As Chartered Accountants prepare for 2024, Ross Boyd outlines key measures to stay one step ahead in a challenging climate Whilst the dawn of a New Year brings with it a sense of hope and often optimism, accountants across the world should brace for a difficult 2024.  I established my practice over a decade ago, having earned my stripes for about 15 years before that, but in all that time I’ve never experienced such volatility and uncertainty.  The year that’s gone has presented the most complex economic test of a generation with the impact of two wars, Brexit and the pandemic completely transforming the business landscape.  I commend my fellow Chartered Accountants for powering through and continuing to do their best for their clients, and their own teams.  Chartered Accountants across the island will already be preparing for a tough 2024, aware of the implications of the current economic climate. The accountancy sector faces additional hurdles, including a skills shortage, retention issues, the continued rise of artificial intelligence and digital tools, and ongoing consolidation across the sector.  While changing business taxation is a big issue in the North, talent and technology are two common themes facing businesses across the island on the cusp of the New Year. Change continues at a relentless pace, and we must pause, embrace and adapt to remain relevant. Here are the key areas I recommend you focus on now, so that you can grow your business and continue to provide trusted and expert counsel to your clients.  Talent Labour shortages, paired with the capacity pressures these shortages cause, are likely to be the most pressing issues restricting growth across many sectors in 2024. Unfortunately, the war on talent is a trend our own sector will continue to battle too.  To put it bluntly, the sector’s image needs reinvention if it’s to continue attracting and retaining talent.  And to put it even more bluntly, investing in human capital is non-negotiable – after all, talent and growth are entirely correlated. As employers, we must adopt a two-pronged approach here.  First, we must invest in existing employees to support their continued contribution to the sector. I would advise any practice to objectively assess their employees’ skill sets and put the necessary plans in place to help them develop.  These development plans should look beyond ‘number crunching’ and financial recording to include a broader set of responsibilities, such as analysing forecasts, identifying emerging trends and networking.  It is crucial we ensure that the role of the Chartered Accountant isn’t limited or constrained, and that it is clearly positioned as that of strategic advisor. Second, we must focus on creating the type of organisation – and providing the kind of leadership – people want today.  Organisations that prioritise diversity, inclusion and flexibility are proven to have higher employee retention, and this is becoming even clearer post-pandemic as Gen Z becomes more present in the workplace.  Now aged between 11 and 26, this generation will account for 27 percent of the workforce by 2025.  At RBCA, we have spent a lot of time developing our graduate programme so that we can give our trainee recruits every opportunity to thrive, including supporting their interpersonal development. We also recently invested in a new office in Belfast to provide a physical environment that supports productivity and learning, and our annual Away Days continue to be invaluable to the culture of RBCA.  Technology  We have all come to understand the importance of digital tools in recent years and it is critical that, in 2024, we continue to use technology to improve both efficiency and security.  At RBCA, we moved to cloud computing in 2011 and we recently invested in new cloud technology, successfully tackling our tech stack. Some ill-advised pundits would argue that accountancy’s future is limited in our increasingly digital world, but our experience is that new accounting technologies have been complementary to our work.  Technology will never replace our profession, however. Why? Because, in my opinion, people will always buy into people.  Relationships and quality communications are the greatest tools at the disposal of today’s Chartered Accountant, providing that crucial competitive edge.  Often, we are so focused on our clients’ businesses and their success that we don’t focus enough on the resilience of our own, but it’s vital that we harness the passion and commitment that exists across the sector to thrive in the New Year.  Ross Boyd is founder and director of RBCA, a Belfast-based Chartered Accountancy 

Lorna Conn, CEO of Cpl, talks to Accountancy Ireland about her career, unconscious bias, and how women can support each other to advance together I have always wanted to be an accountant, so I studied hard at University College Dublin for my BComm, did the ‘milk round’ and was fortunate to get offers from all the ‘Big Five’, as they were known at the time.  I joined Deloitte, which sponsored my accountancy master’s degree, also at University College Dublin, and where I trained to become a qualified Chartered Accountant.  I stayed with Deloitte until I was an Audit Manager and gained experience I don’t think I would have if I hadn’t trained as a Chartered Accountant.  I travelled to the US for three months on CRH’s SOX (Sarbanes–Oxley) readiness programme and relocated to Australia on secondment to Deloitte Darwin. I also worked with some really great clients, including Kerry Group plc and Microsoft.  The Chartered Accountant skillset is incredibly transferable, and I believe career progression opportunities are limitless with this qualification. Many CEOs of large multinationals have started their careers as Chartered Accountants, and I think the new era of accounting is much more strategic in outlook.  Financial literacy is a remarkably marketable skill around the world.  Now, I am 43 years old. Married to Geoff with three children – Ollie (11), Lucy (9) and Louis (6) – and I’m CEO of Cpl – a talent solutions organisation with 14,000-plus staff operating in 13 countries with 47 offices worldwide.  