Moves underway globally to reform the audit process should reduce the likelihood of corporate collapses and internal fraud, writes Paul Kilduff Whenever there is a sudden company collapse, a shocking fraud or a financial scandal, the details make the front pages of the newspapers and news sites, and the shareholders and the public rightly ask: ‘And where was audit?’ Work is presently underway to address this vital question. In the US, the Public Company Accounting Oversight Board (PCAOB) oversees the audits of public companies in order to protect investors. There are quality control standards in place covering personnel, ethics, engagement performance and client acceptance, but the chair of the PCAOB accepts that these are outdated and do not adequately promote audit quality.  The PCAOB’s plan is to close the gaps by updating the rules for how firms should police their audit work. It recently issued its 2022–2026 Strategic Plan for public comment, so these planned developments will take time. In the UK, the Financial Reporting Council (FRC) develops and maintains auditing and assurance standards. The most recent annual report from the FRC on the quality of audit in the UK found that 33 percent of all audits reviewed needed improvement. This was an unacceptably high number of audits, according to the accounting watchdog. Of the 147 audits inspected by the FRC, 41 required ‘further improvements’ and seven needed ‘significant changes’.  The Institute of Internal Auditors believes the FRC findings underline the need for urgent audit reform and robust measures designed to increase audit quality. One solution is to put the FRC audit regulator on a statutory footing with enough new legal powers to do its job effectively. Sadly, the problem of audit quality remains, and it has impacted the work of the auditor for years. High-profile scandals When Nick Leeson single-handedly destroyed Barings Bank, I was an internal audit manager with HSBC in London. My first reaction was one of relief that the calamitous events had not occurred at our bank. My second reaction was one of concern that the bank’s internal audit team and external auditors in Singapore had not discovered the £869 million trading loss hidden by Leeson. Leeson outfoxed audit. When internal audit arrived from the London head office, he met them on the chaotic trading floor of SIMEX, he told them he was very busy, and he avoided the office and all meetings with the auditors. When external audit from a Big 4 firm asked him for a confirmation for a large bogus option trade, Leeson manufactured the confirmation from a page of headed bank notepaper, using scissors, glue, and a photocopier. The audit team was none the wiser as to his deceit. Wirecard AG, a Munich-based electronic payments provider, once valued at €24 billion, went kaput in 2020. The accounts of this listed company included a bank deposit in Singapore of €1.9 billion, which simply did not exist. The Financial Times reported that, instead of obtaining confirmation of the deposit directly from the bank, the auditors relied on documents and screenshots provided by a third-party trustee and by Wirecard staff.  This audit failure happened not once, but at three successive year-ends from 2016 to 2018. I qualified as an ACA many years ago, but even then, obtaining independent confirmation of bank deposits was covered in day one of audit training. The head of the German financial watchdog BaFin was critical of the audit work performed and said the Wirecard scandal was ‘a complete disaster’, adding: ‘It starts with looking at a complete failure of senior management and it goes on to the scores of auditors who couldn’t dig up the truth.’ In the UK, there are recent examples of previously robust companies, which had been audited by leading UK accounting firms, suddenly failing. The demise of retail chain BHS, travel agency Thomas Cook and construction giant Carillion had a major impact on the UK economy, costing the taxpayer millions. The Institute of Internal Auditors believes that stronger governance and audit can help to prevent such collapses occurring in the future, protecting jobs, pensions, investors and incomes. Necessary reform The necessary improvements to audit must deliver on several fronts. The audit profession must ensure that it attracts capable individuals with strong product knowledge, an inquiring mindset, and a character strong enough to deal with any management obstruction.  The improved audit approach must be documented in revised policies and procedures, which must be ingrained in audit work. Quality Assurance functions must be set up or enhanced in firms to ensure standards are met. The cost of implementing these audit reforms must be reasonable to bear, whether the auditor is in an internal audit function, a Big 4 audit firm or a small audit firm with a more limited budget. There is an expectation that audit reform must use all available technology to improve the quality and scope of audit work. In the past, audit sampling may have been acceptable, but with advanced Computer Assisted Audit Techniques (CAATs), 100 percent auditing is the likely optimal solution. Global audit reform must also consider the changing nature of work, and the associated risks. Few auditors thought three years ago that so many employees would now be working on a hybrid basis, relying on remote systems access for client verification, payments processing and other critical tasks.  When reform does arrive, there should be international convergence, so that the audit quality rules in the US, UK and other jurisdictions are consistent and align with international standards, thereby avoiding unnecessary differences and costly duplication that could weaken audit effectiveness.  In the meantime, accountancy bodies are providing new guidance to members.  New guidance  In the UK, the Institute of Accountants in England and Wales recently reported on the significant resources devoted to fraud-related activities within audit firms. It also acknowledged the public perception that auditors can and should be doing much more to deter and detect fraud and to prevent the unexpected failure of large companies due to fraud. It was Lord Justice Lopes who famously summed up the auditor’s duty in the case of Kingston Cotton Mills Co., where the company directors had fraudulently overstated the value of stock, by proclaiming: ‘An auditor is not bound to be a detective. He is a watchdog, but not a bloodhound.’  Lopes opined that the auditor cannot be liable for any wrongdoings they had no reason to suspect were taking place, but that landmark legal judgement was handed down in 1896. The expectation placed on both internal and external auditors is significantly higher today.  The auditor is not specifically expected to search out any fraud or deception in their audit, but if there are warning signs that all is not well, the auditor must investigate these to reach a satisfactory conclusion regarding the audit opinion.  While writing my latest banking book, I researched the case of Joseph Jett, a former bond trader with Kidder Peabody in New York, who created $350 million of phantom trading profits on the bank’s computer systems.  The subsequent post-mortem report stated that the internal auditors learnt that Jett had booked billions of dollars of unusual transactions, but no auditor followed up on this anomaly. The auditor had to explain his work in court, as audit workpapers were produced with hand-written annotations without evidence of action. This is not a situation any auditor would wish to defend.  I also came across Sir Allen Stanford and his Stanford Financial Group, based in Antigua, which was later revealed to be a giant Ponzi scheme. His bank at the time had a value of $8 billion, but it was audited by a small Antiguan audit firm with just ten staff. This should never have been acceptable. When corporate disaster does strike, it is easy to point the finger at the auditor, but this is often unfair. Every auditor comes to work with the intention of doing a good job. The aim of audit reform is to assist and guide the auditor in their work, rather than to make their work more onerous. The global audit reform process is underway, and it must deliver improvements to reduce the likelihood of further high-profile corporate disasters, which damage the reputation of the auditor. In the meantime, the auditor at large would do well to maintain a healthy sense of scepticism.  Paul Kilduff B.Comm FCA is an author and banker, who has worked with HSBC, Bank of Ireland, Bank of America, Barclays and Citibank. His eighth book, Stupid Bankers: The World’s Worst Banking Disasters Revealed, is available exclusively on Amazon UK in paperback and Kindle format

Irish Government finances are in surplus and Ireland’s debt-to-GDP ratio has stabilised, so why are there calls for higher taxes? asks Dr Brian Keegan It’s hard to avoid concern fatigue setting in. What with the war in Ukraine, the cost-of-living crisis, the continued Northern political stalemate, multiple dire warnings amplified at COP27 over climate change and another possible COVID-19 surge—the list of concerns seems particularly endless at the moment.   Some time ago, the commentator Marc Coleman projected that population growth—and, by implication, skills growth—would drive prosperity in Ireland. Coleman’s ideas have been given additional credence by the current situation in the UK. Chancellor Jeremy Hunt’s November budget looks towards an extended period of economic stagnation. British productivity has not grown in line with government spending in recent years. In the moribund British economy, there is a record low level of people out of work while the number of job vacancies is at a record high.   There is a straightforward, one-to-one relationship between economic growth and the growth in tax yield, which permits more government spending without further borrowing. When the growth in gross domestic product (GDP) stalls, so too do the tax figures.   In his book The Best is Yet to Come, Coleman pointed out some of the links between more workers, growth and greater resources for public services and benefits. Though the timing was unfortunate (the book was published just months before the 2008 financial crisis), Ireland is now indeed in a better place, at least economically, than it has been for many years. Government finances are in surplus and the debt-to-GDP ratio, at around 50 percent, is back under control.   Unlike the British situation where a Budget bordering on the austere was required to meet existing public spending commitments, without an intolerably high borrowing requirement, the recent Irish Budget took a cost-of-living crisis in its stride, with grant aid against soaring energy bills for households and businesses alike being met through current tax receipts. Nevertheless, a narrative has emerged that the burden of taxation in Ireland will have to increase.   Why this should be the case is not always specified. There are unquestionably problems with housing, health, and education, but it does not automatically follow that these problems arise from underinvestment. At the time of writing, close to half a billion euros set aside in 2022 for local authority housing remains unspent. This points to management or capacity problems, not funding challenges.   The much-heralded report of the Commission on Taxation and Welfare has not had a huge impact on the political debate. This may be because it presents solutions in search of a problem. As research from the Irish Fiscal Advisory Council has pointed out, “its work was not framed around any specific shortfall in funding that needed to be filled. Instead, it was guided by a broad intention to generate additional revenue”.   Even government politicians, who are rarely scathing about the output of an expert group, which the government itself commissioned, were dismissive of the recommendations. Clearly, there are some areas of the economy where additional tax funding will be required, if not immediately, in the medium-term.   Unless there is an unforeseen level of immigration of people of working age, the ratio of workers to pensioners is going in the wrong direction. Climate change management, ironically being driven more by energy security concerns than global altruism, will come with a price tag. The sustained high corporation tax take may have peaked. In Britain, the urgent need for higher taxation has been unanswerable. In Ireland, there needs to be a clear business case for any form of new or additional taxation. We have enough to be concerned about without the prospect of unnecessary taxes. Dr Brian Keegan is Director of Advocacy and Voice at Chartered Accountants Ireland

