Níall Fitzgerald explains how to achieve consensus, do your duty, and be yourself as a charity or non-profit trustee. There is something exceptional about those who volunteer their time, skill and expertise to a board, or sub-committee, for the benefit of a cause they feel passionate about. As Nelson Mandela put it, “there can be no greater gift than that of giving one’s time and energy to help others without expecting anything in return”. But being a board or sub-committee member (trustee) for a charity or not-for-profit organisation is not without its challenges. These challenges can present themselves around the board table in the form of disagreement or frustration as you strive to get things done. People skills and leadership skills will be called on in order to listen effectively and convey concern, constructively challenge and support the ideas of other trustees in order to achieve consensus. Difficult dilemmas Achieving consensus is not always easy, especially when resource constraints (financial or otherwise) impact the organisation’s ability to realise its strategic objectives. Difficult dilemmas can be tabled at board meetings, which can present challenges for the organisation and test the core values that compelled each trustee to volunteer in the first place. A classic example involves proposals to suspend services in one area to the detriment of some beneficiaries in order to ensure continuity in another. An avalanche of conflicting priorities around the board table can result in an impasse. Challenges like these can make a trustee grateful for a good governance framework. Such a framework can provide clarity on their duties and responsibilities to the organisation, including the various stakeholders it serves. There can be comfort in understanding the policies and procedures that ensure the collation and adequate flow of accurate information from the front-line service providers (both staff and volunteers) and senior management to the board. Such information results in better decision-making that is in the best interests of the organisation as opposed to any individual or group of trustees. Such a framework will also provide a welcome format for effective and well-chaired discussion at the board, and ensure that the right level of diversity, skills and expertise are enabled to inform the decision-making process. Rule of law But what about the rule of law regarding the trustee’s duties and responsibilities? An understanding of these rules will help channel a thought process towards what is important for the organisation. A trustee does not need a law degree to understand these requirements. Rather than feel overwhelmed, it is useful to first understand the organisation (including its vision, mission and values), its legal structure (e.g. company, trust, unincorporated etc.) and the area within which it operates. This process will highlight the laws and regulations that are most relevant for consideration. Figure 1 illustrates the types of legal and regulatory duties that apply to trustees. Notice that some overlap and they have a common design to ensure that the organisation is always the focus of consideration. Being involved as a trustee can be the gift that keeps on giving for the individual and the organisation. Challenges present opportunities for trustees to exercise values, apply skills, provide expertise, assess problems and inform decisions in a different way – for example, through the lens of life-changing consequences. A good governance framework and adherence to the rule of law will provide another useful lens to guide, rather than impede, trustees towards consensus on trickier dilemmas.

Differences divide us, and that’s why we need to find the values that unite us, writes Sinead Donovan. It strikes me that, in today’s world, we are constantly putting labels on things or people. We are either male/female, Gen Z/Gen Y, baby boomers, LGBT+/straight. We have the labels of our culture or our creed, and while I am so in favour of diversity, and have pushed the diversity and inclusion concept incredibly hard within my firm and throughout the work I have done in Chartered Accountants Ireland, I sometimes wonder – have we made too many labels? Are we defining ourselves by labels rather than looking for the commonality and the thread that keeps us all together?   It’s not a new concept but, as perhaps I progress in my career and through management, I sometimes think it’s better to look for what binds us together than at what differentiates us. Maybe by finding those common threads it will enable us to be a more holistic family together, despite our gender, culture, religion, or sexual orientation.  So, I suppose the big question is: are there common threads and, if so, what are they? To me, it comes down to people’s beliefs. Fundamentally, underpinning us all, as it does in our professional careers, are the value sets that define us. For us, in our business unit in Grant Thornton, we have identified those values as: Adaptable; Innovative; Passion for what we do; Collaborative; Going the extra mile; Ethical and professional; and Technically knowledgeable. People may have different values they use to identify themselves, but whatever it is, there should be that common link in us all. With Chartered Accountants, it has to be the value set of ethics. These underpin our profession, despite how wide it has become or the labels we have put on each other as accountants: are we forensic accountants, cybersecurity accountants, auditors, tax advisors? Whatever you are, the one item that underpins us all is our code of ethics.  Ethics is taught in the early days of a student’s profession, sits beside us as a professional, and maybe gets looked at once or twice in our career. However, I would urge that the concept of ethics is used more widely to link us together as one family of accountants – be that Chartered Accountants Ireland, ATI, or membership to any other accountancy body. We have a responsibility to our stakeholders, the people we report to, the people who use our knowledge, and the daily work that must be done in an ethical manner.  As a member of the Diversity & Inclusion Committee in Chartered Accountants Ireland, I am not saying any of the above to absolve ourselves of the need to identify the differences we all face in life. But what I am saying is, maybe sometimes, let’s just celebrate our similarities and, with that, see ourselves as a family of accountants in the first instance and then ensure any differences that we may have are 100% noted, understood, managed and included because, just as in any family, there are different characters, beliefs, and personalities. And, while there are going to be difficulties, there has to be that underlining acceptance of who we are and what we are. To me, it starts on the journey as a student and, I think, that our profession is more open than it may have been when I started. However, I do know that from our work in CA Support, difficulties, prejudice, and unbelievable stress which may not be acknowledged or identified, remain. So, look out for your student members, your newly qualified members, and even look out for the more experienced members who may be going through difficulties in their professional or personal lives. If I can leave you with one thought, let it be this: let us identify the differences, ensure those differences are respected and brought together in one bucket of inclusion. Importantly, we need to unite in our underlining similarities that we have as Chartered Accountants and use that as a thread to tie us together.   Sinead Donovan FCA is a Partner in Financial Accounting and Advisory Services at Grant Thornton.

As the days of the current bull market appear numbered, investors need a strategy to see them through more volatile times. By Cormac Lucey The Capital Asset Pricing Model (CAPM) contends that the risk involved in buying any financial asset can be divided into diversifiable risk (which can be effectively eliminated if you spread your investments sufficiently) and non-diversifiable risk (which is the specific, non-market risk associated with the asset). Financial studies tend to focus on the non-diversifiable risk element (measured by beta), as this is a key driver of the security’s cost of equity and thus, of its cost of capital. Many market practitioners, by contrast, concentrate instead on the overall direction of the market. Get that right, and you are likely to make money even if your choice of assets is poor. Get that wrong, and even a good choice of assets may go unrewarded. Berkshire Hathaway is an example of a great stock to have owned over recent decades – over the last 31 years, its share price has risen at a compound annual growth rate of just over 18%. But you would have suffered significant losses if you had held the stock during the last two equity bear markets: between March 1999 and February 2000, its share price dropped 44%; and between December 2007 and March 2009, it fell 47%. What do today’s investment signals indicate about prospective equity returns? Excuse me if the following analysis is USA-centric, but in general global equity bear markets begin and end in the USA. Looking at America, there are two clear warning signs that the days of the current bull market – which commenced over a decade ago, in March 2009 – are numbered. The first warning sign concerns the US unemployment rate. There is a clear pattern over the last half-century that US recessions and bear markets occur after a prolonged fall has brought the American unemployment rate below 5%. There is also an established relationship between the US unemployment rate and one-year equity returns: if the US unemployment rate exceeds 7%, average annual returns exceed 11%, but if the unemployment rate is below 4.5%, average returns are just 1.3%. As of September, the US unemployment rate was a mere 3.5%. The logic of this relationship is that, while lower rates of unemployment are good for workers and society, they can stoke wage inflation, business costs and thus central bank interest rates. The negative effects exert a negative influence on equity values. The second warning comes from the yield curve. It depicts the annual rate of interest investors can get from US government bonds of differing maturities. Normally, investors get a higher rate of interest when they expose themselves to greater risk by purchasing government bonds of longer maturities. Very occasionally, we get an inverted yield curve, when the rate of interest on short-dated government bonds exceeds that on longer-dated ones. Inverted yield curves have, in the last 50 years, been unfailing warnings that a US recession will occur within 24 months. In recent months, the US yield curve has inverted. While these two warnings strongly indicate a US equity market peak sometime within the next two years, neither signals the need to head for the exit door immediately. Indeed, some of the largest investment gains can be made towards the very end of bull markets. Citi Research maintains a Bear Market Checklist of 18 different signals. In March 2000, 17.5 of the signals were flashing red. In October 2007, it was 13. In September, just four of their 18 indicators were signalling warnings. This suggests that investors should remain positive on equities, but they should also plan now what their investment strategy would be in a bear market. Will they reduce their equity exposure, switch entirely to bonds and cash or are they willing to short the market (and seek to profit from falling equity values)? Investors now need to shorten their investment horizon and switch from a long-term buy and hold strategy (which works wonderfully over prolonged bull markets) to a short-term tactical approach (which will be more suited to the choppy investment waters that appear to be ahead). Cormac Lucey FCA is an economic commentator and lecturer at Chartered Accountants Ireland.

