Spotlight

Spotlight

Six influential Chartered Accountants in business and politics share their stories. Chartered Accountants are in many ways a driving force in the economy. With more than 16,000 members working in industry, and many in C-suite roles, our colleagues are found in every sector and at every level. In the pages that follow, we meet a number of trailblazing Chartered Accountants at various stages in their career. Each has had a significant influence on Ireland Inc. and continues to exemplify the very best aspects of the profession. From Sharon Cunningham, Co-Founder of Shorla Pharma to Michael Cawley, former Deputy Chief Executive at Ryanair, these profiles offer a snapshot of the talent and influence within the membership – qualities that will be in high demand in these uncertain times. Senan Murphy The CRH Group Finance Director discusses his journey from technical subject matter expert to general manager and leader. CRH Group Finance Director, Senan Murphy, divides his career into five chapters, beginning with his education and training as a Chartered Accountant and culminating in his current role. “I was interested in maths, business and science in school and did a BComm in UCD,” he recalls. “You could take a number of routes after that, but Chartered Accountancy looked the most interesting to me. I did a Diploma in Professional Accounting, which took the first three years out of the accounting exams at the time.” Senan joined Arthur Andersen in 1990 when it was one of the so-called Big 8. “I stayed there for five years and it was a very good place to work. It was a great transition from college into the real world. I moved into industry in 1995.” That saw him move to GE and begin chapter two. “Practice is a great experience, but you are an adviser. I wanted to be part of the execution and implementation; not just give advice and come back the following year to see how it worked out.” His GE career took in finance, acquisitions and business development in Europe and then the US, before moving back to Europe to what became GE Money. But the call of home was loud, and he moved back to Ireland with his wife and children in 2003 to begin the next chapter with Eddie O’Connor in Airtricity. “I stayed and helped grow the business until it was sold to SSE in 2008,” he said. That saw the beginning of chapter four with Senan moving into banking, first with RBS Ulster Bank and then Bank of Ireland. “2008 was an interesting time for the sector,” he noted with at least a hint of humour. “When something is in a crisis, you learn more than when things are going smoothly. It was a tough time for the banking industry but an interesting time to be part of it.” He sees the transition from subject matter expert to general management as quite natural for a Chartered Accountant. “The move from accountancy to financial leader to general management happens naturally. You start off learning about the financial side, but most of the job is about managing people. It’s about collaborating, working in teams and leading teams. As a financial manager, you get more and more involved in the commercial and operational sides of the business. In Airtricity, I became more and more involved in growing the business. “In some ways, it’s good to leave the numbers behind,” he continues. “As you go on, it’s about building good teams around you. The expertise around you comes from them. You become an orchestrator in a way. Accountants all start off the same way, and a lot of Chartered Accountants own their own business or end up running businesses. We don’t all stay in the financial world.” His fifth chapter sees him back in the role of Group Finance Director with CRH. “It’s a large organisation with lots of operating companies around the world. My job is to help drive performance and improve the business, but I also help to recruit, develop and promote talent globally. I also spend a fair amount of time talking to the owners of businesses. We have lots of shareholders around the world who want to hear from us.” For Senan, the people agenda is the most enjoyable. “That’s the part I enjoy most. I’m always pleasantly surprised by the people coming through the system who are more capable than their years might suggest. I also enjoy meeting shareholders. Some are supportive; some are quite challenging. Those two parts are very enjoyable.” He believes Chartered Accountancy has provided a good grounding for his career. “When you come out of college, you have to decide if you want to go into a business or go into practice and train as an accountant there. Practice is a good place to start with people of a similar age. You have to be a team player and learn to work with others. You have a number of clients and you have to build relationships with them. You’re not quite in a sales role, but you are really.” Michael Cawley Michael Cawley recalls his unorthodox path to Chartered Accountancy and life as the second in command at one of the world’s most successful airlines. With the candour we’ve come to expect from people associated with Ryanair, Michael Cawley says his reasons for becoming a Chartered Accountant were mostly materialistic. “My sister had a few boyfriends who were accountants and they had cars,” he says. “That was quite impressive, and it stuck out as most people didn’t have cars at that time.” Having never studied accountancy in school, Michael chose to pursue a commerce degree in UCC. “I liked it, and I went to Coopers & Lybrand afterwards. I spent three years auditing, and I hated it with a passion! The moment I qualified and finished my training contract, I walked out the door.” After a year teaching in UCC, he went into industry with the Cork-based motor dealer, Frank Boland. “I wanted to be in the middle of the action rather than just recording what had happened. I worked there until 1981 when I moved to Dublin to work for Kodak for five years.” His next move was to Athlone Extrusions as Managing Director. He led a management buy-out (MBO) of the company in 1990, the biggest such transaction in Irish corporate history at the time. The company later went on to a public flotation. After that, he moved back to the motor industry with Gowan Group in 1993. “I enjoyed my time there, but it was a family-owned company, so there was no prospect of a stake in the business,” he says. His move to Ryanair in 1997 as CFO and later, Deputy Chief Executive and Chief Operating Officer had its roots in the Athlone Extrusions MBO. “I worked on it with Gerry McEvoy in KPMG and Tony Ryan was one of his clients. I stayed in contact with him and he knew I had ambitions beyond the Gowan Group. I was 42 or 43 at the time and I wanted to really have a good lash at something. Ryanair was about to float at the time.” That connection led him to join the airline at a crucial stage in its history. “Incredible as it may sound, I got on with Michael O’Leary from day one. I had a good few rows with him over the years as well, of course. It was always exciting, sometimes frustrating, but I was extremely lucky to be involved. It suited