Chartered Accountant Eamonn Hughes is playing a leading role in Bank of Ireland’s Responsible and Sustainable Business Strategy. Hughes tells Accountancy Ireland about the four-year plan and his goals as Chief Sustainability and Investor Relations Officer  Before joining Bank of Ireland Group in February as Chief Sustainability and Investor Relations Officer, Chartered Accountant Eamonn Hughes had a longstanding career as a sell-side market analyst with more than 25 years’ experience in capital markets and domestic banking.  Having worked most recently with Goodbody, the stockbroking firm, as Irish Banks and Insurance Sector Analyst and, before that, Head of Research, Hughes also had a clear view of the swift rise in environmental, social and governance (ESG) to the top of the financial agenda worldwide. “I could see that ESG was becoming hugely important in capital markets and the financial sector. The climate crisis, in particular, is a critical threat, but also a significant opportunity,” said Hughes. “For our planet, there is no Plan B, but the discussion about sustainability is not just about climate change. It is also about creating a more sustainable business model. Our vision at Bank of Ireland is to be the national champion in Ireland, to use our balance sheet and resources to drive positive change for a better, fairer society and improve the environment. “This gives me a very strong framework to think about my role, because, if we can deliver on our ESG strategy, we can ultimately deliver a more sustainable business model for all stakeholders and positive returns for investors. “The ESG agenda also involves regulators, so disclosure and risk management are very important—and there are reporting frameworks in place, but they are evolving very quickly. This is one of the challenges we face and is also why transparency and the availability of clear data is so important.  “With my background in capital markets, I can clearly see the mobilisation in capital, and I think the banking sector has a very obvious supporting role to play in society’s sustainability transition.” Investing in tomorrow Bank of Ireland published its Responsible and Sustainable Business Strategy in March 2021, a year before Hughes joined the group.  Bank of Ireland’s four-year Investing in Tomorrow strategy set out its own goals to support the green transition, alongside two additional pillars: enabling colleagues to thrive; and enhancing customers’ financial wellbeing. The Investing in Tomorrow green transition pillar included the setting of science-based targets aligning the bank’s lending portfolios with the Paris Agreement. The international treaty on climate change, adopted in 2015 at COP 21, set out a goal to limit global warming to 1.5 degrees Celsius, compared to pre-industrial levels. “Data is key across all three pillars, because reporting is essentially an output of what we are doing in support of climate change, colleagues, customers and the organisation as a whole,” said Hughes. “We need to focus on how we interact with our stakeholders internally and externally and, in my role, investors are obviously a key priority. As investors now have to produce more disclosures themselves, they will need to engage more with us in terms of what we are doing on our own ESG journey.” Clear reporting strategy How Bank of Ireland communicates with, and reports to, stakeholders on the progress of its ESG strategy is a priority for Hughes in his role as Chief Sustainability and Investor Relations Officer. “Ultimately, we need to explain how we are meeting the targets set out in our strategy, and it is incumbent upon us to develop the capacity and skill sets we need to support reporting and strategy delivery,” he said. “My role is to support in delivering across all three pillars, which involves a lot of data-gathering internally, particularly from a regulatory and reporting perspective.” Detailed progress reports on ESG will now be a core part of Bank of Ireland’s annual reporting cycle. “We need to be able to demonstrate clearly that we are creating a sustainable business strategy, enabling colleagues to thrive in the organisation and enhancing financial well-being among customers, in addition to supporting the sustainable transition,” said Hughes. “Transparency is hugely important. There are a lot of differentials in this space, so we need to standardise our reporting; to be able to explain clearly and cohesively what we are doing and why.” Commercialisation is becoming increasingly important as Bank of Ireland continues to implement Investing in Tomorrow, Hughes said. “Like many banks, we are in the commercialisation phase of our ESG strategy with the creation of sustainable finance solutions for, and increasing engagement with, customers. We are supporting and incentivising customers through competitive rates to buy or build an energy efficient home or to retrofit their home or business to make it more energy efficient.” Sustainable finance fund Bank of Ireland recently announced a €3 billion increase in its Sustainable Finance Fund, which will bring it to €5 billion by 2024. The fund covers green propositions, including mortgages, home improvement loans and business  loans.  Bank of Ireland’s inaugural standalone Responsible and Sustainable Business Report, published in June, tracked the progress of its ESG strategy in 2021. More than €1.8 billion in mortgages, home improvement loans and business loans had been drawn down from the Sustainable Finance Fund by the end of the year, the report stated. Thirty-five percent of all mortgages provided by the bank in 2021 were green, rising to 48 percent in the first half of 2022.  Bank of Ireland was also the largest provider of wholesale finance for electric vehicles in 2021, providing finance to 13 of the 15 car manufacturer franchises. The publication of the Responsible and Sustainable Business Report marked a significant “step-change in the tracking and transparency” of the bank’s ESG reporting, Hughes noted.  “Our stakeholders—including customers, shareholders, and regulators—are demanding far greater transparency as to how we are meeting our ESG commitments,” he said. “This report provides insight into our strategic approach, appraisal of our progress to achieve our purpose, and information on the key focus areas we plan to progress in the years ahead. Being clear on ESG, and showing how you are delivering what you sign up to, is now a commercial imperative for all lenders, including Bank of Ireland.” Science-based targets Bank of Ireland has also committed to setting science-based targets across portfolios and operations to align lending practice with the low carbon ambitions set out in the Paris Agreement. “We completed two successful green bond issuances in 2021, raising €1.25 billion with the capital used to finance green buildings, renewable energy projects and clean transportation,” said Hughes. “Thirty-five per cent of the mortgages we provided in 2021 were green and we have also launched a green mortgage product in the UK.” Bank of Ireland is providing finance for the development of at least 750 megawatts of renewable wind capacity across the island of Ireland. The bank is also in the process of decarbonising its own operations—reducing absolute emissions by 88 percent between 2011 and 2021. Social and governance Although supporting the green agenda is a major part of Investing in Tomorrow, the strategy also sets goals for investing in colleagues and enhancing customers’ financial wellbeing. “We recognise the supporting role we can play in Ireland’s response to the climate crisis, but the ‘S’ and ‘G’ are equally important when we consider ESG,” Hughes said. “We have a strategy to improve the financial wellbeing of our customers and to foster a financially inclusive society.” Bank of Ireland was, Hughes said, supporting customers to become more financially confident, while also working to simplify processes, so that the “financially marginalised have easier access to banking services.” Financial health and inclusion  Bank of Ireland is one of 28 banks around the world that have signed the Commitment to Financial Health and Inclusion published in December 2021 under the United Nations Principles for Responsible Banking (PRB). A first-of-its-kind initiative aimed at promoting universal financial inclusion and health in the banking sector, its launch closely followed the publication of the UN’s PRB Collective Progress Report. The report identified financial inclusion as the third most pressing sustainability challenge facing signatory banks, behind climate mitigation and adaptation. “This UN initiative is particularly important in an environment in which we have a cost-of-living crisis and customers are facing major challenges in the medium- to long-term. The question for us is, ‘how can we deliver this particular skill set and support our customers at a time when they really need it?’” said Hughes. Bank of Ireland is also helping customers to “live more sustainably” with the recent announcement of the roll out of bio-sourced debit and credit cards. Launched in October, the initiative will over time replace all plastic debit and credit cards issued by the bank, to help support the reduction of single-use plastic. “If we are to live in a more sustainable way, we need to do things differently, including through our everyday banking. The introduction of bio-sourced cards is a very practical way we can help our customers to reduce their environmental footprint,” Hughes said. “As a bank, we are working very closely with our customers on the sustainability transition. As they deliver, we deliver. It is a symbiotic relationship and an exciting place to be.”  