Claire Lord explains how the outcome of a recent court decision clearly articulates the meaning of a director’s “independence of mind”. It is a fundamental and long-standing principal of common law, and more recently a principal enshrined in statute, that directors owe their duties to the company of which they are a director and to the company alone. Directors may come to owe particular duties to others in particular circumstances, such as to shareholders where there are negotiations for a takeover and the directors should act to promote the interests of the shareholders in agreeing a deal that best reflects the value of the company, or to creditors where the directors are aware that the company is insolvent and its assets should be preserved to the extent possible to settle its liabilities. There is also a statutory duty placed on directors to have regard to the interests of members and employees when performing their functions. There is, however, no mechanism for members or employees themselves to enforce this statutory duty unless, in the case of members, they can muster sufficient voting power to compel the directors to have regard to them or, in the case of employees, where a liquidator does so on their behalf. The result of these principles in practice is that, on a day-to-day basis and when the business of a company is running in the ordinary course, the directors need, at all times, to be making decisions on business strategy that are in the best interests of the company. While a company’s shareholders and employees will have an interest in the outcome of a company’s strategy, they have no direct responsibility for the impact on the company of a course of action taken. It follows, therefore, that where directors of an Irish company act in breach of their duties to the detriment of the company, the proper plaintiff to seek recourse is the company itself. Collective independence In performance of their duties owed to a company, the directors act as a collective in the interests of the company. In doing so, directors must exercise independent judgement. These concepts of togetherness and independence are not contradictory; the requirement is simply for each individual director to bring their own independence of mind to the deliberations of the collective. Behaviours that demonstrate independence of mind include having conviction and strength to effectively assess and challenge decisions of other directors; the ability to ask questions of those closer to the executive function of the company or to certain aspects of that executive function; and, very importantly, the ability to resist group-think, all with a view to ensuring that decisions made by the board are in the best interests of the company. Exercising independent judgement does not mean forming a view independent to that of the board as a whole and then acting independently to achieve a particular outcome in support of that view. A court’s view The High Court of England and Wales recently considered the scope of directors’ duties, and more particularly the duty of a director to exercise independent judgement, in proceedings that arose out of a boardroom battle within Stobart Group Limited, the publicly quoted logistics group. The proceedings concerned a dissenting director who formed an independent view on a company matter and sought to involve shareholders and employees in matters of corporate strategy that fell outside their purview. The specific actions taken by this director included criticising the board’s management to the company’s majority shareholders, agitating these shareholders for the removal of the company’s chair and improperly sharing confidential company information with a non-board member. All of these actions were taken independent of the board of the company. The judgment delivered noted that the duty to exercise independent judgement is one that must be performed by a director in the context of the board of directors acting as a collective. The judgment also noted that this obligation does not carry with it some kind of entitlement for an individual director to act independently of the board in relation to matters that fall within the sphere of management of the company’s business. The judgment correctly concluded that an individual director should raise, debate, reflect upon and then decide on their own position on a matter at the level of the board, either as part of the majority or as a dissenting voice. Only by doing so will they be able to comply with their duties to exercise an independent judgement and to act in the best interests of the company.   Claire Lord is a Corporate Partner and Head of Governance and Compliance at Mason Hayes & Curran.

Des Peelo outlines why prospective sellers and buyers should not rely on rules of thumb as a basis for the valuation of a business. Commentators, financial analysts, investment advisors and others often like to believe, or at least promulgate the belief, that the valuation of a business in a particular sector can be stated as some simple formula such as ‘X times turnover’, a percentage of something, or a multiple per unit (that unit being a hotel room, a subscriber and so on). Sometimes, advisors charge extraordinary fees for imparting such wisdom in an apparently knowledgeable manner. This wisdom is known collectively as ‘rules of thumb’. Common sense dictates that the reason for acquiring a business, or an interest in a business, is to obtain an economic return (i.e. future profits). However, the use of rules of thumb in valuing a business is at best arbitrary, is not based on economic assessment, and carries little if any logic beyond being a kind of shorthand valuation usually put about within the business sector itself. Financial press commentators too can create a norm by simply relating the sale price of a particular business to some underlying statistic in the business, such as the price being a certain multiple of the turnover, the price per hotel room, the number of subscribers divided into the price, the price expressed as a percentage of the amount of funds under management. This norm, having been published and thereby accorded a status, is then perceived as a comparison or benchmark for any future transactions in the same sector, even where it bears little relation to the reality of the marketplace. The underlying premise to a rule of thumb basis of valuation, if there can be a premise at all, has to be a belief that profitability in the sector does not vary greatly and that therefore, almost any company in the sector will have the same characteristics. This is obviously irrational because the following factors may differ:  Rented versus owned premises; Different levels of borrowings; Young versus mature businesses; Use of technology; New versus old equipment; and Age and experience profiles of key employees. A norm is an average. An average, by definition, includes high and low and does not distinguish between a good and a bad business. An average is not excused by saying that it relates to a typical business. A business may be described as typical only insofar as it has, for example, a turnover or characteristics similar to other businesses in the same sector. However, one or two common characteristics do not negate the differences between businesses, as set out above. A potential purchaser should be wary of a valuation based on a rule of thumb approach. Examples abound of unwise acquisitions made by following such an approach, sometimes referred to as ‘formula purchases’. In the UK, the practice of ‘formula purchases’, now much more muted, included undertakers, hotels, pubs and restaurant chains, recruitment agencies, insurance brokerages, advertising agencies, estate agents, newspapers, pharmacies and even nursing homes. A high proportion of these acquisitions subsequently unravelled. It was mainly ‘people businesses’ (such as estate, advertising and recruitment agencies) that lost the most money for their new owners. It can be the case, however unscientific, that certain valuations are based and/or accepted on something akin to rules of thumb. For example, the Revenue work manual on the valuation of shares regarding Capital Acquisitions Tax states the following: “Companies which own or operate licensed premises or restaurants or whose business is in the services sector, such as insurance brokers, quantity surveyors, architectural practices, consulting engineers, legal etc. are normally valued on the basis of a multiple of their turnover, fees or commissions.” In the case of a professional practice, notably accountants and solicitors, the valuation is probably seen as a price for giving a new entrant a head-start in the business; or alternatively providing a bolt-on addition to an existing practice. Experience suggests that there is some fall-off in respect of repeat business when a practice changes hands. Hence, a transaction on a rule of thumb valuation that is based on expected repeat fees may defer some of the consideration based on the actual outcome. Any fall-off is usually ameliorated, however, by parallel working for a period with the outgoing practitioner. In summary, relying on a rule of thumb as a basis for valuation is flawed. If a rule of thumb is to have any use at all, it can be no more than a preliminary indication of a seller’s expectation of price. This expectation must be met by the reality that a valuation is about market value, not a pre-ordained norm. A potential purchaser, properly advised, will not buy solely on a rule of thumb valuation. Des Peelo FCA is the author of The Valuation of Businesses and Shares, which is published by Chartered Accountants Ireland and now in its second edition.

Travel is a critical enabler in our efforts to tackle the climate crisis, however contrary that might seem. Brian Keegan explains why. We may need to increase our carbon footprint. This thought occurred to me some 35,000 feet over the Atlantic but is perhaps none the less valid for it. By now, no one can deny that climate change is real. Denying it is the 21st century equivalent of suggesting that the sun won’t rise tomorrow unless something (or someone) is sacrificed. I don’t believe, however, that mankind’s role in the climate change challenge will be resolved by not travelling. We are social animals and cannot work together, sustain our families or feed our intellects without some degree of travel. I don’t know any parent who wouldn’t undertake a school run purely on the grounds of minimising their carbon footprint. Nor do I know anyone who would decide not to visit an elderly parent for fear of the carbon emissions from the car journey they might have to make. The challenge for “clean” energy Well over half a century ago, the psychologist, Abraham Maslow, proposed a hierarchy of human needs. These range from basic needs like food, water and shelter and then onwards up the hierarchy towards a notion of self-actualisation. Self-actualisation is all about developing and using abilities and talents. The theory goes that people tend to attend to the more basic needs at the bottom of the hierarchy first, and then move upwards. In the past, travel might have been more linked with activities at the top of the hierarchy. However, climate change may have snookered that perspective as using abilities and talents become more fundamental to securing routine shelter and safety. The snag is that travel is now inseparably associated with the release of unwelcome levels of CO2 into the atmosphere, with the attendant consequences of climate change. The problem, though, is not the release of CO2 from the combustion engines used in most types of travel. Instead, the problem is one of fuel portability. Fossil fuels – the liquid hydrocarbons like petrol and diesel – are popular because they are easy to store and replenish, and relatively small quantities can deliver useful distances (as anyone who has ever suffered range anxiety in an electric car will confirm). The technology exists to generate “clean” energy without releasing carbon into the atmosphere – solar, hydro, wind. Even nuclear works, depending on your definition of “clean”. The biggest technical challenge now is not clean energy. Rather, it is how to deliver the clean energy currently being generated in a format that is widely suitable for transport.   “You can’t email a handshake” Greta Thunberg’s contribution to the tackling of climate change this year was not so much her address to the United Nations. Nor was it her publicity stunt to sail to New York to make her speech, rather than fly there like the rest of us. Her contribution was to acknowledge the fact that people need to travel to collaborate to find solutions and make an impact. As Tyrone manager, Mickey Harte, pointed out at an Institute event some time ago, you can’t email a handshake. If societies decide not to promote the kind of human association that is required to tackle climate change by putting embargoes or levies on travel, the problems will never be solved. Little progress can be made without socialisation. Colleagues here at the Institute are currently examining the issues associated with sustainability reporting by businesses and firms. What gets measured gets done. It’s just one example of the collaboration needed at every level of industry to resolve environmental issues. This will never be achieved if, to save the planet, we all decide just to stay at home. Dr Brian Keegan is Director of Advocacy & Voice at Chartered Accountants Ireland.