me from the outset.” He describes it as a phenomenal opportunity. “Low fares were in their infancy back then. We transformed air travel across Europe. I have dealt with more than 300 airports across Europe; lots of them were a bit like Knock back then, small with a few connections. We breathed life into many communities and helped them build up tourism industries. Bergamo in Italy had 130,000 passengers when we started there; that increased to 13 million by 2014. Charleroi grew from 30,000 to 7.5 million.” He stepped down from his executive role with Ryanair in 2014. He took up several non-executive directorships with a wide range of organisations including the Gowan Group, Kingspan plc, Fáilte Ireland and, of course, Ryanair. “I was 60 and grandchildren had started to come along,” he explains. “When I joined, we had 3.5 million passengers, and when I left, we had reached 83 million. It was 142 million last year. I’m delighted to still be on the board. I’m in and out every five or six weeks to catch up, so I haven’t really left. I’ve also been lucky enough to have become involved in a number of very fine businesses.” Michael concludes by   emphasising the need to keep pace with change. “You have to be open to change. Despite the advent of artificial intelligence and so on, accountants will still be able to master their environment. But we have to stay up-to-speed and be flexible and humble about the need to change. You can be top of the pyramid today, and irrelevant in six months’ time.” Ronan Dunne Ronan Dunne, the self-declared “accidental accountant”, has taken opportunities as they arose – and to great effect. A stellar career that has seen Ronan Dunne become Executive Vice President and CEO of Verizon Consumer Group, the largest division of the world’s biggest telecoms company, could have been very different if not for a teachers’ strike back in 1981. “I was all set to do Law in UCD, but there was an examiners’ strike the year I did the Leaving Cert,” he says. “The papers couldn’t be marked and there were no college offers.” And then fate took a hand in the form of intervention by Terry O’Rourke, Managing Partner of Touche Ross, and a past pupil of his school. “He contacted the Dean and said if anyone was interested, they had three to four unfilled slots for trainee accountants. I was one of those kids who was always fascinated by finance. My dad worked for Shell in a finance role and I was always interested in it.” A phone call from the Dean and a chat with O’Rourke sealed the deal. “It sounded like an interesting opportunity, so I decided to give it a go. I am an accidental accountant.” Six years later, the newly qualified Chartered Accountant was about to experience his next encounter with fate. An injury in his final year at school had put paid to a promising rugby career, but he was also an excellent soccer player and went on to play at senior level for the Mount Merrion club in south Dublin. “We were playing in a soccer tournament in Wales, and I visited my brother in London as part of the trip. I was sitting in his apartment when my mother rang, saying a lady had called about a job interview. The job was in London so I borrowed a suit and tie from my brother, went for the interview that afternoon with BNP and by 4.30pm had a job offer. It was 1987 and the markets were on fire. They couldn’t recruit fast enough. I signed a contract, went back home and packed my bags, and returned to London three weeks later.” Rapid promotion followed, and by the age of 25 Ronan had become the chief accountant at the bank. He then switched to the banking side of the operation where he dealt mainly with major US corporates with operations in Europe. And then came a call to jump the fence. That saw him switch to senior finance and treasury roles, first with Waste Management International and then with transport and logistics group, Exel. Dunne’s next move saw him follow his former boss at Exel into BT Mobile, which was about to become O2 and de-merge from its parent. “In 2005, O2 was acquired by Telefónica and I became CEO of Telefónica UK in 2007,” he says. “That was an interesting back story. When I became CFO in 2004, my boss gave me responsibility for legal and regulation, then procurement, and then asked me to take on HR as well. After a while, I pointed out that I was doing all the heavy lifting and doing three jobs instead of one. He said I had missed the point. I clearly had the capability to be a general manager, and he was getting me ready to be a success in such a role. I still thought my future was as a big public company CFO. My boss and my chairman saw my potential before I did.” Dunne’s departure to Verizon followed a blocked sale of the business to Hutchinson in 2015. “I had decided to leave once the deal was closed. I had a fairly extensive non-compete agreement, so I had to move sector or move geography. Verizon is the largest telecoms company in the world and when I got that approach, there was no way I would turn it down. In late 2016, we headed off to New Jersey.” “My training as a Chartered Accountant has been incredibly valuable at every stage in my career,” he adds. “It really is best-in-class, and I don’t think there is a better skillset out there. In my opinion, a good Chartered Accountant is better than any MBA from any business school in the world. It’s the best business qualification out there.” And he has some advice for his fellow accountants. “The biggest challenge and opportunity for accountants is to realise that your success is measured not by what you do, but by what you can make happen and the influence you have on people. Building teams, coaching and developing them, and bringing them on a journey with you is what’s most important.” Sharon Cunningham Ambition and tenacity helped Sharon Cunningham forge a path from practice to the cutting edge of pharmaceutical innovation and entrepreneurship.   Award-winning entrepreneur, Sharon Cunningham, learned about business and accounts literally at the kitchen table. The Shorla Pharma founder was interested in business from a very early age. “Both of my parents owned companies, and it was ingrained in us from a very young age. They did the books on the kitchen table. I used to go to the accountants with my mother and was fascinated by the questions the accountant would ask. My mother was focused on things like sales and cash and had her own goals. The accountant was asking about things like profit margins, inventory management and so on.” That early inspiration led her to a degree in finance in UCC. “I wasn’t 100% sure what I was going to do when I went to college at first, but by the time I finished I knew I wanted to be a Chartered Accountant and wanted to get a training contract, preferably with one of the Big 4.” Sharon went to work with PwC in Waterford initially but soon found herself travelling to Dublin, Chicago, New York and London. “It was fun but difficult; it was lots of hard work, but it was great. I went on an international secondment to an investment fund in Manhattan. That was a great experience.” Her