat are the tell-tale signs of burnout? Burnout can lead to physical and mental exhaustion, a feeling of detachment, or a feeling of never being good enough no matter how much you deliver. Are you:terrified of going to work every day?always tired?disinterested in participating in hobbies outside of work?getting little enjoyment in anything and no motivation to seek it?feeling stuck, with little or no light at the end of the tunnel?(Sometimes these can also be accompanied by unusual physical aches and pains.)These are just a few of the more common red flags, but it can be different for everyone. The great news is that burnout is treatable. Taking breaks, knowing your limits, and watching out for situations or people that elevate the stress can help. However, there are also huge benefits gained from working on your relationship with work. I-It and I-ThouMartin Buber, a theorist and 19th-century Austrian philosopher, suggested that humans have two approaches to the way we interact with people, things and nature. One is an ‘I-It’ approach where we objectify whatever we are dealing with and seek to get as much out of it for ourselves as possible and the other is an ‘I-Thou’ approach, where we turn to the subject as a partner and seek to relate more to it for the mutual benefit of both parties. There is a recurring theme that I see is in relation to how people interact with their career and the workplace. A pattern emerges over years whereby one relates to their career, work or co-workers from an I-It standpoint, viewing it as a means to an end, which can cause the relationship with work to become so unhealthy that people become ill. Having a more constructive relationship can alleviate the symptoms of stress and burnout and instil a sense of nourishment into the workday. We should aim to shift the relationship from I-It to an I-Thou and think of work as something to be engaged in, enjoyed or experienced.  Noel O’Callaghan FCA is a qualified psychotherapist. If you would like to discuss how any of the topics mentioned above are impacting your mental health, please contact the CA support team at CASupport@charteredaccountants.ie.

Sep 04, 2020

Sustaining a family business can be complicated. Liam Lynch considers how good governance can achieve the right balance between family and business.Like any enterprise, a family business needs governance to ensure that its family and business strategies are aligned and achieved. This governance must protect the business from the normal and predictable challenges that family involvement brings. However, formalising ownership structures, power and processes can create resistance and (often healthy) conflict as the management of a family business transitions from an ‘autocracy’ to ‘democracy’.The benefits of governance far outweigh the challenges of developing it. As more generations become involved, and the demands of people in the business increase, the need for more a formalised governance structure is vital.Governance means education and pre-agreed rules about management and how strategies will be implemented. These rules must apply to everyone involved in the enterprise, from directors to shareholders, managers and staff.There typically needs to be two separate but related sets of rules (governance). One regarding how the family will behave and relate to the business – a family constitution, even if not formalised as such – and the other regarding how the family will behave and relate in the business – a Shareholders’ Agreement and sometimes a Board Charter.Discussions must start nowBuilding a sustainable family business means starting early to communicate about plans for growth and future succession. Unlike a regular enterprise, a family business is usually built on a level of trust and informality by the founder family members. However, if a business is to grow and employ more people, including family, it needs a level of structure to help the business ‘scale-up’.To minimise distraction to the business and tension within the family when formalising governance structures, it is important to recognise that these issues are completely normal and predictable. It can be helpful to work with an independent party who can facilitate conversations, share proven frameworks and use their experience to navigate the process. Invariably this will lead to a better outcome.Four pillars of governanceGovernance is broken down into four pillars: management, income, control and equity.ManagementA common trigger of problems is when the founder brings children into management roles who have not gained the experience to perform the roles. This not only creates tension, but it can stunt the business’ performance. Having pre-agreed rules regarding how family members can join the business, and the required experience, involvement, development and output – just like any other employee – will help alleviate this.The pre-agreed rules will consider reporting lines, and establish performance expectations and review processes, as well as how issues are communicated and resolved. Ideally, family members should report to someone outside the family, but if it is a family member, their performance review should happen with an independent advisor as well. These rules help prevent disagreements later and spill-over between business and family relationships.IncomeThere must be clarity around how family members, in and out of the business, will be recognised and rewarded, and how they can develop and progress. Part of achieving the balance of a sustainable business will mean adopting rules that reflect the different roles family members can play in relation to the business as employees, directors and/or owners.Think about it like employees earning a market-based salary, family members who contribute as non-executive directors earning directors’ fees, and owners receiving dividends or repayments of capital in accordance with the pre-agreed plan. ControlThere also must be clearly defined rules in relation to the decisions that managers, directors and owners make in each of these roles. An important distinction to remember is that family members are ‘equals as members of a family’ but not ‘equals as managers, directors or owners of a business’. Some of these rules may reside in a family constitution, business policy or shareholders’ agreements.  The important thing is that they are clear, agreed, communicated and respected.EquityLike any business relationship where there is more than one owner, there needs to be agreement and communication on how people will behave as owners. This includes defining who can appoint directors, the payment of dividends, how decisions will be made, how and when ownership interests can be sold or transferred, and how the business will be funded.Respect the separation of powersFinally, the creation of a governance structure is all about clearly defining and respecting the separation of powers. Focusing on the above four pillars ensures that each area has clear governance, helping family business members avoid arguments and ensure the success of their strategy.At the end of the day, a lot of this comes down to ‘best fit’ rather than ‘best practice’. Families and the businesses they own need to do what’s right for them in their own context. Making sure a governance structure is in place that is tailored to the specific history and needs of the family will mean they manage and avoid arguments and problems down the road to a sustainable future. Liam Lynch is a Partner and Head of Private Clients in KPMG.

