Fostering a culture of equity, inclusion and belonging for members from minority ethnic groups is the aim of the Institute’s new Ethnicity Network Group An inclusive culture that promotes and supports diverse perspectives can stimulate innovation and improve performance for organisations in all sectors. This is according to Deborah Somorin, Manager, People Advisory Services at EY Ireland, and Chair of the recently launched Ethnicity Network Group at Chartered Accountants Ireland. The Ethnicity Network Group has been established to develop a more inclusive profession by helping organisations to foster a culture of equity, inclusion and belonging for employees from minority ethnic groups. “I always look to the research to work out value and significance and it really struck me to discover the very concrete benefits for organisations that are ethnically diverse,” Somorin explains.  “According to McKinsey, these organisations are 36 percent more likely to outperform their peers financially, because inclusive culture helps to attract and retain talent.” A voice and platform The Ethnicity Network Group will organise a programme of events, provide training and resources for organisations, and develop a mentoring programme to support members and students from Traveller, Black, Asian and other Minority Ethnic groups.  Its aim is to encourage and facilitate the discussion of issues relevant to people in these minority groups and give them the voice and platform to identify solutions.  “It’s really about expanding the conversation around diversity, to further strengthen the cultural intelligence within our profession and beyond, and to continually challenge biases in the highest and best way,” says Somorin. “If you look at the top-performing organisations in the McKinsey research, they don’t just hire for diversity, they also invest in the cultural initiatives needed to integrate people of all backgrounds and ethnicities into their organisations.  “They focus on training and mentoring, which is a really important part of creating and supporting an inclusive culture, and all of this helps to attract and retain the best talent.” Creating awareness The Ethnicity Network Group was formed in late 2022, supported by Shauna Greely, former President of Chartered Accountants Ireland and current Chair of the Institute’s Diversity and Inclusion Committee. In addition to Somorin in the role of Chair, Ethnicity Network Group members include: Vice-Chair Rutendo Chiyangwa; Khadijat Lawal; Aisling McCaffrey; Lloyd Mufema; Reabetswe Moutlana; Mwale Tembo; and Seun Olayanju. “Creating awareness is a big part of what we want to do. We are all different and it’s really about being open to learning and asking questions,” explains Khadijat Lawal. “We want to support members and students from Traveller, Black, Asian and other Minority Ethnic groups, but also to open up the conversation in the wider profession, to integrate and celebrate, because—while we are different—there are also so many similarities between us.” A Financial Accounting and Advisory Services Senior at Grant Thornton Ireland, Lawal has had different experiences at work and in education, not all of them positive. “I’m used to being in environments where I am either the only Black person, or one of the few Black people in the room. Sometimes, I have felt that I couldn’t fully be myself, that I couldn’t share parts of my culture and who I am,” she says. Lawal joined Grant Thornton in 2019 as a trainee. “One of the first things I noticed was colleagues of different ethnic minorities,” she says. “They were eating their own food and speaking their own language. That communicated to me that my difference would be welcomed here.” And Lawal noticed this commitment to true diversity and inclusion (D&I) in other areas too. “My manager at the time was always so curious about where I was from, and about my differences,” she says.  “I am from Nigeria and Yoruba is my native language. This manager looked up how to say ‘thank you’ in Yoruba for me. I found that so endearing because he didn’t have to do it.  “It just shows how much it really matters that we feel we can be curious about one another, but also kind and genuine. “The Ethnicity Network Group is about getting that message out there and helping people to have these conversations in the right way.” Positive energy Aisling McCaffrey is Director of Sustainability and Financial Services Advisory, Grant Thornton Ireland. She was invited to join the Ethnicity Network Group by Lawal, her colleague at the firm. “I was delighted to be asked. When we had our launch in December at the EY office on Harcourt Street, you could just feel this amazing, positive energy in the room,” says McCaffrey. The launch felt especially timely, because, says Caffrey, “diversity of thought really matters now. It’s a reflection of a changing dynamic in Ireland, and it’s hugely important”. Fostering a sense of belonging, and creating a supportive, inclusive culture, is essential for all employees in the modern workplace. “The way people view work, and what they want from an organisation, changed a lot during the pandemic,” says McCaffrey. “The lockdowns, social distancing and remote working gave people a lot of food for thought in terms of: ‘What do I want to do?’ What do I want from my work? What do I value?’ “People now really want to be part of an organisation that recognises them, not just in terms of what they can deliver, but also what they bring to the organisation as an individual. “We want to promote a sense of belonging and inclusion, we want to celebrate diversity—but it’s also really important that the Ethnicity Network Group can generate measurable outputs in time.  “For me, that’s where the potential for an Ethnicity Pay Gap Report comes into play, because while it’s all well and good for an organisation to say that they have an inclusive, equitable environment, we need to see that reflected in pay and leadership.” Member survey The launch of the Ethnicity Network Group in December followed a survey of over 1,300 members and students of Chartered Accountants Ireland conducted by Coyne Research. The findings revealed that, for 40 percent of members who claimed to have witnessed or heard discrimination against others, it was based on ethnicity.  Two-in-three of the students surveyed reported the same. “Changing this is really about action: ‘What can you do to bring about change?’” says McCaffrey. “People are generally self-aware and often you will find—especially in a work environment—that they are not sure how to approach questions or conversations around cultural difference. “They are concerned that they might offend someone if they say the wrong thing. So, it’s about being able to create a safe space and a learning environment that benefits everyone.  “It’s about understanding that, if someone says the wrong thing, you feel comfortable enough giving them feedback and they feel comfortable enough accepting it.” Importance of training For Somorin, the level and quality of the D&I training available to employees in any organisation is of the utmost importance. “If it is approached as a tokenistic tick box exercise, it’s going to feed into how importantly people view it,” she says.  “I’ll give you just one example of why this matters. For Irish people, where you come is a really big thing—if you’re from the Carlow clan or the Mayo clan—it is a huge part of people’s identity here. “But, if you don’t look stereotypically Irish, people will frequently ask you where you are from, and when you tell them you’re from Ireland, the next question will often be: ‘But, where are you really from? Where are your grandparents from, your great grandparents?’ “It comes from trying to place your clan, I think, and even though there is rarely any malice behind it, you do need to educate yourself as to how that can make someone feel. “When you are facing the same question over and over, it can invalidate your own sense of identity as an Irish person. It can make you feel ‘other’ or singled out.” Rules of engagement In organisations that have a truly inclusive culture, and an appropriate level of training, Somorin believes that people will organically begin to develop an awareness of the impact questions like this can have. She calls this learning the ‘rules of engagement’. “For me personally, this is a big selling point at EY. These things are made very clear even down to the performance evaluation process,” she says.  “We’re constantly encouraged to take a step back and ask ourselves, ‘if someone did or said something in a different way, but it led to the desired outcome, can we really view it as a negative?’ “Not everyone has grown up in a diverse environment and not everyone inherently understands how they should behave and what they should or shouldn’t say or ask. And it’s okay not to be perfect. What really matters is that we are all open to learning.” 

A truly diverse and inclusive workplace can boost business by promoting innovation and enhancing reputation, says Sandra Healy, founder and CEO of Inclusio Employers who treat diversity, equity and inclusion (DE&I) as a “tick box” exercise are missing a valuable opportunity to improve, not only their organisational culture, but also their ability to attract and retain talent and improve business performance and profitability. So says Sandra Healy, founder and CEO of Inclusio, the Irish tech start-up behind a first-of-its-kind platform offering a scientific, data-led approach to measuring DE&I in the workplace. Founded in 2016, Inclusio is now on the path to global growth amid plans to expand overseas and increase its Dublin headcount from 35 to 120 by 2025. The global expansion will be financed by the company’s Enterprise Ireland and VC backed €6.2 million investment. In addition to her role at the helm of Inclusio, Healy is a member of the Diversity and Inclusion Leadership Council for An Garda Síochána and a former member of the Expert Advisory Group for Ireland’s Citizens Assembly on Gender Equality. An organisational psychologist, her interest in promoting and supporting DE&I, and her inspiration for Inclusio, came about as a result of her experience working for two decades in global telecoms. “One of the values I hold dearest is fairness and I could see through my work that not everyone is treated fairly or equally at work,” Healy explains.  “That’s a problem for the individual who is not treated equitably, but it is also a problem for the organisation and, beyond that, for society as a whole.” Better outcomes  Ultimately, Healy believes that true DE&I can deliver better outcomes across the board.  “For organisations, the benefits of hiring a diverse workforce include access to a greater range of skillsets, experiences, and perspectives that reflect the reality of the society around us,” she says. “This provides a better understanding of their customers, and their customers’ needs—which improves commercial performance and boosts the bottom line.” Other benefits include greater creativity and innovation, improved talent attraction, engagement and retention, and a better reputation in the marketplace. “By intentionally creating a diverse workforce and a socially responsible organisation that takes DE&I seriously, you are opening the door to new markets, customers, business partners, and employees,” says Healy. “There are so many benefits—and you don’t have to go it alone. There are plenty of organisations providing advice and support to help employers get their approach to DE&I right, creating a better environment within the company and supporting a positive culture.” Inclusive hiring Creating an equitable hiring process is often the first step to building an inclusive work environment. There can be barriers to equitable hiring, however, sometimes including deeply held beliefs and behaviours.  “These barriers may be rooted in stereotypes, prejudice, or unconscious or implicit bias, which may lead to discriminatory beliefs and actions,” explains Healy.  “Only by identifying and understanding them, can we begin to dismantle beliefs that lead to discriminatory actions and attitudes.” The DCU Centre of Excellence for Diversity and Inclusion, founded by Healy, lists some the main barriers to equitable hiring as: 1. Stereotypes A stereotype is an oversimplified or exaggerated belief or sentiment about a group; a broad generalisation that doesn’t allow for individual differences. Stereotypes can be positive or negative and can apply to any group on the basis of race, ethnicity, age, disability, religion, gender, and other categories. 2. Prejudice Prejudice is a predetermined opinion or attitude about a group and its members. Prejudices are often negative and accompanied by a belief in an “in group” and an “out group”, the latter being the target of the prejudice. 3. Unconscious or implicit bias This is a form of prejudice or belief we are largely unaware of, which is held about members of a group. It can also be described as the positions we hold, filters we form, or conclusions we reach by means outside our active thought. Hence, unconscious or implicit biases often seem automatic. Unlike stereotypes and prejudices, these biases may not even enter our awareness, but they can drive discriminatory actions. 4. Discrimination This behaviour involves, or results in, people being treated unfairly, unequally or differently, because of their identity or the group or groups they belong to. Discrimination often starts through stereotypes, prejudices, and bias. Discriminatory behaviour can range from subtle actions to hate crimes.  Conscious steps All of these concepts work together to perpetuate inequity, so it is crucial that employers take deliberate, conscious, and considered steps to establish hiring practices that are as inclusive as possible. “As a first step, I would advise employers to evaluate and challenge the language you use in your job ads. Ask yourself, ‘what cohort am I appealing to, and who is missing?’” says Healy. She advises employers to design and develop interview processes that are inclusive, non-judgmental and respectful, creating equitable opportunity for all candidates. “All your approaches should be multidimensional—working to address biases and discrimination in all aspects of the hiring process,” she says. “Then, moving beyond the hiring process, you have to intentionally embed DE&I into the culture of your organisation and stress its importance through inclusive leadership and best practice.” As Healy sees it, culture lives “collectively” in the behaviours and lived experiences of each and every individual within an organisation.   “If you want to have a culture that is truly supportive of Diversity, Equity and Inclusion—and consistently so—you have to educate your people managers,” she says. “It should really be the case that, no matter what part of your organisation an individual works in, or who they report to, their experience is consistent with that of everyone else. Your DE&I policies and practices must be ‘lived’. “Your people managers are the custodians of that lived experience, and the culture of your organisation. They must be crystal clear about your DE&I policy and practice,” says Healy. “They must know how to have good conversations to make sure people are supported and get what they need. Ultimately, you want to focus on what every member of your workforce can do, not what they can’t do, and how they can contribute to, and enhance, your organisation.”  So, how can employers gauge whether or not they are on the right track when it comes to DE&I? “That’s one thing employers really struggle with—how do you measure culture?—and that’s where Inclusio comes in,” says Healy. “We’re bringing a ‘scientific evidenced’ approach to employers, which allows them to listen to the collective voice of their people and to measure, track and act on DE&I,” she says. About Inclusio Healy spun the idea for Inclusio into Dublin City University (DCU) in 2016 where she established and led its Centre of Excellence in Diversity and Inclusion Research. “Diversity and Inclusion is a core focus for many organisations now and the DCU Centre of Excellence was established to give them access to the very latest developments in academic research, insights and tools to drive change across organisations,” Healy explains. “I started working on Inclusio from 2016 with my two co-founders Deborah Murphy and Arthur Lubambo and support from Enterprise Ireland’s Commercialisation Fund, we spun out of DCU in 2020.” Inclusio has been developed by experts in behavioural data science, psychology, artificial intelligence, equality, diversity and inclusion. The platform gives employers real data-driven insights that will help drive DE&I improvements within their workforce and deliver measurable improvements in their culture. Healy has ambitious plans to make Inclusio Ireland’s first female-founded tech unicorn, and a global DE&I enabler that will help employers to “take the right action on DE&I and ensure that it’s not just a tick box exercise”. Participants in the company’s €6.2 million investment round, closed in 2022, include lead investor Elkstone, alongside Atlantic Bridge, Oyster Capital, Wakeup Capital, Enterprise Ireland, and a group of private backers, such as Brian Caulfield and John Hearne.  Inclusio’s clients include RSA Insurance Ireland, 123.ie, Intact FBD insurance, Linesight, Kilsaran, the Public Appointments Service, and Teagasc. “We already use global benchmarking, and we are now starting to develop sector benchmarking, initially with the insurance sector. Our customers use our data for Board and regulator reporting, Gender Pay Gap and environmental, social, and governance reporting,” Healy explains.  “That will allow employers to answer the question, ‘how am I doing compared to competitors in my own industry?’ as well as the global benchmark. “There is nothing else like Inclusio in the world. Our software is helping organisations to pinpoint and focus DE&I actions in a more strategic way, linked to business KPIs.” “That will allow employers to answer the question, ‘how am I doing compared to competitors in my own industry?’ as well as the global benchmark. “There is nothing else like Inclusio in the world. Our software is helping organisations to pinpoint and focus DE&I actions in a more strategic way.”