As the end of 2019 approaches, we reflect on what has been a year of uncertainty for our profession and the wider business community. The source of much of the uncertainty, Brexit, has now been pushed into 2020 with a flextension which gives a new deadline of 31 January. Members can keep up-to-date in our Brexit web centre while the Institute continues to do all it can to support members and member firms while managing their preparations. New technology-focused FAE curriculum Digital disruption is transforming the business world. The accelerating pace of technological change has kicked off a revolution in financial services.  As an Institute, it’s important that we lead the way. It is part of the role of the accountant to anticipate those changes ahead and to ensure that our client or organisation is not just ready to survive, but to thrive.   That is why we recently announced a new partnership with leading Robotic Process Automation (RPA) software firm UiPath, making us the first professional accountancy body in the world to begin formal training and examination of students in this area. As part of our augmented education programme, more than 1,300 trainees per year will be studying and developing practical skills in artificial intelligence, RPA, blockchain and cryptocurrencies. We believe that it represents an important investment which will benefit our trainees, profession and the wider economy. Together, our member firms are the largest employer of graduates in Ireland. It is vital that we give them the best possible business education. In recent weeks, I was privileged to present certificates to almost 500 new members of our Institute at ceremonies in Belfast, Cork and Dublin. I’d like to congratulate all of our new members (and those who supported them along the way). The Brydon Review  At our AGM in May, I said that the future of audit would be a key consideration during my term in office.  I had the opportunity to discuss the issues with Sir Donald Brydon in October. He is, of course, overseeing the Brydon Review into the quality and effectiveness of audit on behalf of the British Government.  The discussion ranged from the extent to which the future audit reports should inform as well as assure stakeholders, to consideration of how to enhance the audit process by having greater collaboration between audit committees, company management and the auditor.   The meeting was the third element in a series of engagements by the Institute, both in writing and in meetings, with the Brydon review team. Sir Donald Brydon’s report is expected by the middle of January, and we will keep members informed of any developments. IFAC board appointment At the annual IFAC board meeting in Vancouver earlier this month, I was delighted to be present to support the election of an Irish Chartered Accountant to the board of IFAC. Joan Curry, a Council member of Chartered Accountants Ireland and Principal Officer in the Department of Transport, Tourism and Sport, is the first Irish Chartered Accountant to serve on the board of IFAC. Her appointment is a testament to her own immense abilities and to the regard in which your Institute is held by the global standard setting body. Joan’s success was acknowledged by our own Consul General in Vancouver, who hosted a lunch in honour of Joan’s achievement. Annual Dinner Finally, the 2020 Chartered Accountants Annual Dinner will take place in the Convention Centre, Dublin on Friday 31 January. I am delighted that our guest of honour will be Irish Chartered Accountant, businessman and philanthropist Lochlann Quinn. Bookings for the event are now open. I look forward to welcoming friends, colleagues and guests to our premier event at the end of January. Conall O’Halloran President 

There are many professional benefits to donating your time to a non-profit organisation. Ciara Tallon outlines how you can enhance your career by volunteering your experience and skill. Over the last decade or so, the term ‘work-life balance’ has featured more and more in career conversations, and with millennials in particular. This need to make more of a balance often involves children, pets or parents but can also be a wish to carve out time for fitness, education and upskilling or volunteer work. According to volunteering.ie, 28.4% of adults in Ireland volunteer; that is over one million people. 65% of those who volunteered were over the age of 45. Half of all volunteering was work carried out directly by individuals (informal) rather than through organisations (formal). Getting started Look at what you have access to, be it a sports club, scout den, church or community group that could benefit from your experience. Talk to people on the side-lines at your child’s football match to find out who else is working in this sector and how they got their foot in the door.  It’s a good idea to look into your own organisation, as well. It may have some CSR initiatives and perhaps sponsor or collaborate with organisations in the not-for-profits. There may be room to leverage your connections to secure experience and exposure within these organisations.  For employers, volunteering by employees is increasingly recognised as a potential way to develop broader skills. A recent Accenture report highlighted that 76% of volunteers said they had developed core work skills while volunteering. Career benefits Through our career consultations, we have seen an increase in the number of members who view volunteering as a strategic stepping stone and career move. Members are beginning to recognise that a period of volunteering can be a shrewd investment in their career in more ways than one. The opportunity to develop new skills and strengths without it affecting current career plans can be of huge interest to members. Often a new group or organisation can challenge us differently and bring about fresh thinking, and this freedom from the confines of our day to day role can draw on untapped resources and spark our creativity to explore new strategies. It leads us to areas of abilities unbeknownst to us.  Members also have the opportunity to explore an area of work or change of sector without the risk of financial penalties in a try-before-you-buy scenario, avoiding the potentially costly mistake of focusing on just one sector. A role working with young adults or with older people may have been a life-long dream but often the reality bears no resemblance to expectations. The chance to do this in a not-for-profit on a voluntary basis can be a valuable buffer. The not-for-profit space has experienced a massive overhaul of its governance and risk processes so a fresh approach coming from outside of a not-for-profit field may be just what they need.  Perhaps the organisation in question uses state of the art systems or allows you the opportunity to oversee a team or group that doesn’t exist in your day-to-day role – they can all combine to broaden your skills set.   The last decade or so has seen an increase in the demand for governance and compliance in the not-for-profit sector to ensure robust ‘fit-for-purpose’ checks and balances. Chartered Accountants have played a key role in this area by taking on full-time positions within these organisations. For members who would like to transition into this sector, a voluntary, non-executive director or board of directors opportunity may fit the requirements and give that not-for-profit exposure.  Governance Those looking to make the move from traditional practice and industry roles into the not-for-profit space can often find the experience frustrating and difficult without any prior industry knowledge or exposure. Members who gain exposure to the not-for-profit sector even in an unpaid capacity can find that they gain that crucial exposure and CV-enhancing experience which can subsequently evolve into a long-term career investment that eventually pays dividends in the form of a paid role. These roles also offer the opportunity to develop new skills and give sectoral exposure, as well as provide additional networking and brand development potential.  Value to you and your career In 2017, there were over 14,000 volunteers registered with local volunteer centres and the online national database of volunteering opportunities (IVOL). These volunteers clocked up an incredible 480,000 hours of volunteering with an estimated economic value of over €10.5 million. Finally, whatever you are involved in outside of your working day has the opportunity to help you to broaden your views, opinions, expertise as well as gain invaluable contacts and connections in what could potentially be your next career move. This new sector may hold an interest for you, or separately the skills and areas of development may, as Julie Bond says, ‘give you the edge’ in that crucial interview or sectoral change.  What is invaluable is the mutual value-add to be gained by both the volunteers and the voluntary organisations – with knowledge sharing on both sides.   Ciara Tallon is a Career Coach and Recruitment Specialist with Chartered Accountants Ireland. 

Dee France outlines the services available to members  and students through CA Support, and the need for generosity in this season of goodwill and beyond. CA Support was re-launched at an event in October. Tell us about the rationale behind the re-launch. This new service is a re-imagining of the Institute’s original hardship fund, the Benevolent Association, where member donations were deployed to members in need. CA Support is now a registered charity with its own board of directors and the donations from members help fund a wide range of expanded support services such as professional counselling, wellness coaching and mental health workshops in addition to financial supports to members and students  in crisis. Based on your experience, what common challenges do our members face and how can the Institute help through CA Support? Given the mental illness epidemic, most calls received by CA Support have a mental health element that stems from the challenges faced by members and students. Members who engage with our service may be suffering from bereavement, redundancy, serious illness or some form of depression or burnout. Students also look for help with these issues in addition to exam stress, work-life balance and financial worries. At our launch in October, President Conall O’Halloran acknowledged that although a career in accountancy can be extremely rewarding and fulfilling, for some the road bumps encountered along the way can be significant and come at a huge personal cost – both in their careers and with their mental health. The new CA Support model is all about empowering the individual to self-sufficiency through a wide range of supports, namely professional counselling, wellness coaching or referral to our in-house career or mentoring service. We engage with our members throughout the process and many keep in touch to avail of additional support and guidance as they move away from crisis situations and towards positive change. How exactly does CA Support work to help members in difficulty? We provide a telephone, email and  face-to-face suite of services for members and students. Most engagement is via email initially, with many opting to talk to one of the team face-to-face or by phone. Every case is different; some members or students avail of several services while others seek support for an isolated issue. Whatever difficulties our members or students encounter, we are with them every step of the way. All members can help their colleagues by donating to CA Support. How important is this fundraising activity? Quite simply, donations are the lifeblood of CA Support. Without members’ donations, this service will cease to exist. We ask everyone to think of those members and students who can be blindsided by problems outside of their control such as bereavement, redundancy, mental health challenges or a family crisis. These issues take their toll in different ways, with many who contact us often in dire need. Unfortunately, many more may be suffering in silence. We want to reach those members and offer them all the support they need. Without the generosity of their fellow members and students, our ability to offer these services is compromised. We encourage all members to give generously, particularly when times are good. Nobody knows what’s around the corner and it is heart-warming to know that members’ support is there when you need it most. Finally, if a member needs a helping hand, how can they contact CA Support? Members and students can phone us on 01 637 7342 or 086 024 3294, contact us by email at casupport@charteredaccountants.ie or visit our website at www.charteredaccountants.ie/casupport    Dee France is Manager at CA Support.