Aug 28, 2020

Giving a presentation is hard enough but now we also need to grapple with technology while keeping the audience engaged. Eric Fitzpatrick outlines how you can build on your presentation skills to effectively present remotely.  Giving presentations can be challenging at the best of times, but over the last six months, they have become a little more difficult because they need to be delivered remotely via platforms like Zoom, Webex, and Teams. We’re at the mercy of technology, feeling more distant from our audience, struggling to engage and not always certain that our message is getting through. The following ideas will help when delivering presentations remotely.  The old rules still apply Many rules that work for face-to-face presenting also work for remote presenting:Know your audience. Be clear about who you are presenting to so you can tailor your content to reflect what’s important to them. Clarify your objective. Know what you want your audience to do, think or believe at the end of your presentation. Give one message. Regardless of the length of your presentation, only ever deliver one message. The longer your presentation, the more points you will have to support that message but every time you present, deliver one message only. If your audience gets that message, that’s your job done. Structure your presentation. Build a deliberate structure into your presentation so that it is easy to follow and understand. Most presenters never include a deliberate structure, which can confuse your audience and cause them to switch off. Engagement is key. Build your presentation to include deliberate engagement techniques, such as questions, stories, humour, audience interaction. This will keep your audience enthralled and increase your chances of making sure they are still with you at the end of your presentation.   Rules for remote presentationsThe rules that are especially important for remote presenting include: Less is more. Make your presentation short. If you deliver 30 minutes face-to-face, try to cut it to 20 minutes for remote presentations. This will increase your chances of keeping your audience engaged.Slow and steady. Slow down when speaking remotely. Build-in longer pauses to allow your audience time to digest what you have said. Don’t be afraid of the silence.Visual impact. If using slides, make them stronger visually. Bigger, brighter images or graphs will provide a visual stimulus that will support your spoken word more effectively. Reinforce the message. Don’t finish with a slide that contains any of the following two words: “Thank you”, “Any questions?” or “The end”. Instead, finish with a slide that reinforces the message you want your audience to take away.  Craft your opening and closing word-for-word. The opening of your presentation is where you are most nervous, while the words you finish on have the potential to have the greatest impact on your audience. Crafting them word-for-word increases your impact at the beginning and the end of your presentation. Practice makes perfect. Practice more for remote presentations so that you can get as comfortable as possible with the content and the technology. Do a technology check in advance. Finally, there is a debate regarding whether a presenter should stand or sit when presenting. Do what is most comfortable for you. Sitting is more intimate and can build stronger connections, while standing allows you to be more passionate and energetic. Also, there will be occasions when the technology will let you down. Don’t be fazed by it. Most audiences are very understanding when this happens.Finally, the two most important considerations for remote presenting are whether you can be seen and heard. Given that this is how we will be presenting for the foreseeable future, there is value in investing in a good microphone, webcam and the right lighting. Eric Fitzpatrick is the owner of ARK Speaking and Training, the author of Persuade on Purpose: Create presentations that influence and engage.