move to industry came about almost by chance. “At the height of the recession in December 2010, I was working on a very challenging audit. A colleague of mine got wind of a job going in a pharmaceutical company I had never heard of in Waterford. I met with the co-founders of EirGen, Tom Brennan and Patsy Carney. They are very inspirational people, and I joined the company.” Having spent seven years with the company, initially as a management accountant and later as Head of Finance, Sharon decided that it was time to start her own venture with her colleague, Orlaith Ryan. “EirGen was sold to a multinational in 2015 for $135 million in a very successful exit,” she explains. “After the takeover, the company started to change and was no longer the entrepreneurial organisation that we knew and loved. The excitement wasn’t there anymore, and both of us knew it was time to move on.” Their idea was to establish a speciality pharmaceutical company based in Clonmel, which would develop a pipeline of innovative oncology drugs for women’s and children’s cancers. “We spent two years planning Shorla at night and in our spare time, and we launched the company in January 2018,” says Cunningham. “Both of us would say that at no point were we scared. We believed in ourselves and our vision for what we wanted to do; we never thought it would fail.” That confidence was well-founded. “We don’t have billions of dollars and 20 years to wait like major pharmaceutical corporations. We are not a major corporation, nor are we a generics company. We are somewhere in between. We take existing active substances and do something novel with them. We put them to different uses and make them less toxic to the patient. The time to market is much quicker. Business is great and we are very busy. We are in the middle of multi-million euro ‘Series A’ funding round and we are growing and scaling up for the US market launch of our first product, a breast and ovarian cancer drug.” It is a bit unusual for a Chartered Accountant to set up a pharmaceutical company, she concedes. “But accountancy is a very useful skill to have in any industry. The Chartered Accountant qualification gives you a certain degree of confidence when you talk about numbers; people listen to you and don’t tend to probe too much. They accept and trust what you say. The profession as a whole has a very positive impact on society.” Sharon’s experience has taught her the value of planning. “It’s much more beneficial to work smarter, not harder,” she says. “Everyone should sit down and decide what they want to do and what they want to be, and then map out a way to get there. Don’t get bogged down in small details; don’t sweat the small stuff.” Michael McGrath Having moved from practice to politics via industry, Michael McGrath has brought his training and experience to bear in his role as Fianna Fáil’s finance spokesperson. One of the most prominent faces in politics in recent years has been that of Fianna Fáil finance spokesperson, Michael McGrath. The Cork South Central deputy has earned plaudits for his work on tracker mortgages and the regulation of so-called vulture funds, among other pressing issues. And he attributes at least part of that success to his training as a Chartered Accountant. “There is no doubt about it, the training I received as a Chartered Accountant has proven to be far more valuable than I ever thought it would,” he says. “It equipped me with the skills to get to grips with the finance portfolio. It also makes you comfortable with numbers and reaching informed decisions. The analytical skills you acquire are hugely valuable when it comes to problem-solving.” He started out on his professional and political journeys at a very young age. “I was the first member of my family to go to college when I went to study Commerce in UCC having just turned 17,” he recalls. “My first election was a contested role in the Commerce and Economics Society, and I won.” Having completed his degree in 1997, he joined KPMG in Cork. “I wanted to stay in Cork and was keen to get a professional qualification. I stayed for four years and was fortunate to work with a number of companies and organisations in a variety of sectors.” Then came the move into industry. “Following the end of the training contract, an excellent opportunity came up to join Red FM, a new start-up commercial radio station in Cork. I joined as Financial Controller in late 2001. The station had yet to go on air, and I was involved in helping set up the processes and systems to run it. It was great working for a station with a youth focus. I was reporting to the CEO and the board, and I enjoyed the diverse range of responsibilities. It was very nice having a company car as a 25-year-old, of course. I didn’t think things could get much better.” He left Red FM for a relatively short stint in the UCC finance function. “It was quite a senior role and a step up for me,” he notes. But the call of politics was loud. “I always had an interest in politics in parallel with my working life,” he explains. “I was fortunate to live in a town that still had a town council. That provided a fantastic platform for a young person to contest an election. A few hundred votes was all you needed to get elected. I ran in 1999 at the age of 22 and managed to get elected. My heart was set on politics after that.” Michael was elected to Cork County Council in 2004 and quickly realised he couldn’t continue working full-time. “I resigned from UCC in 2005 and found some part-time work to tide me through the next year and a half.” Election to the Dáil in 2007 followed. Re-election in 2011 was an altogether more difficult proposition, however. “It was an incredibly tough election. Fianna Fáil lost over 50 seats. At a time when the party vote collapsed, I managed to take the fifth and final seat. I focused on playing my part in rebuilding the party after that. Brian Lenihan passed away in June 2011, and I was appointed spokesperson on finance.” He enjoys his role as a public representative. “It is an enormous privilege to be a member of Dáil Éireann, and I still pinch myself walking in as a member. As a T.D., I am juggling a number of responsibilities. I have the finance portfolio and at a local level, I try to serve people to the best of my ability. What I get most out of it is being able to help people. Very often, people come in with difficult and sensitive issues. Sometimes they need guidance; sometimes they need someone to fight their corner.” Serving in government remains an ambition, of course. “Having spent nine years as finance spokesperson and four years involved in confidence and supply, to present a budget as Minister for Finance would naturally be an ambition,” he says. Fergal O’Dwyer Fergal O’Dwyer is one of the driving forces that helped turn DCC into the industrial powerhouse it is today. DCC is one of those quiet Irish success stories. Since its flotation in 1994, it has grown into a significant force in the energy, electronics and healthcare sectors with a substantial presence in 17 countries. From an investor