Jenna Mairs ACA, Senior Investment Manager at Whiterock Finance, discusses her career highlights, productivity at work and the future of the profession. What do you most enjoy about your current role? The variety, without a doubt – no two days are ever the same. Whiterock Finance offer loans ranging from £100,000 to £2 million across two funds, so we deal with an extensive range of Northern Ireland-based SMEs from early-stage (two years plus) to well-established businesses on a growth trajectory. We have no sectoral focus, so one day you could be meeting an IT company in Ballymena and the next an engineering firm in Enniskillen. It’s interesting to meet businesses of varying degrees of complexity and to see what a difference our funding can make to their growth story. What has been your career highlight thus far? I’ve had many highlights, so it’s hard to narrow down. Over the years, I’ve worked with some great people who have taught me so much – both professionally and about myself. I’ve made lasting friendships with both past and present colleagues and had a lot of fun and laughs along the way. I’ve grown a fantastic support network and have many people I can rely on for advice and guidance. I’ve also had the privilege to meet some inspiring and passionate business leaders and to learn about their trials and triumphs along the way. If I had to choose one recent highlight, it would be winning the “Woman of Influence” award at the inaugural Northern Ireland Women’s Awards last year. How do you stay productive day in, day out? I am a morning person, so I try to start every day with exercise – either a class at the gym or a 5km run, which means that by the time I get to work, I’m wide awake and ready to go. At the start of each week, I make a list of everything I’d like to achieve that week and then allocate the tasks to each day. To keep my productivity high in the afternoon, I always try to get out at lunchtime for some fresh air and, although it’s a bit of a cliché, I drink a lot of water. I also focus on maintaining a positive work-life balance to ensure that I’m productive in the long-term. I appreciate the importance of having downtime to spend with friends and family, visiting new places and experiencing new things. What changes do you anticipate in your profession in the next five to ten years? In the short-term there will be greater digitisation with cloud-based applications becoming more prevalent, thereby leading to an increased ability to work remotely and collaborate globally. Automation will continue to rise, especially in terms of replacing repetitive and mundane tasks. In light of recent issues within the profession, there is also likely to be a requirement for increased transparency and accountability and further aligning of global accounting standards. Within business, there will likely be an increased focus on sustainability and increasing environmental awareness. What’s the best advice you’ve ever received?  When I was completing my training contract, a colleague told me that there’s no such thing as a stupid question. I’m not sure I agree with that statement completely, but I am a firm believer that you should not be afraid to ask questions to further your understanding. If you want to increase your knowledge, you need to be inquisitive and you shouldn’t be scared to question everything you are told. It is advice that I have shared with others many times, and I am always more than happy to answer questions put to me.

Feb 10, 2020

While support for diversity and inclusion is welcome, it is now time for business leaders to instigate meaningful change, writes Rachel Hussey. In the past ten years, diversity of all kinds – but gender diversity in particular – has become an area of focus for almost all business leaders. In what can be interpreted in many ways as progress, the 30% Club, which I currently chair, has been asked more frequently if 30% is a sufficiently ambitious goal. 30% Club Ireland is a group of Chairs and CEOs of 260 Irish organisations who agree with our goal to ensure that 30% of board members and senior management in Irish businesses are women. The Club was founded in the UK in 2010 by Helena Morrissey, and the Irish chapter was established in 2015. The 30% title was adopted because 30% is the critical mass that a minority must reach in a group to have an effective voice. And 30% is very much a floor and not a ceiling in terms of our goals and ambitions. I am a lawyer, but law firms and advisory and accounting firms face the same challenges around inclusion and diversity. In this rapidly changing world, with new careers emerging all the time, professional services firms have to find ways to stay attractive to graduates (both men and women) and to retain them once they have been trained. In other words, diversity may be a moral imperative, but it is also a necessity for business. Today’s graduates expect to find diversity where they work. That wasn’t the case in the 1990s when I started in practice. There was no discussion about diversity in business back then. There was a concept of ‘equality’, which was confined mainly to pay and conditions. The feminist movement was a social one, focused on issues like contraception. The Women’s Political Association was advocating for more women in politics, but the business world was separate to all of that. And I think many of the women who were in that business world either didn’t focus on the lack of diversity or were too isolated to speak up in any meaningful way. I was, of course, aware of the social movements while I was in college, but I assumed that the world was mostly a fair place and that if you were good enough, you could do whatever you wanted to do. Women were very well represented in the top of my class in Trinity. I didn’t even notice when I was doing a master’s degree at Harvard Law School that only a quarter of my class were women. After I qualified, however, a few incidents surprised me. When I attended an event with my then-boss, and we met his sister, she asked me how long I had been my boss’ secretary. When I was pregnant with my first child and was the primary breadwinner, I realised that I was going to have to rely on social welfare payments to survive. And then I had to make – and saw other women having to make – career decisions that weren’t decisions, as there was no choice. Spurred on by all of this, my women partners and I came together in 2008 and came up with plans to empower the women in our firm. And when I saw Helena Morrissey speak in Dublin in 2013, I knew the 30% Club was a real game-changer because it had clear goals, was business-led and – most importantly of all – included men, without whom no real change will ever be possible. There has been some progress, but perhaps we in professional services firms need to take some bolder steps now – for our men and women. We need to recognise the needs of a more modern workforce and find ways to integrate family life and absences into a career path rather than separate to, or an exit from, a career path. That includes better career planning built around family absence and greater recognition and accommodation of the needs of men in their desire to play an equal part in family life.  We need to recognise the potential for 24-hour demands in a digital age and become more agile in how we work and how we rest – as individuals, as parents, as carers and as human beings – and we need to demonstrate and practise this, starting from the top. We all state our commitment to diversity and equality of opportunity. It’s now time to prove our commitment. Rachel Hussey is Chair of 30% Club Ireland and a Partner at Arthur Cox.  