John Francis Dick tells Accountancy Ireland why it is so important to advocate for yourself and ask for what you need to succeed at work “Be the disruptor”. That’s the call to action from John Francis Dick, ACA, whose approach to his career has seen him seek out new opportunities at every turn. “My attitude has always been to just go for it, to take that step and to be the disruptor. You have to be willing to represent yourself in any new situation; to come in and say, ‘this is what I need, please provide it for me’.”  As John sees it, people in positions of influence—school teachers, college lecturers, and bosses and managers at work—have an enormous impact on the opportunities open to people with disabilities. “I want to get the message out there that it’s just so important to give people the time and space they need to perform at their best, to engage with them, and take the time to understand what they need to contribute in the best way they can.” John, who has cerebral palsy, grew up in south Belfast and, after completing his A Levels, went on to Queen’s University Belfast to study for a degree in land use and environmental management. “A lot of my school friends dropped out after their GCSEs. They didn’t go on to do A Levels, but I didn’t grow up seeing many people with disabilities around me, so I’ve never taken my education or career for granted,” he explains. “I was passionate about getting as much out of the educational experience as I could. Going to college was a big milestone for me. I hadn’t always been sure I’d get to do it because of my disability.” Be your own advocate It was at this time that John learned the value of speaking up, asking for what he needed, and becoming his own advocate. “It was the first time I was really on my own. I didn’t have my parents behind me and I was suddenly in a much bigger environment than I had been in at school. It was the first time I found myself having to fight for my needs and rights,” he explains. The experience taught John the importance of determination, and gave him the confidence to begin looking further afield to progress his career and education. He decided to apply for a one-year placement with Study USA, a British Council initiative, which allows third level students to spend a full academic year studying business in the US. His placement was with Monmouth, a private college in the midwestern state of Illinois. “That was really where my business education began,” he says.  “Up until that point, the only experience of accountancy I’d had was through my dad, but he just did a one-year course at Ulster University and then went into business.” John was “very open” to learning about accountancy and business, and potentially taking his studies in a new direction. “Really, I’d say my entire education and career to date has been driven by an openness to grasp opportunities, try new things and make the most of lots of different experiences,” he says. “I think this approach will take you in the right direction and, again, for people with disabilities, it comes back to that idea of being a disruptor. “It’s so important to reach out, to be seen and counted, and have access to the same experiences, opportunities and choices as people who do not have disabilities,” says John. “For the most part, people have been accepting of my difference, curious to know more about me and how they can help.  “The bigger challenge for me has been navigating the organisations and institutions that are not quite sure how best to support people with disabilities. “I feel that, in my own journey from school to college and on to work, I’ve really had to be my own trailblazer in terms of getting things done, but I’ve also seen a lot of change in those years.  “Even in terms of Chartered Accountants Ireland as an organisation, its approach to helping people with disabilities continues to improve and that’s encouraging. The Institute has agreed to my request to introduce disability awareness training for staff and I really welcome that.” Path to accountancy While he enjoyed studying for his degree in environmental management at Queen’s University, John was also aware that better career opportunities might lie elsewhere. “I remember, when I was at Monmouth, being encouraged to come up with business ideas. It was just a different way of learning and I think it really helps you when you go into the working world,” he says. “So, I came home and finished my degree, but I also took a part-time job as a book-keeper and started learning about debits and credits. My parents were a big support at that time, because they were both responsible for the accounts in their jobs.” In late 2011, the year after his graduation, John decided to apply for a training position with EY in Dublin. He was offered a six-month internship and went on to work with the firm for five-and-a-half years, qualifying as a Chartered Accountant and becoming an Audit Senior. “Joining EY was a really big step for me. It was my first full-time role and my first experience working in a Big Four environment. Starting with the six-month internship was really key for me because it meant I knew what to expect and how best to navigate my way around,” he says. Importance of managers During his years with EY and in subsequent roles in banking and industry, John has learned time and again the critical role managers can play in supporting career progression. “I remember once I had one manager who, I felt, wasn’t supporting me or interested in me as a person.  “I thought, ‘something has to change’. There were other managers I got on really well with, so I asked to switch teams. I took control of the situation. “The person I talked to about switching teams, who was also a Chartered Accountant, was an enormous help and support to me at that time. They are also someone I’ve returned to over the years to ask for advice and input.” Such support has been crucial in helping John to navigate his career path and make the right decisions.  “It just goes to show how important it is to speak up and advocate for yourself. Anyone can find themselves in a situation where their manager isn’t open to promoting them or supporting their needs and progression,” he says. “You might not have exactly what they’re looking for on the face of it, but if they’re not open to seeing your strengths, they won’t be able to see how a different approach could result in a better outcome for you and for your team.” The result of this approach to managing people is often a poor culture and a higher turnover of staff of all abilities, John says. “I wasn’t the only one on my team who was frustrated with how we were being managed, but I think I found it especially difficult. I had identified what I wasn’t able to do myself, but there was no room for genuine communication.” He continues: “These days, I am more confident about asking for that communication and understanding. I’ll give everything 110 percent. Living with a physical disability can present acute challenges, but I find solutions and I put them into practice.  “I am an advocate for the promotion of differing abilities in the workplace. I think it’s crucial that we respect and value each colleague’s abilities and I take pride in my work and in leaving things better than I found them and having a positive impact on the people around me.”

Maeve Dermody tells Accountancy Ireland about her experiences in the workplace as a person who is profoundly Deaf For Maeve Dermody, ACA, a truly inclusive workplace is one that supports open communication, diversity and allyship. Dermody, who qualified as a Chartered Accountant in 2018 and now works for Revenue, has had varied experiences in the working world—some positive, and some negative.  Above all, she has learned the true value of open communication, a willingness to embrace difference, and the strengths and benefits it can bring to the working world.  “My biggest advice to employers would be to focus always on a person’s abilities, not their disabilities,” Dermody says. “I am Deaf, but I have strong communication skills. I am very good at writing reports and communicate very effectively this way. I am a team player and I always want to contribute, to discuss my work, and find out about other people’s work.” Dermody joined Revenue five years ago as an Executive Officer and was promoted to Administrative Officer in 2019. “I have been given a lot of space here to learn, develop and grow in my career,” she says. “Not all jobs are positive, and I think this has really shown me the enormous value of providing the right supports for people with disabilities and creating the right culture of communication.” The right support Dermody has the full support of her line manager at Revenue and is provided with an Irish Sign Language (ISL) interpreter at all team meetings. “This means I’m able to converse, interact and engage. The conversation flows naturally because I can express myself. Without an ISL interpreter, it would be challenging in a group environment to engage effectively,” she says.  “I can lip read in one-to-one meetings, but, in a group setting, it is much more difficult because I am trying to keep track of everything around me.” This practical support also helps to foster a sense of inclusion and allows Dermody’s colleagues to benefit from the full scope of her skills and expertise as a Chartered Accountant.  “I haven’t always had a positive experience at work. A few years ago, I worked with a small firm in private practice, and I found it very challenging,” she says. “At team meetings with colleagues, there was no interpreter present, so I found it hard to understand the messages my colleagues were communicating.  “We would be sitting together around a table and people beside me would be chatting and looking at their notes, so I wasn’t able to lip read.  “I was the only Deaf person and felt I couldn’t make the role work for me, because of the lack of support in the environment. “With Revenue, my experience has been completely different and so—to all employers—I would say, ‘be an ally, listen and work together with the individual, because everyone has different needs’.  “My husband is Deaf too, but his level of hearing is different which means he can use the phone, whereas I can’t, but we have the same preference to have an ISL interpreter at meetings.  “At the same time, another person who has the same level of hearing as me might prefer to use captions. Different people have different preferences, needs and accommodations and that is why it is so important to talk, to ask questions, to listen and respond to the individual.”  Maeve’s story Dermody grew up on a farm in Mullinalaghta, Co. Longford, with four older brothers. “One of my brothers has a hearing loss and I am profoundly Deaf, so we have both had very different experiences. I went to a Deaf school and he went to a mainstream school. “I grew up seeing him progressing a few years ahead of me—going to college and getting a job. I thought, ‘I’m going to grow up and I’ll do the same because he’s been able to do it’.” At first, Dermody set her sights on becoming a primary school teacher. “I went to a Deaf school in Dublin and I knew that St Patrick’s College offered a teacher training course in Deaf education. That’s what I wanted to do,” she says. Dermody discovered, however, that she couldn’t apply for a place on the course because the Deaf school she had attended had not taught Irish as a subject at either primary or secondary level.  This meant she did not have Irish as a Leaving Certificate subject—a requirement for primary teaching in Ireland. “I didn’t have the option of doing my primary teacher training in Ireland. I could have gone over to the UK, but I didn’t want to do that. I wanted to study here and be close to family and friends,” she says. Instead, she decided on a different career path; one that would allow her to use her strength in maths and interest in business to become a post-primary teacher. College life Dermody embarked on a degree in accountancy and finance at Dublin City University (DCU) in 2008 followed, three years later, by a professional diploma in education and a master’s in education. She is a qualified secondary school teacher, specialising in accounting and business studies.  Dermody’s college experience was positive, but it was also a new and unfamiliar environment. “When you’re in a Deaf school, it’s a bit like being in a bubble. You know all the teachers and everyone uses sign language. We had very small classes of just two to six pupils,” she says. She was the only pupil in her class to do the Leaving Certificate. “I had always wanted to go on to third level, meet people and socialise,” she explains.  “College is very new and different though when you’re coming from a Deaf school. You can feel a bit lost, but I was determined to roll up my sleeves and integrate.” As well as forming close bonds with her collegemates at DCU, and forging lifelong friendships, Dermody made use of the supports offered to Deaf students, including ISL interpreters and note-takers for college lectures. “I started to teach and I enjoyed it, but found myself wanting more from my working life. I’ve always been a problem-solver, so I started thinking instead about pursuing a career in accountancy,” she says. Dermody’s next port-of-call was AHEAD, the independent non-profit organisation working to create inclusive environments in education and employment for people with disabilities. “AHEAD is a really good organisation and they provide a lot of support in the workplace, both to the person with a disability and to the employer,” she says. Through AHEAD’s Willing Able Mentoring (WAM) programme for graduates with disabilities, Dermody secured two paid work internships with ESB and the Civil Service. “I started applying for jobs when I completed my internships, but I wasn’t having much luck. I decided that I needed more qualifications under my belt, so I started studying to become a Chartered Accountant,” she says. “As an organisation, Chartered Accountants Ireland was every bit as supportive as DCU, organising ISL interpreters and anything else I needed. “It was only when I started applying for jobs, both after graduating from DCU and completing my CA training, that I started to feel different. I could see my peers, who had similar grades but no disability, getting jobs. I wasn’t getting those same opportunities.” Path to experience To gain the experience she needed, Dermody took a part-time paid position with Reach Deaf Services. “That was a good start for me, and I was able to apply for other jobs while I worked there.” Eventually, Dermody was offered a fixed-term accountancy position and, from there, she joined St. Joseph’s School for Deaf Boys in Dublin as an accounts administrator. “I also started working as an administrative accountant with Deaf Village Ireland and the Sign Language Interpreting Service. I was working three different jobs, all fixed-term, but I wanted more security.” That was when Dermody decided to apply for work with the Civil Service and was offered her first position with Revenue. Government supports Even though her experience of working in the public sector has been overwhelmingly positive, Dermody would like to see greater emphasis at Government level on the provision of practical work-related supports for people with disabilities in Ireland. “I think the Irish government should look to the UK model of providing supports for people with disabilities. The Access to Work scheme there provides people with a disability with funding at an individual level, to help support them in the workplace,” she says. “This means the employer doesn’t have to be concerned about the cost of providing this support. The person with a disability receives the funding and the employer then confirms that the funding has been used.” On the other side of the coin, Ireland is better than the UK in terms of access for people with disabilities in social spaces.  “I would also like to see Irish Sign Language (ISL) included in the school curriculum in Ireland. ISL is one of our three official languages, yet it is not taught in our schools,” says Dermody. “If Irish Sign Language were on the curriculum alongside Irish and English, it would help to give people a basic understanding of sign language. That would make it easier to converse with Deaf people, even just through simple, everyday expressions like ‘please’ and ‘thank you’.”