perspective, the company delivered returns of nearly 7,000% up to the beginning of 2020. One constant throughout that success has been Chief Financial Officer, Fergal O’Dwyer, who joined the company in 1989 when it was still a venture capital firm. “Shortly after I joined, the company decided to change its colours and become an industrial group,” he recalls. “That required a complete transformation. We had a number of minority investments and had to decide which ones fitted in with the new strategy and which did not. Between 1990 and 1994, we spent our time moving out of some of them and moving to ownership positions in the others. I am not aware of other companies that made that strategic change.” He began his accountancy career with Craig Gardner (now PwC) almost straight out of school due to a natural aptitude. “I did maths and accountancy subjects at school and was always going to head towards finance or accountancy. I didn’t have a burning desire to be an accountant or anything, I sort of gravitated towards it.” O’Dwyer qualified as a Chartered Accountant at the age of 21 with a year or so of his training contract remaining. Ireland was in the depths of a recession at the time, and the search for opportunities took him overseas. His search took him and his wife to South Africa. “After we got married in 1983, we headed off to South Africa. I worked for three years there for Thomson McLintock, which represented KPMG at the time, and came back to PwC in 1986.” That move back led him indirectly to DCC. “I had clients who were looking for development capital, and I had worked on a number of deals on their behalf with DCC and they had worked out well for everyone. In 1989, I got a call from the founder and former CEO of DCC, Jim Flavin, who asked me to join the firm.” That was a major change. “I became an associate director of a venture capital company. I was dealing with entrepreneurs and building relationships with them. I learned about the venture capital focus on return on capital employed. That’s still the same mantra in DCC to this day. What is the return we are going to get on every euro? We aim to get a circa 15% return because we want returns well in excess of the cost of capital.” He describes the transformation from venture capitalist to industrial group as “very exciting”, but the flotation in 1994 was not without its challenges. “The flotation was a success, but we didn’t raise any capital, and our share price didn’t perform for quite a long time. We wore out a lot of shoe leather explaining our business and strategy. It has been all about constant delivery over the years, getting investors to listen and building a following. We were growing revenue, growing profits, growing cash flow, but still were having to work hard to sell the story. It was frustrating, but we had to accept that the market is always right.” His advice to other Chartered Accountants starting out on their careers is to keep learning. “The qualification equips you to do much more than just the numbers. You’ve got to interpret and advise on them. I still learn every day and you have to try to learn all the time. And you’ve got to learn from your mistakes. You can find business to be stressful, but if you put in the work and effort, it can be rewarding and fulfilling.”

Apr 01, 2020
Spotlight

Employees the world over are encouraged to ‘collaborate’ with zeal, but there’s much more to successful collaboration than technology and open-plan offices. Picasso wasn’t a big fan of collaboration. The Spanish-born artist once said, “Without great solitude, no serious work is possible”. Yet businesses can’t seem to get enough of it; they’ve even torn down the walls and developed software to ensure that people work together. And Picasso wasn’t the only one who railed against the idea of working with others. The co-founder of Apple Inc., Steve Wozniak, was also unequivocal in his advice: “Work alone… not on a committee. Not on a team”. So why did the collaboration craze catch on? And is it all that bad?Skills and culture Collaboration often gets a bad rap because, in many cases, organisations’ efforts to promote and sustain collaboration fall short. Writing in Harvard Business Review, the behavioural scientist Francesca Gino accused leaders of thinking about collaboration too narrowly: as a value to cultivate but not a skill to teach. Her solution is to “teach people to genuinely listen to one another; to approach discussions with empathy, not opinions; to become comfortable with feedback; to lead and follow; to speak with clarity and avoid abstractions; and to have win-win interactions”. That’s a lot for any leader to unpack, but it illustrates one critical point – there’s a good chance that asking your people to collaborate without helping them to build the necessary skills will result in frustration and failure. But rather than blame your people, Francesca encourages leaders who are exasperated by a lack of collaboration to start by asking themselves one simple question: what have you done to encourage it today? According to Maighread Kelly, Director at Collaboration Ireland, collaboration is also a mindset in many ways. Giving thought to prospects for collaboration, be that within your organisation or with third parties, can open up new opportunities and generate a higher level of engagement all round. In her view, there are three critical elements in a fruitful collaboration: It must be a collaboration of the willing – all partners must buy-in fully to the project;The initiator must find the right partner(s), both personally and culturally; and A good process must underpin collaboration. So, it essentially boils down to two key components: skills and fit. If people have the skills necessary to work together, often through uncertainty and disagreement, and the inclination to do so from a culture and values perspective, the chance of success rises significantly.Unexpected challenges However, collaboration also throws up unique challenges that must be managed sensitively. According to Amanda Shantz, MBA Director at Trinity Business School, collaboration is useful for highly complex and strategic tasks such as overhauling an IT system or entering a new market, and such collaborations require diverse and specialised skills – but these very characteristics can also impede collaboration. “Take diversity, for example,” she said. “The challenging tasks that businesses face today require the expertise of people from diverse backgrounds to spark innovation. Research shows, however, that people are less likely to collaborate when others are seen as somehow different from them in terms of age, gender or ethnicity, for instance.” Amanda believes that strong leadership is required to cultivate a culture of collaboration where individuals succeed both because of, and in spite of their diversity. “People need to understand who has the requisite knowledge in, and outside, the business,” she said. “They need to feel that they are operating in a safe place to ask questions and make mistakes, and there needs to be a strong sense