I am a Senior Managing Executive Officer of our parent company, Outsourcing Inc (OSI), and a member of OSI’s Group Executive Committee. Finally, I am a Non-Executive Director of Bord na Móna plc. Life is fairly busy and I am lucky to have a great support network around me, including my husband. As someone once said to me – equality starts at home.  Geoff works full-time too, but we share the load 50:50 – and this includes the mental load of raising children. School WhatsApp groups, sports activities, their emotional well-being, etc. fall equally on both our shoulders. We are also privileged to have two sets of healthy grandparents who mind the children one day a week each. Mutual respect and equal opportunity Many women assume the role of working mum and caregiver all on their own but to their detriment. Not only do we need support from our partners, but we must insist on that support when it’s not forthcoming. This is the same in our profession as it is at home. As the stats show, accountancy is a popular profession for women – 43 percent of the members of Chartered Accountants Ireland are female, and the new student intake is 47 percent female.  While I have seen great representation at graduate level, however, this tends to wane on the climb to partnership. Our workplace structures were created in an era when women stayed in the home. These structures need to fundamentally change to accommodate a growing and hugely valuable female workforce. I have experienced conscious and unconscious bias – lazy assumptions that my ambition to succeed was somehow tempered by having a family.  To the best of my knowledge, I have never been adversely impacted in my career because I’m a woman, and I’ve only ever considered my gender as a positive attribute. Women bring different skills and perspectives to the workplace, and the right mix of men and women at the top table can be very impactful for an organisation.  I think men and women are hugely effective when they work together in an equitable working environment – one of mutual respect and equal opportunity. In my view, equity is top-down – see it at the top, and you will feel it throughout the organisation.  That said, I continue to be impressed by accountancy firms that promote women to partner mid-pregnancy and mid-maternity leave. It is a smart approach to retaining top talent, and I would like to see the trend of female representation in top finance roles continue. Empathy, compassion and communication While expertise and strategic acumen remain crucial in business, the need for empathy, compassion, the ability to communicate openly and transparently and to make decisions has taken centre stage, in my opinion. These are traits equally required of women and men to succeed today. Leaders who can understand and connect with their teams on a human level are not just desirable but crucial.  Empathy allows leaders to comprehend the unique concerns and aspirations of their employees, fostering a sense of belonging and loyalty. Compassion enables them to provide support during difficult times, building trust and camaraderie.  Moreover, open and transparent communication cultivates an environment of trust where employees feel valued and informed, empowering them to contribute their best.  The need for these skills has become pronounced in an era of social media and in a generation that wants to feel empowered, not controlled.  For many women, these skills come naturally, and that is the ace card we bring to the table.  I have developed these skills over time by seeing them as a strength and not a weakness. I also choose companies that align with my personal values. These are the environments where I know I can thrive. Women and career progression With the advent of gender quotas, ESG best practices, and an increasing focus on diversity, equity and inclusion, I think this is our time to advance in the workplace.  Businesses need more strong women at the helm. With better family-friendly structures (hybrid working, affordable childcare, etc.), we have a good shot at attracting, advancing and retaining women in the workforce.  If there are issues with advancement in your workplace, I have found the best tactic, assuming you’ve exhausted all avenues, is to move on. There are lots of great companies out there, and you are the navigator of your own career.  You are not entitled to career progression. It’s your responsibility to create opportunities and pursue them elsewhere if you have reached your cap with your current employer.  It might be nerve-wracking to move on from what’s comfortable and familiar, but I have always looked at my career as a 40-year horizon – plenty of time to take risks and explore new opportunities. And women should be taking advantage of their networks. Mentoring and networking enables women to broaden their circle of advocates.  People who will publicly endorse and support you can be a very valuable asset to have. I think women, in particular, need to advocate for each other more – at all levels across an organisation.  I’ve certainly been helped along the way, and it has been hugely impactful for me during my own career advancement.  Authenticity is key. Being unapologetically ‘you’ is incredibly empowering.  The old stuffy image of an accountant is long gone. There is widespread recognition now that accountancy skills are enduring, and they will serve you in every facet  of life.  If you’re starting off in the profession, absorb every bit of knowledge you can from your colleagues as you progress through your accountancy qualification. This will be the foundation for a successful career in private practice or in industry – the options are literally limitless. Interview by Liz Riley