Kate van der Merwe explains why businesses must incorporate sustainability in all financial decision-making processes in order to remain relevant. Ray Anderson, the founder of Interface, once said: “I always make the business case for sustainability. It’s so compelling. Our costs are down, not up. Our products are the best they have ever been. Our people are motivated by a shared higher purpose – esprit de corps to die for. And the goodwill in the marketplace – it’s just been astonishing.” Companies of all sizes make significant decisions every day. Decision-making is an essential process in determining a company’s trajectory and performance. These decisions may be operational, or concern future internal and external investments. In this, the third in my series of sustainability-related articles, I will touch on the emerging practice of internal carbon pricing, consider how environmental factors shape decision-making within organisations and explore how a focus on sustainability can enhance the management of operations or the evaluation of future opportunities. Carbon pricing Companies already employ a variety of methods to embed environmental sustainability into their operations. In doing so, they are driving cost efficiency, reducing greenhouse gas emissions and gaining happier customers and employees. Carbon pricing is one such method. Companies set an internal price of carbon that is applicable across transactions, depending on the related carbon emissions. Carbon pricing enables these emissions to be incorporated into the budgeting process – directly feeding into day-to-day decisions. Reducing this carbon cost may include greening your energy supply (more than 200 companies have committed to becoming 100% renewable as part of the RE100 initiative) or re-assessing production processes. For example, Microsoft introduced internal carbon pricing in 2012 and implemented carbon budgets across all business units. The funds collected are ring-fenced for investment opportunities that further reduce carbon emissions. Since Microsoft implemented carbon budgeting, the company reported a 7.5 million ton reduction in emissions and over $10 million savings per year. Carbon pricing embeds the environmental cost and is flexible in nature, allowing schemes to be piloted before being fully incorporated. Tangential gains Just as carbon pricing helps to make the invisible visible, incorporating sustainability has many tangential gains that should be included within cost-benefit analyses. These benefits include indirect cost reductions, greater resiliency and enhanced brand goodwill. Truly embedding sustainability can mean a cheaper cost of capital, particularly with the emergence of green and sustainability loans. Danone, for example, brokered an innovative new €2 billion loan facility, where preferential rates are linked to the company’s third-party-verified ESG performance. To embed sustainability and avail of the benefits, or merely survive upcoming transitions, companies’ existing products or services may need reexamination. For example, how sustainable are your materials? How climate-resilient are your supply chains? Are your assets vulnerable? What happens to your customers or client base as the impact of climate change increases? Savings aren’t only made by eliminating waste and inefficiencies in production or overheads. Companies can achieve higher employee attraction and retention by embedding sustainability. Both millennials and Gen Z are significantly concerned about the climate crisis and prioritise value alignment when looking for prospective employers, leaving companies that don’t live up to their stated values. Consumer power In looking for the next business opportunity, it also pays to assess environmental and social impacts. Significant problems must be solved if we are to successfully tackle the climate crisis. However, for those who seek to meet these challenges, there are important market opportunities. Millennials (who are projected to become the most powerful consumers this year) and those in the Gen Z demographic cohort actively use their purchasing power as consumers. They start or stop transacting with a company based on the company’s deemed ethical behaviour, creating a market incentive for sustainably minded businesses. Environmental resources have often gone uncosted, but this is set to change. This shift should be embraced; it is an opportunity to innovate, to aid society and to eliminate waste and cost. If businesses wish to remain relevant and engender trust, they must incorporate sustainability in all financial decision-making. It is necessary for businesses, and society, to thrive. Case study - Patagonia Founded with a focus on the environment and people, Patagonia has a long history of environmental awareness. The company’s organic growth has been aligned with its core of utility, simplicity and nature, with decisions consistently factoring in the impact to the environment. Examples of this aligned evolution include the Worn Wear programme, Tin Shed Ventures and Patagonia Provisions. The Worn Wear programme recycles clothing, which enhances the company’s eco credentials while extending access to a new demographic with lower prices. Patagonia established Tin Shed Ventures to ethically manage the company’s investments, supporting start-ups trying to tackle the climate crisis (including two finalists in the 2018 Circular Economy Awards, a World Economic Forum initiative). And in innovating textile improvements for reduced environmental impact, Patagonia Provisions was born to manage the company’s sustainable farming activity. How has this decision-making impacted Patagonia? Employee turnover is at 25% versus the industry average of 43%, with roughly 900 applications for every job opening. The company has weathered storms, but quadrupled profits and revenues in the last decade, debt-free, and was awarded the Worlds’ Most Innovative Company award in 2018.   Case study - Interface Carpet companies don’t usually make headlines, but Interface has a remarkable story to tell. The company’s founder, Ray Anderson, was inspired to redesign a carbon-intensive and environmentally damaging carpet business with a ‘mission zero’ vision back in 1994. After setting a goal to eliminate any negative impact on the environment by 2020, he began an intensive journey of innovation. Anderson created a recyclable carpet made from recycled or biobased materials, which worked better and cost less, while re-conceptualising overheads. In doing so, Interface managed to achieve: 82% reduction of net greenhouse gas emissions per ton; 84% increase in renewable energy use, with a 45% reduction of energy used per pound of product; 91% reduction of facilities waste; 100% carbon neutrality across all products; and $185.4 million annual savings realised by 2000. Perhaps unsurprisingly, Anderson credits the company’s sustainability journey with its ability to successfully navigate the last recession.   Kate van der Merwe ACA is responsible for Global gFA Reporting Optimisation at Google.

Gareth Morgan appraises the mandatory framework for charity accounting in Northern Ireland, which represents a significant change for charities and practitioners alike. Charities in Northern Ireland are still getting to grips with a mandatory framework for charity accounting, including a requirement to file accounts in specified formats with the Charity Commission for Northern Ireland (CCNI). Although CCNI has required charity accounts for several years, the statutory accounting framework under the Charities Act (Northern Ireland) 2008 only took effect for financial years starting on 1 January 2016 or later. Northern Ireland-registered charities have therefore had to file accounts under the new rules since late 2017. A review of some of the documents filed with CCNI shows major variations in terms of compliance, especially among small- to medium-sized charities. Some are excellent, but others seem to show virtually no awareness of the rules despite plenty of guidance from CCNI. Charity accounting regulations took effect in England and Wales in 1996 (originally under Charities Act 1993, now under Charities Act 2011). English and Welsh charities now have more than 20 years’ experience of preparing accounts under a statutory framework and filing them with the Charity Commission for England & Wales (CCEW). Scotland has had charity accounting regulations since 1992 but, without a charity regulator, compliance in the early years was highly variable. However, following devolution and the establishment of the Office of the Scottish Charity Regulator (OSCR) with statutory powers under the Charities and Trustee Investment (Scotland) Act 2005, new regulations took effect in 2006. Effective means of reporting In all UK jurisdictions, including Northern Ireland, smaller charities with income of up to £250,000 (if not constituted as companies) have the option to prepare a receipts and payments (R&P) account together with a statement of assets and liabilities (SOAL). Above this, accruals accounts are required arising from Charities SORP with a statement of financial activities, balance sheet and extensive notes. In my experience, and from my research findings, the R&P regime – if followed properly – is a very effective means of reporting for funders and others who use charity accounts at this level. But it is not uncommon to find the SOAL missing or to find something labelled as an “income and expenditure account”, which is not appropriate either under the R&P regime or under the SORP. A further complication in Northern Ireland is that, because the new structure of charitable incorporated organisations (CIOs) has not yet been implemented, many smaller charities are still being formed as charitable companies, which rules out the R&P approach. (In England and Wales, most new charities are now formed as CIOs and in Scotland as SCIOs. Many existing charities have converted to the CIO forms.) From further training to good governance Separate thresholds apply in each jurisdiction regarding the external review process. In Northern Ireland, registered charities with over £500,000 in income are subject to audit regardless of their legal form. Below this, a charity must have an independent examination (IE) of its accounts, but this is much more than an informal process – even in the case of R&P accounts the examiner must, by law, follow the directions of CCNI and must consider seven separate issues of negative assurance before completing his or her report. Moreover, like Scotland, Northern Ireland has no lower limit for IE so there is a great need for training more people to undertake IEs. In the £250,000 to £500,000 income band, the examiner must be professionally qualified. Fortunately, the Association of Charity Independent Examiners now has a specific committee focused on training and supporting IEs in Northern Ireland with good links to Chartered Accountants Ireland. Reforming the Charities SORP However, for charities subject to the SORP regime (which includes all Northern Ireland-registered charities with over £250,000 in income, and charitable companies whatever their income), further changes may be on the horizon. In the last year, I was invited by the four charity regulators of the UK and Ireland (CCEW, OSCR, CCNI and the Charities Regulator of Ireland) to chair a Charities SORP Governance Review. This was concerned not with the detailed content of the SORP, but with how the processes in developing the SORP could be improved. The panel recommended several changes including a reduction in the size of the SORP committee, but with a clear representation of at least two persons from each jurisdiction – one of whom would have specific experience of smaller charities (under £500,000 in income). Hopefully, Northern Ireland will soon have two specific members on the committee, including someone to make the case for smaller charities applying the SORP. The benefits of more informed trustees Both the English and Scottish jurisdictions can now be considered as ‘mature’ in the sense that charities have over 10 years’ experience in applying a mandatory accounting regime. It has been exciting to see trustees increasing their understanding of finances, including the appreciation of restricted funds, reserves policies and public benefit reporting, which has in turn led to more effective charities. I am confident that similar benefits will soon become apparent in Northern Ireland, especially as Chartered Accountants and others gain experience as independent examiners. New accounting regulations are also due to be implemented soon in the Republic of Ireland under Charities Act 2009, which will hopefully bring similar benefits.   Gareth Morgan is Emeritus Professor of Charity Studies at Sheffield Hallam University and now works with charity consultants, The Kubernesis Partnership LLP, based in Dunbar, Scotland. Gareth is the author of numerous publications on charity regulation and accounting, including The Charity Treasurer’s Handbook (the fifth edition includes the new requirements for Northern Ireland) and Charitable Incorporated Organisations. In 2018/19, Gareth served as independent chair of the Charities SORP Governance Review.

