Spotlight

Ireland has performed well in the face of Brexit-related uncertainty, but there are risks on the horizon. Ireland’s economy has thus far weathered the impacts of Brexit uncertainty well. Employment growth in the first half of the year was 3.4%. This represents a pick-up on employment growth of 2.9% in 2016 and is well ahead of expectations. Private sector business employment grew by 5.2% in Q1 2017. Our expectation for the full year is that employment growth will emerge at around 3.2% for the full year of 2017. Despite this solid economic backdrop, there are serious risks on the horizon. It is still likely that some slowdown in the pace of employment growth will occur in 2018 as Brexit uncertainty begins to bite on labour-intensive sectors. There is significant downward potential for our forecasts if the prospect of a ‘no deal’ scenario emerges.The figures on Ireland’s exposure to any change in the EU-UK trading relationship are well rehearsed. The UK accounts for 14% of Irish goods exports and 20% of our services exports, the highest share of any European country and double the exposure of the EU average. In addition, more than 32% of goods imports come from the UK. Any change to either through the introduction of tariffs or non-tariff barriers will hit Ireland disproportionately. Although large in their own right, these figures might even understate Ireland’s exposure. Indigenous firms only account for around 12% of exports and the foreign direct investment (FDI) pipeline continues to deliver. As such, aggregate exports may still experience strong growth to the EU, US and elsewhere. This must be seen in context, however. Indigenous exporters spend as much in the domestic economy through purchases and wages as the multinational exporters and employ more people. These indigenous exporters are also much more reliant on the UK than the multinational sector. 43% of output from indigenous manufacturers goes to the UK, compared with only 10% of that from non-Irish companies. The impact of Brexit on that 12% of our overall export base will be almost as important for the domestic economy as the fortunes of the other 88% for the average Irish household. Irish business wants the UK to remain in the customs union, maintain tariff-free trade and minimise non-tariff barriers with the EU. However, the prospect of this appears to be getting further from reach. The UK has indicated that, while it wants trade with the EU post-Brexit to remain as frictionless as possible, it also wishes to agree its own trade deals with third-parties and decide its own rules and regulations for doing business. This would exclude the UK from the EU customs union as we know it and necessitate a new external EU customs border between the Republic of Ireland and Northern Ireland, and on the east-west aviation and maritime trade routes between the Republic of Ireland and Britain. Ireland’s geographic position, with the use of the UK as a land bridge to other EU states and the reliance on UK suppliers and markets, in addition to the land border with Northern Ireland, means it is uniquely exposed to the cost, complexities and disruptions associated with applying and administering a customs border. In a very worst case scenario, this could be coupled with a ‘cliff-edge’ outcome involving the imposition of World Trade Organisation (WTO) tariffs on trade. It is difficult to predict what the final outcome will be, but this much is clear – Brexit is likely to disrupt Irish/UK trade in a significant way; it will increase the cost of doing business and as we are already seeing (through falling real incomes), it will leave the UK consumer much poorer. For Ireland, the negotiations are now about degrees of pain rather than the inevitability of Brexit. The best advice for business is to know your exposure, prepare for the worst and hope for the best.The regional perspective The economic implications of Brexit are clearly very large across the Republic of Ireland; for the regions, they are enormous. A number of sectors are most at risk in the event of a hard Brexit and have already been significantly impacted by the weakening value of sterling. These include agri-food and beverages, accommodation and tourism services, air and freight transport, and traditional manufacturing. The downside of Brexit will hit sectors that are regionally dispersed and any potential upside is likely to be concentrated in Dublin and other major urban centres. In agri-food, which accounts for two-thirds of indigenous exports, 46,000 jobs in the sector are linked directly or indirectly to exports to the UK. In recent economic work, Ibec showed that Irish agri-food exports to the UK begins to slow at a sterling/euro exchange rate above 80p and that approaching 88p, Irish agri-food exports to the UK begin to fall. This was borne out in the latter half of last year with Bord Bia estimating a loss of over €500 million in exports. The impacts of Brexit are already being felt in some sectors. Figures from persons who declared their sector of work in Census 2016 show that 243,000 workers (13.2% of the employed population who declared a sector) work in these sectors. By examining employment in these sectors across different counties, we can give some idea as to which areas of the country are most exposed in the event of a hard Brexit. The counties with the highest exposure are Cavan (28%), Monaghan (27%), Kerry (22%) and Longford (21%) with over one in five workers in each of those counties employed in exposed sectors. Meanwhile, exposure is lowest – as expected – in urban areas. The least exposed counties include Cork and Galway along with the four Dublin local authorities and their surrounding counties (Louth, Meath, Kildare and Wicklow), where there is a potential upside from Brexit. These figures give an overall picture, but local and company-specific factors will mean other counties (particularly those along the border) will be much more exposed. New Irish tourism numbers illustrate this point. Overall, tourism is already experiencing an evident Brexit-related slowdown in UK trips to Ireland. Between 2015 and the first half of 2016, visits from the UK to the Republic of Ireland grew annually by an