Martin Moloney, Secretary General of the International Organisation of Securities Commissions, outlines his priorities for the year ahead Irishman Martin Moloney is Secretary General of the International Organisation of Securities Commissions (IOSCO). Headquartered in Madrid, Spain, the international body brings together the world’s securities regulators and is recognised as the standard setter for the securities sector worldwide. IOSCO develops, implements, and promotes adherence to internationally recognised standards for securities regulation, working closely with the G20 and the Financial Stability Board (FSB) on global regulatory reform. Accountancy Ireland sat down with Moloney to discuss his goals, priorities, and concerns for the year ahead. Q: What are the biggest risks facing investors around the world right now and how is IOSCO working with securities regulatory agencies to address these risks? The risks that investors face never really change. There are some fundamentals. You can hire the wrong advisers, you can pay them too much, you can choose the wrong times to get in or out of markets, and you can invest in the wrong things. These risks are the core risks for investors, and they have been for as long as financial markets have existed. The difficulty is that financial markets are constantly changing. New asset classes like crypto are emerging, and there are new ways in which intermediaries work on your behalf, but also earn fees for themselves. This creates new risks for investors. Also, as we saw from recent events in the UK, markets can go into sudden periods of stress and crash. We do our best, working with others, to try to make markets as resilient as they can be, to ensure that these episodes are few and far between insofar as we can. These are the big issues facing us currently. Really, it all comes down to integrity—being able to trust the price you see when you invest in the markets and ensuring that you are not being fooled by people who are trying to cheat you out of your money. Q: You have described the rise of cryptocurrency as an area fraught with risk, requiring “a lot of work” on the part of regulators. Can you tell us more? There is no doubt in my mind that we have reached a turning point in relation to crypto. This is not because of the so-called ‘Crypto Winter’. The value of crypto might go up or down, but that is not really the issue. The point that we all have to observe and recognise is that crypto has survived and has continued to survive over a number of years. It is reasonable to assume that it is not going away and, therefore, it has to be regulated. I am delighted to say that, since I have joined IOSCO, the organisation has moved forward with its policy in this area and is now very quickly developing a set of guidelines for the market on how different jurisdictions should regulate crypto and the common standards they should aim to achieve in doing so. We are seeing a number of regions, notably the United States and Europe, now moving towards developing legal frameworks. I have no doubt that this is far from the end of the matter, however—it is just the beginning. Crypto is going to evolve and change as people get on top of the technology and new opportunities emerge. The most important thing we must all keep an eye on here is the outcome for the investor. In the first years of crypto, a huge number of people lost money through fraud. Other people, who may not even have been aware of it, lost money through market manipulation, insider trading and various other dubious activities we know well. Very often, this has been driven by conflicts of interest. If you dig down into the principles articulated by IOSCO for financial markets many years ago, you will find us warning against many of the phenomena we are now seeing in crypto markets. Theft does not change. It might happen in a different location, but theft is still theft. Bad management is still bad management, no matter where it happens. It is up to us to re-articulate these very simple, but really important, ideas and explain how they can apply in the crypto space. It is also important for the crypto sector itself to come up with good solutions and technologically enabled solutions, so that its work can be supervised and that it can reach the same standard of regulation as the rest of the financial sector. There are a number of individuals, I think, within the crypto sector who have come to understand that they need to move positively towards a strong regulatory framework in order to bottom out their businesses and remain stable. If we do not start to see self-regulation within the crypto sector, then I think we will see more jurisdictions banning crypto. It is just not sustainable over the medium term to try to avoid the regulatory frameworks that apply to everyone else. It is one thing to see yourself as a different asset class. It’s quite another to see yourself as an entirely different industry when you are effectively doing the same thing. Q: So, you do believe that cryptocurrency has a long-term future provided that there is robust regulation in place across the board? I think there is some potential for this asset class, but it is going to become more challenging. I don’t have a crystal ball, so I try not to predict the future. I see some very interesting new products developing in the decentralised finance space, and I wonder if this is ultimately where crypto is going to go. We are all used to a simple model in which you get quite non-functional assets like Bitcoin being traded and people making money primarily out of the bubbles in Bitcoin. The use cases for crypto continue to be worked on extensively, however. So, every time you have one of those bubbles, what is actually happening is that money is being raised to allow people to invest in new potential use cases. There are now so many use cases that have come and gone, and failed ideas that have been touted and promoted, you could be forgiven for thinking that there are no use cases left for crypto—but that is probably wrong. I think people will continue trying to figure out good use cases for crypto. I don’t think it’s going away any time soon. Q: You have spoken recently about the greenwashing risk facing securities regulators—what can be done to address this? We put out a couple of reports in 2021 where we looked at the greenwashing issue in great detail, listing the different ways in which this phenomenon occurs. We had to acknowledge, however, that it is not just about ‘evil intent’. Activity that might be described as greenwashing often happens, because the market structures needed to adequately support sustainable finance are not yet in place. Sometimes, you do get people who are frankly trying to fool investors by issuing misleading information, but, equally, the markets as they stand are just not built for sustainable financing. Having identified the problem and having asked the industry to work as hard as possible to reduce the amount of greenwashing that now exists, we have had to acknowledge that the system itself needs to change. Regulators have to do it, governments have to do it, standard-setters have to do it—to create a better system to achieve true sustainable finance. If, for example, I am proposing an investment that has a strong impact in terms of reducing carbon emissions, I should get a better price on the market and a better investment price for that security than someone who comes to market with a security for a carbon-emitting project. We want the market to be sensitive to the environmental impact of different proposals, companies and products. They must have access to information that is reliable; that has been independently audited; and that brokers can bring together to compare stocks from different parts of the world and determine differential pricing based on their impact on the environment. Getting all of this right would be an incredibly hard job, so we have broken the job down into a number of elements. We will be progressively working on putting these building blocks in place over the next couple of years, in order to make sure that the process can be regulated and that people who don’t do the right thing can be held to account on the basis that they could have done the right thing and chose not to. Q: As the move to establish standards for environmental, social and governance (ESG) reporting gathers pace, what is your take on the current efforts underway? We have a very close relationship with the International Sustainability Standards Board (ISSB). We effectively oversee its work and, if we like what it is doing, we will endorse its standards, and recommend those standards to individual regulatory securities agencies around the world, so that these jurisdictions can adopt the standards as they see fit. The fundamental issue we are all facing is that a sustainable financial marketplace has to be a global marketplace. If you have fragmentation and you don’t have the same information sets available in different parts of the world, you cannot have a true comparison between different securities, and capital cannot flow to the best projects. It is no good for anyone if Europe is pristine, while the rest of the world is working in a different way. What happens in the Amazonian rainforest matters to all of us. Capital, therefore, has to flow from those places where it is abundant, such as Europe and North America, to locations in which the opportunities exist to do the right thing. What IOSCO has said to the countries we work with around the world is, “do this any way you want, but use the ISSB standards as a baseline and build your own approach on that foundation”. Put simply, you can do all you want in the ESG space, but unless we have a common core, we cannot create a global financial market that will bring about any real change. Q: Can you tell us about the work you are doing with the Financial Stability Board in relation to investment funds? This is a very big project for us. Investment funds are a crucial mechanism all around the world for people to get access to markets on a collective basis, but they can have a concerning impact on markets in periods of crisis. We have been doing work in this area since 2016. We have done a lot already, but there is more to do. A major focus for us next year will be trying to make sure that the kind of funds both ordinary individual investors and the more risk-averse institutional investors choose are safe in a crisis. We are trying to ensure that, if you are investing in a product that is riskier, it will be clear to you that it is more difficult to get your money out of it; that these kinds of investment funds are not the equivalent of a bank account. This is a typical example of what we do, but there are lots of others. We do a lot of work on cyber-resilience, and we are also very interested in the change in the behaviour of retail investors and their vulnerability to scams. One of the problems we face at the moment is that, while technology has made it easy or cheap for people to invest in the markets, it has also made it easy or cheap for fraudsters to get at many thousands of people. We need to figure out better and better ways to stop these fraudsters and prevent them in their designs. About Martin Moloney Prior to joining IOSCO as Secretary General in September 2021, Martin Moloney was Director General of the Jersey Financial Services Commission and, before that, he worked as a Special Adviser on Risk and Regulation to the Central Bank of Ireland, where he served for 16 years, previously heading up the Markets Policy, Markets Supervision, and Legal and Finance Divisions. Moloney began his early career working in industry with Barclays Bank and Bank of Ireland in London, before returning to Ireland to work with the Department of Justice, Department of Finance, the Irish Competition Authority. Born in Dublin, he has a master’s degrees in Business Law and Economic Policy, both from Trinity College Dublin.