Volunteers and non-profit experts explain how volunteers and civil society organisations can work together for the betterment of society. The third sector is the part of an economy or society comprising non-governmental and non-profit-making organisations or associations, including charities, voluntary and community groups, cooperatives, etc. Charities, non-profits and voluntary and community organisations are terms often used interchangeably, and although they can be different, they often overlap. In November, a BBC.com story about “the lifeguard” – a 22-year old Norwegian woman who keeps track of roughly 450 ‘dark’ Instagram accounts and intervenes to help suicidal users – generated a stir on social media. Ingebjørg Blindheim isn’t paid for what she does, nor is she formally qualified to offer help. Instead, the BBC report reads, she feels compelled to act. While for many this would be an overwhelming commitment in an always-on digital age, and some have questioned the wisdom of an untrained individual working in the space, it is reflective of the driving force behind volunteering and non-profit groups as a whole – a determination to help. This determination is alive and well in Ireland. Despite well-publicised issues in a small number of charities, the country’s non-profit sector remains robust, with 163,000 employees and 81,500 directors or charity trustees. The value of the third sector to Irish society is arguably best summed up by the degree of Government support it enjoys. Data from Benefacts, a non-governmental organisation that provides information about the non-profit sector in Ireland, shows that at €5.9 billion, Government was the biggest single source of funding to the third sector in 2017. This represented 8.4% of all current Government spending that year – although some might say that is still not enough. And while the focus of non-profit organisations is on the people they serve, several academic studies have demonstrated that spending time helping others leads to benefits for the individual volunteer. Such benefits can include greater positive affect, life satisfaction, social engagement and reduced depression according to a 2017 academic study by a team of US-based researchers. So, what is the nature of volunteering in Ireland today? The evolution of volunteering Over the years, the nature and popularity of volunteering on the island of Ireland evolved. According to Nina Arwitz, CEO at Volunteer Ireland, people now want to volunteer in new and less restrictive ways. “People generally look for short-term, flexible, one-off volunteering opportunities, but organisations have not kept up with this change in demand from volunteers,” she said. “Many volunteering roles are ‘traditional’ in that they require a regular, long-term commitment. Although such roles are very important, a lot of our work involves helping organisations develop new types of volunteer roles and think outside the box in terms of how they involve volunteers.” Nina also points to the growth in ‘informal’ volunteering, which is conducted without the assistance or oversight of an organisation. A common example is helping an elderly neighbour with their shopping each week. “About half of volunteering in Ireland is informal, and this follows a growing international trend across the globe.” Whether formal or informal, there is a strong demand for volunteers – and a corresponding willingness in individuals to give back to society. This willingness creates huge potential for mutual benefit at both personal and societal levels, according to Nina. “Volunteering enables non-profit organisations to engage in hugely important work in a range of areas from homelessness and supporting young people at risk of offending to animal welfare, the environment and befriending,” she added. “Much of this work would not be possible without volunteers.” Indeed, Volunteer Ireland’s 2018 annual survey of volunteer-involving organisations found that 60% of organisations see volunteers as crucial to their organisation, while almost one in five believe that their organisation could not operate at the same level without volunteers. The monetary value of volunteering further illustrates the importance of the volunteer community to the provision of necessary services throughout the island. “If you take the 232 million volunteer hours given in Ireland each year, as measured by the Central Statistics Office, and multiply it by the average industrial wage of €23 per hour, which is the internationally recognised way of approaching it as volunteering reflects a range of skills, you get an annual value of over €5 billion,” Nina continued. “But that doesn’t account for other economic benefits such as improvements to health and wellbeing, which ultimately saves money for the HSE. So, it’s still a conservative estimate.” Before you commit There is also an inherent value to volunteering – doing more than you must because you want to and because you care. This was certainly a motivating factor for Institute member, lifelong volunteer and Director of Finance at The Wheel, Tony Ward. “Being out and about and encountering new people is rewarding as it reinforces the fact that everyone is different and for a more vibrant and healthy society, we need to understand difference,” he said. “Also, when I joined Fighting Blindness and encountered so many people who were also visually impaired, it was comforting and of great support to meet and speak to people who had similar challenges.” While volunteering is undoubtedly a good thing to do, as much for the volunteer as the non-profit organisation and the people they serve, it is not something to be rushed into. The cause must resonate with the individual, and he or she must be able to fulfil their commitments, according to Tony. “Ultimately, nobody wants to be involved in something where they have any doubt about the organisation or cannot deliver on what they sign up to,” he said. “Volunteers also need to ensure that they don’t over-commit. Aside from one’s day job, family and interests, everyone has limited time to volunteer so it would be better to give your time wholeheartedly to one or two organisations rather than spread yourself too thinly.” It is also important to consider the type of organisation you volunteer with and the impact you might have. Some would-be volunteers may be attracted to well-known organisations, but Chartered Accountants can often add a disproportionately high degree of value in smaller, less-known charities. “Smaller organisations will undoubtedly have limited staff resources and struggle to access a broad range of skills. They may also struggle to get the necessary systems in place to ensure compliance with the increased regulations,” said Tony. “Without taking on an executive role, I believe that most Chartered Accountants could make a huge contribution to such organisations. I have done this many times, from my local GAA club to working with boards. It isn’t only about proper accounting systems but making good and prudent business decisions and ensuring that the organisation takes relevant factors into account when making those decisions.” Corporate volunteering To attract and retain talent, companies are increasingly supporting their employees in their volunteering activities and, in many cases, are getting in on the act themselves. According to Pamela Gillies, a Director in the Business Advisory team at BDO Northern Ireland, volunteering programmes are more than a CSR or marketing exercise – they help to create a healthier, happier and wealthier society that benefits everyone. “I am personally involved with our current charity partner, The Children’s Cancer Unit Charity, and I also volunteer with several different organisations in a personal capacity outside of BDO Northern Ireland,” she said. “Such volunteering programmes allow me to give something back to the local community, connects me with people I otherwise would not meet, and to have fun.” In Pamela’s view, a good volunteering programme is one that is sustainable and benefits both organisations in one way or another. “There could be a perception that volunteering diverts the time of client-facing staff,” she said. “But when volunteering is managed correctly and communicated effectively, the benefits of the organisation performing valuable work in the community will increase brand perception as a result.” Based on her experience, both corporate and personal, Pamela has some advice for organisations that have yet to step into this space. “As John Donne wrote in his famous poem, No Man is an Island, we all rely on each other, or we all need help at some time,” she said. “What we might consider a relatively small contribution in terms of time or cost can have a significant long-term positive impact on those receiving our help and support.” For organisations, volunteering creates a competitive advantage, raises brand awareness and helps businesses develop trust with shareholders, customers and employees, she continued. “Our world – and the people and organisations in it – is increasingly interconnected and volunteering is a way to actively manage those connections to benefit a company, as well as those people, organisations and communities you are helping,” said Pamela. “It therefore makes sense for businesses to implement CSR strategies in their business plan – not only for the benefit of others, but also for the success of the business.” The non-profit landscape According to Benefacts, there are almost 30,000 civil society organisations in Ireland for companies and individuals to partner with. While some are long-established, others are newer and have evolved in response to societal needs. At a high level, the sector includes: A few hundred large and well-established charities that deliver services on behalf of the State, mostly in education, health and social care, and international development aid. These organisations receive more than 70% of public funding which, in 2018, amounted to more than €6 billion or just under 10% of all current exchequer expenditure; A few thousand non-profit organisations, half of which are registered charities that rely substantially on the State for some, or most, of their income. These organisations are active in various sectors – including local development, social housing and the arts – and derive their income from various sources including the State (often in the form of service fees), earned revenues and donations from the public; and Tens of thousands of small, locally-based organisations. Many are local branches of national organisations while others are community-based. Few are incorporated, most are volunteer-led, and many receive small grants from their local authority. The biggest change affecting civil society organisations in the last ten years is successive waves of regulation, according to Paula Nyland, Head of Finance and Operations at Benefacts. “There are nearly 10,000 non-profit companies incorporated by guarantee and without share capital. As corporate citizens, they are subject to the same rules as any other company in terms of corporate governance, employment law, health and safety, lobbying, protected disclosures and so forth,” she said. “This has driven a marked professionalisation in the way they are run as non-profit businesses.” Also, half of these companies – as well as many unincorporated non-profits (mostly schools and religious bodies) – now come into the purview of the Charities Regulator, which has brought greater scrutiny, new compliance standards and disclosure requirements, and sanctions in the case of non-performance. Sector challenges In addition to regulation, the sector faces challenges on several other fronts, according to Tony Ward. These include: An inadequate understanding of the role the non-profit sector plays in Irish society, and subsequent negative media coverage; A lack of multi-annual funding, with many organisations surviving year-to-year; A lack of understanding, particularly by State funders, of the need to carry reserves – and the imperative for a board of trustees to have adequate reserves to manage an organisation competently; and The streamlining of financial reporting for charities, given that different forms of reporting are required by different State agencies. While collaborative thinking, such as the establishment of the Department of Rural and Community Development in 2017, may help non-profit organisations overcome these challenges, distinct risks remain for charities – both large and small – in the years ahead. However, Tony looks at this in a more nuanced way. “The sector is comprised of charities and non-profits doing fantastic work in areas of society that are overlooked, or where the only effective way the State can deliver essential services is through these organisations,” he said. “The risk is, therefore, a risk to society whereby those most in need of help or assistance may not be adequately served. And the simple fact is that the current model is not sufficiently planned or resourced to deliver for people at risk.” While much of the solution is out of individuals’ direct control, Tony firmly believes that volunteers and donors can exert a positive influence for change in how the non-profit sector is supported and resourced. “As we know, volunteers are essential at many levels within the charity and non-profit sector, and donors are the life-blood for many organisations,” he said. “They need to be very much part of the solution and need to feel they are contributing in a way in which they believe and trust.” Trust through transparency When it comes to improving the reputation of, and the aforementioned trust in, charities of all sizes, transparency is often cited as a critical factor. However, a significant milestone on the journey to true transparency is disclosure – a point on which Benefacts takes an uncharacteristically pointed stance. “Benefacts has a neutral position on most things. We give you the information as we find it and let you draw your own conclusions. The exception is disclosure, where we have a very strong view that more is better,” said Paula. She believes that various regulatory wrinkles have permitted a race to the bottom in non-profit disclosures. For example, Companies Act 2014 allows companies limited by guarantee that are SMEs (i.e. most of them) to avail of the same reporting exemptions as private companies. This means that since FRS 102 came into force, more than 40% of incorporated non-profits (including regulated charities) now file abridged accounts to the Companies Registration Office. “This is an awful pity since the full accounts have to be produced anyway and are required by funders,” said Paula. Furthermore, FRS 105 permits an even more minimalist standard in her view. “There is no requirement for a true and fair view presentation, no directors report and virtually no notes to the accounts. By now, 15% of non-profits – including some charities – are using this standard, which incidentally has been ruled as an ineligible standard for charities in the UK. “The Charities Regulator has proposed amendments to the law to introduce regulations that would specify the content required for charity accounts, including incorporated ones,” Paula continued. “This prevents the reporting of abridged or FRS 105 micro-entity format and mandating Charities Statement of Recommended Practice (SORP) for certain income thresholds.” The preparation of financial statements is universal to all enterprises of scale – be they private companies, government agencies or non-profits – and they have various merits, according to Paula. “They allow trend analysis and like-for-like comparisons. They must be formally adopted by the enterprise and validated by an expert third-party. Our message to non-profits is: seize the opportunity presented by these mandatory disclosures to put your best foot forward. Tell your story; explain where your resources come from and how you put them to best use.”She added: “Tens of thousands of sets of financial statements and constitutions have been downloaded from our free public website since Benefacts.ie went live in 2016. One thing we can say for sure is that donors, prospective board members and, surely, other volunteers as well will weigh the evidence of what they find before deciding to give or to serve.” Tony Ward, Director of Finance at The Wheel My volunteering began in a very unexpected way. In the mid-1990s, not long after qualifying as a Chartered Accountant, I was diagnosed with a degenerative eye condition. This brought me into contact with the charity, Fighting Blindness. I initially volunteered with the organisation as a member of the Dublin branch and then as a member of the board for ten years. Volunteering soon became the norm for me, and I subsequently joined the boards of Vision Sports and NCBI. As many Chartered Accountants know, finance skills are always in demand, so I often ended up as treasurer or on finance sub-groups. I am currently a member of the board of Sightsavers; a committee member of my local GAA club in Co. Monaghan; and the co-chair, with Paula Nyland, of the Chartered Accountants Ireland Charity and Non-Profit Special Interest Group. The older one gets, the more one becomes aware of the diversity in society and the different pathways people’s lives can take, often through family crises or encountering others who have personal or family challenges. It is important to give back and assist in any way one can, while not over-stretching as we all have our own commitments. In my experience, volunteering gives you the chance to meet new people, most usually very committed and passionate for their chosen cause. So many people volunteer in Ireland, and it is taken for granted, but society would be so much worse off without it.   Patrycja Jurkowska, Operations Accountant at GOAL Global I am currently President of Junior Chamber International (JCI) Dublin and as part of my role, I lead a board of nine directors and approximately 60 members. I work with young professionals, local communities and businesses to create positive change in the world through workshops, initiatives and projects. I am also a member of the Chartered Accountants Young Professionals Committee, which organises member-focused events.  I always wanted to give back to the community and have a positive impact. In 2017, I was introduced to JCI. After doing some research and attending a few events, I decided to donate a portion of my free time to it and have never looked back. Similarly, with Young Professionals, after enjoying a few events, I was encouraged to join the Committee in 2018. I like the idea of organising get-togethers for Chartered Accountants to learn new skills, share knowledge and network, and I have supported the Committee ever since. Through volunteering, I learned that what my most prominent motivators are helping others and giving back. This was a deciding factor for my career move. I found a role with GOAL, where I wake up excited every morning at the prospect of being able using my skills as a Chartered Accountant to work towards a more sustainable world where poverty, hunger and inequalities no longer exist. Volunteering makes the world a better place to live – and it helps me be a better person too. Deborah Somorin, Senior Associate at PwC If  you work for eight hours and sleep for eight hours, you still have another eight hours in your day. I choose to spend some of those eight hours volunteering. I know how valuable support can be in achieving your goals, and I also understand that a lot of people don’t have that support in a form they need. So, I try to give as much of my free time as possible to initiatives that allow me to help people in a way that is tailored to their needs. A homeless charity supported me when I was homeless, and again when I was transitioning out of State care. They later asked me to help with some fundraising initiatives and arising from that, I founded Empower the Family in 2018 to support single parents and State care leavers in third-level education. It’s essentially my second child. I also volunteer with other organisations. I am a board member at Chartered Accountants Support, which offers support to Chartered Accountants, Accounting Technicians, students and their families, and a member of Chartered Accountants Ireland’s Diversity and Inclusion committee. Beyond the Institute, I act as a Diversity in Business ambassador for Diversein.com, which works to create equal and happier workplaces through diversity and inclusion. I am still shocked at the impact I can have by sharing my experiences. Helping others is a huge privilege, and I plan to keep volunteering for as long as I can be of help.