Aug 27, 2020

How can boards navigate the many obstacles thrown up by COVID-19? David W. Duffy gives five tips on the way boards can future-proof their organisations.COVID-19 has thrown up incredible challenges for all boards. These include going concern issues, survival, future financing, managing a workforce remotely and staying market-relevant.Assuming the organisation can make it through COVID-19, one of the key questions to be addressed by the board will be to determine whether the organisation has a sustainable business model and, if not, what to do about it. While all organisations should continuously assess their business models, those in the education, tourism, entertainment, hospitality, sports, fintech, retail and restaurants sectors need to have a sustainable model to get them through COVID-19 and to the future beyond.Business models will be influenced by several factors, such as: effective leadership; the level of innovation at board and CEO level;the speed at which organisations are able to move online;being able to breakeven while reducing capacity by at least 50%;having the internal skills to enable a smooth transition to a very different working environment; andhow fast the competition is responding in comparison.While it's hard to know what the future will look like, the time to figure out an organisation’s business model will depend on the strength of an organisation's balance sheet. However, even large companies will have a limited timeframe in which to act.What does this mean for boards? This is a leadership moment and the board should seek to take control of an organisation’s destiny. Time will be of the essence – organisations do not have the luxury of spending four to six months developing a plan. They must find a way of doing it faster, or risk being overtaken by events, both short term and in the future. Five things boards can doInitiate a strategic review of the business. Assess whether the current strategy is fit for purpose by seeking evidence from the market. If it is not, initiate the development of a potential new strategy that is sustainable in the current and post-COVID climate. Bear in mind that no one knows what the future will look like. It is therefore essential to consider various scenarios in strategic planning and evolving a model that will work.If there is no future for the business, the board must look at ways to limit diminution in shareholder value by seeking opportunities to sell all or parts of the business, merge with a complementary partner or wind up.If a sustainable business model does emerge from the planning process, the board needs to carry out an evaluation of its skills and competencies in the context of the new strategy to see what new skills and experience will be required.Recognise that digital skills will need upgrading for all as the world and organisations move online, perhaps for good.Induct these new directors and get cracking!David W Duffy is the Found of the Governance Company and Co-founder and CEO of The Corporate Governance Institute.

Aug 27, 2020

COVID-19 highlighted weaknesses in many business continuity plans. Now is the time to reassess risk and update your plan, says Teresa Campbell.The public health restrictions introduced to control the spread of COVID-19 highlighted contingency planning weaknesses across many sectors of the economy. Consequently, businesses are currently reassessing risks and seeking new ways to mitigate against the potential disruption of local lockdowns, difficulties accessing necessary services or supplies, travel and logistics disruption and changing customer demands. The purpose of a contingency plan is for an organisation to return to its daily operations as quickly as possible with all risks outlined and actions identified to mitigate. The starting point is deciding what you want the plan to achieve. Allocate responsibility for the plan to a senior member of your team and, where possible, involve HR, communications, legal, health and safety, and operations team representatives. List out your organisation’s products and services, then examine the costs and revenue associated with each, update contact lists, identify the potential impact of disruption on employees, operations and customers, and work out what actions can be taken to protect against these risks. Make sure your contingency planning team familiarises themselves with relevant COVID-19 guidance. In the Republic of Ireland, this includes the Government’s Return to Work Safely Protocol and in Northern Ireland, the COVID-19: Working Through This Together.Where business activity temporarily ceased due to COVID-19, the complexity of the recovery process will need to be considered, with objectives for businesses likely to include:Protecting people (employees and their families, customers, suppliers): This may involve adapting workplaces to accommodate physical distancing, minimising social contact, improving cleaning and sanitisation. The plan should highlight the importance of staying away from work if employees have any symptoms. Communication will be key, and procedures should be developed for and conveyed to employees or close contacts who think they may have been exposed to COVID-19 or if they feel unwell. Finding ways to continue operating: If employees, customers, contractors, and suppliers cannot access your place of business, you must have back-up plans to remain in operation.Ensuring the business complies with health and safety legislation: This is essential to protect both your organisation and your employees.Protecting liquidity and financial stability: Monitor cashflow, optimise working capital, and avail of COVID-19 funding, grants and tax incentives (where relevant) to protect liquidity and financial stability.Prioritising remote working: Make sure that your remote working systems are in place at all times so that in the event of a COVID-19 outbreak in the area, the risk of exposure for employees can be reduced.Cross-training Train your staff so that they can cover for one another.Communicating the contingency plan: Clearly convey your contingency plan to internal and external stakeholders so that they understand how COVID-19 may affect your business and show them what they can do to help minimise the impact.Ensuring the business operates in a socially responsible manner: Act fast and don’t try to cover anything up. If there is an outbreak of COVID-19 in the area, use your contingency plan to keep your business operating while also being socially responsible. Going forward, businesses will need to continue to comply with public health restrictions, so regular monitoring of Department of Health and WHO COVID-19 updates is important. Contingency planning must become a routine part of every business operations; without one during these times, your business will fall behind. Teresa Campbell is a Director in PKF-FPM.

Aug 21, 2020
Show Me More News