Tony Ward tells us about his experiences starting his career as a Chartered Accountant and adapting to a new working reality after he began to lose his sight in his twenties I had a very ‘ordinary’ early life growing up in Monaghan. I was of a generation where it wasn’t so commonplace to go to college, but I was always reasonably academic and chose to study commerce at UCD.  I had no particular focus on going on to do accountancy, but I guess the subjects I studied were already oriented towards accountancy and business.  Looking back now, almost 40 years later, I don’t know whether I was lucky or smart, but choosing to become a Chartered Accountant turned out to be a great decision from a career perspective. I’ve never had any sense that I went in the wrong direction. I began my career in contract with a smaller firm—now long gone after many mergers over the years.  Like all trainees, I started at the bottom and found working at a smaller firm to be of great practical help. I qualified as an Audit Senior in 1989, moved to Deloitte for two years and, from there, went into a management role in practice. It was around 1990 that I became aware that things I used to be able to do fairly easily were becoming more difficult. I was losing my sight, but it wasn’t until 1994 that I was diagnosed with Retinitis Pigmentosa, a genetic condition that causes sight to degenerate over time. Those four years without a diagnosis were the most difficult for me, both personally and professionally.  I was desperately trying to survive in the sighted world and many things became more difficult, and eventually impossible.  It may sound strange to say it now, but it wasn’t obvious to me at the time exactly what was going on.  I think the human response when faced with all kinds of challenges is often to try to survive in the moment.  It’s perhaps only afterwards that we realise what was actually going on. My diagnosis in 1994 came as a huge relief. It’s hard to believe in 2022, but back then losing my sight meant that I basically had to stop working.  Computers and adaptive technology were in their infancy, and I just couldn’t read any more.  At that point, I embarked on a new career pathway—less direct than most in the profession.  Technology began to improve and one of the most important decisions I made was to learn to touch type.  Around that time, I and others were gradually starting to realise that, just because I couldn’t see didn’t mean I didn’t have the skills to do a lot of the jobs sighted accountants could do—think clearly, solve problems, and be part of a team.  Definitely then, and even now, people can be too easily judged at face value. Unfortunately, this means that your most easily identifiable, defining characteristics—in my case, my sight loss—can be a real disadvantage.  At that time, many doors were closed—both to me, and on me. Fortunately though, there were enough open doors, even then, to allow me to pursue a rewarding, constructive and worthwhile career. Here, I have to mention Access Support Services at Chartered Accountants Ireland. I was extremely reluctant to engage with the service at the outset. I thought, “what can they really do apart from sympathise with me?” But, for whatever reason, I decided to reach out, initially to Derek Snow and then Oliver O’Brien. Oliver (who only recently retired from the Institute) was a huge support. He encouraged and facilitated me to go to Institute events and introduced me to others. For that, I am extremely grateful.  I think the biggest challenge people with disabilities face is often other people’s perceptions and attitudes.  This is much improved nowadays with genuine engagement on equality, diversity and inclusion and a much more diverse society than 30 years ago. Challenges remain, however, including preconceptions of what blindness means and assumptions about what you can and can’t do.  There are also the very practical challenges involved in everyday tasks—reading hard copy documents, shopping, transport, participating in sport, traveling, the basics of working full-time, and walking into things if I’m not careful!  I suppose one way for a sighted person to understand my experience would be to close your eyes and try to go about your daily life. That said, technology and a multitude of very considerate family members, friends and colleagues have all made this easier for me.  So, while everything starts from a position of potentially being difficult, good planning and decent workarounds make it all much more possible.  Nowadays, I enjoy a very fulfilling work life, and numerous work- and career-related interests, but getting to this point was neither easy nor inevitable. In my experience over the years, very few employers actively start from a position of discrimination—but we all know, through training and education, that bias is ever-present, including unconscious bias.  The phrase I use to describe how this works is, “the making of assumptions”. We all make incorrect assumptions all the time based on sub-optimal information or flawed perceptions.  So, while the world of employment has improved greatly over the years, much more remains to be done to ensure that we are truly fair and unbiased. People with disabilities and other differences deserve a fair crack at fulfilling their expectations of obtaining and retaining work.  We wouldn’t like to be discriminated against, so we should not put ourselves at risk of discriminating against others. My advice to employers here is to be fair and equitable. Don’t make assumptions about employees or candidates who have disabilities and get professional advice if you need it.  There are organisations like AHEAD (ahead.ie) working to create inclusive environments in education and employment for graduates with disabilities, and many other sources of excellent information about people with specific disabilities that will give any employer the resources they need.  The essential ingredient here is that the employer is genuinely open to all of this and has the right attitude. Without this, it doesn’t matter how many resources you have—­­it will be inadequate. It was one small private company I worked with 20 years ago that gave me my first breakthrough in obtaining employment in an open competition.  I am very good friends with the Director to this day. When I asked him why he gave me the job, he said I was the best candidate. He knew I would be able to do the work as a person with a visual impairment because, he said, “I figured you would figure it out and that it was really none of my business!” That was worth more than anything to me and I flourished in that role for six years. It just shows how much attitude matters. The details can always be figured out, unless the person hiring you really believes your disability is an issue—then, it won’t work. I had a similar experience with The Wheel where I was Director of Finance from 2016 to 2022. They were a bit apprehensive about hiring me, simply because they didn’t know what they didn’t know. In other words, they didn’t know how I would interact with the normal volume of information any Director of Finance would be expected to handle—but, if I can put it this way, they took the risk. By risk, I don’t mean me as a person or professional. What I mean is that they were comfortable not fully knowing or understanding what they didn’t yet know or understand. If you look at equality for people with disabilities in the wider working world and in society as a whole, the bottom line for me is that, if we are treated fairly and equitably, then we have the same likelihood of benefiting from opportunities in life as everyone else.  As it stands, unemployment rates among people with disabilities are much higher than in the general population. There may be genuine reasons for some of this disparity, but definitely not all of it—and employment opportunities really matter because there are so many benefits that go along with them. I am talking about active engagement, social interaction, economic benefit, and the power to make decisions about where and how you live, and what you do.  So, to the extent that people with disabilities might need some extra support or flexibility in the work environment, the benefits for these people, for employers, and for society as a whole far outweigh any efforts, costs or flexibility required. If it is done the right way with the right support from the Government and from employers, we will all reap the rewards.

Julia Rowan answers your management, leadership and team development questions Q: My team is positive, proactive and eager to learn more. My company doesn’t invest much in training and won’t give me a budget because ‘nothing is broken’. How can I keep them motivated? There is a lot you can do to motivate and upskill your team. First, think about how you would describe your team. Is it strategic? Independent? Collaborative? The words you select will guide the way you direct them. The next step is to consider the way you engage with your team. Set yourself up so that your conversations become a learning experience. Coach and listen. Trust the team enough to share your challenges and see what ideas they have. Here are a few ideas to get started: Start a pool of resources – books, articles, podcasts, webinars – where everyone is able to access the same material. Schedule protected time to discuss and share ideas, allowing team members to choose the material and chair the discussion. Organise an away day (even if you are on company premises) and scope out a small number of business projects that will move the team forward and give them learning opportunities. Small groups could work on individual projects and report back regularly to the wider team, making sure that all retain ownership. Ask them to report back on the ‘what’ (what we are doing), the ‘how’ (the process) and the learning (what went well and what could be improved on). Make your team meeting a place where people can share their learning about their everyday experience. This can be done in very simple ways: like opening with a ‘check-in’ (what are you proud of achieving this week? What has your biggest challenge been?), but also by asking team member to make presentations around projects, tasks or initiatives that they have undertaken, and sharing their learning. Seek out cross-functional projects that your team can get involved with.If you put together a business case with learning objectives, outputs and impacts, your company might give you a budget. Q: At meetings, my contribution is often overlooked, but I’m often the only person who has prepared. There is lots of aimless discussion. When my ideas are heard, they are often taken up but attributed to others. This is a common problem, very frustrating and exacerbated by online communication. To address the issue long-term, talk to the meeting owner, explain your challenge, and suggest that they do a ‘go-around’ from time to time, hearing from each individual. Meet the main movers and shakers one-to-one to discuss challenges and share ideas – this puts you on their radar. Some tactics: sit close to the Chair so that it’s easy to get their attention. Quieter people often contribute tentatively, in short sentences. Note the points you want to make so that you can be deliberate when you speak. I’ve devised a structure that quieter clients have found useful: ‘Signal, State, Suggest’. Preface your contribution with a ‘signal’ that gets people’s attention: “reflecting on what I’ve heard, there are two ways to tackle this”. State (give your input): “we could either do A or B”. Suggest (a way of moving on): “Given current circumstances, I suggest we”. It’s not easy to enter the melee– but your meetings will be better for it. If you read one thing... Coaching for Performance – The Principles and Practice of Coaching and Leadership by Sir John Whitmore. An accessible and practical book about coaching. The updated 25th anniversary edition has recently been published. Busy managers often direct. Coaching creates a conversational space for learning through everyday experience.

Brendan O’Hora reports on the findings of the 2022 All-Member Survey Research is conducted to discover new information or reach a new understanding of something, so the Institute’s biennial membership survey is crucial. These have been two years of significant change, and as a membership organisation, it has never been more important for us to act on the findings in a comprehensive, targeted way for the benefit of 31,000 members globally.  The survey was conducted in May and June with over 1,800 members by independent research agency, Coyne Research. This level of participation helps us to build a very accurate picture of the member experience and is much appreciated. It allows us to make the most of this opportunity to check in with members, and to ascertain how we will respond and act on the findings.  This year, we also conducted qualitative research via eight focus groups. This exercise gave us a deeper understanding of member sentiment and reinforced that we are operating in very unusual times.  The operating environment The pandemic may be in retreat, but its effects persist. An ongoing adjustment to hybrid working, declining levels of resilience after extended periods of pressure, and changing priorities among younger members, many of whom qualified or spent their early years in a virtual environment, have had an impact. Compounding this are growing cost-of-living pressures.  The top challenge emerging from the survey for businesses was, unsurprisingly, the competition for talent, up significantly on 2020. Following this is inflationary pressure and increased labour costs. What is resonating with members  Looking at our membership as a whole, the qualification is very highly regarded and a source of great pride. The letters mean a lot to our members, and that pride also extends to the robustness and quality of the education provided.  In reviewing the findings, Bernie Coyne at Coyne Research noted that members are broadly positive about the way the Institute has responded over the last two years to the pandemic.  She said: “As in previous years, members were invited to rate a range of services, based on their experience and degree of satisfaction, with sentiment remaining consistent. Over seven in 10 members rated the webinars and online CPD options as good, with a 20 percent increase in those who experienced them since 2020. The range of specialist qualifications was also rated highly, as was Accountancy Ireland magazine, the weekly Tax News circular, and the knowledge hubs on the Institute’s website.”  The research also pointed to an increase in the number of members who have communicated with the Institute by phone and email since 2020. Roughly seven in 10 rate their experience in communicating positively. While there was strong uptake of the virtual alternatives on offer during the pandemic, there is confidence in returning to face-to-face events. Indeed, the research points to a desire, particularly among younger members, to engage and learn about how they can make their membership work for them and derive the greatest value from it.  Consistent with many of our peers globally, we have seen drops in key member metrics, such as satisfaction and relevance as well as likelihood to recommend the qualification. While, unsurprising, given these unusual times, it is an important alert for the Institute that is already prompting action.   How we are responding to the findings In a changed external environment, and armed with considerable insights, our challenge now is to reposition how we engage with members, with a particular focus on younger members at the start of their career, to optimise their experience of the profession. We are working closely with the Chartered Accountants Student Society of Ireland (CASSI) and the Young Professionals Committee in so doing.  Our members are some of the strongest advocates for the profession, and, at a time when there is a continuing shortage of qualified accountants, it is incumbent upon us to ensure the membership experience is a positive, rewarding, and relevant one for these most important advocates.  One of the ways we will be doing this in the coming weeks and months will be through a campaign to put the tools into members’ hands to make their membership work for them. It will feature real members speaking about how they’ve made the most of their membership and will be accompanied by an updated member section on the website to help users better access and understand what is available, from membership details to Continuing Professional Development, conferences, social events, and supports. Our focus is on giving more control of their experience to our members, so that this experience can be tailored and made to work for the individual.   In closing, I want to return to a theme I touched on at the outset—resilience in the face of sustained pressure. One-in-two respondents reported that COVID had a negative impact on their mental health, compared to 2020. Younger members were less likely to be aware of the Institute’s member support service CA Support, and we will be working to increase awareness of this important resource.  Brendan O'Hora is Director, Members, at Chartered Accountants Ireland