average of 13.5%. Q1 2017 has seen these figures collapse with visits falling by 6.5%. This was driven by both the impact of sterling and falling real incomes for UK consumers. British tourists spent over €1.1 billion in Ireland last year with 68% spent outside Dublin. As a proportion of their total income from tourism, British tourists are most important for the northwest (47%), east and midlands (36%) and southeast (35%) regions.The domestic response Brexit involves an unprecedented fracture of the single market, with Ireland particularly exposed. As such, it is vital that EU institutions and national governments recognise the potential for economic disruption and take decisive steps to offset such risks. This must start in Budget 2018. To support businesses, funding should be provided over a three-year period from both Government and EU sources to help companies trade through any period of disruption, adapt, and succeed into the future. These funds will be needed for enabling technology, low-cost refinancing, management upskilling, plant renewal and expansion, market development and innovation. Some will require a temporary state aid regime similar to the 2009 regime. The need to improve the taxation environment for small business has also become even more important in the context of Brexit. In the past, the State often viewed indigenous firms as captive and only FDI as contestable – that has now changed. A central threat to the Irish indigenous business base is that of Irish companies moving capacity to the UK in order to keep a foothold in their major market. For most, this is likely to be a more economical and less risky option than attempting to diversify into new markets. This threat has been heightened by the fact that those companies would receive more favourable treatment when it comes to capital gains tax, investment taxes and the tax treatment of share options in the UK. These gaps must be closed in the short-term to make sure the best of our growing indigenous sectors do not become contestable.Gerard Brady is Head of Tax & Fiscal Policy at Ibec, which represents Irish business both domestically and internationally.

Trust must be restored in the island’s public institutions. To achieve this goal, however, good governance and ethical behaviour must become the norm. There are a huge number of public bodies delivering a wide range of taxpayer-funded services. Public bodies are always under scrutiny and it takes only a small number of high-profile events to raise doubts as to whether public bodies can be trusted. Indeed, some recent events show how easily trust can be lost. This questioning of trust is not confined to public bodies, however. Earlier this year, Ipsos Mori conducted a poll on trust in the professions. Politicians have always been at the bottom of the trust pile and according to the poll, politicians are still trusted less than estate agents, journalists and bankers. The poll found that nurses were the most trusted profession in Britain, followed closely by doctors, while politicians once again brought up the rear. Public trust in politicians had slipped a considerable six percentage points over the previous year and at that stage, they were trusted to tell the truth by just 15% of the British public. It will be interesting to see the results of the next poll in Britain following the general election, the start of Brexit proceedings and a number of high-profile terrorist incidents.  A spirit of trust But it isn’t just in professions where trust is being lost. There is an apparent breakdown in trust across society generally and established bodies which years ago would have been held in high regard are no longer seen in the same way. Situations such as the collapse of the BHS empire show that big business is also seen as part of the problem. Once trust is lost, it is very hard to win back. Because of the crucial role of public bodies in society, it is important that trust in public services, and those who deliver them, is not lost. That is why it is critical that the public sector is open, transparent and accountable. Furthermore, everything possible must be done to instil and maintain a spirit of trust, despite what the public might think about the political process. Principles of good governance Last year, the then Minister for Public Expenditure and Reform published an updated Code of Practice for the Governance of State Bodies, and this was also the subject of a breakfast event in Chartered Accountants House. The code is based on the underlying principles of good governance: accountability, transparency, probity and a focus on the sustainable success of the organisation over the long-term. Public bodies are expected to be fully compliant in relation to financial reporting periods beginning on or after 1 September 2016. There are a number of significant changes since the publication of the previous code back in 2009 and compliance is on a “comply or explain” basis. The risk for boards It is clear that boards have an important oversight role and the code places additional requirements on boards, especially in the context of setting strategy and agreeing this with the respective department and minister. Indeed, many of the changes in the latest version of the code relate to how boards, and their members, operate. But there is a danger that board members, especially those acting in a voluntary capacity, will decide that this is too onerous and not something they want to be part of. There is also a risk that it will be seen as being all about reporting and that someone lower down in an organisation will be given the job of complying with the guidance. It is therefore essential that the boards and senior management of our public bodies set the correct tone and lead by example. Good standards of governance and ethical behaviour should be the norm. Many Chartered Accountants either work in, or are board members of, public bodies and we need to be seen to be living those values. Will the new code prove useful, or will it be just a “tick the box” exercise? It is simply too important to be the latter. David Thomson FCA is a member of Council at Chartered Accountants Ireland and Chair of the Public Sector Committee.