of community that’s inspired by an overarching goal.” Interestingly, the lack of an overarching goal is one of the most common reasons for failure in collaboration according to Maighread, who helps guide collaborative projects in the voluntary, community and social enterprise sectors. “It isn’t good enough to collaborate just because you want to work with another person or organisation,” she said. “For a collaboration to be successful, there has to be a good strategic rationale and a strong business case.” If this is in place, other common threats to collaborative efforts – such as a lack of stakeholder buy-in; poor relationships; a lack of trust; and poor processes – then become more manageable because there is a clear roadmap for the future.Collaboration in action Chartered Accountants Ireland discovered the benefit of planning first-hand in 2019 when it undertook a project to update the Institute’s syllabus to account for the impact of technology on the profession, but without overshadowing its core elements – audit, financial reporting, taxation, business leadership and critical thinking. With a limited timeframe for implementation, the Institute couldn’t ‘go it alone’. It instead collaborated with a host of third-parties to revitalise and future-proof the syllabus. “We broke our projects into two parts, developing new elective subjects in collaboration with CIPFA (the Chartered Institute of Public Financial Accountants) and the Institute of Banking before tackling the technology aspect,” said John Munnelly, FAE Paper Development Executive at Chartered Accountants Ireland. “From my research on the technology side, it was clear that trailblazing companies were doing great things, so I contacted Alteryx, Tableau and UiPath – but these companies had never collaborated with an accountancy body before.” To secure buy-in, John approached senior leaders in each organisation to lay out his vision for collaboration. “I knew that I needed senior project sponsors in our partner organisations, who understood the importance – not only for our profession but also, for their industries,” he said. Working with CIPFA and the Institute of Banking was an efficient profess, according to John, and they both delivered fit-for-purpose syllabi for the public sector and financial services electives. However, collaboration with the technology companies was more complicated. “Once the initial scoping exercise was complete, it was important to share our vision for the new syllabus with our partners,” he added. “This was a learning experience for the companies and while we ultimately produced a suite of materials that complemented the ACA qualification, the low point came when we realised that something was missing.” Although the new syllabus taught essential principles in the areas of data preparation, data visualisation and robotic process automation, this teaching needed to be underpinned by practical experience. “This led to an audacious request for training licences for all FAE students,” added John. “And it was a testament to the strength of our relationships that all partners offered training licences for their products for all FAE students. This would have been quite disappointing had it gone differently, but relationships are indeed at the core of collaboration – particularly when issues arise.”Conflict and collaboration Although the Institute’s experience of collaboration was very smooth and cordial, it is not uncommon for teams to experience conflict as part of the collaboration process. Indeed, somewhat ironically, the absence of conflict may be a warning signal, according to Amanda. “In some cases, people who are collaborating become so excited about their ideas and activities that they shut down naysayers – nobody wants to be the skunk at the picnic,” she said. “Alternatively, an overbearing micromanager who always has the ‘right’ answer doesn’t encourage the type of discussion necessary to optimise collaborative efforts. In both cases, it might be a sign that the environment isn’t safe enough for people to speak out.” But all is not lost. According to Amanda, there are many ways for leaders to increase people’s perception that they can – and indeed, are expected to – put all views on the table without fear or favour. “Senior managers need to set the tone from the top that collaboration and conflict go hand-in-hand,” she said. But although senior leadership rhetoric matters, research has shown that the behaviour of mid-level line managers is especially crucial. “In particular, what’s important is how mid-level managers respond to failures, invite conversation and demonstrate humility and curiosity in their interactions with others,” she said. Words of wisdom And that isn’t the only advice Amanda has for those tasked with building a culture of collaboration in their organisation. “Organisations need to invest in building and maintaining social relationships across the organisation,” she said. “This requires a technological infrastructure that makes it easy for people from different parts of the organisation – often located globally, but even across the building – to work effectively as a team. And the use of software to connect people by projects, not by roles, is another way to utilise technology to support collaboration.” Aside from technology, Amanda returns to the critical role of leadership. She urges leaders to ensure that collaborative behaviours among senior executives are visible to employees and to avoid the tendency to make an executive a standalone ‘hero’ in his or her unit. “Senior leaders need to ensure that employees are selected for – and trained in – the skills needed for collaboration, such as productively resolving conflict and active listening,” she added. “They could also sponsor events and networking activities and host innovative and fun opportunities for people to connect.” Mid-level managers have the most critical role to play in championing collaborative efforts, however. “They need to support the strategic goal for collaboration by coaching employees on how to connect with different parts of the business,” Amanda said. “Research shows that managers can increase collaboration by changing their leadership style as the team’s project progresses. In the beginning, the manager should consider focusing on the task at hand and articulating accountabilities, but when conflict emerges, the manager may consider switching to a relationship-oriented leadership style.” So if you’re frustrated by your organisation’s inability to collaborate successfully in a sustained way, remember Francesca Gino’s simple question: what have you done to encourage it today?Maighread Kelly is a Director at Collaboration Ireland. Amanda Shantz is MBA Director at Trinity Business School. John Munnelly is FAE Paper Development Executive at Chartered Accountants Ireland.

Feb 10, 2020
Spotlight

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. 

Dec 02, 2019
Spotlight

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.

Dec 02, 2019
Spotlight

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.