Feb 10, 2020

The ability to judge the mood music of society could be our greatest asset in shaping how the profession is perceived, writes Dr Brian Keegan. If you happen to be an auditor and are of a sensitive disposition, look away now. Apparently, you are not a member of a profession. This is just one of the suggestions of the Brydon review into the quality and effectiveness of audit, which was published at the end of last year. Brydon’s work was prompted by public disquiet over high-profile business collapses in the UK, where it was believed that the auditors should have done better. The standard response of politicians everywhere to topics that make them uncomfortable is to commission a review. In that way, action is seen to have been taken and the discomfort is spread around. There are many reasons, of course, why Brydon is wrong about auditing not being a profession. An audit is, after all, about the exercise of intellectual skill and knowledge. It is an unfortunately flippant conclusion in a study that otherwise has a lot going for it. Worse, in the court of public opinion, many people won’t necessarily make a distinction between what an auditor is and does, and what an accountant is and does. It is therefore inevitable that the profession often finds itself in the uncomfortable position of having to explain itself. It doesn’t matter that our most immediate stakeholders – board members and investors – know perfectly well the contribution of the audit and the role of the auditor. Government policy in any area is not exclusively formed by listening to, and then following, the views of knowledgeable stakeholders. The perception of the accountancy profession can be contradictory. Surveys conducted by Edelman (admittedly commissioned by this Institute) report that the level of confidence in accountants among financial decision-makers is high relative to the level of confidence in other professions. Yet public opinion is all too willing to jump on the bandwagon when they think we get it wrong. For instance, the response to the exclusion of the former Chair of Anglo Irish Bank, Mr Sean Fitzpatrick, from Chartered Accountants Ireland was heavily skewed. Much of it focused on the length of time our proceedings appeared to take. No one seemed interested that the Director of Public Prosecutions wanted the State’s actions in the matter to conclude first, hence a seven-year delay. Understanding this lack of interest is important because the effective communication of what the profession is and does relies heavily on the receptiveness of the public audience. There are lessons here from politics. Prime Minister “Get Brexit Done” Johnson and President “Make America Great Again” Trump are widely lauded for their communication skills, but that misses the point. The genius of the messaging of Prime Minister Johnson and President Trump is not in their capacity for articulation – it is in their capacity to read the mood of the public. During the recent hustings in the Republic of Ireland, the major political parties would have fared better using slogans like “give people homes” or “hospital beds, not trolleys” instead of plaintive murmurings about futures we can look forward to, or an island for all. Like the more successful politicians, the accountancy profession has to get better at reading public opinion and responding to that mood. If we fail to get across the ethical value and the competency involved in the work that accountants do, and the wider contribution made to society by virtue of that, future government policy towards accountants and auditors will be shaped by the negativity that is already out there. Much is made of the challenge to the profession from things like artificial intelligence and robotic process automation. You can add to that list the suspicion with which the profession is viewed. We now know that some don’t even consider that auditing is a profession at all. Dr Brian Keegan is Director, Advocacy & Voice, at Chartered Accountants Ireland.

Feb 10, 2020

Against a backdrop of underinvestment, housing will remain a key economic concern for the new Government, writes Annette Hughes. With 2020 well under way, some of us have already broken our New Year’s resolutions and had our focus shifted to the plethora of election resolutions and promises which emerged over the past four weeks. With the election now behind us, political leaders will need to focus on delivering on those election promises.  Governments generally have a five-year term to fulfil their promises, but experience tells us that some of the policy commitments promised in party manifestos may never be implemented. The new Government faces both challenges and opportunities in steering a sustainable economic path as it embarks on a new term. One of its key functions is to administer public policy and deliver high-quality public services and infrastructure across a range of areas including housing, health, education and transport. Notably, housing was the topic that received the most attention during the election campaign and it remains the Government’s number one priority. There continues to be underinvestment in both private and social housing, and the demand for housing significantly exceeds the current supply. Much has been made of the doubling of housing stock from 2016 to 2019 with 21,000 new homes, however the national annual housing supply requirement is closer to 35,000. We were informed during the election campaign that 6,000 new social housing units were built in 2019. Yet, data from the Department of Housing, Planning and Local Government shows that there were 2,003 new social housing units built in the first nine months of 2019, or 2,229 units when local authority vacant units brought back into the stock are included. Adding acquisitions (1,533), units leased from the private sector (630), households supported under the Housing Assistance Payment (12,853) and the Rental Accommodation Scheme (717), implies that a total of 17,962 social housing households were accommodated in the first nine months of 2019. This may be in the region of 24,000 for the full year. This total is in a year in which the latest assessment of housing need reported that there were 68,693 households across the State (43.2% in Dublin) on the social housing waiting list.  In the meantime, the shortage of affordable accommodation to rent and buy continues to create challenges for Irish policy makers, notably, the escalating homelessness problem, and rising rents and property prices, although the rate of growth has moderated in recent months.  Some of the solutions proposed included building more social and affordable homes, preferably on State-owned lands, which has implications for the level of capital investment on housing (€2.03 billion in 2020), the second largest allocation after transport (€2.5 billion). Other measures included rent regulations, which have proved to have a range of unintended consequences for tenants, including a negative impact on new and existing supply, as well as the potential for lower quality stock. The issue of the decade will undoubtedly be climate change and this too will impact on housing stock. With an estimated two million residential properties across the country, the potential cost of retrofitting to improve energy efficiency could be in the region of €10,000 to €30,000 per home, depending on its age and quality.   The one consensus during the election campaign by all parties was that there needs to be a substantial and fundamental change in housing policy, given the failure by all to address a number of issues over the past decade. The new Government clearly has its work cut out. Annette Hughes is a Director at EY-DKM Economic Advisory.

Feb 10, 2020

Cormac Lucey argues that accountants need to discuss one of the most unjust outcomes of Government profligacy – the over-taxing of the State’s high earners. The UK electorate recently faced a general election where, under the leadership of an Islington Marxist, the British Labour Party was offering its most left-wing proposals for a generation. It proposed raising the rate of income tax on earnings above £125,000 (equivalent to €146,000) to 50%. With the 4% UK rate of PRSI, that would have required Britain’s top earners to pay a marginal rate of deduction of 54%. In the Republic, those of us of a right-of-centre political disposition are lucky not to have to face the prospect of barely diluted Marxism as a real policy prospect. Here, government control switches pretty seamlessly between right-of-centre Fine Gael and right-of-centre Fianna Fáil-led administrations. That’s the theory. The reality is something very different. Down south, top earners must already face a 52% (income tax 40%, universal social charge 8% plus 4% PRSI) rate of deduction on income above €70,000. Indeed, if a person is self-employed, they face a marginal rate of 55% on income above €100,000. In terms of top tax rates, high earners in Ireland already face marginal rates of deduction in excess of 50% at incomes of around twice the national average that the UK Loony Left was only contemplating applying on incomes of about four times that average. Largely unnoticed, the contours of the Irish tax system have changed very substantially since 2007. Income tax receipts are up €9.3 billion, or 68%, from 2007 levels. They have risen from 29% of total tax receipts to an expected 40% this year. Thirteen years ago, income tax proceeds were slightly lower than VAT receipts. Last year, they exceeded VAT receipts by 52%. The Organisation for Economic Co-operation and Development (OECD) has concluded that Ireland has the second most progressive income tax system among its 36 member countries and the most progressive among its EU members. In other words, high earners pay disproportionately more in income tax here than in nearly every other developed country in the world. Revenue’s Budget 2020 Ready Reckoner document reveals that the top 1% of income earners (those earning more than around €250,000) contribute more than a fifth of all income tax receipts, while the top 5% of income earners (those earning more than about €125,000) contribute more than 40% of total receipts. By contrast, the bottom 75% of income earners (those earning around €55,000 or less) contribute a mere 18% of total income tax proceeds. The top 1% lose an average of 42% of their income in State deductions while the bottom 75% lose an average of 9%. One might accept this dramatic soaking of high earners if it was required to save the State from imminent insolvency, but the Troika left town in 2013. Large rises in tax revenues since then have been used to fund dramatic increases in State spending rather than to reduce the national debt. When the Government first officially forecast total 2018 Government spending, it expected a total spend of €60.3 billion (according to the 2014 Stability Programme Update). In reality, the Government ended up spending €76.8 billion in 2018, 27% more than its original forecast. High earners are being soaked, not to save the State from bankruptcy or to secure minimum levels of State spending but, rather, to indulge a fiscally incontinent and gruesomely inefficient Government apparatus. It strikes me that we (as a profession) and Chartered Accountants Ireland (as a representative body) should speak more loudly about the clear errors and short-sightedness of this approach.  Cormac Lucey FCA is an economic commentator and lecturer at Chartered Accountants Ireland.