Elaine Coughlan, one of Ireland’s most successful venture capital investors, tells us how her experience in accountancy and audit led to a high-flying career in technology Since qualifying as a Chartered Accountant and cutting her teeth in audit in the 1990s, just as the first wave of tech entrepreneurs in Ireland were beginning to access US capital markets, Elaine Coughlan has carved out an illustrious career in venture capital. Dublin-born Coughlan is the co-founder and joint Managing Partner of Atlantic Bridge, the global growth technology fund with more than €1 billion in assets under management across nine funds. For Coughlan, her career is a testament to both her training in finance and the power of human connection in business the world over. “Atlantic Bridge has over 35 companies we have successfully sold or ‘IPOed’ and I am immensely proud of that,” she says. “The wins drive you on because you can see what’s possible and those Irish entrepreneurs become role models for the next generation. I’m proud of the assets we have under management, and that Atlantic Bridge now has people in Dublin, London, Paris, Munich and Palo Alto in Silicon Valley. That is a truly global footprint, and it really helps us to scale our companies.” Early connections Coughlan credits the professional connections she made at an early stage in her career at Ernst & Young with setting her on the path to professional success. “Some of the people I met back in the nineties, our clients at the time, were hugely influential on me,” she says. Among those clients was Smurfit (now Smurfit Kappa), already a long-established industry leader in paper packaging production. “I was seconded from Ernst & Young to work with Smurfit when it was probably the number one Irish company in terms of market capitalisation and really blazing a trail in Irish business,” she says. “It is still a phenomenal company today, but for me at that time, Smurfit was just so ambitious and far-reaching in its approach to mergers and acquisitions, and the capital markets. I worked on fundraising and acquisitions with them and had early exposure to some of their senior executives—people like Gerry Fagan, their then-CFO.” Coughlan forged other crucial connections at the time with Bill McCabe, founder of CBT, the e-learning group, and Iona Technologies’ Chris Horn. “Bill and Chris were the first entrepreneurs in Ireland to float tech companies on the Nasdaq and, if you look at what they had in common with Smurfit, it was really that they were all entrepreneurial,” she says now. Coughlan would leave Ernst & Young to join Iona ahead of the company’s Initial Public Offering. “I knew then that practice probably wasn’t for me. That’s not to say that you can’t be entrepreneurial in practice, but the cut and thrust of the tech business pulled me in,” she says. “I remember traveling over to the US with CBT back in 1993 and that was it for me. There was such a sense of possibility.” Coughlan went on to join Parthus, the semiconductor IP company co-founded by Brian Long, and the pair formed an abiding partnership, co-founding both Atlantic Bridge and GloNav, the GPS company acquired in 2007 for $110 million. “All these years later, I am still in business with the same people, and they were the people that had an impact on me starting out. They were the people I learned from and the people who were generous with their time and their knowledge, and willing to give me experience and opportunities,” she says. For young Chartered Accountants starting out in their career, Coughlan has this advice: “Above all else, nurture your connections. These young professionals will already be well-qualified and proven in their ability and resilience, because training to become a Chartered Accountant is challenging in itself,” she says. “The question they have to ask themselves is ‘what differentiates me beyond that?’ It comes down to being able to combine your knowledge with strong relationships in ways that bring about better outcomes.” As Coughlan sees it, building solid sustainable relationships in business isn’t simply a case of networking and ‘transactional interactions’. “It’s about finding people who share your values and ethics, whose accomplishments and abilities you admire, and who have the ability to lead and inspire. You always have to be thinking long-term, not just about your next connection on LinkedIn,” she says. Supporting start-ups Coughlan’s commitment to supporting start-ups and advancing Ireland as a leading hub for technology development was recognised at this year’s Irish Accountancy Awards, at which she won the prize for outstanding contribution to the profession. “When we started Atlantic Bridge in 2004, we wanted to help tech companies in Ireland to scale successfully. Ireland is a small island and a small economy, so there are two things tech companies here need to scale—they need to move beyond the island to reach customers and they need access to capital,” she says. “We wanted to cross the Atlantic to the US, because it is the largest market in the world in terms of customers and capital markets. At the time, Ireland had a VC market of less than €100 million. It’s 10 times that size now, but back then, it was really small.” The primary focus for Atlantic Bridge today continues to be “deep tech” innovators in the business-to-business (B2B) space. “We’re not after instant gratification or overnight success. These are businesses with defensible research-intensive technologies that are primed to scale when the time is right,” says Coughlan. “Our investors are patient. They are looking for strong long-term returns, and we are very proud to have reached the stage where we have raised nine funds, because that is not an easy thing to do in this industry.” Coughlan warns, however, that we are entering a “new investment cycle”, in which surging inflation, rising interest rates, and the risk of recession, are all making investors more risk averse. “The outlook for Atlantic Bridge in the short-term will be cautious and tactical, but beyond that, we are optimistic and deeply committed to the technology trends we are seeing today that will make a difference in the future,” she says. “A lot of the technologies we’re investing in now are in climate change action—low-power, low-carbon enablers—and in medical technology and the digitisation of health, where we can meet unmet needs. We’re focusing on technologies like Artificial Intelligence and semiconductors—the fundamental building blocks that will be built into new products over the next three to five years.” Research and development As the economy enters uncertain terrain, Coughlan is urging the Government to continue investing in research and development (R&D). “Ireland has to continue to invest in R&D. We need to hold our nerve in continuing to invest in the best and brightest people and start-ups, because they will drive the next generation of growth,” she says. “Today, we are investing about 1.25 percent of GDP in R&D. We need to get that up to between 2.5 percent and three percent. The future economy will be knowledge-intensive and that requires knowledge-intensive people.” Coughlan is equally committed to the advancement of her profession, and proud of her own achievements as a Chartered Accountant. “The ‘bean counter’ perception is one too many people have of accountants, but I would probably be the last person you’d ask to do a P&L statement,” she says. “I can tell you if it is right or wrong though, because I understand the numbers and what they mean. I can interrogate and interpret any set of numbers and that is because I am a Chartered Accountant. All business now is run on data and our profession gives us a really strong grounding in using data to make decisions—and that is the future. “There are doors that are opened to you when you train as an accountant. You learn about process, structure, deadlines, and relationships. All of these skills are incredibly important. “You come out of it battle-hardened and resilient, and with all these options: to stay in practice; to focus on technical work; to go into consultancy; financial services; or business and entrepreneurship. The opportunities are phenomenal.” Growing up in Beaumont in north Dublin in the recession-hit 1980s, however, Coughlan had envisaged a different career for herself. It was a chance encounter that set her on the path to accountancy and a high-flying career in venture capital. Early career path “I was good at numbers at school and I studied accountancy for the Leaving Cert, but I wouldn’t say I was destined to be an accountant. I fully recognise now that it was my accountancy and audit experience that led me into the technology industry, but my real interest growing up was people,” she says. “I wanted to work in a people-focused environment, so I applied to study marketing and languages at DCU and went for a summer job at a small accountancy firm to keep me going in the meantime.” Coughlan didn’t get the summer job, but she was contacted by her interviewer and urged instead to consider accountancy as a full-time career. “It was 1989, unemployment in Ireland was something like 15 percent and so many people were emigrating to find work in the UK and the US,” she says. “I didn’t know anything about becoming a Chartered Accountant, but I wrote to the Institute and was offered a training contract with Ernst & Young. Here was this opportunity to have my fees paid and earn a wage with guaranteed work in a really tough economy. It was a great deal. That’s why I always say to this day, ‘what’s meant for you won’t pass you by’.”

The war for talent is as fierce as ever, but how can private companies entice employees to stay versus listed companies? Laoise Mullane explores Amid the backdrop of the great resignation, it is unsurprising that employee empowerment is the central emerging theme in this year’s PwC Global Workforce Hopes and Fears Survey, Irish Report 2022. The survey’s insightful results illustrate that today’s workforce is very focused on areas such as fair pay, hybrid work, meaningful work, the ability “to be oneself” at work, and wellbeing. Here are five ways businesses can respond to the survey’s findings and use them to their advantage. 1. Offer competitive pay Unsurprisingly, given the increased cost of living, salaries were identified as a significant issue for most survey respondents. Over 60 percent of respondents plan to ask for a pay rise, and one in five respondents are extremely likely, or very likely, to find a new job in the next 12 months. Employers in the private business sector may feel that they are at a competitive disadvantage and, compared to listed companies, they have fewer opportunities to incentivise employees with rewards such as employee share schemes. Private businesses should instead look to other rewards that only they can offer. It is imperative that private businesses review their pay scales and ensure that they offer competitive salaries and benefits. This is an important factor in both attracting and retaining top talent. 2. Capitalise on hybrid working Historically, private businesses may have struggled to attract employees because of their geographical location. However, remote work, in many cases, has eased this problem by removing the need for employees to be in the office five days a week. In the survey, hybrid workers are most satisfied with their work, and 52 percent of respondents prefer a mix of in-person and remote work. The ability to flex to the needs of your employees is proving to be a winning formula, and hybrid working will assist private businesses in attracting top talent from outside their geographical area. Communicating this hybrid proposition clearly and routinely to employees can set private businesses apart from competitors. 3. Demonstrate the meaning and purpose at the heart of your business Employees want to work in an environment where they can be their true, authentic selves. Respondents ranked job fulfilment and the ability to be one’s true self at work as a top issue when considering their current work environment. A large cohort of people (73%) said that finding their job fulfilling was an important factor when considering a change in a work environment. There is often a sense of collective purpose in working for a company with tradition, history and a defined role in the local community. This strong local community anchor can be used to differentiate and empower employees to express their authentic selves. 4. Commit to an open, transparent culture This year’s survey results show that employees working in Ireland value meaningful engagement. However, only 24 percent of respondents felt that their companies provide support for them to work effectively with people who share different views. This is a disappointing result that represents a missed opportunity for some employers. Private business leaders are encouraged to facilitate an open and transparent culture and to provide both time and space for discussions—particularly when it comes to sensitive topics. Lead by example in your communications and demonstrate consistently that you welcome these open discussions. 5. Seize ESG opportunities now Employees value working in an organisation where environmental, social and governance (ESG) is identified as a key priority. Acting on environmental concerns is a key area of interest for employees, with only 18 percent of respondents stating that their company helps minimise the environmental impact of their job. ESG can be a real area of differentiation for private businesses. Listed companies are obliged to embrace ESG against the backdrop of reporting requirements. However, without the pressure of being held to account on ESG initiatives, private companies risk falling behind. Indeed, employees are demanding that companies look beyond financial performance to broader ESG commitments. It is imperative that Irish private businesses enhance their workforce strategies to attract and retain key talent. They must also tailor their strategies to the unique needs of their workers. Laoise Mullane is Senior Manager of People & Organisation in PwC