Jennifer Nickerson left a successful career in Dublin to co-found a whiskey distillery in rural Tipperary. She tells Accountancy Ireland about her inspiration, ambitions and lessons learned along the way When Jennifer Nickerson co-founded Tipperary Boutique Distillery in 2014, the Aberdeen-born Chartered Accountant had already risen through the ranks at KPMG in Dublin to become an associate director in the tax department just seven years after joining as a trainee. Tipperary Boutique Distillery is now exporting worldwide and employs seven people in south Tipperary with further plans for expansion. Here, Nickerson tells us about what inspired her move into entrepreneurship and her experiences establishing and growing a small business with global reach. Q: Tell us about your life and career prior to co-founding Tipperary Boutique Distillery—what prompted you to become a Chartered Accountant? I grew up in Scotland and my dad, Stuart, was a master distiller. He managed and worked as a consultant for some of Scotland’s best scotch producers, such as Glenfiddich, Balvenie and William Grant & Sons. You could say I grew up in the industry. I loved it, especially the passion the people working in it had. I went to college in Edinburgh for six years, studying Veterinary Medicine initially and then switching to Accountancy. I decided I didn’t want to work outside in the cold and wet.  I wanted to work in an office and I had this perception that a job in accountancy would be “nine-to-five”.  I was wrong about that, but after meeting my husband Liam and moving to Ireland to train, I found I really enjoyed the problem-solving aspect of the work. Numbers make sense. There is a “right answer” and that can be very satisfying.  I worked in the tax department at KPMG and did a lot of advisory work. The hours were long but there was great camaraderie and that makes for a really nice working environment. Q: So you had settled into this new career in Dublin and you were enjoying it. What prompted you to up sticks and move to rural Ireland to set up a whiskey distillery? I married a farmer—but I did tell him that I wouldn’t be moving to Tipperary unless there was work there that would interest me as much as what I was doing with KPMG in Dublin. We talked it through and my dad had already mentioned during a visit to Ballindoney, Liam’s family farm near Clonmel, that it would be the ideal setting for a whiskey distillery. We could grow grain, we had the land to build a distillery on, there was good quality water in Tipperary and good conditions for maturing whiskey as it’s a little bit warmer than Scotland. He really just mentioned it in passing, but it struck a chord. I’d had lots of experience putting together business plans and I was lucky that Liam had a steady job working for the county council. It was a calculated risk and we could afford to do it, so we went for it. Q: What was your vision for Tipperary Boutique Distillery starting out in 2014? Ultimately, we wanted to produce a world-class whiskey from grain to glass here on Ballindoney Farm.  We knew we had everything we needed, but we also knew it would take time, because distilleries are expensive and there is also the cost of laying down spirit for at least three years before it can be sold as whiskey. It wasn’t until 2020 that we finally had the funding raised, the facility built and the equipment installed to open our own distillery. We had started outsourcing Irish whiskey casks from other distilleries cut to bottling strength with water from our farm and released our very first expression way back in March, 2015.  After that, we started taking our own grain from the farm, having it malted and distilled by my dad at other facilities. Now, we are able to do everything apart from malting here in our own distillery. We grow our own grain, we mill, we mash, we ferment, we distill, we mature and we bottle here on the farm.  Q: Tell us about your markets? What countries do you sell to and where do you have the healthiest trade? We sell into Belgium, France, Canada, into several states in the US, and a little in Korea and Singapore. We were selling to Russia, but obviously not any more, and we were in discussions with distributors in Ukraine and Poland, but the impact of the war has scuppered both. Germany is our biggest market, Italy is great, and Belgium is a surprisingly steady little market as well.  In Ireland, we sell online ourselves at tipperarydistillery.ie and through Irishmalts.com, James J Fox, The Celtic Whiskey Shop, and through local retailers around the country. Q: What was it like moving from a successful career as a tax advisor in a Big 4 environment into the cut and thrust of entrepreneurship? Was it a good experience? It was massively humbling to be honest, but also incredibly rewarding. At the start, I did miss having colleagues to talk to and bounce ideas off. I really felt I was on my own and it took me a while to find my feet. My background in accountancy definitely helped a lot with the ‘form filing’—understanding bills and applying for licenses, things like that. At the same time, there were lots of things I didn’t know about, like where to get a barcode or source seals for bottles. It was a massive learning curve. Q: What are the most important lessons you have learned so far running your own business? I had no idea starting out how vitally important sales are. That sounds like a ridiculous statement, but it took a long time for me to shift my mindset away from numbers and deadlines to just getting out there and going after sales.  What I know now is that you can’t give up. It’s no good just sending out an email to a potential customer and waiting for them to come back to you. You have to keep trying and telling literally everyone you can how great your product is and why. That can be really hard because it’s very different to sitting in front of a computer as an accountant and working to a deadline. You have to be willing and able to stand up on a stage and say, “this is what we’re doing, we’re amazing and our product is the best”.  There is a theory that 80 percent of all sales in any business come from 20 percent of costumers. Based on my own experience, I’d have to agree with that. There’s really no point in chasing one-off sales. It’s far more important to focus on valued relationships than driving around trying to get a bottle into every bar in the country. On the other side of the coin, you have to chase your bills just as much. If you’re not getting paid, you’re in trouble. Q: How has the COVID-19 pandemic and the more recent war in Ukraine affected your business and how have you responded? As soon as the Pandemic hit, our orders from overseas plummeted. We had two pallets due to go to a distributor in a country that was very badly impacted by the pandemic and they ended up having to wait six months to take delivery. Irish people are brilliant though. They started buying more Irish whiskey during the pandemic and that really saved our business. Russia’s invasion of Ukraine had a massive impact as well, because it caused major supply chain issues for us and other producers. We had to change our glass suppliers, and we had really big delays with cork supplies, the capsules for the top of the bottle seals, cardboard for packaging deliveries—you name it, everything was disrupted. Most of our suppliers I tried to keep, because we have good relationships with them and that’s really important in business. We were also probably lucky that we are quite a small operation, so we have been able to adapt more quickly than bigger producers. Q: The Irish whiskey industry has grown enormously in recent years—do you think there is room for further growth and what are your own plans from here? When we started back in 2014, there were something like six craft distilleries in Ireland, but by the time our own distillery was up-and-running in 2020, the number had risen to around 40.  The market grew so much in that time. There is a lot more competition now and a lot more diversity in the sector, but there are also a lot more customers buying Irish whiskey in Ireland and overseas. I think there is still scope for some growth in the market. Forty distilleries sounds like a lot, but Scotland has around 100. What we are seeing is that, as the market matures, there is less focus on cost and greater focus on quality. Each producer has to know their niche and communicate it well to the marketplace. For Tipperary Boutique Distillery, our plan now is to continue to sell in Europe, and expand our presence in America and Asia. We want to continue to grow sustainably and one day—hopefully soon—open our own visitor centre at our distillery here on Ballindoney Farm.

Attracting, retaining and upskilling their people will be a top priority for Ireland’s chief financial officers in 2023. Colin Kerr reports As Irish businesses approach another year of uncertainty, Ireland’s chief financial officers (CFOs) are looking to workforce upskilling as a major “investment opportunity” in the 12 months ahead. The latest Deloitte CFO survey benchmarked the sentiment of 1,151 CFOs in 15 countries in Europe. Published in mid-November, the bi-annual survey sought the views of 75 senior finance executives in Irish business, in sectors ranging from construction, healthcare, and manufacturing, to retail, tourism and transport.  Seventy-two percent said upskilling was a major priority for them currently, while 96 percent identified attracting and retaining skilled talent as one of the biggest risks they would face in 2023. “This outweighs their assessment of other risks, such as the economic outlook for Ireland, the geopolitical outlook, supply chain logistics, and cyber risk,” said Danny Gaffney, Partner, Deloitte Ireland. “The survey also highlighted the point that a lot of CFOs are recognising the multiple benefits of upskilling at a macro level. As Irish businesses upskill their teams, it creates capacity within those teams and CFOs see the importance of that given the constrained talent market.” Businesses in Ireland are refocusing their workforce policies and planning talent attraction and retention, according to Deloitte’s findings. Eighty-five percent are looking at rolling out flexible working patterns, while 69 percent are reviewing their reward offering.  Sixty-eight percent, meanwhile, are investing in wellbeing and assistance programmes, and 59 percent are investing in sustainability initiatives, such as measures to reduce their carbon footprint. “Wellbeing and assistance programmes are actually getting leveraged to a greater degree. Going back to the hybrid discussion, the usual supports that are available onsite are not always available when you are working in a hybrid environment,” said Gaffney. “Having in place good wellbeing and assistance programmes is very useful to organisations in the hybrid environment where CFOs and their teams are not as well-connected as they would be onsite.” Gaffney advised that CFOs put a clear strategy in place when considering how best to upskill their team. “What we need are practical solutions where team members continue in their roles and can upskill around the working day, either in person or online,” he said. “At Deloitte, we are working with clients to help them meet this challenge, including an increasing focus on digital technologies. Personally, I would encourage CFOs to look at training as a better use of their internal capital than focusing on external resources, as a means to allow them to do some of the challenging things they are not doing at present.” The pursuit of digital finance strategies is one of the challenges facing CFOs. Upskilling existing employees can help to meet this challenge. “Getting upskilling right is essential. If you don’t get it right, it falls by the wayside and the business, the CFO and the internal teams all lose out as a result,” said Gaffney. “The biggest trap CFOs can fall into is making upskilling too complicated. The three pillars I would identify are: Show, Support, Assess. CFOs need to be sure the people on their teams are getting the specific training and development they need.” Communication is equally important, as is commitment, according to Gaffney. “It is a two-way street and both the CFO and their team need to be open, upfront and honest in advance of committing to training and upskilling,” he said.  “The business needs to understand the team motive and the individual team members, who are being upskilled, need to understand the business motive behind the process. Commitment is also key because—if we are talking about businesses trying to generate capability to create business value going forward—they need to be committed to ensuring the right conditions are in place for their teams to excel during and after the upskilling.” The growing trend towards hybrid working among businesses in Ireland offers its own potential opportunities. “Remote and online training is much more commonplace now than it was two or three years ago,” said Gaffney.  “With hybrid working, the big challenge a lot of businesses and organisations have faced, and continue to face, concerns connectivity. They can say, ‘we mandate you to be in the office on particular days each week,’ and that can lead to a reaction that may be very negative.  “On the other hand, there are workplaces that are more employee-led in terms of when people are required to come into the office. The challenge in this scenario is that these employees can feel disconnected from the organisation.  “Training is a brilliant way to make people feel connected. When training is made available to me through work, I feel that I am valued and more aligned to my role. This is because I can see that both my organisation and I understand what it takes for me to be successful.” The foremost challenge for many organisations is their CFO’s capacity to “absorb costs”, both new and existing, Gaffney said. “Rates of inflation will remain higher for a longer period of time, as the cost of debt rises and the appetite for risk declines, and organic growth is more of a focus for the CFOs over merger and acquisition (M&A) activity. “Reducing M&A activity may seem like something CFOs would look to do, but they should look at longer-term investments to mitigate current risks.”