My decision to train with an Irish university opened the door to an unexpectedly varied training experience. The most popular route to becoming a Chartered Accountant begins with the prospective trainee accountant joining a practice firm, with the majority choosing from the Big 4. I instead chose to complete my Chartered Accountancy training with University College Dublin (UCD) and in fact, many are unaware that the option exists to train within this sector. While this choice will not be for everyone, the option is not so perplexing when you consider what can be gained on the journey to qualification outside practice. A lot to offer Before commencing third level education, I knew accountancy was the career I would pursue. However, I also recognised that auditing and the practice-based environment was not the route I wished to take. My choice to train as a Chartered Accountant seemed obvious as the qualification and brand is among the most respected in the market. This, however, narrowed my options as the vast majority of training opportunities were in practice and in particular, with the Big 4. At that point, I was leaning towards an industry-based training contract with a large multinational organisation. But by chance, I saw an advert for a training contract with UCD and when I investigated the opportunity further, I found that UCD had a lot to offer. The university has a large finance department and is involved in managing the finances for cutting-edge research projects and providing incubation units for start-ups, for example. It also has multiple subsidiary companies including student residences, restaurants, student centres and even a property development company. I didn’t hesitate to apply and following a successful interview process, I began my training contract in September 1999. A great foundation The first thing that struck me about my traineeship in UCD was the sheer size of the organisation and the diversity of the role. My training manager, Donal Doolan, developed a comprehensive training programme for all trainees in my cohort, which included Maria Masterson, Jane Holmes, Tom Hogan and Sean Laphen. The programme was designed to help the trainee develop by rotating through the university’s different finance functions, thereby allowing the individual to see all aspects of the finance function. I started in the general ledger department where I learned the basics of double-entry accounting and had the opportunity to complete sets of company accounts for many of the university’s ancillary activities. This was a great foundation, after which I rotated through the university’s research, financial planning, treasury and asset management departments before finally returning to the general ledger department in a supervisory capacity. The research office was a unique training opportunity which involved partnering with and supporting academics in the financial management of their research projects. I was provided with expert guidance under the tutelage of John Kenny, who took a genuine interest in the development of all trainees. John was, and I am sure still remains, a very exacting manager from whom I learned a lot but in particular, I learned the importance of professional written communication. I can remember redrafting documents multiple times before John would give his approval. Over time, I developed this skill and I continue to carry this exacting professionalism with me today. My transition to industry Having completed my training with UCD in March 2003, I decided to take a working holiday in Australia – as did many other newly qualified Chartered Accountants at that time. I returned to UCD in January 2004 and I was subsequently promoted to the position of Senior Financial Accountant with responsibility for the implementation and preparation of GAAP accounts for the University and its subsidiaries. However, my native Wexford was calling me home and I finally left UCD in September 2006 when an opportunity arose with a multinational company called Waters Corporation – a key employer in the Wexford area with over 350 employees. In many respects, the substantial and varied training I received in UCD prepared me well for my current role in industry. That said, learning and development is a lifelong endeavour and I am continuing this journey with Waterford Institute of Technology as a doctoral student while working as Finance Manager with Waters Corporation. Alan Murphy is Finance Manager at Waters Corporation.