Feb 10, 2020

The resourceful con artist has now moved to online scams, but old advice still holds, writes Des Peelo. Confidence and a presence are often perceived as necessary for business or personal success. This resonates with me in the context of recognising con artists, better described as fraudsters, whom I have encountered. The most outstanding was an approach from a gentleman, intending to be my client, who lived in a suite in one of the great London hotels. Of indeterminate nationality, his occupation – or the source of his apparent wealth – was not evident. Happily, I withdrew from involvement early in the saga but became aware of subsequent events. A mine of false information This gentleman was promoting an opportunity for investment, which was highly confidential, in newly discovered vast ore resources adjacent to a previously worked-out mine in Ireland. The geological studies and supporting paperwork (all forged) was there. The scam worked for nearly £3 million. British aristocracy and London financiers, amongst others, came on board. Subsequently, this gentleman was arrested in the UK. He was refused bail as the police said they found nine passports in his suite. After one year on remand in a London prison, the charges were inexplicably dropped, though an accomplice and a UK solicitor were subsequently jailed. No monies were recovered. During that year in prison, my almost-client managed to have meals delivered from the hotel, paid monthly in advance. He also started a charismatic movement and a choir. On learning of his imminent release, he called the hotel manager, who reportedly said something like “wonderful news; we will send a car” and he moved back into his suite. That was not the end of the story. Some years later, on watching an investigative programme on UK television, there was my almost-client being named for a stunt involving investors and coffee futures in Central America. This time, still based in London, he allegedly had a prestigious commodities brokerage office in Miami. A load of beeswax Older readers may recall the origin of the description ‘widget’. It was first used in an amusing film, loosely based on a real event in the 1950s, about a Texas con artist launching a widget company on Wall Street. None of the financiers knew what a widget was or wouldn’t admit they didn’t know, but the word was that the oil industry was very excited about it. Hence the contemporary use of the word ‘widget’ when nobody understands the product. The modern equivalent of a widget, on occasion, might be a ‘tech disrupter’. My possible ‘widget’ moment involved another gentleman from London. He arrived in Ireland sporting impressive achievements, connections and qualifications (all bogus), including being a medical doctor. His business card showed an address on the famous medical Harley Street in London (which turned out to be a temporary post-box). Accompanied by a self-described titled lady, he rented a country mansion near Dublin and quickly entertained his way into the bloodstock and racing fraternity. He claimed to be developing a product akin to Viagra, long before it was invented. The connection with Ireland was that the magic ingredient could only be sourced from the blood and urine of top-bred horses. State agencies expressed interest, impressive international names were mentioned as possible directors, suitable sites were inspected, and so on. All that was missing, of course, was the millions necessary to bring it all together. Fortunately, shortly before substantial monies changed hands, a sceptical stud farm owner and the IIRS (then a State scientific agency) analysed a prototype unbeknownst to the bogus doctor. It was largely beeswax. The gentleman concerned managed to depart Ireland in time, leaving large unpaid bills. He was last heard of as being in Lebanon, again something to do with horses. Don’t be fooled The world has now changed for the con artist. The old scams are easily identified with instant access to history, profiles and technical information. However, the resourceful con artist has now moved to online scams. If an investment is too good to be true, it is. This adage has never changed. Des Peelo FCA is the author of The Valuation of Businesses and Shares, which is published by Chartered Accountants Ireland and now in its second edition.

Feb 10, 2020

In this digital age, data analysis is important to a high-performance culture, but so is trust. Teresa Stapleton discusses how to find the balance. There is a need for a data-driven approach to understand how a business is performing, but capturing, analysing and interpreting large volumes of data is a time-consuming process that can lead to analysis paralysis, slow decision-making and delays in getting work done.  When building a high-performance culture, the key is to find the balance between trust and data, where people feel motivated, engaged and empowered to do their best work and collaborate with colleagues to make the business successful.  Building trust For most people, trust in another person is based on knowing from personal experience or by reputation that someone is reliable. We naturally tend to trust people with a proven track record, who can keep commitments, deliver on time, be open and honest, admit mistakes, and speak up to share concerns. Trust is essential for a leader to stand back and give their team space to get on with the job. When a leader doesn’t trust their team, it inevitably leads to micro-management in order to keep tight control and minimise risk. This approach can be extremely frustrating and demotivating for an individual, and particularly for experienced, competent teams. Micro-management often produces disengaged employees, increased absenteeism and reduced productivity – ultimately impacting bottom line results.  When trust is lacking, it’s important to identify and tackle the root cause behind the trust issues. In some cases, it’s down to personality clashes where people have different beliefs on the best way to get work done. When this is the issue, it really helps to invest in team building exercises to promote collaboration. Managing a new team New managers are often in the tricky position of not knowing if they can rely on their new team while having to depend on them to be successful. This can create an anxious and stressful atmosphere. Taking time to get to know a new team, being clear on expectations and open about how you like to operate are critical to building a solid foundation for a good working relationship. Having the right mix of skills, experience and personality style is critical to the success of any business. This explains why many leaders like to build their own teams or bring people they trust when they take on a new role. However, more often, managers inherit people they wouldn’t have chosen. As a leader, it’s important to keep an open mind and give people the opportunity to prove themselves. As Ernest Hemingway said, “The best way to find out if you can trust somebody is to trust them.”  Situational leadership The most successful leaders adapt their leadership style based on the ability and level of commitment of the person or group, as well as the circumstances. Situational leadership involves evaluating what level of trust versus support is optimal. When managing someone new in a role or with responsibility for critical or high-risk tasks, close oversight is advisable. But, as the person demonstrates that they can perform competently, experienced leaders will adapt their style to give the employee more accountability and independence.   Remote working It’s increasingly common for managers to have employees who work remotely. This requires a hands-off style of management with clearly defined goals and KPIs and regular check-ins to stay connected and aligned on performance. While calls and teleconferencing are great for remote working, it’s still important to plan face-to-face meetings periodically to build the relationship and employee engagement, and to ensure they feel that they are valued members of the team.So, what breaks trust? Failure to deliver expected results, keeping someone in the dark, misaligned goals and priorities, competing for rewards and different personal values are often underlying causes. Whatever the reason, once trust is broken, it is extremely difficult to repair. The key to business success is strong leadership with the ability to set a clear vision, create high-performing teams and promote a culture where people feel trusted, valued and motivated to deliver great results.    Top tips for building trust 1. Get to know your team. Share your background, previous experiences, goals, values, expectations, and ask the team to do likewise. Sharing information on family or interests outside work is also a great way to identify common ground and build relationships. 2. Assess whether you have the right resources. Have you got the right mix of skills, experience and capability on the team to support the current and future needs of the business? Modify your plans, or team, to close gaps and set everyone up to be successful. 3. Set clear expectations. Agree and document clear, concise goals (specific, measurable, achievable, relevant, time-bound) and expected results. Ensure clarity and alignment on the performance management and rewards process.  4. Build self-awareness and collaborate. Personality profiling tools and workshops enhance self-awareness and provide practical support to help individuals, teams and organisations improve communication, increase productivity and drive results. 5. Stay connected and keep up-to-date. Agree with your team what you should know and how you want to be updated on progress and issues. Check-in to ensure the communication approach is working for everyone and adjust as required. Ensure decision-making authority is clear and protocols for escalating issues to the right levels are defined and understood (e.g. highlight bad news fast, no surprises, etc.) 6. Recognise and reward success. Take the time to thank team members regularly for their contribution and impact. Recognise and reward success and behaviour that demonstrates company values or best practices. Provide honest feedback on performance and coaching to drive improvements. Ensure performance is rewarded fairly and that your team knows they can trust you to represent them well. Teresa Stapleton is an Executive and Career Coach with Stapleton Coaching.