Trócaire’s Michael Wickham Moriarty speaks to Accountancy Ireland about his career in the non-profit sector and the satisfaction he gets from volunteering. From Monaghan to Dublin to Khartoum and back again, Michael Wickham Moriarty’s career path as a Chartered Accountant has been anything but predictable. Trócaire’s Director of Corporate Services, who recently collected the ‘Best Large Charity Annual Report’ award at the Published Accounts Awards, and two additional accolades at the Good Governance Awards, has worked in the charity and non-profit sector since completing his training contract with PwC’s tax department – but in fact, that’s where his passion for meaningful work began. As a trainee, Michael’s work exposed him to several family businesses and non-profit organisations. Reporting to PwC’s Teresa McColgan, who is a board member at Concern, helped him realise the value he could bring to organisations as a Chartered Accountant – both as an employee and volunteer. The first stint overseas Despite enjoying his work in tax during the Celtic Tiger years, a career in practice wasn’t in Michael’s long-term plan. Rather than move straight into another ‘career’ role, however, he instead opted to work overseas for one year with GOAL. “In 2008, when the economy was beginning to wobble, I moved to Khartoum in Sudan to work with GOAL as their on-site donor compliance officer,” he says. “I was working under the supervision of GOAL’s financial controller in Khartoum, which was great because donor compliance was a new area for me.” At the time, Sudan was also ruled by Arab dictator, Omar al-Bashir, whose forces imposed an arbitrary sharia legal system within the country. “I experienced a lot of changes in a very short space of time,” Michael recalls. “Plus, I had to get used to a new way of living. The stipend provided by GOAL meant that you had just enough to get by and this was a major drop from my salary as a Chartered Accountant working in practice, but it was never about the money. Ultimately, it was a fascinating experience and I learned a lot during my time there.” Over the course of the year, many of Michael’s colleagues returned home for brief spells. At this point, the financial crisis was taking a wrecking ball to the Irish economy and he was hearing reports that described a different country to the one he left behind. After a year of volunteering with GOAL, he took up another donor compliance role with Plan International Ireland, which divided his time between Dublin and West Africa. “It was quite shocking for me to hear just how bad things were in Ireland. I was in Guinea when I heard on French language radio about the IMF coming into town, and I remember having to explain to the locals about the situation back home,” he says. “It was devastating because so many people overseas rely on Irish aid. In one village, for example, the only stable concrete building was built using Irish aid and the locals were extremely grateful because it allowed them to care for disabled children safely.” Returning to a changed Ireland Michael worked with Plan for three years – before joining the Ana Liffey Drug Project as Head of Finance and Administration. Working with Ana Liffey was very different from working overseas, Michael recalls. “Our clients were in and out of the building every day and I had the opportunity to meet them and hear their stories,” he recalls. But the most interesting thing he noticed about small charities is how little they have by way of resources to get by. “The organisation had an amazing ethos that really appealed to me, but every cent mattered,” he says. “So much so that when a computer broke down, I found myself carrying it to the local PC repair shop rather than spend money on a courier. And that’s the reality for many small charities in Ireland today.” Michael’s stint with small charities came to an end, however, when an opportunity arose to join the team at the Central Remedial Clinic (CRC). The CRC had survived a major scandal in 2013 that involved top executives receiving salaries far in excess of agreed official public service pay rates – and these executive salaries were being topped-up in part by public donations. Although Michael was a spectator to many scandals, he now found himself in an organisation that was working to rebuild its reputation and regain the trust of the public. “Eighteen months after the CRC scandal broke, the new CEO decided to recruit a new Head of Finance. I applied for the job and it helped that I was interested in governance and reform, as that was a critical objective for the entire organisation,” he said. “And it was a wonderful experience. I headed up a great Finance team and we quickly recruited a new external audit firm, adopted Charities SORP and implemented a new internal audit regime.” The key to success, in Michael’s view, was the fact that change was supported at all levels of the organisation – not least by the leadership team. “The technical changes weren’t without their challenges, but that was my area of expertise,” he says. “What really impressed me, though, was the CEO’s focus on culture change. The entire organisation moved from an old reality to a new reality in a relatively short space of time, and it was fascinating to observe that shift happening.” Stepping up During this time, Michael was also volunteering as the Company Secretary and Deputy Chair of EPIC – a national organisation that works with children and young adults who are either in care, or who have experience of being in care. He stepped down in July 2017 after five years as a board member, to take up a voluntary role with the Rotunda Hospital where he is now Honorary Treasurer, Vice President, and Chair of the Audit and Governance Committee. According to Michael, both volunteering and working in the non-profit sector allowed him to see both sides of the same coin – something that benefited him in his capacity as an employee and board member. “In my younger years, I volunteered because I had the time and inclination to put my training to good use, but it ended up being a mutually reinforcing experience,” he says. “The time I spent at the board table certainly made me a better executive when reporting to the board. It also introduced me to an entire network of people with similar values to my own and it has become an outlet of sorts for my own need to make some sort of positive change in society. So, in that respect, I’ve found volunteering very worthwhile.” Living a meaningful life While Michael is a volunteer in one sense, he is very clear about his paid role as an employee – and this extends to his approach to management within Trócaire, where he now works. “I lead a team of accountants and IT professionals, so I think about talent retention a lot. My colleagues don’t get paid as much as they could elsewhere, but they don’t work as a favour either. All staff in the not-for-profit sector need to be paid fairly; you need to be able to send people home with the ability to pay their bills and support their families,” he says. “Otherwise, only the independently wealthy could work in this space and that wouldn’t be right or good.” And while Michael himself took a significant pay cut to work with GOAL in Sudan all those years ago, and has only recently recovered the shortfall, he is happy with his lot. “Some of my friends stayed in practice while some moved into industry, and they get paid very well, but I am happy with my circumstances,” he adds. “I am very lucky to do meaningful work, which brings me a lot of value and satisfaction. Many people have been interested in my experience and career path, but I’ve found that they often struggle with what they would be forced to give up financially and that is very understandable. But for me, working in an organisation that provides life-changing and life-saving services gives my work great meaning and ultimately, that has influenced    my career choices and it’s what keeps me in the sector.” Michael on… Volunteering: “We can’t solve all the problems of the world, but volunteering gives you an outlet beyond being upset or angry about it.” Scandals: “There is a sceptical eye on charities, and that will continue. We must respond to that scepticism and the best way to do that, in my view, is through transparency.” Reporting: “Charities need to present financial statements in a way that allows people to understand the issues with ease, and the Public Accounts Awards is doing great work in driving standards up across the sector.” Motivation: “When you see kids donating €2 for their school’s hot chocolate day or pensioners donating part of their weekly pension, there’s nothing more motivating than that. It pushes you to ensure that their money is used for the full benefit of the people you serve.” Diversity: “A lot of boards are dominated by white, middle-aged and middle-class men, and I’m at least two of those myself! We need to help more young people, women and those from ethnic minorities to get involved in boards – and that diverse talent pool is available amongst the membership of Chartered Accountants Ireland."