Collaboration between the public and private sectors could greatly enhance the lives of those working in Northern Ireland. It is a time of uncertainty for Northern Ireland. It is not controversial to suggest that this isn’t particularly helpful in terms of growing our economy, creating jobs or providing the best possible public services for our people. Key factors are the ambiguity of Brexit and the absence of a functioning Northern Ireland Executive, followed by slow-moving negotiations to reconstitute an Executive. There was hope that after the UK General Election, the Northern Ireland parties could form an Executive and the Northern Ireland Assembly could reconvene and begin to address the questions posed. However, the breakthrough hasn’t happened yet and it now looks like it may have to wait until the autumn – or else we fall back to direct rule from Westminster. We firmly hope that local political parties will be able to resolve outstanding issues to allow a budget, a new programme for government, direction and clarity for Northern Ireland to be put in place. It is important that our business leaders and political leaders work together to find a way through. Of course, the local business community will get on with things and continue to do business – it always has. Imagine, though, how much better it would be if politicians, public sector decision makers and private sector leaders were working together to address the key issues. We need a collaborative approach from business and the public sector. It is the only way we can hope to deliver a sustainable economy and the social, health and education benefits that come with it. We want an approach that displays responsibility, accountability and maturity. Leadership vacuum Brexit is a key concern for the Institute’s members, both north and south of the border. Separate surveys in each jurisdiction found that 80% of members viewed Brexit as a negative factor in their region in the year ahead. 80% felt that Northern Ireland will be more negatively impacted by Brexit than other UK regions, while 87% felt that the Republic of Ireland’s trade relationship with the UK will suffer. The detrimental effect of not having a Stormont Executive to address Brexit planning is hard to quantify, but it stands to reason that we would be better served by a group of elected representatives working together to speak for Northern Ireland and engaging with the business sector. It was noticeable that the EU chief negotiator, Michael Barnier, met with the first ministers of Scotland and Wales in July to “listen to different points of view”. Without an Executive, there was no-one to meet with from Northern Ireland. The clear majority of members, north and south, want free trade in goods and services to be part of the UK’s deal with the EU and are opposed to a hard border on the island of Ireland. No matter what your opinion of the UK’s relationship with the EU, those views suggest that the removal of customs barriers through a Customs Union has been one of the big successes of the EU project. One of Theresa May’s clearly-stated objectives is that the UK will leave the Customs Union as a result of Brexit. That means we could be back in a similar position to where we were before 1993 – a trade border between the Republic of Ireland and Northern Ireland. It will mean considerable change for businesses engaging in cross-border trade. It will require significant investment in planning and skills. So what is the answer? Cooperation. Working together. There will need to be cooperation between business, public sector and political leaders in Northern Ireland, the Republic of Ireland and the UK. There will need to be cooperation between the EU, HM Revenue & Customs and the Irish Revenue. Local businesses, with the help of politicians and customs bodies, will need to work on their customs expertise. Corporation tax The Brexit challenge is just one area where renewed partnerships between the public and private sectors are necessary. Our Institute has been a strong advocate for a reduced rate of corporation tax for Northern Ireland for many years. We first called for it over 10 years ago. The strong cross-border support for such a measure is both notable and commendable. It speaks volumes on the benefits that it could bring. In a recent Ulster Society survey, members identified a reduced corporation tax rate as a key measure in improving the local economy. 63% said that a lower rate would have a positive effect on Northern Ireland’s economic performance. We believe that it represents an investment in the future growth of the economy and would act as a welcome catalyst for growth of the private sector. It is an attention grabber that enables those tasked with attracting inward investment to ‘get a foot in the door’ with potential investors. The potential new rate of 12.5% and operation date of 1 April 2018 was announced as part of the 2015 Fresh Start Agreement. Since then, it has looked increasingly likely that the date will slip. The agreement between the Conservative Party and the DUP following the UK General Election has provided a much-discussed funding deal which will take some immediate strain off the Northern Ireland public sector and will allow for some much needed infrastructure investment. The confidence and supply agreement has also brought focus back onto the prospect of corporation tax devolution, but it is reliant on the restoration of the Northern Ireland Executive and it being able to “demonstrate its finances are on a sustainable footing”. If this can be delivered, it will be a tremendous boost for the private sector in Northern Ireland in an economy which is very much over-reliant on the public sector. If the will is there to make a deal work and to get a local Assembly working, there is potential for closer working between the public and private sectors. Collaborative approach My experience, both in practice and the public sector, has illustrated to me the power of business and the public sector working together. It is not an exclusive relationship; it does require a strong partnership. Perhaps some of this comes down to the public sector adopting more of a private sector attitude – a ‘can-do’ approach. Can the public sector allow the private sector a role in showing how to move away from risk-averse culture? Can those in the private sector be encouraged to ‘put their heads above the parapet’ and deal with the scrutiny that the public sector is so used to? It goes far beyond the economy, however. A sustainable and diverse local economy is vital if we are to deliver on the social, health and education benefits we want to see. A strong economy will help us to provide greater opportunity and the best possible public services for our people. If Northern Ireland is a great place to do business, it will help us to ensure that Northern Ireland is also a great place to live. The island of Ireland has fantastic potential. For a small place, we have a big impact around the world. There is much of which we can be proud but by working together and moving outside our comfort zones, we can achieve more. I believe that our profession has an important role to play in driving a collaborative approach. As leaders and decision-makers within organisations, and with careers and networks that stretch across sectors, we are in a great position to facilitate change. At the inception of our profession, our predecessors were not just leaders within our profession. They were not only leaders of industry. They were leaders within the broader society in which we live. They brought business and civic life together. Many of our members today maintain that connection through their voluntary work – they bring their experience to bear for their local community. I believe that we can expand on this and bring our professional expertise, our experience and ability to forge a strong link between the public and private sectors. This contribution has the potential to improve the lives of all within our communities. It’s a contribution that Chartered Accountants may be uniquely placed to make. Pamela McCreedy FCA is Chair of the Chartered Accountants Ulster Society.