Attracting and retaining talent is a challenge for most companies. Sean McLoughney outlines how regular performance management conversations can help engage and motivate high performers When someone leaves a company, there are greater costs than lost revenue and business opportunities. It costs time to recruit, interview and onboard someone. It can cost team morale, too, when a highly valued team member leaves. So, it is no surprise that managers are looking at ways to improve their staff retention strategy. However, one option that is often overlooked is performance management—in particular, the performance conversation. Below are three ways that performance conversations can be used as part of your strategy for engaging high performers. 1. Regular conversation The traditional annual reviews will soon be obsolete as they have little or no impact on people’s performance levels. Sitting down at the end of the year to discuss someone’s performance is a complete waste of time, because often it is too late to influence results. The only topic that people want to talk about at these annual meetings is their pay rise and bonus. Regular performance conversations throughout the year can, however, provide a great platform to communicate expectation levels and clarify business priorities. They can also help to foster the right environment for success, because talented people need to know that their input has meaning and makes a difference. Link their successes to key business and team outcomes and comment on their individual contributions. Another key component of these regular conversations is discussion about the areas each team member will focus on in the period ahead. Keeping the conversation future-focused will help you to understand what they intend to do and how they will optimise their time and resources. Remember, while you can’t change past results, you can influence future performances. Build regular performance conversations into your ways of working. 2. Align individual goals with business outcomes High performers want to ensure that their efforts add value and have an impact on the overall business results. The role of a performance-focused manager is to translate the business strategy at its highest level into what it means for each person. Discussing the business plan with your team will bring context to their work. It allows them to establish their own key goals, aligned effectively with wider business objectives. Being involved in defining their own goals increases personal accountability by fostering a sense of ownership, which will also increase engagement. Set up a team meeting to discuss the business plan prior to your next performance conversation. Start by outlining the plan at its highest level and the subsequent key priorities for your team. This will give everyone a better understanding of the significance of their work, as well as a sense of purpose. Next, ask the team what they believe needs to happen to achieve these expected outcomes. Gather all their ideas and connect them to the business goals. Then prioritise this list so that everyone’s focus and time is spent on tasks that generate a maximum return on their efforts. Finally, turn these ideas into achievable goals that bring clarity and engagement. You can discuss these goals with each person during their performance review meetings and update them, when necessary, throughout the year. This will ensure everyone is always working on the most important tasks. 3. Skills mastery and career progression The third way performance reviews can be used to improve staff retention is to have discussions about their skills mastery and career progression plans. Talented people are more likely to stay with your organisation if they genuinely believe that they are being continually developed and have access to opportunities to progress their careers. As part of your talent support role, you should ensure that everyone on your team has a skills mastery plan. A skills mastery plan provides people with a framework to enhance their skills, knowledge, and expertise. This helps them build a knowledge of skills for their current role requirements, while also preparing them for future promotional opportunities. The skills knowledge plan is not a static document. It must be reviewed and updated on an ongoing basis. During performance conversations, outline how your team members’ skills knowledge plans are aligned with the agreed business goals, and how they are likely to impact their career paths. Make sure to affirm how their learning can support them in achieving their goals and career aspirations. This is a great opportunity to embed a culture of continuous learning and improvement. Performance conversations, when used correctly and regularly, ensure that your company has the best possible chance of delivering a sustainable level of high performance now and in the future. It is an important component in attracting and retaining talented people. Crucially, all these steps are about much more than just discussing goals. They create opportunities for talented people to understand why they are important, how their efforts impact business plans, and how you plan to support their personal development and career progression. Seán McLoughney is the founder of LearningCurve and author of Time Management, Meaningful Performance Reviews and Slave to a Job, Master of your Career, all published by Chartered Accountants Ireland

With the Protected Disclosures (Amendment) Act 2022 now signed into law, companies must ensure they are up to speed with new requirements, writes Ita Gibney As we emerge from the pandemic, we have entered a phase of overwhelming change. We are heading into inflationary times, the Ukrainian–Russian war looks set to be prolonged, a recession is imminent, and a new world of work is emerging, as companies consider their cost base and margin pressure—whether it’s office space, employee numbers or energy costs. Such adversity creates increased risk and additional scope for negative news, making it imperative for companies to manage their communications with even greater skill and care. Accountants, as close advisors, are often called upon for advice in this area, which is not always their field of expertise. Liquidators and receivers, in particular, will be under pressure as they work through the fall-out of corporate challenges in the period ahead. Against this backdrop, businesses are also trying to be socially conscious and to run responsible, sustainable ventures. Purpose is now seen as being every bit as important as profit. Stakeholder capitalism is part of the valuation equation. Good governance, ethical behaviour and sustainability are now on a par with risk management and legal compliance. And, recent whistleblowing cases concerning both Uber and Twitter demonstrate just how fast reputations can sink when a corporate entity finds itself in the glare of negative publicity. Updates to Ireland’s whistleblower regime In Ireland, the Protected Disclosures (Amendment) Act 2022 has brought significant change to our whistleblower regime, including greater risks for companies, especially those engaged in unethical practices or breaches of law. The updates build on the protections offered in 2014 under the Protected Disclosures Act. Now, a wider scope of categories of worker will be protected, including volunteers, board members, shareholders, and job applicants. Further, the definition of penalisation has been expanded to cover more covert acts, including negative performance appraisals or withholding promotions. Most notably, the amendments put the burden of proof firmly with the employer. For corporate entities of 50 employees or more, the Act requires that they establish, maintain and operate internal reporting channels and procedures for the making of protected disclosures. The importance of having policies and processes for protected disclosures provides an avenue for the whistleblower to go through prior to reaching out to external sources. Entities will need to be aware of, and know how to, manage their risks prior to a disclosure. Prevention is better than a cure Under the new legislation, there is now a greater risk of a whistleblower going public. Whistleblower procedures, then, must be part of wider corporate reputation strategies, recognising that crisis prevention is the key to corporate health. There is a renewed drive towards unionisation of workers, and a backlash against the gig economy and poor workplace cultures, especially for new market entrants. Work cultures, if found to be negative, are quickly trending on social media, affecting recruitment as well as reputation. Companies need to be quick, consistent and authentic when it comes to protecting their brand against public scrutiny. All the experts in the world will advise that it is wiser to prevent a crisis than to handle one. A good CEO will manage the risks hands-on, test the crisis communication plans, have good independent counsel to plan for any potential bad that may arise in the future. Companies will forge great reputations, not just because they have great products and services, but also because they take full account, in advance, of the public impact of their corporate footprint. CEOs and boards must take heed—never has corporate reputation and maintaining the trust of stakeholders been such a critical factor in preserving business value. Ita Gibney is Chair of Gibney Communications

Active listening can be a powerful tool for effective communication and connecting with colleagues. Ed Garvey-Long offers tips on how to get it right It might surprise you to hear that there are different types of listening. However, I'm sure we all know the feeling of talking with someone and noticing that the other person's attention is elsewhere, distracted by something else. This can make us feel like the person we are talking to is undervaluing what we are saying, even though they may well be able to recall accurately what was said during the conversation. This is known as 'passive listening.' Its opposite—active listening—is a much more useful tool, particularly in the workplace and when connecting with colleagues. The term 'active listening' was coined in the 1950s by American psychologists Carl Rogers and Richard Farson. The central idea of active listening is to be an equal participant in conversations. This allows the listener to take note of body language as well as words and will result in a more nuanced discussion. Employing active listening will not only help your colleagues feel they have genuinely been heard but can also help build a foundation of trust within teams. Furthermore, this is a skill that anyone can learn. Below are some tips to help you become an active listener: Slow down When another person else is talking, we might rush to the end of the conversation, guessing what they are trying to say and getting our brains to start rehearsing what is best to say in response. In doing so, however, our attention shifts, and we risk missing important details. Don't rush ahead! Instead, slow down and really consider what is being said to you. Once the other person has finished speaking, taking a second before speaking is OK; maybe even ask a follow-up question about what they have just said to demonstrate that you have been listening and understood what has been said. Notice what's not being said We give off more signals about our thoughts and feelings than just by using our words. Our body language can often give subtle clues about the speaker's situation. For example, a stressed colleague might have very tense body language, sitting hunched on their chair. Stress can also sometimes be heard in someone's voice, making them sound strained or even quieter than usual. If you notice these behavioural changes in someone you are conversing with, don't interrupt them and draw attention to it. By doing so, you run the risk of making them feel uncomfortable. Instead, wait for an appropriate time to ask a question like 'are you doing all right?' This can reassure someone that they are being noticed and might encourage them to open up more about their situation. Empathy is king Everyone has difficulties in their lives from time to time, whether it be work stress, family issues or money worries, etc. When listening to someone, consider their perspective as much as possible. They might have been nervous about having this conversation with you or are finding the topic hard to talk about. Recall how you've felt in the past in similar situations and behave as you wish others had behaved towards you then. Consider the context Active listening is a great skill to practice and can really help colleagues feel heard and help you develop your own communication skills. However, it is essential to acknowledge that it can be quite tiring to be constantly in active listening mode. Instead, consider saving your active listening skills for important meetings, such as probation reviews or when colleagues ask to speak to you in private. Active listening can be a powerful tool, but it's wasted if it's used on idle chitchat in the office kitchen! Ed Garvey-Long is a poet and founder of Ed Garvey-Long Coaching

The use of malicious software to extort small businesses is on the rise in Ireland as global criminals seek out easier prey. Arlene Harris reports Ransomware. At a time of rising awareness of cyberthreats and the need for adequate safeguards across all business functions, including finance, ransomware is emerging as a growing threat for even the smallest operators. And, according to Dr Richard Browne, Director of the National Cyber Security Centre (NCSC), ransomware is “here to stay”. A form of extortion “as old as the hills”, ransomware is a type of malicious software designed to block access to a computer system until a sum of money is paid, explained Browne. What is new in the field is a concerning rise in the number of ransomware attacks recently aimed at small- and medium-enterprises (SMEs), a segment of Irish business so far largely unaffected by this particular cyberthreat. Indeed, a statement issued in August by the NCSC in conjunction with the Garda National Cyber Crime Bureau warned SMEs that, in a noticeable shift in ransomware tactics, hackers were turning their attention away from big business and government entities to focus instead on smaller businesses. “This trend has been observed globally and Ireland is no exception, with several businesses becoming victims of these groups in the past number of weeks,” said Browne. “A number of different business models are typically used, which involve encryption of a victims data by a threat actor, whether that is a criminal gang or a lone individual.” Greater threat in newer tactics Cybersecurity has, by and large, kept pace with criminal activity online until now and experts are quite adept at dealing with established ransomware practices—which typically involve a threat actor making contact with a victim, and requesting a key to unlock or decrypt the victim’s information. The threat landscape is evolving, however, leading to newer ransomware tactics that are more difficult to defend against. “Recently, human-operated ransomware has been developed, which means there is a person in the loop with more advanced techniques,” Browne explained. “They hack into a system—or across it, in many cases—steal data and seek to encrypt an entire IT system. The old-fashioned ransomware ‘drive-by’ (often caused by clicking on a link) is not a massive threat as it can usually be stopped by anti-virus software, but human-operated ransomware is categorically a risk for businesses of any kind.” Behind the rise of human-operated ransomware are often established, integrated and organised criminal enterprises that operate “at scale and at speed” globally, Browne said. “This is very much a global market, with the ‘bad guys’ targeting IP addresses anywhere in the world,” he said. “Over the years, many have been heavily compromised, but, while their organisations have been broken up, the individuals involved are still criminals and they are still capable of conducting cyberattacks, so they tend to simply reform and go after smaller targets.” Criminals target smaller players While large corporations are more likely to have the financial means, technology and expertise to handle a sophisticated ransomware attack, the same cannot be said for many of their smaller counterparts. “Because of changes in the ecosystem, smaller companies are getting hit more often than bigger entities, which can afford to be prepared, are more resilient and much more able to deal with incidents when they occur,” Browne said. “So, [the hackers] are going after SMEs and individual companies, which might only net them a smaller ransom, but they are much more likely to be paid. “It is also easier. They don’t have to spend as much time navigating systems and don’t have to be as careful as they would with high-end security systems, so they can target more small companies. “Solicitors’ offices, for example, will often have sensitive data on file—so it is in their interest to pay not to have it released. “The criminals may also gain access to customer money sitting in a firm’s account over a weekend (for lodgement the following week), which makes them a target for other activities, such as fraud. “Of course, there have been some very high-profile attacks too, such as the Colonial Pipeline attack in the US, which took out a piece of physical infrastructure without actually damaging or physically affecting it. JBS Meats is another one and the HSE is probably the most well-known here in Ireland.” These ransomware attacks are happening “all the time”, said Browne, both in Ireland and elsewhere. “Just today, I’ve had reports of about 15 new ransomware attacks in Europe over a few days. We, in Ireland, are relatively lucky as we are something of a small player, but we are at risk nonetheless.” While criminal gangs are set to continue making money by hacking into IT systems, harvesting data and selling it on, or blackmailing companies into paying a ransom, Browne advises that there are steps SMEs can take to protect themselves from ransomware attacks. Effective security measures “We appreciate that many business owners are understandably nervous about the threat ransomware poses, but some straightforward security measures can be put in place to ensure that an organisation’s data and systems remain secure,” he said. “Some SMEs won’t have an IT system as it will be outsourced, so the first thing they need to do is to ask their vendor how prepared they are for dealing with this kind of thing.” At the very least, businesses should have two-factor identification on all of their online accounts—whether it be Facebook, Gmail or a financial services package. “It sounds simple, but, if everyone did this, it would dramatically reduce the amount of damage done,” said Browne. “After that, I would encourage firms to ensure their vendor has proper offline back-up and, internally, to decide that—on a specific day of the week—someone will be tasked with taking the external hard-drive, making a copy of it, and putting it away. “This way, they will have a secure offline system so, if they need to restore it after an incident, it can be done without taking down the company. “Beyond that, they should have an up-to-date antivirus system and ensure any vulnerabilities are patched up.” Making these provisions is becoming more essential for SMEs because ransomware, as Browne puts it, “isn’t going away”. “People need to be vigilant and governments need to do more to deal with it and ensure these guys don’t get paid, so that, eventually, it will become less prevalent,” he said. “That’s not going to happen overnight. It is going to continue to be an issue for some time. We all need to be aware and take steps to keep our systems secure.” For more advice and information, visit ncsc.gov.ie or garda.ie/en/crime/cyber-crime