Feb 10, 2020

Dr Eddie Murphy explains how personal values can support and enhance your wellbeing. Personal values are a set of beliefs and qualities by which we strive to live. They are key qualities and psychological concepts that are deeply important to us and our sense of the world. When we live by our values, what we do and how we do things match the internal qualities that are most important to us. Positive psychology Amid the constant stress and activities in our daily lives, it is easy to lose track of what we truly care about and value. Identifying and working to incorporate personal values into our lives can not only be fulfilling, but can also deepen our sense of purpose and meaning. Prof. Martin Seligman, who is known as the father of positive psychology, talks about a life of pleasure, meaning and engagement. Indeed, if you follow my work, you will know that I see meaning and engagement as a dynamo that constantly replenishes our wellbeing. The importance of values  Our values act as an internal compass that guides our direction in life. It is, therefore, important to be aware of what they are and use them to make key decisions. Values are influenced by our social background, family, birth order, generational factors and genetic inheritance to mention just a few. Values serve as your guide, acting as a Garda, judge, doctor, psychologist and social worker. Psychologist Steven Hayes describes values as “chosen life directions” that are “vitalising, uplifting, and empowering”. A value is not merely a goal, but it can be thought of as a continuous process, direction and way of living that helps direct us towards various goals and live a meaningful life. Identify your values It is now time for you to do some work. There are various ways to identify your values including choosing which domains or areas in your life are most important to you, and specifically what you value within each domain. Which areas of your life, and how many you choose, can vary. They can include relationships, career achievement, parenting, self-care, spirituality, community involvement, and education/learning. Take some time to reflect deeply on the areas of your life and ways of living that give you the most meaning, interest and sense of fulfilment. Pick an area and examine how this value is expressed in your current life, including daily activities, lifestyle and relationships. List ways you can make your chosen value more prevalent in your life. These do not need to be major life changes but can be small actions or activities. Now, imagine you are 80 years old, in good health and have fulfilled your life dreams and goals. Your family and friends are planning a testimonial party for you, and your childhood best friend has been asked to write and read a tribute to you. Write the tribute you would want your friend to write. It may be short, long, nostalgic, humorous, biographical or visionary – but it must be responsible. It must capture the spirit and essence of the ideal life you hoped to have lived. As you write this tribute, refer to your core values. Incorporate the essence of these values into the story. Be as realistic, specific and as honest as possible.  Find your purpose Going through life without a sense of our values is like walking into a store and buying a new pair of shoes with our eyes closed: chances are they will be the wrong size, the wrong style and not at all what we wanted. Equally, we may end up with a life that doesn’t suit us, leaves us feeling uncomfortable, dissatisfied, awkward (even in pain), and a life that is more something that just happened to us, rather than something we consciously chose. Discovering our core values is one of the first and most important steps in living authentically. Find your values and re-find your purpose in life.   Members and students can phone CA Support on 01 637 7342 or 086 024 3294, contact us by email at casupport@ charteredaccountants.ie or visit our website at www.charteredaccountants.ie/casupport. Dr Eddie Murphy is a clinical psychologist, mental health expert and author.

Feb 10, 2020

The UK left the EU on 31 January, but what does the rest of the year look like in terms of negotiations, what are the key dates and Brexit milestones of which you need to be aware? David McGee gives you a list of what you can expect until the end of the year. February 2020 25 February European ministers are scheduled to meet in Brussels. It is expected that they will approve a new negotiating mandate for Michel Barnier. March 2020 26-27 March European Council meeting. June 2020 It is expected that a UK-EU27 summit will take place to finalise the new trade relationship that will apply from the end of 2020. 18-19 June European Council meeting. July 2020 1 July The legal deadline for agreeing on an extension to the transition period. The amendment blocking an extension to the transition period means that, should a trade deal not be agreed by 31 December 2020, there is the risk that the UK deals with the EU on WTO terms. October 2020 15-16 October European Council meeting. November 2020 26 November MEPs will be in Strasbourg for their penultimate plenary session of 2020. European lawmakers have stated that a trade deal must be negotiated, checked, translated and presented to the European Parliament by this date if the transition period is to end by 31 December 2020. December 2020 10-11 December European Council meeting. 31 December This date marks the end of the transition period as per the Withdrawal Agreement. The UK Government aims to have negotiated the future economic partnership and financial settlement with the EU by this deadline. December 2022 31 December Should the UK Government request an extension of the transition period it would end on 31 December 2022. This is not the UK Government's intention. David McGee is Brexit Partner at PwC.

Feb 09, 2020

We've all survived the UK leaving the EU on 31 January, and it's no wonder. The hard work for Brexit negotiators and Irish businesses is yet to come, writes Mark Kennedy. 31 January came and went with the tapping of a gong – perhaps fittingly at midnight EU time – and the world has not fallen apart. And why would it? From a business perspective, we have just completed the prelude and much of the real work is yet to be done. The remainder of 2020 will be given over to a negotiation which is designed, we hope, to achieve a new relationship – and notably a new trading agreement – between the EU and the UK. Initial signs have not been too positive, but neither have they been especially negative. Both sides have set out a view of their requirements from a deal. Much has been made about the differences between the two sets of objectives presented. Issues as various as fishing rights, regulatory alignment and state aid regimes have been identified as particular challenges. The EU has focused on the need to have a level playing field to avoid unfair competitive advantages accruing to either side in a post-Brexit scenario, ensure non-regression on environmental and social standards and to protect worker rights. UK Prime Minister Boris Johnson has said that he sees no need to encumber a simple free trade agreement with links to EU rules on competition policy, subsidies, social protection or the environment. So, the battle lines appear to be drawn. However, this is all to be expected. What is far more important is whether we see the professional negotiators in the UK and the EU engaging quickly and meaningfully in the detailed and hard work that goes into crafting a formal and comprehensive trading agreement that covers both goods and services. The process needs to include both political feedback and a good mechanism to hear the needs of individual sectors. I believe that we are going to see the discussions recede from front-page news and get into the minutiae of a number of key sectors: financial services, technology, agri-food, pharmaceuticals and medical, and energy to start, with many more to be considered. Getting this right by minimising damage to key sectors, protecting jobs and maintaining continuity in the newly separated markets will be a significant challenge. Brussels is world-class in managing trade agreement negotiations. The UK Civil Service is also an exceptionally talented team. The challenge they have is to create a comprehensive agreement in a very short period of time. I have two suggestions: first, business leaders need to be advocating now for their sector concerns to make sure that they are on the agreement roadmap. The new Government needs to be very active with our European partners in advocating for these concerns. Second, there is a very real risk that certain sector issues will not be dealt with comprehensively in a truncated negotiation process. For that reason, all businesses need to prepare for a ‘no deal’ style default in their sector and closely monitor developments in the coming months. Mark Kennedy is the Managing Partner of Mazars Ireland.