Stephen Prendiville looks at how sustainability efforts to date are contributing to Ireland’s attractiveness to investors and how Ireland can continue to thrive in this area The EY European Investment Monitor, published in May 2022, has demonstrated how Ireland’s sustainability credentials are helping to bolster our position among Europe’s most attractive FDI destinations. Ireland has enshrined climate action law, holding itself to carbon budgets that include sectoral emissions ceilings and producing a climate action plan each year that sets a clear direction. The stability this offers provides positive momentum for sustainability and climate action, which is a factor in Ireland being an attractive destination for investment. It shows that sustainability can and must be a value-led proposition. Sustainability KPIs According to the EU European Investment Monitor, Ireland rated extremely well when it comes to a range of key sustainability performance measures. Eighty-eight percent of respondents said Ireland performs as well as, or better than, the European average for the presence of workforce and skills to facilitate sustainability projects. Eighty-six percent said the same for the availability of financing for sustainability projects and for regulation to support sustainable business practices. Ireland’s potential as a location to decarbonise the supply chain was rated as better or as good as the European average by 83 percent of respondents. The presence of an ecosystem of innovative cleantech and sustainability businesses (82%), local consumers’ concern for sustainability and climate change (81%), and the proportion of renewables in the electricity supply chain (79%) were also rated as at least as good or better than the European average. Government action Sustainability also figured strongly when respondents were asked to name priority areas for Government action to maintain Ireland’s FDI attractiveness. Investment in the decarbonisation of Ireland’s energy system and measures to accelerate progress towards a net-zero economy were highlighted as key areas of policy focus. Budget 2023 maintained a stable set of incentives, grants and other drivers for decarbonisation and positive change across the economy. The carbon tax was adjusted in line with prior commitments, and the overall result was stability in Budget 2023. These findings should come as no surprise. Sustainability issues have been ascending the corporate agenda for many years. In many key areas, the corporate and investment worlds appear to be ahead of governments when it comes to actions to tackle climate change and other environmental, social and governance (ESG) issues. At last year’s COP 26, it was highlighted that companies and governments must work collectively to advance climate action and decarbonisation at the scale demanded. While governments toil with difficult long term implications, businesses can move nimbly and take necessary action on much shorter timescales – which in turn will help governments take brave steps forward. Foreign direct investment From an FDI perspective, sustainability is likely to grow in importance in the coming years. FDI decision-makers will increasingly look at sustainability factors when choosing locations for new investments. And this will be driven by compelling business reasons. The first of those will be companies’ own requirements to decarbonise. New regulations like the Corporate Sustainability Reporting Directive (CSRD) will see companies being held to account for their performance in relation to decarbonisation and other sustainability targets. That will fundamentally change the equation when it comes to energy supply, for example. The availability of renewable energy will move from being a ‘nice to have’ to an absolute essential. Companies which have set 2030 as their target date for achieving net zero carbon will require electricity supplies generated exclusively from renewable sources well in advance of that date. While Ireland is viewed quite favourably at present for the proportion of renewables in its electricity supply chain, that position can change very quickly. Massive investments are required to make the grid capable of carrying more than 80 percent renewables by 2030, especially while there are barriers to renewable energy developments which need to be removed or mitigated. Rapid progress will be required in both of those areas if Ireland is to retain its attractiveness for inward investment. Ireland leading the global community While there is an opportunity for Ireland to be a significant part of the global climate action story, with the associated benefits to the Irish economy, there is no arbitrage opportunity when it comes to climate. Ireland is and can continue to lead the global community as we move forward on our sustainability journey together. We have some natural strengths, including a stable economy, vibrant tech and innovation ecosystems and an educated workforce. We are also a hub of global finance and technology companies accessing the European market. We can do more, and the European Business Attractiveness Index highlights that we are in a strong position to do so. Stephen Prendiville is Head of Sustainability at EY Ireland

Your time is a precious commodity and should be respected, particularly during busy seasons. Moira Dunne gives three tips on how best to utilise your time and maximise your productivity It is hard to be productive in today’s busy work environment, especially in the lead-up to the holidays. Whether you are working hybrid or fully remote, it is important to get the best return from the hours you work. Imagine finishing each workday with a sense of achievement, knowing that you have done everything on your list. For many people, that is the simplest definition of being productive: making a plan and then sticking to it. It helps us deliver important tasks, but it also contributes to our well-being. If you are not happy with your workday, do something about it. Start by understanding where your time goes each day. In most busy work environments, there are many requests and urgent issues, causing us to spend a lot of time in reactive mode, responding to others instead of making progress toward our own goals. To change to a more proactive way of working, you need to develop good habits. This helps you take control of your time and take charge of your workday. Here are three tips to boost your productivity in the few weeks before everyone takes a much-earned break. Tip 1: protect your time To protect your time, it is important to have a plan for your own work. Set out the key pieces of work you want to get done each week and the targets you absolutely must reach by Friday. Figure out what tasks will make you feel the most productive and accomplished by the end of the week and put them in motion. This plan gives you a focus for each day. You will be motivated to complete your tasks to achieve your target by the end of the week. Tip 2: say ‘when’, not ‘now’ Without a plan, it is hard to say no when someone makes a request, and people are often compelled to respond immediately. Your weekly plan will now help you quickly assess which work should take priority, particularly when it comes to new requests. For work that is a lower priority, ask the requester when they need it. They may say they need it straight away, but the question can prompt them to assess their own timescale and will communicate that you don’t drop work to respond to new requests. The best part of this response is that you are not saying no but instead negotiating a response time that suits your plan. Tip 3: make progress on the big things It can be hard to find time to work on bigger projects or goals, but this is our most important work. Sometimes we wait for a quiet week or a free block of time in our diary, but when those days do not come, the project gets pushed out. Start using your weekly plan to achieve your long-term goals. Include actions to get started on a project. Set a target to complete a goal. Bit by bit, task by task, make progress each week so that when the deadline arrives, you have the work done. Moira Dunne is Founder of beproductive.ie

The gap is closing on gender inequality in Ireland’s boardrooms, but organisations must do more to promote female leadership. Meliosa O’Caoimh explains how Published this month, the Balance for Better Business Review Group’s fifth report brought welcome news, revealing that targets of 30 percent for women on all public listed boards in Ireland had been exceeded for the first time, now standing at 32 percent. Figures for the percentage of women on the Boards of ISEQ 20 companies rose to 36 percent through voluntary action, up five percent on last year. Ireland also now exceeds the EU27 average for the proportion of women on leading company boards for the first time. For other listed companies, the percentage of women on Boards stands at 26 percent, exceeding the 22 percent target set for the end of 2022 and up 16 percentage points since 2018. It’s fantastic that, after just five years of the Balance for Better Business initiative, we are seeing such strides forward in female board representation. Progress is not happening at the same pace in other spheres, however—particularly with regard to C-suite (CEO, CFO and Chair) roles. Here, women are still significantly under-represented in many large companies. It is critical that we continue to address this gap, because—in addition to providing an important pipeline for board talent—it is imperative that we have gender balance at all senior decision-making levels within organisations. To help redress the balance, individual organisations must take their own steps to promote gender equality on Boards and C-suite. Here are some recommendations: Set Diversity and Inclusion (D&I) as a standing agenda item at Board level, using topics like the Gender Pay Gap, Balance for Better Business, ESG and other related issues to promote genuine discussion, and track progress; Integrate diversity into the business agenda at C-suite and Board level, to include action planning and KPIs for outcomes relating to employees, product innovation and development, supply chain integration and customer experience; Set targets for senior roles of influence with a focus on Board and C-suite; Build succession planning for key roles and ensure that, in 3:1 cover plans, there is a gender balance in available talent or a plan to achieve greater gender balance. Such succession planning should be based on individual roles and functions, and not approached as a blanket team approach; Complete a process review of all board appointment systems—including, for example, a board diversity policy, a nomination committee standard, and a commitment to balanced slates for selection consideration; Carry out a process review of all C-suite appointment systems, including mandated balanced slates, open advertising, and reviews of merit standards and role accountabilities; Commit to career path planning across specialist functions, particularly in Finance or P&L portfolios, to ensure gender balance in roles that are the future pipeline for CFO and CEO—from graduate, through to middle management, and on to senior management, as part of a longer-term strategy. Meliosa O’Caoimh is Chair of 30% Club Ireland