Many people confuse ‘assertive’ with ‘dominant’, and to their own professional detriment. To be an effective communicator, you need to be an assertive communicator, says Fiona Flynn. Being an effective communicator is a very important soft skill in business. It helps us influence others and to ensure that our voice is heard in a busy and often stressful environment. Effective communication demands a certain amount of assertiveness. Unfortunately, many Irish people have a problem with being seen as assertive. Whether in business or our personal lives, we often don’t want to appear overly dominant and many of us can tend to lump ‘assertiveness’ in the same box as ‘dominance’. However, this is a cultural misnomer. Yes, there are those who are dominant and assertive, but it is equally possible to be understanding, accommodating and likeable while still being assertive. Benefits of assertive communication Developing the skills to become an assertive communicator can help you in myriad ways. If you’ve ever walked away from an encounter thinking ‘I should have said…’ it is likely that you haven’t fully flexed your assertiveness muscles. When you communicate with assertiveness, you are more confident in articulating your point clearly. Confusion and misunderstandings are then easily avoided. Confidence A key element of assertive communication is your ability to react to conflict situations without emotion. When you present yourself as cool and confident, this injects calm energy into the interaction. Although others may become emotionally charged, you are able to remain level-headed. The confidence that comes with assertiveness prevents you from becoming a doormat.   Conflict resolution Assertive communication also equips you to read those with whom you are interacting. We encounter many different personality types in our professional lives; some are easy to work with while others can be challenging. It is inevitable that conflict will arise on occasion and there are a number of ways that people tend to react. Some avoid it and are seen as passive. Others are aggressive, and there’s a large cohort who present with a combination of the two. The best way, however, to deal with conflict is by using assertive communication. This approach allows you to listen to the opinions of others, air your own views, gently challenge others while attempting to find some common ground without alienating anyone in the process. This approach is a sure way to gain respect from those around you – even if they don’t agree with your viewpoint. Influence In his book, Pre-suasion, Robert Cialdini identifies six influence strategies. From establishing rapport, to showcasing your authority, and giving what you hope to receive, these strategies are not rocket science, but they are very clear, implementable strategies to positively influence those around you. When you examine them, however, you will notice that, to be successful, all of these influence strategies require a degree of assertiveness. Even while building a rapport with someone we hope to influence, we must be confident enough to disagree with points of difference so that when we find points of agreement they are seen and appreciated as truly genuine. Fiona Flynn is an Associate Director of Talking Talent and President of PWN Dublin. Fiona will host a training course on Assertive Communications at Chartered Accountants Ireland, The Linenhall, Belfast on 10 December.

How do organisations build trust with their clients? Graham Reid explains why customer trust is so important and what you can do to earn a good business reputation. If trust is the firm belief in the reliability, truth or ability of someone or something, how many organisations do we truly trust? And how do we empower ourselves and our c-suite colleagues to create a strategic plan through these key pillars of trust? In an era of continuous disruption, it’s important to ask whether we are equipped to align the benefits of trust to our customers and to our businesses’ success. Why is trust so important? In today’s world, customers are overwhelmed with a plethora of services. While the digital age presents a large magnitude of opportunity for businesses, it also leads to the exponential growth of competition, with customers having an unmatched selection at their fingertips. As a result, customer expectations are now higher than ever before. No longer simply focused on the functionality of products and services, customers want more. Taking note of how certain companies go above and beyond to meet their needs, customers now expect this treatment from all companies –and are disgruntled when they don’t get it. These enhanced customer experiences form the foundation of building a trusted relationship that customers know they can rely on. Brand image and reputation are the consequence of these customer experiences, with trust being a core component. How to build trust Like any relationship, there are several key principles that help build trust. Living by these principles, and demonstrating genuine authenticity while doing so, will gain customers’ confidence in your brand. Values Creating shared values is essential for developing trust and truly connecting with customers. Customers place importance on companies having values, and even more so when a company’s values match their own. When customers can relate to a company’s purpose and share their values, the relationship extends past the mere buying and selling interaction – it fulfils a more emotional need to connect and, consequently, leads to a more trusted relationship. Integrity Integrity is central in the provision of genuine customer experiences. It is a core basis of strong brands; reputation is made on integrity. What we must remember, however, is that integrity precedes trust. Similarly, trust goes before customer commitment and loyalty. This trust comes in a number of forms, whether it be trust in handling money, trust that problems will be dealt with in an effective manner, and trust that the products and services will deliver as expected. To build this trust, brands need to demonstrate their integrity by showing that they are genuinely putting their customers’ best interests ahead of their own need to make a profit. Mutuality Based on the sharing of a feeling, action or relationship between two or more parties, mutuality is a key element to trust. Take steps to ensure that your customers feel valued and important by building a mutually beneficial relationship. Commitment Be genuine in your commitments. Live by your promises and never promise to over deliver. In meeting or exceeding your customer expectations in every interaction, companies can build trust over time. Trust is an integral part of earning a good business reputation. Empower your customers, your colleagues and your organisation by building up trusting, mutually beneficial relationships. Put your customer first and demonstrate your integrity, values and commitment to them.   Graham Reid is the Head of Markets at EY.