Feb 09, 2020

Northern Ireland businesses have much to think about now that the UK has exited the European Union. Michael Farrell explains some changes SMEs should consider going forward. With the transition period due to expire on 31 December 2020, the timeframe for the EU and UK to reach agreement on a free trade deal is extremely challenging. If an agreement cannot be achieved in the coming weeks, there is still the risk of a no-deal exit at the end of the year. Regardless of whether or not a free trade agreement is reached, the Northern Ireland Protocol in the Withdrawal Agreement will avoid a hard border on the island of Ireland. Effectively, this means that while businesses in Northern Ireland will remain part of the UK customs regime, they will continue to have free access to EU markets. However, mixed signals about the customs arrangements that will be in place at the end of the transition period continue to be a cause of concern. On one hand, the UK government has said it will legislate to guarantee unfettered access for Northern Ireland’s businesses to the whole of the UK internal market and ensure that this legislation is in force for 1 January 2021. On the other hand, Michel Barnier, the EU's chief Brexit negotiator, has said that in agreeing to the Protocol on Northern Ireland, the UK has agreed to a system of reinforced checks and controls for goods entering Northern Ireland from Great Britain and that checks are “indispensable”. For now, it seems prudent to plan on the basis that while the Protocol means that it should be largely business as usual for NI businesses whose only trade is within Northern Ireland, NI businesses who trade with GB are likely to face additional costs, delays and disruption due to a border in the Irish Sea. Likewise, NI businesses that import goods from GB for onward distribution or processing in the Republic of Ireland could face additional administration costs. Irish companies with UK-based directors It’s also important for SMEs to remember that companies that have established in the Republic of Ireland and have only UK-based directors will need to have taken appropriate steps to continue to trade legally once the transition period ends. These companies will need to either appoint an EEA-resident director or put in place a Section 137 Revenue Bond in order to comply with the Companies Act. A third possibility may be to obtain a certificate under section 140 of the Act to get an exemption from having an EEA resident director. To obtain this, a company must make an application to Revenue for a written statement that there are reasonable grounds for Revenue to believe that the company has a real and continuous link with one or more economic activities being carried on in the State. Application for a section 140 certificate is then made to the Companies Registration Office (CRO). There are also additional company law implications for companies, including restrictions on changing financial year-end when aligning with group companies and change of branch registrations from EEA to non-EEA. The CRO have updated its guidance on this on its website. Duration of the transition period While Prime Minister Johnson has said that the UK will not seek to extend the transition period, if an extension was to be agreed, it could be until 31 December 2022. The key date to be aware of in this regard is 1 July 2020, the deadline for agreeing on an extension. If there is no extension, as seems likely, the transition period will end on 31 December 2020. Michael Farrell is a Director at PKF-FPM Accountants Limited.

Feb 09, 2020

It can take several years and a lot of hard work to build an effective board. David W. Duffy outlines key measures that can be taken to improve its effectiveness. It can take several years to build a fit-for-purpose board that has the leadership and dynamism to support the executive team. The most important element in any governance structure is the Nominations or Talent Acquisition Committee. The purpose of this committee is to help the board make sound business decisions by appointing the right board members. If this committee does not do its job, then the board and the organisation risk stagnating through the lack of new ideas or no challenges to the status quo. New appointments should be strategic and not tactical; they must bring unique skills and experience to the company that will have a real and tangible impact at board level.  This could include the world of digital, geopolitical insight, capital raising, or knowledge of a particular sector, such as offshore life assurance. Board appointments that are rushed are not a good sign of good corporate governance; each appointment should be considered carefully before being made. So, assuming the board is populated with the right talent, here are a few examples of other measures that can be taken to improve its effectiveness: Conduct regular external board evaluations to get an external perspective on the effectiveness of the board. Conduct 360 reviews of the board directors. Make sure that the information provided by the executives is assessed annually to ensure the board can do its job efficiently. Have an annual work plan for the board and for all its committees. This will help set the agenda for the year, and will also ensure the board spends enough time on the future by delegating as much as possible to its committees. Hold an away day at least once a year to reflect on the board’s strategy in some depth and to focus on specific issues, such as looming regulation or competition issues. This also provides an opportunity for the directors to get to know one another other better. Invest in the capability of the board through a professional development programme. The board evaluation may well indicate what the directors might like in terms of development, but it is helpful to also ask them. Topics will depend on the company, but the programme could focus on new regulation and compliance requirements, sustainability, diversity and inclusion, etc. David W Duffy FCA is the Founder and CEO of The Governance Company and the author of A Practical Guide to Corporate Governance, published by Chartered Accountants Ireland.

Jan 31, 2020

How can a board set the example rather than becoming one? Ros O’Shea gives a five-step approach to creating an ethical board. “Where was the board?!” is the question often asked in the immediate aftermath of corporate misconduct. Stakeholders, quite rightly, expect boards to ensure businesses are run ethically. Yet, sometimes boards (and usually their companies in turn) fail dismally in this crucial aspect of their role. What can a board do to ensure the highest levels of probity in their organisations? This five-step approach can help. Ensure the ethical infrastructure is in place From a code of conduct to ethics training, speak up channels, ethical due diligence procedures and incentives programmes that reward the 'how' and the 'what', directors must ensure the appropriate infrastructure is in place in their organisations to enable and foster a culture of integrity. This is akin to laying down an ethical 'base layer'. Appoint the right CEO In leading that culture, the CEO is key. On appointment, they are bestowed with the organisation’s most precious asset – its reputation – and must be responsible for its safekeeping. It is the most important decision the board makes and demands commensurate investment in a robust process to recruit the right leader. Act ethically It is rare for a board to deliberately endorse an illegal act, but we know there can be a vast difference between decisions that are legal and those that are right. Decisions are usually right when a director is comfortable being personally accountable for their part in it, especially if it would be made known to their family on the front page of the local newspaper. Directors would do well to assess all decisions through that lens and determine whether they want to simply meet a bar, raise the bar or – better – set the bar in terms of moral courage. Lead by example In order to effectively set the tone from the top, the board should be a microcosm of the organisation’s desired culture. Espoused values, such as respect and openness, should underpin board interactions and encourage constructive debate. IQ at this level is a given, but emotional intelligence (EQ) differentiates high-performing directors and their boards and should be a prized quality in director recruitment. Monitor culture Finally, directors must know that only so much governance can be done within the confines of the boardroom; they need to experience first-hand the organisation’s “mood music”. This provides the board with the holistic assurance it needs that the desired culture is truly living and breathing across the organisation. By following these five steps, the board will focus on doing the right things and asking the right questions, which will ultimately lead to the right outcomes. Briefly, that is the board’s role in relation to ethics: to stand squarely behind their chosen CEO and collectively set the tone from the top while providing independent oversight on the organisation’s ethical infrastructure and culture. Ros O’Shea is the founding partner of Acorn Governance Solutions.