The Government has signed into legislation a new tax credit for the digital games sector. Ian Collins and Arek Rojek outline what this will mean for the gaming industry in Ireland On 21 November, the Irish Government, on the back of European Commission approval, officially signed into legislation a tax credit for the digital games sector. This offers a refundable corporation tax credit to digital games development companies for expenditure on the design, production and testing of a digital game. Originally announced in Budget 2022, the new tax credit represents a fantastic opportunity for Ireland to become a powerhouse in the global games development industry. It follows the recent introduction of several university courses geared towards video game development, and clearly sets Ireland’s ambition of becoming a hub for the digital gaming industry in a sector estimated to be worth up to €260 billion. This incentive will be available at a rate of 32 percent of eligible expenditure ranging from €100,000 to €25 million per project. It will also require the game to meet a cultural test based on the contribution its development is expected to make to the promotion and expression of Irish and European culture. These parameters are similar to those already applying to the Irish film tax credit. Video games in Ireland have a vibrant history, and a significant number of indigenous and multinational gaming companies already have operations in the country. When you combine this incentive with the Irish talent in the audio and visual arts, you have a recipe for success. Many other jurisdictions have introduced incentives in this sector, so the launch of the digital games tax credit in Ireland is also very timely. The regulations will now be signed by Revenue, allowing digital games development companies to apply for an interim certificate from the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media for a qualifying digital game. It is expected that certificate holders will then be able to apply for refunds under the scheme from 1 January 2023. The incentive provides a great opportunity for attracting, promoting and growing the digital games industry in Ireland. Only time will tell if the regime will be successful, however—and it should be noted that, while the tax credit is very welcome, some aspects could potentially slow the pace of growth in the digital games sector. Factors such as the proportion of development carried out in Ireland versus overseas, the rules governing the cultural test and the level of documentation required, will all no doubt play a pivotal role in determining how successful this regime will be. Guidance in this area will be very important to ensure the level of certainty needed to incentivise investors to choose Ireland as their place of business, as well as a healthy number of smaller companies looking to progress into the premium AAA games sector in cooperation with well-established game developers and publishers. Ian Collins is Partner/Principal, Business Tax Advisory (BTA) and Arek Rojek is Manager, Business Tax Advisory (BTA) at EY Ireland

No employer wants to let people go, but when redundancies are inevitable, a full understanding of your legal obligations is essential, writes Emma Richmond The news has been dominated recently by large-scale redundancies in the technology sector, with behemoth employers like Twitter, Stripe and Meta making headlines daily. Despite the depressing news, redundancy is not something any employer wants to face. However, in these uncertain times, it can be inevitable. Redundancy will leave your staff worried about what this means for their future career prospects so, as an employer, it is important to get the right legal advice when contemplating a redundancy programme. Employers must fully understand their legal obligations under Irish employment legislation, so we strongly advise consulting with a professional firm to ensure a fair, transparent, and legally compliant redundancy process. Before you reach out to a third-party, there are some key considerations to bear in mind. Redundancy A redundancy occurs when an employee's position no longer exists and the employee is not replaced. Within Irish employment legislation, there is provision for different scenarios which constitute a redundancy situation—for example, where an employer decides to carry on its operations with fewer employees. Collective redundancy A collective redundancy occurs where multiple redundancies are affected within a 30-day consecutive period. This is also dependent on the size of the workforce: Size of the workforce   Number of redundancies for a collective redundancy  21–49 5 or more   50–99 10 or more  100–299 10% or more  300 or more  30 or more   In a collective redundancy situation, there are additional employer obligations. These include: notifying the Minister of Enterprise Trade and Employment of the proposed collective redundancies 30 days prior to effecting any redundancies; and engaging in a consultation process with employee representatives. The minimum period of consultation is 30 days. No employee can be made redundant during this consultation period. Selection criteria in a collective redundancy Where a certain number of employees within a particular department (e.g. 10 employees within a department of 20) are being made redundant, the employer must apply objectively justifiable selection criteria. Examples of objectively justifiable selection criteria include adopting the approach of “last in, first out” or basing the selection criteria on an employee’s qualifications. Collective redundancy notice period In a collective redundancy situation, no employee can be made redundant during the consultation period. Once the consultation process has concluded and notice is issued, an employee who has at least two years’ service and is selected for redundancy must be given at least two weeks’ notice. Where an employee’s contractual notice is greater than two weeks, the employer must provide the employee with their contractual notice. While an employer may pay an employee in lieu of their notice period, the employee must be permitted to work during two weeks of their notice period. Statutory redundancy Employees with over two years’ service are entitled to a statutory redundancy payment which is calculated as two weeks' pay for every year of service (capped at a maximum of €600 per week) plus one additional week's pay. Employers may decide to pay their employees an ex gratia payment over the statutory requirements. It is good practice where employees are receiving an ex gratia payment that they be expected to sign a severance agreement in which they waive their right to take any future claims against their employer. Employees should obtain independent legal advice in advance of signing a severance agreement. Employers should get advice in drafting severance agreements to ensure that they are effective and enforceable. Redundancy entitlements and legal compliance Another key consideration is redundancy entitlements. Some of these include: entitlement to statutory redundancy; the lawfulness of the redundancies; timeframes of employment contracts; any transfer of undertakings in relation to the TUPE Regulations; and considerations regarding ex gratia payments. Employing the services of a professional for legal advice and consultation on relevant compliance requirements concerning redundance is advised here. Emma Richmond is Partner at Whitney Moore LLP Law Firm

The cost-of-living crisis seems bleak, but there are also opportunities for businesses to appropriately pivot their products and services to ensure they remain relevant to their core customers. Charlie Kerlin explains how The current cost-of-living crisis is having a profound impact on the UK economy. Consumers are already feeling the pinch, making a significant difference to how they spend their money. Although already impacting all sectors, this crisis will likely be felt most in retail, food and drink, hospitality and other sectors reliant on discretionary spend, in the months ahead. Faced with inflation and rising interest rates, household finances in the UK are being stretched. With GfK, the consumer data firm, reporting consumer confidence at a record low in September, fears of a recession have jump-started a ‘cut back economy’. The Cut Back Economy report, published jointly by Grant Thornton and Retail Economics in July, explored the effects of the current economic climate on discretionary consumer spending in the UK. The report estimated that the cost-of-living crisis would slash discretionary spend across the UK economy by about £24.9 billion per annum—and Northern Ireland is expected to be hit harder than other parts of the UK—due, in part, to the fact that energy prices are regulated differently in the region. The least affluent households across the UK are now spending about two-thirds of their entire income on necessities like electricity and the cost of heating oil or gas, and transport. Eighty-six percent of the households surveyed said they planned to cut back, but some variances exist. More than a third (36 percent) of those surveyed could be considered ‘financially stressed’. Other significant cohorts identified included ‘squeezed spenders’ (25 percent) and the ‘comfortably cautious’ (25 percent), each planning to cut back spending. Just 14 percent of respondents said they were determined to be ‘financially immune’, illustrating the vast impact of the cutback economy. So, how do we speak to the 86 percent, led by the younger generations who are leading the cutback? Some people will have to cut back by necessity. However, a significant proportion of the population, while more cost-conscious, will still have some level of discretionary spend. The data shows where and how habits are changing. Consumers are increasingly mobile, seeking to move brands or retailers. There is a shift towards discount supermarkets and own labels, and demand for foodstuffs, such as dry pasta and grain, is increasing exponentially. In order to allow businesses to pivot, data will be essential. By gathering and analysing relevant data and market trends, companies can better understand the behaviour and intentions of their core customers. What are they willing to compromise on to spend less? Is it lower quality, a lesser experience, or are they prepared to sacrifice convenience? For example, 35 percent of all households, regardless of how conservative they intend to be when spending, said they would spend less on media subscriptions. Thirty-one percent would spend less on holidays and beauty, showing luxuries are on the chopping block. Based on the economic modelling in the report, the impact of the cost-of-living crisis will see the retail, leisure and consumer industries in the UK lose £24.9 billion in discretionary spend in the year to April 2023. Companies must refocus on the core customers that retain spending power and ensure their product is appropriate to that market segment, while also offering value for money and ways to mitigate the challenges their customers face. This will help them to generate goodwill and loyalty as people pinch their pennies. We are seeing businesses work their contingency plans, seeking ways to become more efficient, optimise production and reduce waste. Financial resilience will be a crucial area of focus for the foreseeable future. It will be a challenge, undoubtedly, but understanding consumers and their behaviour is key to navigating the period ahead. Charlie Kerlin is Director of the Corporate Finance team at Grant Thornton Northern Ireland 