In a candidate-led market, how an organisation is perceived can be critical to its ability to attract the very best professionals. Although employers can’t create their own brand, they can do a lot to influence it. Dr Mary E. Collins explains how When recruiting, your reputation or ‘employer brand’—the stand-out differentiator for your organisation—has never been more important. This renewed focus on employer brand can be attributed, in part, to the expectations of the younger generations, who are influenced by an organisation’s reputation and peer reviews. These reviews—and the perception of an employer’s brand they help perpetuate—are a key disruptive element in recruitment, particularly with the growth in influence of review and recruiting websites, such as Glassdoor and Indeed. The Labour Force Survey results from the Central Statistics Office for the second quarter of 2022 put the employment rate in Ireland among 15- to 64-year olds at 73.5 percent – a record high. In this context, an organisation’s ability to attract and retain talented professionals in a market at near full employment—one in which people naturally have greater choice—does more than allow it to compete. It affects its reputation among all stakeholders, from customers and clients to potential employees. What is an employer brand? The term ‘employer brand’ was coined in 1996 by Professor Tim Ambler of the London Business School, who defined it as “the package of functional, economic and psychological benefits provided by employment and identified with the employing company.” The Chartered Institute of Personnel and Development (CIPD) defines an employer brand as “a set of attributes and qualities—often intangible—that makes an organisation distinctive, promises a particular kind of employment experience, and appeals to those people who will thrive and perform best in its culture.” It is important to note, however, that an employer brand is created by other people’s perceptions of an organisation. An employer cannot directly create its employer brand, it can only influence it. The power of employee review In the past, an employer brand (even if not described as such) was based mainly on the reputation of the employer, with very little influence from other sources. Now, with the growth of digital voices through social media and review websites, employees—past and present—are key players in the creation of employer brands. We have seen this particularly with employee reviews, which has been a major driver of change. People can post honest, anonymous reviews about their employers, describing the on-the-ground experience from an ‘insider’s perspective’. Faced with this, organisations must become more accountable for their behaviour—or risk being rejected by potential talent. Candidate-led recruitment In recent years, the approach to recruitment has shifted from ‘company-led’ to ‘candidate-led’, which is evident in the interview process alone. Employers are now reviewing their interview procedures, asking if they suit candidates, and asking recent hires what they would change about the experience. Company-led recruitment This is a top-down approach, where a position is advertised and candidates apply. The information shared about the advertised position is limited. The balance of power is with the hiring organisation. This approach is summed up by the interview question: “Now tell me, why should I hire you?” Candidate-led recruitment This flips the model by guiding potential candidates to make more informed decisions about whether to apply for a role. This approach encourages candidates to reflect on their ‘fit’ for the job by providing them with detailed information on the role and organisation prior to applying. Developing a strong employer brand There are eight key steps to developing a strong employer brand, which will give you a competitive advantage and set you apart in a crowded employment market. Step 1. Define your unique selling point Organisations invest resources in developing and promoting a unique selling point (USP) for their customers, clients and even potential employees. The USP is what makes an organisation distinct, setting it apart from its competitors. An employer’s USP will inform its employer brand, responding to candidates’ desires to join teams that share their priorities and values. This could be: “trusted advisor” “provider of excellent technical service” “friendly, responsive and flexible” “creative, cutting-edge and innovative” “award-winning agency” When defining or refining your employer brand, start by articulating your USP. Larger organisations may wish to engage specialist brand agencies, while SMEs can do this through insightful, exploratory conversations with their stakeholders. Ask your existing employees why they joined the organisation, for example, and what makes the business different to its competitors. You can also ask clients for testimonials which can be published online, thereby elevating your USP, not only to prospective clients, but also to future employees. Step 2. Communicate your purpose An organisation’s strategy is a core part of its employer brand and should be included in employer brand communications. Share strategy and purpose to attract the right people. For example, if the strategy is for growth, excellence and expertise, this needs to be represented in the offer to potential employees who are looking for new opportunities and a defined career trajectory. Step 3. Identify who you need to hire Define your recruitment needs. What are the skill sets you need to achieve your goals? Can they be introduced by training existing employees? Evidence of strong succession planning not only instils confidence in shareholders, but it also showcases your employer brand to current and prospective employees. Step 4. Understand your ideal candidates Find out as much as you can about your ideal candidates. What really motivates and excites them? What can you do to drive them to your organisation? The following can be used to source information on target and prospective candidates: LinkedIn Data can be captured on your target candidates’ education and qualifications, the professional bodies they are members of, and the LinkedIn groups they choose to join. Research Conduct research into new and existing workplace generations—what is the difference between Baby Boomers, Millennials and Generation Z? This will yield information on their motivators, drivers and values, which can inform your hiring strategy. Your team Talk to your existing high-performing employees to understand their interests, professional alignments, and networks. Your networks Use your own professional and social networks for further insights from outside your own organisation. Psychometric tools These can be used to track the personality traits and aptitudes of the best performers and can inform your thinking on ideal, as well as prospective, candidates. Step 5. Define your employer value proposition An organisation’s employer value proposition (EVP) is the distinct set of benefits (financial and otherwise) an employee receives in return for the skills, knowledge and experience they bring. The CIPD defines the EVP as “describ[ing] what an organisation stands for, requires and offers as an employer.” It provides greater consistency—to an organisation’s recruitment advertising, for example. Using the data gathering techniques described above at Step 4, you can develop a bespoke EVP for your ideal candidates. To create a successful EVP, consider the following: design around attributes that attract, engage and retain the talent you are seeking; be consistent with the strategic objectives of the organisation; identify what is unique to your organisation and distinct from your competitors’ offerings. The best EVPs involve synergies between the organisation’s corporate brand and its employer brand. Hubspot’s EVP, for example, states: “We believe the people we work with are our biggest perk. That’s why our people operations team works hard to create an amazing experience for candidates and employees, every step of the way.” As demonstrated by Hubspot’s EVP, it is important that current employees feel as much of a connection to the EVP as potential hires. Your current employees should feel aligned to your brand. Maintaining a strong employer brand demonstrates commitment to invest in talent, it builds trust, loyalty and credibility, and differentiates you from competitors. By making your EVP public and transparent, prospective employees are far more likely to trust what a company’s current employees say about it than what they read in recruitment advertising. To attract talent, employers must rely on employee engagement and advocacy from the ‘inside out.’ Employers cannot publicly offer what they do not privately provide. Step 6. Understand your employer brand As well as analysing feedback from current employees, a systematic way of evaluating your employer brand is to use a tool like the Employer Branding Measurement Dashboard, created by Elizabeth Lupfer of the Social Workplace (thesocialworkplace.com). It identifies key metrics for evaluating employer brand, such as: HR metrics, e.g. retention/attrition rates, number of applicants per position, cost per hire; awareness metrics, e.g. percentage of target audience who are aware of the organisation; differentiation metrics, e.g. employer brand value/effectiveness. Step 7. Enhance your employer brand There are some key areas of focus when enhancing your employer brand. It is particularly important when losing staff, or finding it hard to recruit new people, that each area is reviewed, and appropriate actions are taken. For example: Culture Consider a more ‘people-focused’ culture, e.g. offering flexible work arrangements. Presence in the marketplace Increase your visibility to ideal candidates: attend conferences, contribute to LinkedIn conversations, engage in expert positioning and thought leadership, enhance the organisation’s media presence. Candidates’ experience Improve response times to candidates, e.g. introduce a time limit to get back to candidates following an interview and stick to it. Step 8. Communicate your employer brand Communicating your EVP should be central to communicating your employer brand. This can be done through many channels, such as job advertisements, the organisation’s website, or its social media platforms, for example. The EVP should be obvious from the organisation’s website, which should clearly reflect the company’s culture. For example, if ‘technical excellence’ is one of the key aspects of the employer brand, show this with examples of technical projects and thought leadership. Ideally, the website should have a ‘Why work for us’ page, which is most effective when current employees share their positive experiences, highlighting the EVP. Clearly communicate the benefits you offer employees, for example: flexible working arrangements; training and development supports; annual and other leave schemes; pension schemes and employer contributions; health insurance group schemes and contributions. Conclusion For employers seeking to attract talented professionals, a clear employer brand, which is supported by the views of current employees, is a critical starting point. A strong employer brand gives you a competitive advantage, setting you apart in a competitive, candidate-led employment market. Dr Mary E. Collins is a Chartered Psychologist and Senior Executive Development Specialist at the RCSI Institute of Leadership, and author of Recruiting Talented People.