Jan 31, 2020

With so many disruptive technologies available, is it possible for to directors keep up with the needs of the business? Kieran Moynihan explains how, with the right NEDs, a company can thrive in a constantly evolving digital world. As disruptive technologies such as artificial intelligence, robotic process automation and emerging payment technologies grow in adoption, many boards are struggling to understand how these will impact customers, market segment and the competitive landscape. Crucially, how can they incorporate these technologies into their overall strategy and business models? This relentless wave of new technology disruption is increasingly upsetting the traditional hierarchy of markets by lowering the barrier to entry for new competitors. Companies need to adapt to harness the opportunities and benefits of these disruptive technologies otherwise it risks being left behind irrespective of its traditional market position. Often, the reason behind this struggle to adapt to technological disruptions is that there is a significant lack of technology expertise among non-executive directors (NEDs). This is further compounded by a serious age diversity problem in boards where, across Ireland and the UK, the average age of many boards is late 50s to early 60s. The vast majority of these NEDs indicate that areas such as cyber-security are problematic for them. This, in turn, impacts their ability to provide high-quality, robust challenge, debate and oversight of the CEO and executive team in terms of how a company incorporates these disruptive technologies into its strategy. In marked contrast, younger NEDs in their 30s and 40s tend to be very comfortable in the digital and disruptive technology landscape, have a strong understanding of how customers’ requirements are evolving and can genuinely challenge and support the CEO and executive team in these areas. In most boards, the traditional approach to selecting NEDs has been focused on a majority of generalists with significant executive experience, and a number of sector specialists, which has led to a predominance of financial and general business skills around the board table. However, as both the pace and complexity of emerging disruptive technologies has significantly increased, this traditional model is breaking down and many of the sector-specialist NEDs are finding it challenging to keep up with the pace of change. Many CEOs and executive teams are struggling to make big calls around technology and business model choices. There is a growing trend of board chairs and CEOs who realise that, in order to thrive, the board team needs to be refreshed with the addition of NEDs who have advanced technology expertise. They will be able to provide ample support to both the overall board team and CEO/executive team, thereby strengthening the ability of the company to embrace disruptive technologies, understand the changing needs of their customers and position themselves for sustainable long-term success. Kieran Moynihan is the Managing Partner of Board Excellence.

Jan 31, 2020

How can organisations keep the passion going for D&I? Dawn Leane explores how businesses can do more to successfully deliver their D&I programmes.   Diversity and inclusion (D&I) seems like a simple concept: while we are all different, we are all equal. So why has D&I become such a headache for some businesses? Organisations invest significant resources into D&I programmes, such as creating specialist roles, publishing results and setting up employee groups. However, these often fail to deliver the expected return on investment. Without results, organisations can begin to experience diversity fatigue. People become tired of ideas that don’t gain traction and employees can become sceptical that D&I is little more than a PR exercise.   Creating meaningful change To create meaningful change in an organisation, there are a few things you can do: Diagnose the specific D&I challenges the organisation is facing instead of just rolling out a standard set of programmes or initiatives. Find out what issues need to be addressed and how to measure them successfully. Are the organisation’s D&I programmes and initiatives authentic? Unconscious bias training and inclusion workshops can sometimes be implemented in order to mitigate complaints or, when poorly designed, can treat participants as if they are intolerant, which is ultimately counterproductive. Resist the temptation to tag everything as D&I. Most employees don’t want to be labelled as ‘diverse’ even in a positive way as it can create a sense of ‘otherness’. Make D&I relevant to everyone in the organisation. D&I initiatives often focus exclusively on diverse groups and fail to engage a wider audience of people. This can mean that functional and business unit leaders do not know how to support D&I within their individual areas. Embedding diversity, inclusion and belonging requires an organisational culture change – D&I values and associated behaviours must become part of the organisation’s DNA. This can only happen, however, when there is a sustained focus over a long period of time. Often, small changes have the biggest impact. Developing successful D&I programmes is not a one-size-fits-all approach, it is much more nuanced; organisations and the people who work for them are complex and dynamic. Individualised training An individualised D&I training, which involves a combination of coaching and mentoring, can be hugely beneficial to organisations. These sessions create the space for individuals to talk openly about their challenges and ask questions which they may not feel comfortable doing in a group setting.  A coaching conversation elicits, without judgement, the individual’s attitudes, beliefs and any of the issues or questions they may have. A mentoring conversation then takes this further to identify specific actions and behaviours that will make a difference. In my experience, forcing the D&I agenda in an inauthentic manner only serves to make people know which boxes to tick to be compliant. It doesn’t change attitudes or lead to sustainable change, which is essential for D&I to be successful in any organisation. Dawn Leane is Principal Consultant at Leane Leaders, Developing Inclusive Leadership. She will deliver a workshop on Leadership for Professional Women as part of Chartered Accountants Ireland's CPD programme on 25 March.

Jan 24, 2020

Let’s apply portfolio diversity principles to our workforces to help drive their success and close the gap on gender parity in the workplace, says Darina Barrett. Investors devote considerable time and skill to ensure that our investments are suitably diversified, and we firmly believe in the portfolio value of sustainability and diversification.  Who among us would consider an investment without including those fundamental elements for success? Why, then, are we not moving forward at a greater pace in bringing these critical qualities to our workplaces? In my view, organisations must do much more to ensure that they are building sustainable, diversified enterprises. A deliberate and concerted shift in this direction will unquestionably enhance the value of businesses and their prospects for future success. This mindset is becoming critical, given the intense competition for top talent and the vital skills that will define their success – even survival – in the digital age. Just as diversification and sustainability help safeguard the future of our investments, businesses should also adopt this approach to shape their workforces through the gender-parity lens, and now is the time to act. The best person for the team In the World Economic Forum’s Global Gender Gap Report 2020, Klaus Schwab highlights the growing urgency for action against inequalities in the workplace. “Without the equal inclusion of half of the world’s talent, we will not be able to deliver on the promise of the Fourth Industrial Revolution for all of society, grow our economies for greater shared prosperity or achieve the UN Sustainable Development Goals. “At the present rate of change, it will take nearly a century to achieve parity, a timeline we simply cannot accept in today’s globalised world, especially among younger generations who hold increasingly progressive views of gender equality.” We have spent enough time and energy addressing gender-parity and examining it from every angle imaginable. It is time to turn ideas into action. Let’s apply the power of diversity to gender parity just as we have applied diversification to investing and value enhancement, understanding that the results will be the same: stability and vastly heightened prospects for future success. At the same time, amid the growing race for talent and critical new skills in our rapidly transforming workplaces and workforces, let’s replace our pursuit of the ‘best person for the job’ with a quest that seeks the best person for the team. Turning ideas into actions We believe and live by the modern portfolio theory – look at the whole portfolio rather than one investment. Let’s put that thinking – from a diversification perspective – into concerted action for a new future of gender-parity and the heightened prospects for success that it holds. Darina Barrett FCA is a Partner in Investment Management in KPMG.