In the run-up to the holidays, it can be hard to find the motivation to push on and get challenging projects and tasks completed. Moira Dunne gives a few tips on how to avoid procrastination. Many things prevent us from being productive. While some of these things can't be controlled, most of them can. It is essential to focus on what you can change. First, let’s think about what procrastination will not add to our lives. What problems will it cause? We might temporarily enjoy the freedom of not doing the tough job ahead of us, but eventually the worry, stress, poor performance, bad feedback, and low-quality deliverables will happen, causing more strife than the avoidance was worth.   Identify the problem If you want to stop procrastinating, you need to know why you do it. Ask yourself these questions: When do I procrastinate? What tasks/projects cause me to procrastinate? You should also identify the pieces of work that don’t result in procrastination – this can help you understand what is causing the problem. There is always a reason for our behaviour, so let’s look at some of the common reasons for procrastination: Low confidence about own skills; Lack of training; Unclear what’s required to complete the task successfully; Feeling overwhelmed by the size and scope of the job; and Lack of urgency. Five tips to stop procrastinating Break it down Figure out the first few steps needed to make headway – break down the bigger project or goal into the initial work or phase. You are more likely to feel motivated to start on something once you can see it in bite-sized, easily doable chunks. Start simple Start with the more simple tasks to get you going. Once you feel bolstered by your productivity, switch to the more laborious tasks. The more progress you make, the more your self-confidence will increase. Get clarification Ask for clarity about the project or work, or discuss it with your boss or a colleague. Discuss it until you understand what you are meant to do, what resources you have to do it with, and in what timeframe. Be accountable Nothing like a little pressure to get you moving! Talk to your boss about what you are going to do so you feel more urgency to dive into it. No excuses It’s easy to think of excuses why you can’t do something you are scared of or overwhelmed by – but stop. Make a list of what you need to do and get on with it. No excuses allowed. Reward yourself Who doesn’t love a reward for a job well done? Use a special treat to motivate yourself and, over time, you will find that you don’t need a reward any longer. The feeling of accomplishment will be a big enough reward in and of itself. De-stress This time of year you have enough to be stressed about, but getting things done is one of the best ways to remove some stress from your work life. Stop procrastinating, watch your performance soar and enjoy this Christmas season. Moira Dunne is the Founder of BeProductive.ie.

The World Bank recently launched the Subnational Doing Business in Ireland report. This report examines the business regulatory environment and its impact on local entrepreneurs in Dublin, Cork, Galway, Limerick and Waterford, across five areas relevant to the lifecycle of small and medium-sized businesses: starting a business;  dealing with construction permits;  getting electricity;  registering property; and  enforcing contracts.  The report was published to provide data on the ease of doing business in each city, identify regulatory constraints, contribute to the dissemination of best practices and provide policy recommendations on how to improve the business regulatory environment. Findings The report found that no single city dominates in all five areas measured. There is variation in regulatory performance among Irish cities, with the exception of the 'starting a business' indicators. Findings include: The ‘starting a business’ indicator is one of the areas in which all five Irish cities outscore most EU member states – starting a business in Ireland costs less and is simpler than the EU average. The greatest variation in the performance of the Irish cities studied was in the ‘dealing with construction permits’ indicator. However, all five cities perform above the EU average in this area. Performance gaps on the ‘enforcing contracts’ indicator stem from variations in time and cost. In registering property, all five Irish cities examined differ in time and the quality of land administration. In connecting to an electricity supply, some cities outperform the EU average. These differences in performance provide policymakers with an opportunity to identify examples of good practices that other Irish cities can adopt to allow businesses to operate more effectively. Significantly, the study suggests that Ireland’s standing on the global Doing Business rankings can further improve through peer learning among Irish cities and adopting domestic good practices. The report also lists a number of recommendations for reforms and good practices in each of the five areas measured. In addition to making a number of significant recommendations that may require legislative changes, the authors note that there are several small and easily-implemented administrative changes that could potentially make a big difference for businesses. You can read the full report here. (Source: Department of Finance)

The Central Bank has released four authored Financial Stability Notes on the mortgage market and the functioning of the macro-prudential mortgage measures. The measures are aimed at enhancing the resilience of both borrowers and the banking sector. The measures set limits on the size of mortgages that consumers can borrow through the use of loan-to-value (LTV) and loan-to-income (LTI) limits. The measures are reviewed annually by the Central Bank. The primary objective of the review is to evaluate the calibration of the measures based on evidence. These four papers published today form part of the evidence of this year’s review. The outcome of the review will be announced on 4 December with the Financial Stability Review, following the decision by the Central Bank Commission. The four papers are: Have First Time Buyers continued to default less? by Raffaele Giuliana Mortgage servicing burdens and LTI caps by Jane Kelly and Elena Mazza A Measure of Bindingness in the Irish Mortgage Market by Robert Kelly and Elena Mazza Mortgage borrowers at the loan to income limit by Edward Gaffney (Source: Central Bank)

The International Auditing and Assurance Standards Board's (IAASB) Technology Working Group recently published its second technology communiqué, providing an update on its efforts to incorporate the use of technology by auditors in a changing audit environment. This communiqué also includes other relevant news and information relevant to technology. You can read the communiqué here. (Source: IAASB)

 IFAC is releasing the first instalment in a new series, Exploring the IESBA Code. Through twelve monthly instalments, Exploring the IESBA Code will take an in-depth look at the International Code of Ethics for Professional Accountants (including International Independence Standards) (the Code).  Each instalment of the series will highlight different aspects of the Code in real-world situations, in a manner that is relatable and practical. A special focus will be placed on recent revisions to the Code. The first instalment of the Exploring the IESBA Code deals with the five Fundamental Principles of ethics, which establish the standard of behaviour expected of all professional accountants - a standard which enable accountants to uphold their responsibility to act in the public interest. To read and download this and future instalments, visit the IFAC website. Read more information about the Code here. (Source: IESBA)

A new survey has found that the correct use of technology in finance functions can massively impact your business. Ignore it at your peril, says Kieran O'Brien. Rapid technological advancements, regulatory changes, big data and a heightened need for analytics are placing new demands on the finance function. However, with the right operating model, tools and talents, these challenges can be used as opportunities to carve out a more prominent position in the market. Accordingly, the latest KPMG Future Ready Finance Survey compiled the views of over 850 finance function leaders across the globe to learn what high-performing organisations are doing differently and the results are clear – to establish a competitive edge in the market, finance functions must not only adapt to this new operating environment but learn to thrive in it. It’s all about data Organisations too often look for quick fixes from their technology solutions but avoid the ‘heavy lifting’ necessary to properly address the quality and consistency of its data. While technology can enable better business outcomes, if you don’t get data right, nothing else matters. Finance functions can enable better decision-making by providing accurate, timely, and high-quality data analysis, which will also support improved planning and forecasting capabilities. To achieve this, however, data quality is critical. KPMG’s survey shows that data quality is the single greatest challenge to improving analytics capabilities for many companies, followed closely by difficulty integrating new analytics tools with legacy systems. Get tech-savvy fast CFOs are being asked to innovate and further upskill in areas of new technology. Acronyms like IA (intelligent automation), RPA (robotic process automation), CC (cognitive computing) and ML (machine learning) are now common vocabulary in finance. The survey results show that the most forward-thinking finance functions are mastering the current environment of technological change to drive revenue growth and profitability by combining agile service delivery models, extreme automation (using cloud and emerging technologies) and advanced analytics. The highest performing finance functions have five key core capabilities: Agile operating model: agile operating models promote collaboration and blurs the distinction between finance and other business functions; Predictive and prescriptive analysis: predictive and prescriptive analysis and insights guide forward-looking business decisions, rather than simply measuring past performance; Automation: automation, specifically of data management, transactional processes and other activities of low strategic value, can free finance staff to focus on higher value-added activities; Innovation: high-performing finance functions also show strong capabilities in supporting, and in many cases leading, enterprise-wide innovation through dynamic capital allocation that balances investments in core areas with known technology with riskier, new-to-the-organisation or sector technologies; and Talent: the best finance functions ensure access to high-level analytical, design-thinking, and technological skills that will be needed in the future. The next steps CFOs can take a number of steps to future-proof their functions and professions: Don’t just focus on Excel Data management in Excel is a cost-driver through heavy manipulation of data with questionable accuracy. With all the tools organisations now have access to, there’s simply no reason to perpetuate inefficient and unreliable practices. Think like a venture capitalist Create a separate agile programme-funding mechanism that balances investments in core areas with riskier ones and relies on forward-looking investment criteria that goes beyond pure return on investment to measure success (e.g. customer satisfaction, higher quality analysis, etc.). Take a comprehensive, flexible approach to talent Focus on developing staff with high-level ‘enabling’ skills (i.e. highly productive speakers and writers, influencers, relationship managers) that can adapt to the changing technological landscape. Build, buy and borrow skills as needed. Lead in driving the adoption of advanced analytics and automation technologies Finance should place an even higher priority than executive management on using automation and advanced analytics to increase the quality of analysis and insights needed for the business. Establish a digitally enabled service delivery model Do not optimise finance processes in isolation. Instead, design operating models that enable end-to-end processes that transcend functional silos and promote self-service within the organisation while ensuring a strong focus on the customer. Finance needs to move away from being perceived as a transaction-heavy function reviewing historic performance to a trusted business partner which is uniquely placed to drive and deliver strategic outcomes. The good news is that success is achievable: finance functions at high-performing companies have not only been able to adapt to this new environment but to thrive in it. Kieran O’Brien is a Partner in KPMG.