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

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

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

Delta Partners’ Maurice Roche has Ireland’s next generation of tech unicorns in his sights with the launch of the VC firm’s latest fund, writes Clare O’Sullivan. With the launch of its latest €70 million fund, Dublin-based venture capital firm Delta Partners is targeting the newest generation of promising seed and early-stage technology businesses across Ireland.    Announced in April, the fund is the sixth to be launched by Delta since its formation in 1995. In the years since, Delta has backed over 120 companies, realising a mammoth €1.8 billion.      The new fund is backed by limited partners (LP) including Bank of Ireland, Enterprise Ireland and Fexco as well as the family offices of successful Irish technology entrepreneurs. Bank of Ireland has been an investor in Delta’s previous funds and has a number of initiatives/products aimed at the technology sector. Fexco is a new LP to Delta and widely regarded for its innovation in the fintech sector. Previous companies that have received investment from Delta include Clavis, the e-commerce company sold to London’s Ascential plc in 2017, Neuravi, the Galway-based medtech firm acquired by Johnson & Johnson in the same year, and SensL Technologies—sold to ON Semiconductor in 2018. Delta’s current portfolio, meanwhile, includes Luzern, the Dublin-based e-commerce platform, and Sirius XT, a UCD spin-out developing the world’s first commercial lab-scale microscope. It is a diverse portfolio—and necessarily so, according to Maurice Roche, General Partner at Delta Partners and a Fellow of the Institute. “In a market as small as Ireland, you nearly need to be sector-agnostic as a VC investor. Our main focus is tech, but it makes sense for us to have a range of investments in the broader tech sphere,” Roche said. With the launch of Delta’s latest fund, as many as 30 start-ups will be in the running for funding over the next three to four years. “We will focus on a spread of early stage companies where we aim to be the first institutional investors , i.e. at the early seed stage (companies raising capital to develop the product and prove the value proposition with customers) to late seed (companies raising capital to scale on the back initial customer traction and have early signs of product/market fit),” said Roche. Among all potential investees, a top priority for Delta will be the people involved. “The numbers are important, obviously, but it’s also about the people to a huge extent, the market and the opportunity,” Roche said. “You want to be confident that the management team is capable of developing the product and getting early customer wins. The people behind the product really matter.” A case in point is Richard Barnwell, who recently joined Delta as a partner from Digit Games, the gaming studio he founded in Dublin in 2012. A previous investee of Delta Partners, Digit was acquired three years ago by Scopley, the LA-based gaming company. Another new addition to the Delta Partners team is Amy Neale, who is joining from Mastercard where she led fintech innovation teams globally. “Richard has real start-up experience, and he has been successful, so I think he will be a great support to the entrepreneurs we work with,” Roche said. “Amy is our first female partner and a very valuable addition because she has ‘lived’ in the fintech ecosystem through her role with Mastercard, and fintech is a sector we have invested in, and will continue to invest in, with our new fund.” The fund has reached a first close with Bank of Ireland and Enterprise Ireland as cornerstone investors, supported by Fexco and several family offices. New investors will be added to the fund in the months ahead. “We are extremely thankful to our investors who have entrusted Delta with their capital to invest in the next cohort of Ireland’s early-stage technology companies” Roche added. “This fund will be aimed at what we see as the funding gap for early-stage companies in Ireland. Great Irish entrepreneurs are succeeding across the technology spectrum and the main thing they lack is capital to help them achieve their ambitions,” Roche said. “Our focus will be the start of their journey and helping them to succeed at that foundational level.” A veteran of the VC sector in Ireland, Roche joined Delta Partners at its inception 27 years ago. “I qualified in 1990 and spent some time working in corporate finance where I gained experience advising companies raising venture capital. I was interested in technology, and it was serendipity really that I met Frank Kelly, the founder of Delta, by chance one day playing golf.  “Frank had come back from the States to set up a VC fund in Ireland and he was looking to hire. We got talking and I’ve been part of the Delta story ever since.” In that time, Roche has borne witness to the Dot.com crash, the recovery of the global tech sector, the launch of the iPhone and the rise of the mobile app, and the transition from on-site IT to Software-as-a-Service (SaaS) in an increasingly digital world. “From my own experience, I would say that Irish start-ups have done well in business-to-business (B2B) applications, particularly in fintech and payments,” he said. “We have a very strong entrepreneurial tradition and a lot of very successful companies that have scaled internationally across SaaS and enterprise applications spanning digital health, customer data analytics, customer experience management and many other areas. “We will always be looking at markets ripe for disruption because, where change is happening and new innovations are gaining traction, there is opportunity.” Right now, cybersecurity is one such market rich with opportunity, according to Roche.   “If you look at what has happened in the last few years, businesses have become a lot more conscious of the need to protect their data,” he said.  “We have seen a marked rise in phishing and other cyber-attacks. That has made people much more aware of data protection and privacy. As a result, we’re seeing a lot of money going into cybersecurity, particularly cloud-based offerings.” Another big focus for Roche is fintech. “We have seen just how transformational fintech can be from the consumer point-of-view and person-to-person payments with the rise of digital banking apps like Revolut and N26. “Our main interest here is on the B2B side, because the transformational effects technology continues to have in the enterprise space is enormous and there is a lot of potential there.  “We’ve also seen the speed at which tech start-ups in Ireland like Flipdish and Wayflyer have achieved unicorn status. “With this new fund, we want to find the very best tech start-ups out there waiting to be discovered and give them the funding and the support they need to achieve the global success they deserve.”

SMEs hit hard by the pandemic must now grapple with the economic fall-out of the war in Ukraine, signalling fresh uncertainty for the year ahead, so what’s the best plan of action? COVID-19 lockdowns, global supply chain disruption, inflationary pressure – and now the economic fallout from the Russian invasion of Ukraine.  The headwinds facing Ireland’s small- and medium-sized enterprises (SMEs) show no signs of easing as we enter the third quarter of 2022. Even as the year began, the imminent winding down of Government supports for COVID-hit businesses was already prompting speculation of a spike in insolvencies just around the corner. Now, Gabriel Makhlouf, Governor of the Central Bank of Ireland, has called on a “patient” approach from policymakers and creditors to help ensure that “unnecessary liquidations of viable SMEs are avoided over the coming months.” Speaking at a recent event in Dublin co-hosted by the Central Bank of Ireland, Economic and Social Research Institute, and the European Investment Bank, Makhlouf pointed to the need to “channel distressed but viable businesses towards restructuring opportunities and unviable businesses towards liquidation.” Uncertain outlook For those SMEs in the sectors hit hardest by the pandemic, the fresh economic turmoil sparked by the Ukraine invasion will be a cause for concern. “The outlook right now for SMEs generally in Ireland is very hard to determine,” said Neil McDonnell, Chief Executive of the Irish SME Association (ISME). “It will vary considerably from sector to sector, but after two bad years for hospitality and tourism due to the pandemic, the war in Ukraine is likely to mean volumes will remain low into the summer.”  Pandemic-related insolvencies have yet to spike. Research released by PwC in February found that Government support had saved at least 4,500 Irish companies from going bust during the pandemic, representing an average of 50 companies per week during the period. Insolvency rates are likely to rise in the months ahead, however, as pandemic supports are withdrawn from businesses with significant debts, and PwC estimates that there is a debt overhang of at least €10 billion among Ireland’s SMEs, made up of warehoused revenue debt, loans in forbearance, supplier debt, landlords, rates and general utilities.  “Government supports have to end at some point. We realise this, but it will be accompanied by a significant uptick in insolvencies. This is natural and to be expected, since 2020 and 2021 both had lower levels of insolvency than 2019,” said Neil McDonnell. “Aside from hard macroeconomics, however, we can’t ignore the element of sentiment in how businesses will cope. This is the third year in a row of bad news.” Confidence in the market Before taking on his current role as Managing Partner of Grant Thornton Ireland, Michael McAteer led the firm’s advisory services offering, specialising insolvency and corporate recovery. “What I’ve learned is that you really cannot underestimate the importance of confidence in the market,” said McAteer. “If we go back to 2008 – the start of the last recession – or to 2000, when the Dotcom Bubble burst, we can see that, when confidence is lacking, the pendulum can swing very quickly. “If you’d asked me a few weeks ago, before the Ukraine invasion, what lay ahead for the Irish economy this year, I would have been much more optimistic than I am now. “Yes, we were going to see some companies struggling once COVID-19 supports were withdrawn, particularly those that hadn’t kept up with changes in the marketplace that occurred during the pandemic, such as the shift to online retail – but, overall, I would have been confident. Now, it is harder to judge.” Government supports Neil McDonnell welcomed the recent introduction of the Companies (Rescue Process for Small and Micro Companies) Act 2021, which provides for a new dedicated rescue process for small companies. Introduced last December by the Department of Enterprise, Trade and Employment, the legislation provides for a new simplified restructuring process for viable small companies in difficulty. The Small Company Administrative Rescue Process (SCARP) is a more cost-effective alternative to the existing restructuring and rescue mechanisms available to SMEs, who can initiate the process themselves without the need for Court approval. “We lobbied hard for the Small Company Administrative Rescue Process legislation. The key to keeping costs down is that it avoids the necessity for parties to ‘lawyer up’ at the start of the insolvency process,” said McDonnell. “Its efficacy now will be down to the extent to which creditors engage with it and, of course, it has yet to be tested in the courts. We hope creditors will engage positively with it.” McDonnell said further government measures would be needed to help distressed SMEs in the months ahead. “We already see that SMEs are risk-averse at least as far as demand for debt is concerned. Now is the time we should be looking at the tax system to incentivise small businesses,” he said.  “Our Capital Gains Tax (CGT) rate is ridiculously high, and is losing the Exchequer potential yield. Our marginal rate cut-off must be increased to offset wage increases.  “Other supports, such as the Key Employee Engagement Programme (KEEP) and the Research and Development (R&D) Tax Credit need substantial reform to make them usable for the SME sector.” Advice for SMEs For businesses facing into a challenging trading period in the months ahead, Michael McAteer advised a proactive approach. “The advice I give everyone is to try to avoid ‘being in’ the distressed part of the business. By that, I mean: don’t wait until everything goes wrong.  “Deal with what’s in front of you – the current set of circumstances and how it is impacting your business today.  “Ask yourself: what do I need to do to protect my business in this uncertain climate, and do I have a plan A, B and C, depending on how things might play out? “Once you have your playbook, you need to communicate it – and I really can’t overstate how important the communication is.  “Talk to your bank, your suppliers, creditors, and your employees. Sometimes, we can be poor at communicating with our stakeholders. We think that if we keep the head down and keep plugging away, it will be grand.  “By taking time to communicate your plans and telling your stakeholders ‘here’s what we intend to do if A, B or C happens,’ you will bring more confidence into those relationships and that can have a really positive impact on the outlook for your business. “Your bank, your creditors and suppliers are more likely to think: ‘These people know their business. They know what they’re doing.’ If something does go wrong, they know that there is already a plan in place to deal with it.” Role of accountants Accountants and financial advisors will have an important role to play in the months ahead as distressed SMEs seek advice on the best way forward. “We are about to experience levels of inflation we have not seen since the 1980s. This will force businesses to address their cost base and prices,” said Neil McDonnell. “My advice to SMEs would be: talk to your customers, to your bank, and your accountant. Your accountant is not just there for your annual returns. They are a source of business expertise, and businesses should be willing to pay for this professional advice. No business will experience an issue their accountant will not have not come across before.” As inflation rises, SMEs are also likely to see an increase in the number of employees seeking pay increases, McDonnell added. “Anticipate those conversations, if they haven’t occurred already,” he said. “Any conversation about wages is a good time to address efficiency and productivity – is there more your business could be doing to operate more efficiently, for example, thereby mitigating inbound cost increases?”