Jan 23, 2020

Diversity and inclusion have become part of business strategy, but how do you measure their success? Mark Fenton outlines the key areas organisations need to assess when determining the effectiveness of their D&I initiatives. Diversity and inclusion (D&I) have shifted from being two HR buzzwords to key components of business strategy for many of the world’s best and most innovative companies. Businesses recognise that all organisations share the same three strategic challenges that either inhibit or enable success over the longer term: How to hire, retain and develop top talent; How to understand and connect with clients; and How to outsmart the competition. There has been a myriad of initiatives developed for organisations seeking to embrace and integrate diversity and inclusion programmes into their office culture, with a view to create a more attractive brand that will appeal to future top talent, as well as encouraging and strengthening the existing team. It will also enable organisations to understand clients better, and generate an increasingly innovative workplace to get the jump on competitors. Measuring success However, despite all of these initiatives, less attention is being paid to providing organisations with specific success measures for their D&I programmes (including quantitative and qualitative key performance indicators [KPIs]), and identifiable changes that should follow. Here are nine areas that are worthy of consideration when looking to measuring the success of your D&I initiatives. These are best assessed over time, across several diversity areas, such as gender, ethnicity, disability, sexual orientation and age (with the consideration that some may be subject to restriction around data capture availability).  Representation Look at representation in areas across governance (boards, committees) and hierarchical levels. Look at the promotions that have been attained and by whom. Recruitment Assess your applicant pool, who is brought in for an interview and who receives a job offer. It’s important to also assess the diversity of your selection panel. Remuneration Conduct a gender pay gap analysis of all employees. Financial savings Analyse the budget savings attributable to your D&I initiatives such as the utilisation of remote working (which can reduce office footprint and associated costs), the promotion of internal talent (which can reduce hiring costs and talent turnover expenses) and the improved employer brand (which can be effectively generated through day-to-day engagement and word of mouth without expensive marketing campaigns). Employee turnover Assess employee turnover rates and career break returners following parental, care, illness, sabbatical or other leave. Employee resource groups Determine the level of engagement in employee resource groups. Training Check the completion of D&I training such as unconscious bias, inclusive leadership and cultural awareness. Also, investigate the level of access employees have to these programmes. Policies and procedures Assess the policies and procedures in the organisation to ascertain whether they are supportive of gender and minority groups, parental supports and workplace agility programmes including flexible and remote working, talent sponsorship and codes of conduct. Voice Collect feedback on your D&I programmes from employees (via staff surveys), customers (through net promoter scores), and suppliers (utilising supplier diversity policies). In parallel, KPIs can be applied that cover, for example, employee churn rates, performance ratings, employee engagement/job satisfaction, absenteeism, union feedback, grievances or industrial relations-related issues. This data can be further enhanced by overlaying the empirical research that correlates integrated D&I practices with improved financial performance and increased brand value. More than a buzz word An awareness of the power and influence of D&I on corporate culture in conjunction with a framework to tangibly measure and communicate its ability to overcome key business challenges around talent, clients and competitors make D&I much more than a ‘buzz’ issue within the corridors of HR. It is the business strategy for 2020. Mark Fenton is the CEO and Founder of MASF Consulting Ltd. 

Jan 23, 2020

Companies are not only talking about sustainability; they are also beginning to act. Elise McCarthy explains how companies can support the Sustainable Development Goals through their business activities. Companies are beginning to recognise the role they play in creating a sustainable society and how, by doing so, they are also driving business growth and productivity. Many organisations are looking at the Sustainable Development Goals (SDGs) as a guide. Any company considering how it can support the achievement of the SDGs through their business activities should begin with these five starting points Understand the SDGs In 2015, the world leaders under the United Nations adopted the Sustainable Development Goals for nations and businesses alike to solve the world’s most significant challenges by 2030. Seventeen goals address the global challenges we face by moving to eradicate poverty, promote peace and equality, allow sustainable prosperity and protect the environment. The SDGs are built on 169 targets, which are measured against 232 indicators. It’s a good idea to review the targets and indicators when considering which SDGs offer the most opportunities for your business. Understand your business Looking upstream along your value chain, where does your company source raw materials and staff? How much of these resources does it purchase? This type of information will indicate where your company can make a change and have an impact. By taking cues from the SDGs, your company can set down specifications for suppliers and the resources it purchases.  Alternatively, your organisation could look downstream along the value chain. What products or services does your company make and supply? Are your distribution or logistics as clean and efficient as possible? Could you recycle goods? Would redesigning some products or services make a significant impact on the SDGs? Look for opportunities  There are business growth opportunities in the SDGs. For example, one report identified $12 trillion in savings and new opportunities by achieving the SDGs. The goals are not just branding for what society is already doing; they are goals that require new thinking and an appetite to see change. They are meant to challenge us to think about the world we want to live in, to play to our strengths and to use our power to make a change – even if it is under just one goal. If we all play our part, we will get there. Engage employees These days, most people are interested in sustainability and are trying to implement changes in their personal lives. Tap into that interest and enthusiasm among your colleagues by helping them to play their part at work. Show them that, as a leading employer, the company is also thinking about making smart changes to practices and procedures, and that it wants to involve its people in the journey. This user-friendly guide to the SDGs can help with internal communications and awareness.  Decade of action In September 2019, the United Nations Secretary-General called for more leadership and local action within countries and among individuals to meet these ambitious 2030 goals. Every day events – fires, storms, drought, waste mountains and growing inequality – are reinforcing the urgency of this mission. The clock is ticking but we excel when we put our minds to it. Elise McCarthy is a Senior CSR Adviser in Business in the Community Ireland (BITCI). BITCI has published a detailed guide for business on the SDGs.  