Dec 02, 2019
Spotlight

There is an infinite amount of things a board could and should focus on, but here are five trends boards should consider to help their organisations thrive into the future. By Kieran Moynihan As we count down to 2020 and a new decade, it is very timely to reflect on the significant changes that have happened in the last decade in the areas of boards, directors and corporate governance – and importantly, the major trends that are happening right now that will shape boards across Ireland over the next decade. This time 10 years ago, many company boards were in a firestorm in the middle of the financial crisis. Despite the significant strengthening of corporate governance codes between 2000 and 2010, a significant number of companies and boards, from large Plcs to SMEs ultimately failed to protect the interests of their shareholders, employees and broader stakeholders. This pattern was common across the world and resulted in the major strengthening of corporate governance codes and national company laws, with the result that now – both in Ireland and across the world – there has never been stronger corporate governance codes, company law and regulation in place to ensure that boards and their directors discharge their stewardship duties to secure a sustainable long-term future for their organisation, shareholders and stakeholders. As we stand now, there has never been greater scrutiny placed on boards and directors – not only in large companies listed on the stock market, but across the full range of companies, charities, non-profits and state boards. All shareholders, employees, stakeholders and the public at large have a strong understanding that the behaviours, culture, effectiveness, performance and decision-making of the board of directors have a fundamental impact on the organisation. Despite the strengthening of our corporate governance and company law framework, we continue to see serious issues with boards. Unfortunately, this will continue to be a pattern. The collapse of Carillion in the UK with the catastrophic loss of jobs and significant impact on many state projects in the UK and Ireland sent shockwaves through the UK and Irish business world. When serious problems arise in Plcs and large charity, non-profit and public sector boards, there is significant media attention with in-depth analysis forensically examining how experienced boards made up of executives and non-executives with decades of experience could preside over significant destruction of shareholder value and very poor levels of stewardship that severely impacts on employees, broader stakeholders and – in some cases – the very future of the organisation. In reality, while the scale of the organisation might differ and the board directors may have a lot more experience on high-profile boards, the complexity of the “people equation of the board” means that any board in the large private company, SME, charity, non-profit and public sectors can struggle to deliver on the leadership, performance and responsibilities that their shareholders and stakeholders have entrusted to them. Boards are, by their very nature, complex and while all strengthened corporate governance and company law are very important, the reality is that the behaviours of the individual board members and the board team collectively will ultimately impact on whether the board can genuinely excel as a high-performing board team, demonstrating the highest standards of ethics and ensuring a long-term sustainable future for all their shareholders, employees and stakeholders. It is also important to highlight that in our work week-to-week supporting board teams across Ireland, the UK and internationally across all sectors, we see truly outstanding and committed board teams and directors who are excelling for their shareholders and stakeholders with a genuine commitment to “always do the right thing” and continually improve their board effectiveness and performance. We will now look at the key themes that are impacting boards, both in Ireland and internationally, as we approach 2020. While many of these themes are particularly relevant to Plcs on the stock market, these themes are already finding their way into private companies and charity, non-profit or public sector boards. Progressive board teams, irrespective of scale, are also embracing these trends as key components of the board’s leadership and drive for genuine, long-term sustainable success. 1. Focus on environmental social governance (ESG) One of the most dramatic changes in company boards around the world throughout 2019 was the significant shift away from “shareholder primacy” to a much broader focus on both shareholders and all stakeholders including employees, customers, suppliers, partners, environment, state and the public at large. This is quite a radical shift in thinking for boards and companies. The business and broader community across the world was quite shocked when a highly influential group of 181 CEOs representing many of the largest US and global companies (e.g. Walmart, UPS, Amazon, Johnson & Johnson) issued a radical statement on 19 August which outlined: “While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders. We commit to: Delivering value to our customers. Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect. Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions. Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses. Generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate. We are committed to transparency and effective engagement with shareholders.” This represents a truly seismic shift in how the boards of companies look at their role. While delivering and maintaining shareholders’ best interests will always be a fundamental responsibility of a board of directors, it will now need to be shared with a broader set of responsibilities to operate and behave in a way that takes into account the needs and concerns of all its stakeholders. The emergence of a “multi-stakeholder model of corporate governance” in companies has been coming for some time as globally, there is a very high level of soul-searching going on in terms of “the role of business in society” and the business sector’s responsibility in supporting increasingly challenging social and environmental issues. While this is currently playing out in publicly listed companies, this change is starting to trickle down to large private companies and SMEs will also be affected in time. A key catalyst for this will be that investment, asset management and pension funds globally are now placing a key emphasis on ESG and this in turn is resulting in all types of investment and financial firms – from venture and private equity investors to debt providers, sovereign wealth funds, banks and private investors – now asking a lot more of companies and their boards in the area of ESG and stakeholder engagement in return for their financial investment and support. What does this mean for companies? We are already seeing large companies listed on both the Dublin and London stock exchanges place a very significant emphasis on ESG and broader stakeholder engagement. The boards of progressive large private companies take their lead from their Plc counterparts and over the coming years, a lot more will be expected of the boards of companies and organisations to demonstrate that their actions are not solely driven by profit and financial performance but by a balanced, sustainable commitment to all shareholders and stakeholders for a sustainable future. There is also a strong school of thought globally that this more long-term approach to business and profit will help reduce the enormous impact on jobs and communities caused by excessive corporate pursuit of profits and risk-taking. 