Tackling climate change will mean embracing economic models that prioritise the many, not just the elite few, writes Kate van der Merwe. In the pursuit of a holistic and inclusive economy that can serve current and future generations, we need to take a fresh look at our economic alternatives.  We are facing existential challenges: a climate crisis that we continue to escalate; a biodiversity crisis that is the sixth mass extinction; and significant inequities that the coronavirus pandemic has served to both highlight and exacerbate.  We must review how our economy works with a focus on real value and equity. In doing so, let’s scrutinise the underlying assumptions and realities, and consider alternative options, including the transformative innovations of social and circular economies. The current context Traditionally, economics is often framed as the study of how people make choices and allocate scarce resources over time, individually and collectively — for example, forsaking consumption now for later benefit (in finance, the choice to invest). Key concepts include ‘utility’ (the satisfaction from something) and ‘consumption.’  The relationship between both is represented by the ‘utility curve,’ which defines utility in direct and positive relation to consumption. Simplified, this means that the more we consume, the happier we are.  In finance theory, utility becomes defined in terms of monetary value. The concept of ‘consumption’ also defaults to a narrow definition of a one-time event. When supply meets demand in the market, for example, economic actors (businesses) are driven to mass-produce for one-off transactions, placing emphasis on short term profits.  When core concepts are so narrowly defined, the underlying utility or value is distorted. By focusing so narrowly on monetary value, we can become disconnected from the real value of the ‘thing’ money is buying and being valued upon. An investor following these limited definitions might, for example, invest in a high-yield mining company even if those yields are derived from destroying the health and wellbeing of their community, and feasibly worsening the investor’s overall utility, particularly in the long term.  If we assume that the fulfilment of our essential physiological needs has the highest incremental utility, then a theory assuming and supporting insatiable consumption — despite the consequences of that consumption threatening our essential physiological needs — appears contradictory.  As the COVID-19 pandemic has highlighted, inequity remains a significant challenge. In the current global economy, just one percent of the population holds 38 percent of wealth, while 50 percent holds just two percent.   During the pandemic, the world’s 10 richest men doubled their wealth. As the average worker faced job insecurity, CEO compensation rocketed. In the US, the CEO-to-worker compensation ratio reached 351:1 (in 1965 it was 21:1).  The pandemic has been a relatively mild precursor to the disruption that is building because of climate change – a threat that we have created, one that our current economic system perpetuates and that we have the power to stem. In facing this disruption, we will need economic models that prioritise the many, not just the elite few.  Alternative approaches Alternative models and ideas include circular, ecological, ‘donut,’ community, collaborative or sharing, social and solidarity economies. Loosely speaking, many focus on or draw inspiration from addressing social inequity and/or the environmental crises.  They look to democratise the economy, to better address systemic inequities, as well as incorporating realistic assessments of nature’s limits, so that we might begin to tackle our self-destructive environmental trajectory. Many of these ideas are not new. They are part of our history.  Their elegance is in their flexibility and compatibility with being layered and combined, an example being a social enterprise engaged in the circular economy. Given the breadth of this topic, this article briefly discusses two of the alternative models: social economy and circular economy. The social economy While the concept of the social economy is long-standing, its definition is evolving. Existing forms of social economy businesses include cooperatives, mutuals and social enterprises. Key features include a core organisational purpose of maximising societal and/or environmental impact, not profit, through the reinvestment of profits, and often incorporating democratic governance.  Existing forms of social economy businesses include cooperatives, mutuals and social enterprises. Within the EU, 2.8 million (10 percent) of all organisations are social economy enterprises, employing 13.6 million people.  While GDP is a problematic measure, the social economy contributes eight percent of the EU’s. One growing and exciting part of the social economy are those social start-ups that are applying innovative solutions to some of our biggest problems, like climate change, often tackling social and environmental issues simultaneously.  During the COVID-19 pandemic, the social economy gained visibility for its resilience and its value creation on a broader scorecard and structural supports are developing.  Last year, when announcing social enterprise funding, Minister for Rural and Community Development, Heather Humphreys, recognised social enterprises for “the invaluable role” they played throughout the pandemic, making “an important contribution in areas such as mental health, social inclusion and the circular economy.” In 2019, the Irish Government published the National Social Enterprise Policy for Ireland 2019–2022, which is also a core component of the State’s plans for rural and community development.  The EU is also scaling up support for the social economy, publishing the Social Economy Action Plan in 2021 for implementation this year, with plans for an EU Social Taxonomy.  A European stalwart of the social economy, based in the Basque Region of Northern Spain, is the Mondragon Cooperative Corporation.  Established in 1956, Mondragon is one of the largest corporates in Spain, with sales in over 150 countries. It comprises a collection of mutually supporting social enterprises engaged in education and innovation, finance, retail, and manufacturing/engineering (including the esteemed Orbea bicycles brand and Urssa, the world-renowned steel manufacturer).  Mondragon is particularly intriguing given its social impact aspirations — the structures and practices it has created to differentiate itself as social (such as maintaining a pay ratio limit of 6:1), while maintaining success in an ill-fitting capitalist economic structure.  Ireland also has its own booming social enterprise sector, with plenty of examples across a wide range of sectors, such as:  FoodCloud (connecting retailers with charities to donate food);  Airfield Estate (a working farm, kitchen, education, and food destination in Dublin); WeMakeGood (Ireland’s first social enterprise design brand) and; Moyee Coffee (“a radical company with radical [Fairchain] impact”). The circular economy The circular economy is also gaining ground, driven by the threat of climate change. The circular economy designs out waste by optimising scarce resources to build a restorative and regenerative economy.  It does this by deploying interdisciplinary systems thinking, i.e. considering complex systems holistically, and incorporating relationships and interdependencies between parts.  A long-term approach to resources, especially minimising the use of raw materials, fundamentally contrasts the circular economy with the linear ‘take-make-waste’ economic system.  The circular economy treats natural resources as scarce, which serves to keep climate breakdown and the threat to our survival front and centre. Maintenance and repair services grow, while production becomes more focused on non-virgin sources, thereafter prioritising regenerative materials. The emphasis is on prolonging the life and utility to be gained from products. This shifts the focus from expiry-bound consumption to ongoing use. The circular economy also diversifies the ways we transact – from individual ownership to shared ownership or rental (product-as-a-service).  The Whole of Government Circular Economy Strategy 2022–2023: Living More, Using Less, the first of its kind in Ireland and the Environmental Protection Agency’s Circular Economy Programme 2021–2027, both launched in December 2021.  These are core to the Irish Government’s drive to achieve a 51 percent reduction in greenhouse gas emissions by 2030 and to reach net-zero emissions by no later than 2050. A Circular Economy Bill is also in development.  Similarly, the EU is enabling the circular economy as part of the European Green Deal, adopting a new circular economy action plan (CEAP) in March 2020.  This action plan introduces both legislative and non-legislative measures aimed at facilitating the transition to a circular economy, including the establishment of the European Circular Economy Stakeholder Platform for sharing and scaling up the circular economy. Examples of businesses successfully applying circular principles include MUD Jeans, which offers a discount on the next purchase or lease for each pair of end-of-life jeans returned, recycling the returns into new jeans, eliminating waste, and using 92 percent less water in production.  Locally, the Rediscovery Centre in Dublin is the National Centre for the Circular Economy in Ireland. It hosts four up-cycling social enterprises in fashion, furniture, bicycles, and paint, as well as an Eco Store, and provides various educational offerings. Traditional businesses are also increasingly incorporating circular elements. Harvey Norman, for example, is offering preowned, refurbished phones. Holistic view While the traditional economy has a limited singular focus on the point-of-purchase, many of the alternative economy models, such as social and circular, take a more holistic view and can recognise and pursue multiple goals simultaneously.  Such models reflect the complexities of our environment, including the challenges of climate change, and intrinsic value, more accurately. These alternative ideas are also more dynamic. They can be combined with one another and enable better designed, more resilient outcomes.  Greater care is taken in defining what an organisation does as well as how it does it, generating more equitable outcomes by holistically considering impact, and providing greater long-term efficiency in synthesising society’s needs and the management of scarce natural resources.  In doing so, these alternatives better address critical unpriced externalities and offer ways to change our current self-destructive trajectory. Our traditional economy appears to focus on scarcity of value, durable efficiency, and resources, while the alternative economy models focus on their regeneration and restoration.  These alternative ideas offer fundamentally different approaches in how value is created, measured, and maintained, and are better suited to the holistic and inclusive economy needed by current and future generations. Kate van der Merwe, FCA, is a Sustainability Advocate and member of the Institute’s Sustainable Expert Working Group.

COVID-19 has changed the face of banking globally, but what’s next? Billy O’Connell delves into the top 10 emerging trends shaping banking this year. The COVID-19 pandemic has irrevocably changed the banking industry. Customers have become more demanding on multiple fronts - from service fees to sustainability - banks have doubled down on technology, accelerating their innovation drive, and new entrants to the market have become more ambitious, broadening the scope of services they offer. Here are the ten trends most likely to impact banking globally and locally in the months ahead.  1. Everyone wants to be a ‘super-app’ Just as the smartphone consolidated our hardware needs within a single device, super-apps are consolidating many of our retail, social and other needs.  Most digital banking consists of checking balances, paying bills, and making deposits — functionality more and more big technology players are incorporating into broader platforms alongside other services like commerce and social networks.  How should traditional banks respond when faced with the expansion of Amazon, Meta, and others into financial services?  They can try to add non-banking functionality to their own services and compete head-to-head for customer attention or partner with a super-app to provide white-label services. A third option is to wall themselves off from the fray and defend their traditional franchise.  2. Green gets real Investors and regulators will need to see environmental promises being delivered as they urge financial firms to become better stewards of the planet.  Proposed rules will require independent verification, proving that banks are living up to their claims. They will face immense pressure to redirect credit away from carbon-heavy companies toward sustainable energy.  In Ireland, lending has become increasingly ‘green.’ The main financial institutions are evolving their product offerings, focusing on supporting environmentally-friendly economic activity. These products make a real difference as they actively guide consumers towards a change in their behaviours.  3. Innovation makes a comeback Globally, the decade after the great financial crisis was a period of retrenchment in which many banks pulled back from introducing new products and focused on getting the basics right. Start-ups and digital challengers have emerged, with new offerings leveraging innovative solutions to target specific customer pain points.  The growth of Buy Now Pay Later (BNPL) providers is an example of this. However, banks are fighting back with creativity. Irish retail banks have invested significantly in the last five years in technology and innovation projects to deliver new digital services for customers.  We are seeing this in product innovation across the board – in the introduction of fully digitised customer journeys for personal lending and mortgages, instant account opening, data analytics and new digital capabilities to support SME lending.  During the pandemic, we saw retail banks improvising and innovating at speed as they leveraged their technology investments to respond with creativity and agility to the new challenges. 4. Fees Over the last several decades, banking fees have shifted from regular charges for services like account maintenance to in-built fees for facilities like overdrafts.  Fintech firms arrived, promising an array of services for the magical price of free, only to reveal later that revenue must come from somewhere.  Banks are creating features that put the users in charge of fee decisions. Fortunately, digital, AI and cloud capabilities are converging to provide the perfect platform for personalised advice that will help build consumer trust and involvement. 5. The digital brain gets a caring heart Before and during the pandemic, banks continued to invest heavily in digital technology to make banking more accessible, faster, and efficient. However, it is more difficult than ever to win customer loyalty.  Banks realise they have much to gain by learning to better understand and respond to customers’ needs and individual financial situations. Being well-positioned to meet customer needs through the challenges of the past 24 months has been important for banks and customers who needed their support.  Building on this momentum and focusing on AI and other technologies will be important to help banks predict customers’ intent and respond with more tailored messages and products. 6. Digital currencies grow up Several central banks worldwide are now launching digital currencies, and more are thinking about it. These are accompanied by maturing regulations around cryptocurrencies and a recognition that, while decentralised finance (DeFi) may still be in the experimentation phase, many of the core concepts of decentralised trust will likely have enduring value.  We will likely see more financial institutions and government agencies sharing data and ideas on how to incorporate aspects of this new type of money into the global financial system.  According to the Competition and Consumer Protection Commission (CPCC) research, one in ten Irish investors (11%) held crypto assets or cryptocurrency like Bitcoin in 2021. The number jumps to one in four (25%) for those aged between 25 and 34, indicating the appetite amongst younger generations in Ireland for digital money.  7. Smart operations put zero in their sights In 2022, banks will apply artificial intelligence and machine learning to back-office processes, enabling computers to outperform humans in some tasks. This will, eventually, decouple bank revenue from headcount.  Banks have made incremental efforts to streamline their operations at a global level. These new technologies, along with the use of the cloud and APIs, can accelerate their efforts well beyond small efficiencies and toward the long-held dream of ‘zero operations’ where waste and latency are eliminated.  8. Payments: anywhere, anytime and anyhow Getting paid and sending money are now anytime, anywhere features we’ve come to take for granted. The next step in this payment revolution is for these networks to open up. China has already demanded that internet companies accommodate rival payment services. At the same time, proposed legislation in India would force digital wallets to connect and mandate that merchants accept payments from all of them.  Banks with payment offerings will have to compete and cooperate with rival banks, fintech, and other players as the world of networks opens up. We’ve seen this gathering momentum locally, with AIB, Bank of Ireland, KBC, and Permanent TSB coming together on a joint venture to create a real-time payments app. The continued investment highlights the desire to evolve in response to customer needs and compete with digital challengers, such as Revolut.  Customer trust is an essential factor in driving success in the financial services industry. If the banks can give consumers the digital functionality they crave, alongside reliability and service, they could leapfrog their challengers. 9. Banks get on the road again Just as individuals are relishing getting out from under pandemic travel restrictions, banks too will go wandering in search of growth both at home and abroad. In Ireland, we’re already seeing M&A activity from the core banks, causing a seismic shift in the entire landscape.  This includes Bank of Ireland’s takeover of the capital markets and wealth management divisions of Davy stockbroker and its purchase of KBC’s loan book; AIB’s acquisition of Goodbody Stockbrokers and its JV with Great West LifeCo; and Permanent TSB’s purchase of Ulster Bank’s loan book.  10. The war for talent intensifies Figures released from The Workhuman Fall 2021 International Survey Report indicated that almost half (42 percent) of Irish employees plan to leave their jobs over the next twelve months.  As technology has become a critical enabler for banks, a much-publicised shortage of engineering, data and security talent presents a real challenge. Younger workers, in particular, want flexibility and to be valued in their jobs.  Forward-thinking banks are developing integrated plans that holistically address their work and talent issues. They’re mapping the skills they need now and expect to need in the future and are using a variety of approaches to recruit and retain them. They are also re-assessing their structure, culture, and work practices to improve their appeal as employers.    Time for a different approach Decades from now, the most successful banks will be those that continuously shape their businesses to the needs of customers, employees, and other stakeholders. Their greatest asset will be their ability to identify opportunities and innovate efficiently.  Billy O’Connell is Head of Financial Services business at Accenture Ireland.