Jan 19, 2020

Social entrepreneurs are a valuable and necessary part of society and economy, providing much-needed social and environmental change to communities. Fiona Smiddy outlines how accountants and finance professionals can help support these local social enterprises. Social enterprises are businesses whose core objective is to achieve a social, societal, or environmental impact. Poverty, climate change, anti-social behaviour, housing and health are just some of the problems that Irish social entrepreneurs are attempting to tackle. We need to embrace and support social entrepreneurs as they are a valuable and necessary part of society and economy. Social entrepreneurs often come from range of backgrounds. They tend to see a problem in their local community and devise an innovative solution to help. However, many will run before they can walk, carried by their passion and energy. Below are just some ways that accounting and finance professionals can support their local social enterprise. Provide mentoring services As accountants, we can lend an objective mindset and critical thinking to social entrepreneurs to ensure their enterprise is set up for long-term growth. As in many entrepreneurial scenarios, the main workload often lies with the founder. However, it can be difficult to self-critique when your passion and belief in the solution to your social issue is so strong. A second set of eyes and ears, or the offering of a hand to review a business plan would be welcome support. Improve access to finance Due to their nature, social enterprises often seek alternative methods of funding. EU and government-backed programmes such as the Social Enterprise Development Fund can go a long way to support them. This €1.6 million fund was created by Social Innovation Fund Ireland (SIFI) in partnership with Local Authorities Ireland and funded by IPB Insurance and the Department of Rural and Community Development. There is opportunity for similar funds to be created. With the right financial backing, combined with supportive mentoring programmes, social enterprises can provide much-needed resources to local communities. Open a co-working space With the high costs of rent, many social enterprises are born and run from kitchen tables and inefficient workspaces. Your workplace could provide a platform for social change by opening a boardroom or co-working space on a part-time basis to local social enterprises. Provide training through CSR programmes Corporate Social Responsibility (CSR) programmes can go a long way to support social enterprises. Many of the skills that accountants and finance personnel possess are in demand by social enterprises. Work with your employer to identify training needs of local social enterprises and develop training programmes to assist these mission-driven businesses. Make connections and provide visibility We need more social entrepreneurs to help us find new routes toward social improvement. If you know a social enterprise through your connections or in your local community, use your platform to promote them either via LinkedIn or other social channels. You can even invite them into your workplace to promote their product or service. Social entrepreneurs are drivers of positive change. As accounting and financial professionals, we play a part in their success and must support them in creating positive change for all of us. Fiona Smiddy ACA is the Founder of Green Outlook.

Jan 19, 2020

To promote sustainable finance, the finance industry must incorporate environmental, social and governance factors into investment decision-making. Orla O’Gorman explains how companies can enable investors to invest in sustainable, socially responsible assets. The climate crisis is the most impactful and far-reaching agent of change that we will see in our lifetime, the impact of which is comparable only with, perhaps, the industrial revolution. It will permanently alter how our society and economy operate – that includes our financial systems and how capital is allocated. We have already seen the world’s largest asset manager, Blackrock, asserting that climate change will be the focus of its new strategy and that it will reshape the industry as we know it. We have also seen the world’s largest sovereign wealth fund, Norges Bank, divest entirely from all oil and gas exploration. To promote sustainable finance, the industry needs to incorporate environmental, social and governance (ESG) factors into investment decision-making, supporting the allocation and transfer of capital towards sustainable and transitioning assets. Stock exchanges are at the heart of the global financial system and will play a vital role in enabling this transfer in an efficient, transparent way. Two-pronged approach As part of Euronext’s new strategic plan, Let’s Grow Together 2022, we have developed an ESG strategy with a two-pronged approach:  Sustainable practices (what we do internally); and Sustainable products (what we offer externally). Internally, our goal is to embrace the latest and greatest methods of sustainable working. Externally, meanwhile, our goal is to develop and support sustainable products and services for issuers, investors and the financial community, and we have already launched two initiatives in support of this. The first initiative is Euronext Green Bonds, which will allow investors to discover, compare and participate in sustainable investment opportunities and allocate capital accordingly. The second initiative, the publication of our ESG reporting guidelines for issuers, enables listed companies to communicate effectively to stakeholders about their current work in sustainability and assists them in addressing ESG issues with investors that will encourage them to invest in sustainable, socially responsible assets. The guidelines also provide a basic framework for ESG strategy and reporting. Looking to the future We hope that, by empowering issuers and investors with these products and tools, we can make the transition to a sustainable economy and finance a future of which we can be proud.  Orla O’Gorman is Head of Equity Listing Ireland at Euronext.

Jan 19, 2020

New legislation from the UK government has changed the rules of UK residential property disposals. Maybeth Shaw tells us about these changes and what tax filing and payment obligations need to be adhered to post-6 April 2020. The UK government has passed legislation which will have a major impact on the filing and payment obligations of certain UK resident taxpayers who sell UK residential property from 6 April 2020, applying to both individuals and trusts and only to capital gains tax (CGT). It does not apply to UK resident companies (and, from 6 April 2020, non-resident companies) which are subject to corporation tax on capital gains. This change was initially proposed in 2015 in order to reduce the time between a gain arising on a residential property sale and the tax being paid (in order to bring it closer to the position for other taxes). The April 2020 changes represent an extension of provisions which have applied to the disposal of UK residential property by non-resident persons from 6 April 2015, which was extended from 6 April 2019 to non-residential. Disposals before 6 April 2020 Currently, a UK resident individual or trust disposing of UK residential property that results in a taxable gain is required to report that gain on their annual UK self-assessment tax return. The deadline for reporting the gain and paying the tax due is the 31 January following the year of the disposal. Disposals from 6 April 2020 onwards From 6 April 2020, a UK resident individual or trust disposing of UK residential property will be required to file a “residential property return” within 30 days of the completion date of the disposal. Penalties will apply if the return is filed late. The vendor will be required to pay an estimate of the CGT within 30 days of the completion date. This will be treated as a ‘payment on account’ against their total income tax and CGT liability for that year when their annual self-assessment tax return is submitted by 31 January after the tax year of disposal, if filed online. The individual or trust will, therefore, be required to estimate how much tax is payable. This will depend on several factors which could result in a refund/additional liability being due when the self-assessment return is submitted. If additional tax is due when the annual return is filed, then interest will be payable at the standard rate set by HMRC. Exceptions Some common examples of where a return will not be required are: Where the gain is wholly covered by principal private residence relief for the duration of the taxpayer’s ownership. If a loss arises on the sale of the property. The gain is sheltered by capital losses crystallised before the sale takes place. The gain is small enough to be covered by the individual’s annual exemption for the year of disposal. The return and payment on account will not be required where the property disposed of is not a residential property or where the property is situated outside the UK. From a practical perspective, the taxpayer will need to rapidly determine whether (or to what extent) their gain is sheltered through principal private residence relief and, if it is not fully sheltered, what the gain will be and to what extent it will be sheltered by crystallised capital losses or their annual exemption. As these can take time to assess/calculate, it will often be worthwhile to assess them before the sale has completed. Non-UK residents Non-UK residents have already been required to file returns within 30 days when they have disposed of UK property, both residential and non-residential, since 6 April 2015 and 6 April 2019 respectively. There are no changes for disposals by non-UK resident individuals or trusts from 6 April 2020. Action from 6 April 2020 The application of this legislation to UK residents will be a game-changer in the sense that the tax filing and payment obligations need to be considered immediately on completion of the sale rather than left until after the end of the tax year. It will be common for individuals not to know precisely what their CGT liability will be at the time of the sale and, indeed, some of the relevant information may not be known until after the end of the tax year. For example, this could be the case where the tax liability depends on other disposals or other income in the same tax year. It would, therefore, be prudent to contact your tax advisor much sooner (ideally before completing the transaction) when making residential property disposals in order to submit the returns on time and to determine an appropriate estimate of the CGT liability. Maybeth Shaw is a Tax Partner in BDO Northern Ireland.

Jan 10, 2020
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