Networking can be stressful, especially when you want to leave a conversation without causing offense. Jean Evans outlines the dos and don’ts of a graceful exit We’ve all been there, stuck in a conversation at a networking event and not sure how to extract ourselves politely and leave feeling guilt-free. This is a skill that takes courage and, when done correctly, one that can demonstrate control, respect, and leadership, creating a positive first impression and leaving you with your reputation intact. No one wants to be ditched at a professional engagement by someone who looks like they’re eager to get away, just as no one wants to make another person feel unwanted or uncomfortable. So, plan ahead before you head out the door to network with your colleagues, other professionals or business contacts—and think about how each interaction might take shape. How long should a conversation last? How long a conversation should last really depends on your networking goals, whether you’re an introvert or an extrovert, and if you already know people at the event. However, the recommendation is five to ten minutes per conversation, before moving on. When to break out of the conversation To leave a conversation, you should wait until you can sense there is about to be a lull and then get in there with the opportunity to close off before the lull hits. Why? Because when the lull occurs, the conversation becomes awkward. If you catch it before the lull happens, then you’ll have the chance to leave the person on a positive note and with a first positive impression of you. Here are a few ideas for how you might approach finishing a conversation at a networking event. 1. Request a business card The act of getting and receiving a business card often signals that a conversation is coming to a natural close. You can finish off with: “It was great to speak with you, and thanks for your business card. I’ll connect with you on LinkedIn. I hope to see you at another one of these events soon.” 2. Organise a follow up If a 10-minute conversation isn’t long enough, then get out your calendar and schedule the follow-up right there. This shows that you are serious and committed to the conversation. You might say: “I’d love to get your business card to continue our conversation. Can we arrange a call next week? When might suit, and we can get something in the diary now?” 3. Make an introduction Ask your conversation partner who they’d like to meet and see if you can make a beneficial introduction for them. You’re adding value and allowing both parties to move on gracefully. You can say: “I’d love to introduce you to [name] – I think they would be a great connection for you.” 4.Top up your drink Tell the person with whom you are speaking that you’re going to get a drink or some food. Offer them something and tell them it was great to meet them before moving on. Leave them feeling good. 5. Do them a favour Make your exit sound like you are doing something to benefit the person you’re talking to and less about them thinking you are trying to get away. You can say: “I don’t want to take up all your time – I know we’re all here to network. It was great chatting with you and getting to know you a bit better.” While there is no doubt that closing conversations at networking events can be daunting, anyone can master this essential skill with enough practice. Jean Evans is a Networking Architect and Founder at NetworkMe

Compliance with data protection legislation is the responsibility of the board of directors of every organisation and must be prioritised in the boardroom. David O’Sullivan explains why Data protection starts and ends in the board room. Every board member should have a good understanding of data protection and how it affects their business, and every board- and sub-committee must be equally aware of the organisation’s existing compliance status and the operation of its data protection framework. Data protection fines to board members and directors the Data Protection Act 2018 (GDPR), directors may be liable for a fine of up to €50,000 and/or five years imprisonment if they are found to have allowed the organisation to commit an offence through consent, connivance, or negligence.    In the UK, the Information Commissioner’s Office has levied personal monetary penalties against company directors, demonstrating an appetite to keep senior management and company directors accountable for their actions. And while at the time of writing we are unaware of any such actions against company directors in Ireland, penalties here will inevitably follow. What questions should board members be asking? The data protection world is changing rapidly with the onset of fines, decisions and guidance from regulators, alongside evolving technology and new legislation. As such, it is crucial that organisations remain vigilant to change and proactively manage it, avoiding unnecessary risks.   There are some key data protection questions board members should ask: How are we staying abreast of changes? What are our current top risks? What are our industry peers doing? Are we making the most of this challenge/opportunity? Do we have the right level of expertise to deal with this? Do we need a full-time resource? Can we outsource the Data Protection Officer (DPO) role? What are the upcoming actions in the data protection framework? How involved should the board be in data protection? For an organisation to have data protection embedded, the board should oversee change and the direction of data protection. The below demonstrates examples of what high, medium and low levels of board involvement may look like in an organisation: High – a member of the board is made responsible for data protection. They regularly meet with the DPO or data protection manager for updates and report to the rest of the board on compliance at each meeting. The DPO presents to the board regularly, and the board actively asks for updates on risk actions. Medium – the board receives bi-annual reports from the DPO outlining compliance efforts and key risks and receive updates on risk actions. Low – an update report is provided to the board every quarter, with one annual report is presented by the DPO or another person responsible for data protection compliance.  How to know if your data protection framework is effective Every organisation has a data protection framework, some more formalised than others. Your framework must operate effectively, ensuring you will achieve your desired outcomes.   You will be able to know that your framework is effective if: staff receive regular training and awareness updates; you are informed of data protection risks; privacy has been built into processes and procedures; and frequent updates are given to the board on compliance status and steps to reduce any compliance gaps. How to use data privacy to your advantage There are several reasons to keep privacy in your strategic plans, ranging from compliance and fine mitigation to risk management and consumer trust. Consumer sentiment is changing, and people are making choices based on how their personal data is protected. No stronger evidence is needed than the actions of the world’s largest consumer technology companies’ efforts to increase privacy and security—Apple giving more tracking control to users, for example. To use privacy to create strategic and competitive advantage, the direction needs to come from board level and be embedded into the company culture. The most effective programmes are in organisations with clear ownership of data protection at the top level. David O’Sullivan is Consulting Manager with Mazars

A new survey has shown that most professionals are happy at their work, but remuneration is still the predominant reason people move on. Paul McClatchie delves into the results. The rising cost of living, combined with the talent shortage, is a sure-fire recipe for pay inflation.  However, a new survey by recruitment company Engage People shows mixed fortunes in the financial and legal sectors regarding remuneration over the past year.  Despite this, however, most professionals surveyed appear to be happy at their work.  While 63 percent expect a salary increase over the next 12 months, almost a quarter (23%) of the 795 people questioned did not get a pay increase in the past year. Eleven percent was the average increase in salary for those who did. Sixty-one percent saw their hours impacted by COVID-19, and 47 percent took a COVID-related pay cut. Of those, the average drop in pay was 12 percent. Anecdotally, the flexibility to work from home has saved employees money and contributed to a better work/life balance. So, a short-term impact on compensation hasn’t upset too many in the professions. On top of base salary, many professionals will have a car allowance and fuel cards. Most get an employers’ pension contribution, meaning total remuneration is generally higher than basic pay. In terms of bonuses, 75 percent of respondents in accountancy, banking, financial services and legal roles say they received a bonus last year, and 67 percent of those were satisfied with the level of bonus. For junior positions, 26 percent of base salary was the average bonus, where earnings were predominantly under €35,000.  Ten to fifteen percent was the mean annual bonus in the accounting area, with higher bonuses in banking relationship manager and sales roles. Although 82 percent of respondents claim to have worked some form of weekly overtime for up to three hours a week, just 41 percent received paid overtime. Again, overtime was more common in junior-level roles, up to a €40,000 base salary. Fifty-five percent anticipate their company’s staff numbers will grow over the next 12 months. The lure of a new role Despite the possible pay cuts and overtime, 84 percent of the professionals responding confirmed they are happy with their current work-life balance. However, the grass is always greener. Fifty-eight percent of professionals in financial and legal roles are satisfied or very satisfied in their current role, but almost two-thirds (62%)  admit they would leave their role if the right opportunity came up.  Pay remains the top motivation to move, and a 10 percent salary increase was the average expected by those surveyed to leave their job for a new role. However, 58 percent also said that they would turn down an offer if their current employer were to make a suitable counteroffer. The survey also identified career progression opportunities, the people in the company, and the company culture as reasons people will move to a new role. In terms of desirable benefits employers can offer, the top answers concerned flexible working, including both hybrid working and flexi-time. The offer of career breaks and a company car or a car loan were the next most sought-after perks. Paul McClatchie is the Founder and CEO of Engage People.