Three Chartered Accountants share their perspectives on the changing role of the Chief Financial Officer in today’s fast-paced business, regulatory and societal environment Johnny Harte Founder True Fund Solutions  The Chief Financial Officer (CFO) in a company has long been considered the chief bean-counter whose job has been to say ‘no’ more than ‘yes’.  And in the past, this has been true. CFOs today still have responsibility for the core finance function in an organisation, but they are now increasingly regarded by management and key stakeholders as value-creation partners in a business, and their expanding role reflects this. As a starting point, to realise more efficiencies, CFOs are now investing more in technologies to assist the finance team. Transactional activities are being replaced by artificial intelligence and machine learning technologies, and the way in which financial information is being presented, shared and consumed has changed in line with the expectations of end-users. The CFO may have responsibilities outside the core finance function, too, like human resources and IT, so collaborating with many other departments in the business is more important than ever.  New initiatives to address issues such as environmental, social and governance (ESG) concerns fall under the remit of the CFO as well.  As an example, the financial implications and reporting obligations of ESG are felt company-wide, but they ultimately feed into the finance function. Companies find themselves in times of rapid change that offer potential opportunities, like product innovation, access to new markets, and even the development of new business models. Change can also result in potential risks such as cyber security, geopolitical and environmental concerns, however.  CFOs, by necessity, find themselves at the heart of all of this and play a vital role in navigating the landscape and advising on strategic decisions that can shape the future of the business. CFOs are in a unique position in a company in so far as everything that is important eventually gets reflected in numbers. The old line of “you can’t manage what you can’t measure” still holds true. Karen Sugrue Hennessy  Sustainability Consultant and CEO Real Leaf Farm As our nation, along with the rest of the world, faces mounting pressure to fulfil its climate change commitments, Chief Financial Officers (CFOs) are stepping into a critical leadership role.  According to the Environmental Protection Agency (EPA), Ireland is currently on track to achieve just 29 percent of its committed 51 percent net zero target by 2030. Finance stands as a pivotal enabler in the acceleration of climate action, as emphasised by the Intergovernmental Panel on Climate Change report (AR6).  CFOs, accountants, bankers and directors are primed to lead the charge by shifting their focus away from financing environmentally detrimental projects and redirecting their efforts toward funding initiatives that bolster the transition to a sustainable economic model. By 2029, all businesses, including SMEs, will be mandated to enhance transparency and accountability concerning corporate sustainability, operating under the Corporate Sustainability Reporting Directive.  Significant challenges lie ahead, however. Recent research conducted by LinkedIn revealed that close to 95 percent of financial professionals in 48 countries, including major European nations, lack essential green skills.  Shockingly, Ireland ranks at the lowest end of the spectrum in Europe, with just 0.16 percent of finance job postings related to green skills, according to LinkedIn data. So, where should CFOs begin their journey to upskill in this pivotal area, which is undeniably becoming a sought-after area of expertise?  An excellent starting point is joining Chapter Zero Ireland – a collaborative initiative between Chartered Accountants Ireland, IBEC and the Institute of Directors.  Chapter Zero’s primary purpose is to ensure that companies are well prepared for the future and that global net-zero aspirations translate into robust plans and measurable actions.  The evolving role of CFOs in Ireland is not merely a response to regulatory demands; it represents a unique opportunity for financial leaders to champion a more sustainable and responsible future for both their businesses and the nation.  Embracing this transformation is not only a strategic imperative but a moral obligation that can reshape Ireland’s path toward a greener, more prosperous future. Mark Mulqueen CFO KPMG Ireland Like other C-suite roles, the Chief Financial Officer (CFO) role has evolved significantly, reflecting the evolving landscape of business, technology, regulation, global markets and shifting expectations from internal and external stakeholders.  In addition to the traditional CFO responsibilities as financial ‘gatekeeper’, the role has broadened beyond core topics to become more like that of a strategic partner. At the centre of this evolution is a business appetite for greater insights, data-driven commercial partnering, and a more significant focus on profitability and an organisation’s need to transform operating models and core supporting technology.  Consequently, CFOs must keep up to date with the changing landscape of data, technology, taxation and compliance while also managing the organisation’s financial health. As business models continue to transform, looking to the future, this presents opportunities and challenges for CFOs. The value of data – going beyond traditional finance data to provide valuable insights to enhance forward-focused decision-making. Embrace the challenges of data – overcoming disparate systems with multiple data sources to ensure reliability and accuracy is critical to the role. Automation – managing the changing role of technology and staff in traditional finance processes. Talent retention and acquisition – with a broader set of new challenges, it is essential to have the right skills in the team to leverage the opportunity presented by data and technology. Risk – managing risks posed by fraud and cybercrime. Expectation gap – managing the strategic role of the CFO versus the volume of traditional finance work. Leveraging technology, adding new skills to finance teams, and managing this change will allow CFOs to help companies become more agile and responsive to market changes.  The result will provide more value through greater insights on a broader range of topics and the ability to support faster data-driven decisions through automation and technology while simultaneously supporting business change and managing new risks posed by regulation toward sustainable, profitable growth.  The one constant that will remain for CFOs is change.