2. Engagement between the board and employees  One of the areas that has come into focus as part of this shift to a multi-stakeholder model is the relationship between the board and employees. The vast majority of employees in companies and organisations, large and small, would legitimately ask “what relationship?” Since the first boards of directors formed in the early 1600s (the Dutch East India company is considered by many to be the first company board of directors), the absolute focus of the board and company on financial performance made it very difficult for the board to genuinely partner with employees and incorporate their perspectives and concerns into the board’s thinking and the company’s decision-making. We recently completed an external board evaluation for a FTSE-listed company in the UK. As part of the external evaluation and alignment with the UK Corporate Governance Code (2018), one of the newer areas in the 2018 UK Code we closely evaluated was the engagement model between the board and employees, and how the board and senior management team enabled the “voice of the employees” to be heard and taken into account in the boardroom. In this case, the board and executive team had an outstanding approach to employee engagement and this was reflected in an extremely talented, loyal workforce and an excellent reputation in the market for quality and customer-centricity. The UK’s Financial Reporting Council (FRC), as part of its guidance on board effectiveness, has issued some new far-reaching guidelines as follows: “With the aim of strengthening the ‘employee voice’ in the boardroom, the Code asks boards to establish a method for gathering the views of the workforce and suggests three ways this might be achieved, consisting of: A director appointed from the workforce; A formal workforce advisory panel; and A designated non-executive director.” The FRC also suggested that employee engagement with the board could be further strengthened through: Hosting talent breakfast/lunches, town halls and open-door days; Listening groups for frontline workers and supervisors; Focus or consultative groups; Meeting groups of elected workforce representatives; Meeting future leaders without senior management present; Social media updates; Visiting regional and overseas sites; Inviting colleagues from different business functions to board meetings; Employee AGMs; Involvement in training and development activities; Surveys; Digital sharing platforms; and Establishing mentoring between non-executive directors and middle managers. The vast majority of Plcs in the UK and, by extension, Irish Plcs are finding this a very radical change. In nearly all cases I have seen, Plcs in the UK and Ireland are opting for a designated non-executive director to represent the employee voice and interest in the boardroom. Outside of some European countries like Germany, where employee representation at the board is mandatory for larger companies, Ireland and the UK do not have a history of employee directors at the board. In a survey in October 2018 by the ICSA Governance Institute in the UK, 91% of companies surveyed indicated that they are not considering adding employees to their board, despite the strong encouragement and guidance in the UK Corporate Governance Code and FRC guide on board effectiveness. In my discussions with a number of Plc board chairs, they indicated that their biggest concern was that an employee could lack the overall breadth of experience and judgement to not only contribute effectively at board level and take the overall shareholder and stakeholder perspectives into account, but to handle very difficult issues involving – for example – potential employee layoffs, change of work conditions, etc. This is a very complex area, with sensible arguments on both sides of the debate. In terms of company and organisation boards in Ireland, I believe progressive boards will assess what is happening in this area globally and find ways to increasingly engage employees and to ensure that their perspectives and concerns are genuinely integrated into the board’s decision-making process. In his wonderful new book, Future Proof Your Career, John Fitzgerald provides far-reaching insights into how the workplace has changed fundamentally and that employees today, particularly younger employees, are re-assessing their overall approach to work and their employers. The era of “a job-for-life and unstinting loyalty to an employer who does not genuinely value you” is over and boards are increasingly nervous of the difficulty in attracting and retaining high-calibre employees. When I see a very high-quality board, whether it’s in an SME, Plc or non-profit, charity or public sector board, they have an emphasis on building a genuine relationship with their employees, on nurturing the talent in their organisation, on inspiring their employees to go the extra mile for their clients and colleagues, on treating and supporting their employees with the utmost respect and dignity. Progressive boards also see the very strong link between customer satisfaction and the attitude and performance of employees engaging with customers. We have all seen over the course of our lives the difference it makes, whether as a consumer or a business, when you have employees of a company or organisation who are genuinely customer-centric, who take great pride in delivering for their team and company. 3. A step-change in the value being added by the board As we go into 2020, the boards of companies and organisations have never been under such pressure to demonstrate the genuine value they add to the executive team and the company/organisation. A very wise board chair once said to me that if all the board is doing is merely oversight, and does not add any genuine value in terms of strategic “move-the-needle” thinking, helping the executive team optimise their decision-making and supporting the executive team in times of crisis, the board is ultimately doing a disservice to the shareholders and needs to be refreshed and strengthened to enable the board to add serious value. Every company, no matter how big or small, faces a very challenging set of headwinds, ranging from major business model and technology disruption in their market segment, significantly reduced barriers for new market entrants, unprecedented levels of competition, Brexit, volatile trading and geopolitical considerations as well as attracting and retaining outstanding employees. Clearly, oversight and the board acting as a key line of defence in safeguarding the financial, legal and operational health of an organisation will always be a critical responsibility for a board – but this in itself is not enough to deal with all the headwinds and chart a course of long-term sustainable success for the organisation. A high-performing board team that excels for its shareholders and stakeholders has a great mix of executive and non-executive directors (NED). Successful NEDs bring serious strategic firepower to the board team that both compliments the CEO and executive team, but also brings different thinking. They stretch the strategic envelope of the CEO and executive team in terms of disruptive fresh thinking around new business models, innovation areas, mergers and acquisitions, and new product/service/geographic market areas while helping the CEO and executive team face up to the brutal reality that it’s time to walk away from a once highly successful product or market area. In working with boards, I often highlight the role of the board and NEDs as a lighthouse that shines a light in front of the executive team and, in many cases, illuminates dangerous rocks that could threaten the organisation. As a former CEO and in working with so many CEOs and board teams, I can testify first-hand that many CEOs and executive teams are working so hard and are so close to the day-to-day cut and thrust of the organisation that they can find it very difficult to step back, take a very objective look at their competitors, where customers are at, disruptive trends and the many significant threats and opportunities that are appearing in today’s marketplace. An outstanding NED has a great work ethic, curiosity and interest in the organisation to go the extra mile to not only engage in high-quality challenge and debate with the CEO and executive team, but to roll up the sleeves, add serious value in the strategy area and ultimately increase the quality of executive and board decision-making. 