From tribe-based banking to embedded finance, Nick Root reveals what you can expect to see in the year ahead in fintech The financial technology sector is rapidly evolving, with traditional methods of banking now being replaced with digital solutions to make things faster, easier, and more streamlined for both businesses and consumers.   Here are the top trends in fintech in 2023. Virtual bank cards  Hailed as the future of financial spending, virtual bank cards are at the forefront of a revolution in business expense management. Since 2017, searches for the digital bank Revolut have increased by 143 percent, receiving an average of 1.3 million monthly searches globally.   Looking at Google Trends, we can also see that the term ‘virtual card’ has increased by 216 percent in the last five years and is currently at its peak. But how are they being used by businesses?  Perhaps the biggest reason virtual cards are increasing in popularity is that they offer more robust security measures, helping eliminate misuse by hackers and fraudsters.  They also reinvent the way companies handle employee business expenses. Every employee has a unique card, which means anyone can easily see who is spending what. Funds can also be assigned to team budgets, and purchases can be limited so that nobody spends more than what’s allocated. Embedded finance  The success of embedded finance will be predominantly down to distribution, trust, and improved user experience.   Banking as a service defines an ecosystem in which licensed financial institutions offer non-banking companies access to their services, typically through APIs. It enables clients to embed financial services into their products or build new financial services from scratch. The emergence of API-led banking services means distribution is no longer an issue. That layer of friction has now been removed, with any digital company able to offer a financial service without the headache and complexity that providing financial services used to bring.   Buy-now, pay-later 2.0  While buy-now, pay-later (BNPL) has raised concern recently, the online trend allowing customers to split their payments into interest-free instalments continues to surge.   Traditionally, BNPL services were used to split payments for high-value items, but they soon became associated with online fast fashion brands, targeting Gen Z and Millennial shoppers. In recent weeks, BNPL was further criticised after Swedish fintech company Klarna partnered with the fast-food delivery app, Deliveroo, allowing customers to ‘eat now, pay later.’  And although many mainstream banks are steering towards virtual cards, in January 2022, Klarna launched its first physical credit card, allowing customers to pay in-store and online.   In 2023, although it is expected to expand further, in Ireland, BNPL providers must go through the Central Bank to be approved. BNPL will also be regulated in the UK, as the government plans to enact legislation requiring lenders to carry out affordability checks before approving loans. The financial promotion rules for BNPL are also set to change to ensure advertisements are explicit and do not mislead consumers.   Contactless wearables  The Internet of Things is making waves in the fintech sector, allowing consumers to pay for goods and services faster than ever with wearable technology.  Alongside smartphones, bracelets and smartwatches are now used to make payments instead of bank cards.  The Apple Watch is one wearable that took the world by storm, showcasing an upward trend in 2022. Smart rings are also on the rise, with searches for the revolutionary wearable increasing by 180 percent globally.   Regtech  A new buzzword you may have heard in 2022 is Regtech – but what is it, and why does it matter?   The rise in digital products means there is an increased risk of data breaches, cyber hacks, and money laundering – but that’s where Regtech comes in. Regtech is a group of organisations that solve challenges arising from a technology-driven automated economy.   The Regtech industry is expected to disrupt the regulatory landscape by providing advanced tech solutions to compliance issues that arise in the fintech sector.  Tribe-based banking  The term ‘digital tribe’ has become popular in recent years, used to describe online communities that share a common interest, and are usually connected through social media or other online platforms.   In the past, people from diverse communities have been uncomfortable with legacy banks because they have not been represented, don’t feel empathised with, and aren’t open to communication.  Banks need to be more authentic and receptive to communication in this new era. People from these communities will soon be looking for a bank that gives them a sense of representation and openness. Nick Root is the CEO of Intergiro.

With cyber threat levels on the rise and their complexities growing, it is time to bring cybersecurity into the boardroom, says Puneet Kukreja According to the EY Ireland Global Information Security Survey 2021, 90 percent of Irish cybersecurity leaders reported an increase in disruptive cyberattacks over the previous 12 months. This issue goes beyond the chief technological officer’s remit and should be a company-wide concern, including the organistion’s board. The board plays an important role in overseeing and supporting how an organisation enhances its cybersecurity controls and practices in a world where threat levels are on the rise. Below are seven critical areas that boards need to focus on to better align themselves with the organisation’s cyber strategy and ensure that the organisation’s cybersecurity needle is moving in the right direction. 1. Understand the business Boards and their sub-committees are now required to undertake key oversight activities related to cyber risks across critical business processes and systems. For this, they should be aware of the budget allocated to cybersecurity programmes and understand whether the organisation’s cybersecurity function is adequately funded and resourced. The board should also be aware of the key responsibilities for security and data privacy across the enterprise. They need to be aware of the potential exposure of known blind spots. 2. Acquire knowledge of technology It is important for the board to gauge if it has the required knowledge and expertise in technology. It is imperative for the board to understand how the rapidly evolving ecosystems of cloud, cyber and data protection, internet of things and privacy overlap with its role in corporate governance and risk management. 3. Understand the cyber environment The board needs to have a clear knowledge of how a cyber threat can be responded to in a rapid manner. It is critical for the board to have a view of the full range of cyber risks facing the organisation and the potential to improve its existing cybersecurity control and practices. It needs to ask if management can implement the required risk management protocols to reduce the mean time to exposure and if the organisation has an effective incident response and recovery function in place. It is also important for boards to know if the systems targeted in a cyber event are managed internally, externally or sourced from the cloud. 4. Facilitate response readiness Boards must help document a cyber threat management framework. This framework should be regularly tested against the ‘cyber kill chain’ approach, a phase-based model used to describe the stages of a cyberattack which helps construct response plans for organisations. 5. Have exposure to cyber wargames Has the board and its sub-committees been exposed to a cyber incident response training exercise, or received training on how will the organisation respond if an attack occurs? One key action that boards can take is to bring cybersecurity-related skills and experience into the boardroom through the appointment of non-executive directors with previous experience in technology-related roles. 6. Keep third-party agreements ready Boards need to ensure that cyber incident response agreements are in place with third-party suppliers of technology and subject matter experts who can be mobilised in the event of a cyberattack. Boards also need to understand how the cyber risk exposures of all stakeholders are assessed and determined. 7. Be adept at media management If systems are compromised and sensitive data stolen, it could potentially impact an organisation’s reputation. The board should understand how the organisation will respond to the media and stakeholders following a cyberattack or breach. Take a holistic approach With remote and hybrid work being the new normal, continuous assessments and improvement of cybersecurity controls and practices across the organisation should be the focus of the board. For this, boards can mandate organisation-wide continuous training and education around cyber threats. It may also be useful to accompany this with a cyber awareness programme. An eye on internal control framework and cybersecurity monitoring procedures is needed, as well. The role of the board is assuming greater importance as cybersecurity risks and threats grow. Boards must now play a more constructive role in advising on post-incident response plans and in managing them from a business continuity perspective. Cybersecurity activity should not be seen as purely defensive. A company’s ability to adjust and strengthen its cyber resilience will position it for a more secure future. Puneet Kukreja is Cyber Leader in EY Ireland

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

As organisations across Ireland prepare to publish their reports, Deirdre Malone outlines some practical aspects of the Gender Pay Gap Information Act. Among the key questions for employers about Gender Pay Gap reporting, one of the most important is who to include. All employees must be included, but this is not as straightforward as it appears. The definition of an employee in Irish employment law is well understood, but for Gender Pay Gap reporting, the statutory definition is taken from the Employment Equality Acts and includes individual contractors who are engaged personally to provide services. This definition has the potential to make things very complicated for employers. In most cases, employers have gone to some lengths to ensure that these individuals are not deemed employees. They do not have HR records for them, and they do not know how much the contractors are paying themselves for their work for the organisation, nor have they any idea of their leave and bonus arrangements. Including this cohort of workers in the Gender Pay Gap report will place many employers in a difficult position. Furthermore, this data gap may force some employers to exclude contractors from their Gender Pay Gap report. The Guidance Note that accompanies the Gender Pay Gap Information Act (the Act) advises employers to consult Workplace Relations Commission (WRC) case law for advice, but this is not as comprehensive as it could be. Instead, a practical and common-sense approach is required. Non-binary and transgender employees Very simply, everyone identifying as female must be included as female in the report, and the same applies to males. There is no definition of male or female in the Act, and it is up to individual employees to self-identify their gender. Organisations must remember that HR records may not be in accordance with individuals’ self-identification. Where there are non-binary individuals who do not identify as either gender in the workforce, they are not included in the Gender Pay Gap calculations but should be included in the headcount. Employers must ensure that data collection concerning gender identity is carried out as sensitively as possible. Those collecting the data must never rely on second-hand information or hearsay. Employers must engage with all employees about why they are seeking this data. They must ensure they obtain it directly from the individual or a trustworthy and reliable source. However, no one should be singled out and asked about their gender. Large group companies with numerous legal entities Many large organisations will wish to produce a single Gender Pay Gap report for their Irish operations. However, they need to be mindful that each legal entity in a group that employs more than 250 people has its own statutory reporting obligations. Nothing prevents the organisation from producing a consolidated report, however, if each legal entity also reports its individual statutory requirements within the consolidated report. There will also be cases where large organisations have entities that employ numbers below the reporting threshold. In our experience, though, companies tend to report on those entities—either within a consolidated report, or separately, to present the fullest possible picture of gender representation across its business and also in the interests of transparency. Where an organisation chooses not to report on smaller entities, the reasons behind that decision must be communicated fully, so they cannot be accused of a lack of transparency. Managing leave when calculating ordinary pay If a type of leave is paid, it is included in the Gender Pay Gap report. All pay received by every employee in the 12 months up to the snapshot date must be included in the calculation. However, this can give rise to anomalies. Take maternity leave, for example. Where maternity leave is paid, an employer may pay an amount to top-up statutory maternity benefit. Only the portion paid by the employer is included in the calculation, however, thereby artificially depressing the hourly pay rate of the employee in question. Where employees exercise an entitlement to additional unpaid maternity leave, this can further skew the figures. This will have to be looked at as it will be essential to explaining the anomalies in the circumstances arising for various cohorts of employees. Deirdre Malone is Head of Employment Law at EY Law Ireland