The launch of CleverCards marks the latest chapter in Kealan Lennon’s entrepreneurial story and the FCA has ambitious plans for his latest venture It was while taking part in an IDA Ireland trade mission to China in 2019 that Kealan Lennon hit upon the first spark of an idea for CleverCards, the payments platform provider that would, four years later, bring to market what the serial entrepreneur calls “Ireland’s first tax-free digital Mastercard”. “It all goes back to that trip because that’s when I noticed that no one around me was using plastic cards to pay for anything,” Lennon explains. “People in shops and restaurants were using their mobile phones to pay wherever I went and, at the same time, I could see neobank players like Revolut, N26 and Starling starting to gain traction in Europe. The shift was obvious, but the main focus was the consumer market.” Lennon saw a gap in the market for a payment processor that would focus on businesses rather than consumers and set about developing the technology that would underpin the CleverCards platform. “We agreed a partnership with Mastercard pretty much right at the beginning; becoming a payment processor is effectively the foundation of the entire business,” Lennon says. “For a small company trying to integrate with one of the world’s biggest financial service providers – it was a very tall order. We worked with Mastercard in Ireland, then London and Belgium. It took three years.”  CleverCards launched its first product – a digital prepaid employee gift card – just over a year ago on the back of the Small Benefit Exemption introduced by the Irish Government in 2022.  This exemption allows employers to give their employees up to two small benefits each year, tax-free but capped at €1,000 overall. These benefits cannot be made in cash, nor can they be redeemed for cash. They can only be used to purchase goods or services. “It amazes me how few employers actually know about this benefit,” says Lennon. “It’s frustrating. The Government brought this in, and people just don’t know about it.” Cue CleverCards: “We’re the only game in town here. Employers can order our gift cards online on clevercards.com and email it out to their employees loaded with credit of up to €1,000 tax-free,” says Lennon. Employees can, meanwhile, use CleverCards to pay for goods or services anywhere online or in-store using Google or Apple Pay contactless technology. “They can use the cards for cost-of-living expenses and they can use them in small shops and restaurants the length and breadth of the country, whereas traditional plastic gift cards are restricted to a limited selection of retail networks.” Business strategy So far, CleverCards has signed up over 5,000 businesses and 250,000 cardholders. The company generates revenues via a Mastercard fee on all transactions and also charges clients a small handling fee.  Lennon’s ambitions for the business stretch far beyond employee gift cards and the Irish market, however. “Right now, our focus is Ireland but also the UK. We’ve seen pretty rapid growth and we’re expecting to do significantly more business in the run-up to Christmas,” he says. “Looking ahead 18 months, our goal is that every employee in Ireland and the UK has one of our digital Mastercards on their phone.” In the New Year, Lennon also plans to launch CleverCards’ second product – a digital Mastercard for employee expenses. “We want to start expanding further into Europe from late 2024 and, ideally, we want our existing multinational clients in Ireland and the UK to carry us into new territories by recommending CleverCards to other offices in their European network,” says Lennon. “It’s much faster and more cost-effective than spending millions on marketing in each new market. You’re letting your existing customers bring you there instead.  “That’s our strategy and our USP is that our digital cards can be used for all sorts of expenditure, they give control to the financial controller who has visibility of where spend is going, and transactions are automatically authorised because we are the payment processor.”  Early career Lennon’s confidence in CleverCards’ potential is drawn from a longstanding career in entrepreneurship and a seemingly insatiable desire to identify a gap in the market and run with it. Originally from Leixlip in Co. Kildare, the FCA has had an “eye out for opportunities” almost from the very beginning of his working life as a Chartered Accountant. Lennon initially qualified with Simpson Xavier and worked in corporate finance before leaving the firm in 1992 to strike out on his own. “I took the commencement route to becoming a Chartered Accountant. My first choice on my CAO form was commerce, but I missed it by one point and I couldn’t wait around,” he says.  “I was lucky that I started my career under the leadership of Anthuan Xavier at a very entrepreneurial firm. Being able to get in front of clients straight away was a buzz for me.” Lennon decided to leave the firm aged just 23, however, so he could set up his own financial consultancy, offering corporate finance, tax and accountancy advisory services. “I took an office with a big brass sign on the door and I landed my first client, quite honestly I’d say simply because I was a one-man show so I was cheaper than any of the bigger firms,” he says. “That client owned Kartoncraft, a pharmaceutical packaging business, and he had an offer on the table to sell his business to Inistech, an Irish plc at the time. He hired me to manage due diligence.  “The guy they had hired on the corporate finance side was also a one-man show. Once I had a full understanding of his selling price, I said to the client one evening ‘don’t take this the wrong way, but I think your business could sell for a lot more’. “I got the whole textbook explanation of ‘well, it’s an x percent discount on PE multiples and so on’, but he listened to my advice and came back having doubled the price of the business. He fired his corporate finance advisor and hired me instead.  “The Government and IDA Ireland at the time were focused on bringing more pharmaceuticals into the country. I looked at this strategy, put a five-year plan together for my client and, about six weeks later, we went back to the plc and we doubled the selling price again.  “My client made four times his asking price from the time I started working with him. He paid me £100,000. I was able to buy my first house for cash at just 23 and I had a red BMW. I really thought I’d made it.” Kartoncraft and MeadWestvaco But more was to come for Lennon, who was subsequently asked by Inistech to join the board of the newly acquired Kartoncraft in the role of Finance Director. Within 18 months, aged just 25, Lennon had led the management buy-out of Kartoncraft from Inishtech Plc, backed by AIB in Ireland and Dresdner Kleinwort Benson, a London-based private equity house.  He sold Kartoncraft five years later for $20 million to the NYSE-listed MeadWestvaco and joined the US packaging company’s Board of Directors as Head of Mergers and Acquisitions for Europe. “I was the youngest board director of MeadWestvaco Europe, which had 35,000 employees worldwide,” Lennon says. “It’s interesting now to see the media reports about MeadWestvaco and Smurfit Kappa merging, because when I sold Kartoncraft, Smurfit was the underbidder. “It’s quite a ‘full circle’ feeling to see them coming together to become the biggest packaging group in the world, and those early connections are still part of my life today. Both Michael and Tony Smurfit are investors in CleverCards all these years later.” By the time he left MeadWestvaco in 2007 to set up investment firm K Partners, Lennon was ready for a new challenge. “That corporate role was kind of like an on-the-job MBA. I learned so much about strategic development, people management, motivation and incentivisation. “It gave me an incredible insight into how large corporates work, but, deep down, I am an entrepreneur and I wanted to build something again from the ground up. I had an eye out for potential acquisitions and decided to go for it.” K Partners went on to participate in private equity and VC-backed investments spanning the media sector, publishing, telecoms, leisure and hospitality. Its interests included education publisher CJ Fallon and broadcaster Wilton Radio, now trading as iRadio and recently acquired by Bauer Media. The Netflix of payments Lennon’s vision for CleverCards is to see the venture become the “Netflix of payments”. “Our focus isn’t streaming obviously but I see our market opportunity in the same way,” he says.  “It’s pretty clear to me that everything is moving to the mobile phone and our focus is the configurability of payments. The market is wide open. There’s a big blue ocean of potential there and nobody else is doing it.” That said, he is under no illusion that crossing this “big blue ocean” will be plain sailing all the way. “It can be tough going in any early-stage business when you are trying to spot a gap in the market, launch a new product or service to fill that gap, and keep driving it through in the face of the forces that might be going against you,” he says. “There are challenges every day in business. People talk about an early-stage business being a rollercoaster and that is so true because it implies ups and downs,” he says.  “What people don’t realise is that there can be an up and a down in just one day. I don’t mean a small move in either direction. I mean really big ups and really big downs. You just have to deal with it and move on. You have to be resilient.” Interview by Elaine O’Regan

Audit committees face increasingly complex risks in modern business, according to the latest KPMG survey. Arlene Harris speaks to Niall Savage about the four main risks and how committees can mitigate them KMPG recently published the results of its Global Audit Committee (AC) Institute survey, which collates the views of 768 AC members and chairs, of which 31 were operating in Ireland.  Niall Savage, Partner and Head of Audit Markets at KPMG, says the survey results indicate that, while it may seem at odds with its traditional role, the AC and its members continue to have a “bellwether role for the business as they scan the risk horizon”.  Consequently, ongoing geopolitical issues, cyber threats, the rise of artificial intelligence (AI) and considerations around environmental, social, and governance (ESG) will remain top of the AC agenda in the coming months. “The traditional and essential role of an AC is overseeing the numbers, controls and, as its title suggests, the audit process – both internal and external,” he says. “So its priority is more in the monitoring than the advising. This work is critical for ensuring financial transparency, confidence and compliance but does not encompass the broader aspects of business. “However, given the typical composition of the AC, the external non-executives with wide-ranging experience, the effective AC Chairperson draws upon the insights of their members to identify and advise on risk areas and strategies to address them.  “The findings suggest that the things driving the agenda of the AC are big-picture risks that underpin their organisations’ strategies. And four key themes – geopolitical, cyber, AI and ESG – were identified as foremost in the minds of AC members.” Indeed, these four themes don’t come without challenges, but there are ways in which ACs can navigate them in their role, supporting the board and management. The effects of risk on the market “Volatility by its nature creates uncertainty in the market, making it difficult for businesses and their stakeholders to make strategic operational and investment decisions,” says Savage. “For example, consumer sentiment in uncertain times can fall rapidly, with non-essential purchases frequently deferred, impacting large parts of the consumer market and leisure industries. “Geopolitical volatility can also undermine investor confidence, cutting off access to finance and creating barriers for businesses through restricted access to markets, currency fluctuations and shifts in trade policies. There is also a heightened risk of supply chain disruption.” In the last 12 months, ACs have been faced with:  post-lockdown uncertainty, which is driving cashflow forecasts (and risks) of how to meet consumer demands; geopolitical conflicts, such as the Russian invasion of Ukraine, necessitating a rapid response to secure the safety of people and assess the impact on the business in addition to instability in Latin America and the Middle East; rapid and often unexpected inflation across energy, wheat and other commodities, which created unforeseen risks of business failure if these could not be passed on easily; increased interest rate rises and global financial market fluctuations in response to inflation, which changed base case forecasts for investment decisions, funding, and potentially going concerns; ongoing global trade tensions, including those between the US and China, with increasing tariffs, which had ripple effects on global supply chains; and the fallout from COVID and Brexit, which continued to affect the global economy. Geopolitical risks “It is difficult to predict what the next 12 months have in store, but some key actions for AC members to manage these risks include engaging with management and stakeholders to understand their assessment of geopolitical risks and existing strategies to mitigate those risks, and asking management to provide timely updates on geopolitical developments and the organisation’s risk mitigation efforts,” said Savage.   “Also, understanding the geopolitical risks that can impact the organisation and monitoring global political developments, regional tensions, trade disputes, regulatory changes and other geopolitical factors that may have implications for the organisation. “And, staying informed about current events and diplomatic developments that can impact the organisation’s operations – along with knowing if the organisation is especially exposed to certain regions or risks, should the AC consider recruitment or training to ensure that they have the expertise to address any challenges they face, is also important.” Savage also suggests assessing an organisation’s exposure to geopolitical risks, understanding management’s approach to contingency planning, and understanding the full list of regulatory compliance requirements and whether the organisation has processes in place to identify, monitor and adhere to applicable regulations.  ACs must also consider with management the need for scenario planning to model impact and respond to geopolitical events. Cyber risks Advances in modern technology have also brought about a growing number of cyber threats, and in the past 12 months, many Irish businesses and organisations have reported data leaks and thefts as cybercriminals become more sophisticated and professional in their approach to both getting access to systems through ransomware and social engineering but also monetising this access.  As firms try to protect themselves from this, the list of targets and potential weaknesses continues to grow with the proliferation of the internet of things (IoT), which may not have the same level of security and is, therefore, easier to compromise. “For those engaged in public work, there is an additional political dimension and risk to cybercrime with nation state targeting for political gain, which has seen recent coverage of European Commission staff removing certain apps from their phone restrictions on Telco suppliers due to concerns over security,” says Savage. “But there are some essential actions that ACs can take, which include understanding the cyber risk landscape, the type of threats it faces, potential vulnerabilities and the impact of a cyber incident.  “They can also evaluate the organisation’s cybersecurity governance and strategy while focusing on risk assessment, incident response, training and vendor competence. It is important to be informed – stay on top of cybersecurity initiatives and maintain open lines of communication to address any concerns or gaps identified.” He would also encourage organisations to consider engaging external cybersecurity experts or conducting independent audits/penetration testing to assess the effectiveness of these controls, to ensure the AC is informed of cybersecurity incidents and evaluate the organisation’s response and promote cybersecurity awareness through training and incident reporting and ensure that appropriate cybersecurity risk reporting mechanisms are in place. AI risks The advent of AI has brought a new set of risks to business. “Although long discussed and the subject of many films (Terminator 2 springs to mind), the potential impact of AI really hit home late last year with the launch of ChatGPT, which was quickly followed with spectacular claims of cost savings, entire professions wiped out and of course the danger of ‘the rise of the machines’,” says Savage. “Clearly, there are significant risks and opportunities for businesses and ACs to deal with, many of which are ‘unknown unknowns’ to combat this and assess risk.” In the face of this new business landscape, “ACs should understand the concerns and opportunities for people, customers, suppliers and regulators. They should try to understand how best to get the right level of knowledge, evaluate the existing risk management framework to assess whether additional controls are needed, consider policies around the implementation and use of AI and review critical AI implementation projects.” ESG risks The final issue Savage addresses is ESG, which he says has been an “alphabet soup of regulation” for the past few years – and KPMG research indicates compliance with standards is only one of the ESG risks occupying the minds of AC members.  “There is a broader menu of risks to consider, which impact reputation, performance and financial success,” he says. “Failure to address these can lead to reputational damage and financial implications. So, AC members should consider the potential reputational risks associated with the company’s ESG performance and how they are managed. Climate change risks can impact the value of assets, and non-compliance can result in fines or penalties.”  To address these risks, it is important for ACs to understand and work closely with all stakeholders including management and internal auditors. Areas of focus should: ensure the AC has the necessary expertise to effectively assess ESG risks – this may involve recruiting or training existing committee members; engage with investors, regulatory bodies and industry associations to understand their expectations and perspectives on ESG; develop a list and understanding of ESG risks relevant to the company across climate change, labour, data and inclusion and diversity; review how data is currently captured and analysed and how reporting is verified; look at the existing risk management practices and policies and assess the key controls and how the risks are currently monitored and reported; benchmark these to peer groups and industry standards to ascertain whether they align with recognised frameworks; and seek regular updates on ESG initiatives and consider external assurance on related reporting.  “There are more insights to the survey, and it is interesting to benchmark different priorities across the regions, priorities around finance team talent, the need for in-person time with management and a focusing agenda to maximise effectiveness,” says Savage. “However, by elaborating on and identifying some common-sense actions on the four critical themes – geopolitical, cyber, AI and ESG – we have supported AC members for the next, hopefully, less volatile, 12 months.”  

Accountancy Ireland sits down with Carol Phelan, CFO of Dalata Hotel Group. From her journey at one of the Big Four to private equity, Phelan shares her insights into the business side of the hospitality industry and Dalata’s people-centric approach to success A lifelong interest in business took Carol Phelan on a career path that has seen her work in a Big Four firm, an Irish private equity house and, ultimately, become CFO of Dalata Hotel Group – Ireland’s largest hotel operator. Speaking to Accountancy Ireland  in Dalata’s new state-of-the-art headquarters in Sandyford in south Dublin, Phelan explains how she grew up on a farm in County Laois and was always interested in business.   “At school, I gravitated towards business success stories, particularly Irish ones. I was always strong with numbers – they made sense to me, but it wasn’t just about balancing the books. It’s what people are doing with the business. I did a broad Business degree at the University of Limerick. I specialised in accounting and finance and did a Master’s in Accounting. I knew it was a qualification that would stand to me whatever I did.” Her undergraduate degree included an internship component, and in a forerunner of her future career, it took her to work in a hotel in France for nine months. “I got to work with numbers in a real business and found I could bring some skill to that.” After college, she joined KPMG and qualified as a Chartered Accountant.  “I wanted to develop my skills and build my professional and business network,” she says. “I worked in the financial services and transaction services divisions. That allowed me to work with companies doing deals and making strategic acquisitions. I was able to go into businesses of different sizes in various sectors and work with leading advisors. I enjoyed my time with KPMG.” She also learned something about herself. “I realised I didn’t want to be an advisor. I wanted to be the one making the decisions and living with them.” Moving on from the Big Four Phelan joined private equity house Ion Equity in 2007, just before the global financial crash hit. It could hardly have been a more challenging time for that sector.  “It took me out of my comfort zone,” she says with no little understatement. “It was about going in, putting deals together, and putting money behind them. It was also about helping finance teams in investee companies deal with the challenges presented by the crash.” Given her qualifications and experience, she was often asked why she didn’t go to one of the major international private equity firms. “I wanted to be where the leadership was,” she explains. “I wanted to be close to the decisions. No matter how small a role I had, I wanted to be part of the decision making.” Her next move saw her join Dalata in 2014.  “I wanted to get into the finance function of a large Irish company,” Phelan explains. “The Dalata opportunity came up, and it ticked all the boxes. The people leading the company shared my values – ambition, a desire to grow and challenge oneself, and always wanting to do better. Dalata has that in spades.  “The company has always been led by people very concerned about building a business that works for everyone and not just about generating higher numbers and profits. They want a business that creates opportunities for everybody. I knew the people in Dalata before I joined, so I knew it was all true.” The company was on the cusp of significant change when she joined. “It was just after the IPO. All the structures had to be built to accommodate it. I was able to use my skills for that. It was great to have that challenge.” A people-centric business The culture of the business is very important to Phelan.  “Hospitality is a very people-centric business. It’s about more than numbers and the bottom line. That sits well with me and my background. Dalata has always said it wants people with ambition: ambition to grow and develop themselves but to bring others with them, as well.” Dalata places great store by training and development, with over 113,00 training courses completed by its staff in 2022.  “The company is growing and ambitious. I can’t tell you the opportunities that will exist in three years, but we will put everything behind people who want to grow and develop.  “People who joined the company in 2015 are now working in roles that didn’t exist back then. We give people support to get the experience and skills and take on those roles. We opened seven hotels in 2022, and the majority of the leadership teams in them is made up of people developed in Dalata. That creates opportunities for those following behind them.”  Career mobility is also important. “You can join the finance team here, but who knows where you will end up. We have operations people who ended up in finance and operations people who started in finance. You can’t pigeonhole people. As a major plc, we also have all the finance strands here so someone can build a full suite of experience.” There is a need to look beyond functional skills, she adds. “You can develop skills for a role in finance, but it has never been just about the numbers. I can tell by sitting across the table from someone if targets will be met without looking at numbers on a page. We all have that ability if we work on it.” The people-centric approach delivers real business benefits. “We see ourselves as an employer of choice. That’s very important in the hospitality industry. We are not as challenged as others in the industry regarding recruitment. We are now back at 2019 job vacancy rates. We will always have several vacancies. That’s the nature of the business.” “The only way was up” She was appointed Group CFO on 1 July 2021. “The only way was up, having been shut down for most of the previous two years [during the pandemic],” she says with a smile. “It was easy coming in after that. Anyone can look like a hero in those circumstances.” Looking back on COVID-19, she believes it showed Dalata at its best.  “We never panicked. We stood back and said it would resolve itself. That was based on a genuine belief that science would get there. That was our underlying expectation, and we had to be ready when we came out the other side. We looked at it through a longer lens. Everyone stepped in to do whatever needed to be done. Our bottom line was to protect our people. They represent our biggest asset. The accounting standards haven’t figured out a way to measure the strategic value of people yet, but we know what it is.” The aim was to keep people employed during COVID-19.  “Our focus was on everyone doing the right things in the right ways to keep people on. That’s the Dalata way of doing things. We ensured all our people had full access to the Dalata Online Academy. Even at home, they could continue to grow and develop.” The operations software platform also proved its worth. “We use it in the hotels for people management, rostering, onboarding, as a communications tool, and for pushing out video updates,” Phelan explains. “We have a lot of young people in the industry, and the ability to access information over the phone is so important to them, particularly when they can’t get together physically. We ensured people remained connected to the business even when apart.” That approach was extended to customers, landlords, suppliers, bankers and other stakeholders.  “We gave refunds to customers when they asked for them. We never even considered not paying rent. All our decisions were taken with a view to the long term. That will stand to us in the future.” Growth Having delivered record profits in 2022, there will be no let-up in the growth and development of Dalata Hotel Group, Phelan says.  “We now have 52 hotels in Ireland, the UK and continental Europe, and another five in the pipeline in London, Brighton, Manchester and Dublin. Forty percent of our rooms are in Dublin, 40 percent in the UK, and the balance is in regional Ireland and continental Europe.  “We have great ambitions for continental Europe, but our priority growth focus is the UK. There is a gap in the four-star hotel market, and we are in a great position to fill it. Dalata is a very ambitious company. The focus is always on what’s next. I love that attitude. But there is strong discipline. There will never be trophy assets in Dalata. Everything must make sense for the broader business and deliver a return for our shareholders.”  She concludes by pointing out that her own role reflects the core values of Dalata.  “I am an executive director and sit on the board as well as leading the finance team. I must be able to contribute to Dalata strategically, not just in my own expert area. Board members need to be able to challenge each other. We may approach it from slightly different angles, but it’s important to hear everyone’s views. That’s the Dalata culture overall. People are encouraged to bring their individuality to work. Everyone is encouraged to have a voice and to speak up. Who we are and where we’ve come from shapes that. We all bring different perspectives to the debate.”