4. Diversity and independence of mind One of the challenges every board faces is group-think, where “a psychological phenomenon in which the over-riding desire for harmony or conformity in the group results in an irrational or dysfunctional decision-making outcome”. While this is a well-documented problem that had a serious role to play in company boards in the financial crisis, it is a problem that can affect any board in any sector, sometimes with quite serious consequences. It is human nature; we can all be uncomfortable with having a contrary viewpoint and being an outlier in a group that manifests itself in a board team. Boards can therefore attempt to minimise conflict and reach a consensus decision without critical evaluation of alternative viewpoints by actively suppressing dissenters and isolating themselves from outside influences. The two proven antidotes to group-think are genuine diversity in the board team and an outstanding board chair who nurtures and encourages high-quality challenge, debate and who legitimises either a single or small sub-set of board members who have a significantly different viewpoint to the majority of the board or major concerns with a key proposed strategy or decision. The critical area of “independence of mind” is very topical in the financial services sector, as regulators focus on ensuring that the non-executive directors are genuinely independent and putting this independence into action in the board team. Alfred P. Sloan ran General Motors from 1923 to 1956 and exemplified this quality of board chair leadership before one of his top committees, saying: “Gentlemen, I take it we are all in complete agreement on the decision here?” Everyone around the table nodded in assent. “Then,” continued Mr Sloan, “I propose we postpone further discussion of this matter until our next meeting, to give ourselves time to develop disagreement and perhaps gain understanding of what the decision is all about.” In recent years, I have watched on in amazement at the debate around female representation on boards in Ireland and why there is still a strong need to impose gender quotas and so on, as there is still a portion of legacy-oriented boards resistant to adding female board members. Anyone who still feels, as we get ready to enter a new decade, that the addition of female directors, younger directors, directors with deep technology expertise and directors with diverse professional and industry backgrounds does not improve a board’s effectiveness, performance and decision-making hasn’t seen a genuine high-quality board in action. The critical objective of diversity on a board is diversity of thinking styles. The highest-performing board teams see diversity as the foundation of their board team’s ability to not only drive optimal decision-making, but also avoid serious group-think problems. As we enter 2020, we are finally starting to get to an era where it will be commonplace to have a wide mix of gender, age, professional, ethnic and industry sector backgrounds where the sole criteria is to have the best mix of the best people who excel as an outstanding, diverse board team on behalf of shareholders and stakeholders. 5. Culture, ethics, behaviours and values Throughout 2019, we have witnessed a series of scandals and serious crises involving the boards of a wide range of organisations throughout Ireland. We are not alone in experiencing this, as board scandals and crises are commonplace in most countries throughout the world. In many cases, there are common denominators such as an overly dominant CEO who rides roughshod over the board; or a CEO and board chair who are too close and, thereby, serious robust challenge and debate are suppressed. In the House of Commons Special Committee report on the collapse of Carillion, the following two conclusions are a frightening insight into how a board can lose its way so badly and drag everybody over the cliff-edge, resulting in tens of thousands of job losses: “Corporate culture does not emerge overnight. The chronic lack of accountability and professionalism now evident in Carillion’s governance were failures years in the making. The board was either negligently ignorant of the rotten culture at Carillion or complicit in it.” And: “Carillion’s directors, both executive and non-executive, were optimistic until the very end of the company. They had built a culture of ever-growing reward behind the façade of an ever-growing company, focused on their personal profit and success. Even after the company became insolvent, directors seemed surprised the business had not survived.” In contrast to these findings is the following recommendation in the Carillion report, which highlights the importance of courage and “conviction to do the right thing” in a board team: “Emma Mercer is the only Carillion director to emerge from the collapse with any credit. She demonstrated a willingness to speak the truth and challenge the status quo, fundamental qualities in a director that were not evident in any of her colleagues. Her individual actions should be taken into account by official investigations of the collapse of the company. We hope that her association with Carillion does not unfairly colour her future career.” Early in my own career, I often wondered about the famous phrase from Peter Drucker that “culture eats strategy for breakfast”. For board teams facing into a new decade, it has never been more critical to focus on culture and the board’s key role in working with the CEO and executive team to define and embody the culture, behaviours and values of an organisation. I sometimes hear board members from companies and organisations say that “culture is only for multinationals with tens of thousands of employees – we don’t have time to worry about things like that, we have a business to run”. Yet around the world, organisations and their boards are significantly increasing their focus on culture, ethics, behaviours and values as they recognise that a strong, healthy and vibrant culture in an organisation is a fundamental enabler of long-term sustainable success. Where an organisation has a healthy, vibrant and respectful culture that is embraced and put into practice day-to-day from the board chair and individual board directors right down to the most junior employee, you have the foundation for a sustainable organisation that is genuinely customer-centric. In this scenario, everyone’s default approach in the organisation is to do the right thing, inappropriate behaviours – irrespective of the seniority of the individuals involved – are not tolerated, and all employees, stakeholders and shareholders are genuinely proud to be a part of the organisation. In hyper-competitive and challenging markets, the stewardship and leadership of the board and executive team will influence an organisation’s employees, culture and customer-centricity. This will, in many cases, make the fundamental difference in terms of which companies and organisations will be still standing in 2030. Kieran Moynihan is the managing partner of Board Excellence, a specialist board practice that helps boards and individual directors excel in the areas of effectiveness and performance. Kieran has over 20 years’ experience serving on boards as a CEO and executive director, non-executive director and board chair.

Oct 01, 2019