Robert Watt, a senior leader in the civil service with responsibility for €58 billion in public expenditure, discusses his role as Secretary General of the Department of Expenditure & Public Reform. Robert Watt first encountered the public sector in a professional capacity in the 1990s. Having trained as an economist and worked for a brief period in the IDA, he was offered a job in the Department of Finance in 1993 as an Administrative Officer. He then joined the private sector from 2000-2007 as an economic consultant, but returned to public service on 1 January 2008 – just in time for the bulk of the financial crisis. Since then, Robert has risen from Assistant Secretary to Secretary General of the Department of Public Expenditure & Reform, which was established in 2011 to revitalise and modernise the public service. The quest for efficiency The two key elements of his department – expenditure and reform – bring with them unique challenges. On the expenditure side, there is never enough to go around while on the reform side, change is an often-torturous experience for staff and leaders alike. Despite the bleak context in which he became Secretary General, Robert is upbeat on progress to date and the outlook for the future. “It’s fair to say that, back in 2011, there was lots about the public sector that needed to change,” he said. “We embarked on that process, which is ongoing… but while challenging and busy, it’s been fantastically rewarding over the last few years.” Indeed, Robert can take heart from the most recent OECD Assessment, which found that Ireland’s second Public Service Reform Plan (2014-2016) was “by-and-large successful in terms of completing the majority of the activities it set out to do”. The OECD did note, however, that “more could have been done to help the plan realise its message of achieving better outcomes for all stakeholders by helping sectors translate savings from corporate efficiencies into improved services and outcomes”. In other words, it could have been better – but this ambition to improve is clearly a key driver for Robert and his department. “The OECD report… said that we made a lot of progress and achieved a lot, but that we now need to look ahead to what the next stage of that reform will be,” he said. It is likely that the next stage of reform will have two key elements – central procurement and shared services, both of which are ongoing projects within the public service. “In 2012, we did a study which showed that we weren’t maximising value for money when it came to the €12 billion in annual purchases of goods and services made by the Government,” he said. “We had a devolved system where departments and other entities were purchasing the same goods and services, in many cases from the same supplier, with a variation in service quality and price so we opted for consolidation. We established the Office of Government Procurement where we decided to professionalise the service, develop framework contracts and adopt a new approach to how we buy.” The need for specialist skills While the value of centralised procurement has “shown up in the numbers” according to Robert, a large-scale shared services project is also under way to transform the public service from a collection of disparate entities into a cohesive, efficient unit. The project has three main strands: HR, Payroll and Financial Management, with the latter resulting in a new Finance Shared Services Centre. “We’re in the process of managing that project and we will migrate the first offices and departments to the new shared services centre over the next 18 months or so,” said Robert. “We currently have 48 different public bodies with different financial systems… so this represents significant consolidation on a single technology platform, which will provide us with new functionality, better access to data and will enable us to move towards accrual accounting more quickly.” While some aspects of accrual accounting have been adopted by the public service, Robert maintains that it will take “two to three years” to reach full implementation throughout the public service. “The project is very complex and detailed… we’re taking it slowly to ensure that everything is 100% right,” he said. “It may be two to three years before we have everybody on a new system, but it’ll bring enormous savings in terms of the number of people involved in managing transactions while providing us with much better information across the vast bulk of public spending.” According to Robert, these projects form part of the “professionalisation” of the public service and he is keen to see more specialists from industry boost the quality of outputs emanating from government departments and other public entities. “As part of the Civil Service Renewal, we’re embarking on the professionalisation of several areas,” he said. “In the past, we probably went too far in the direction of generalists where there were general professional servants who were then asked to take up different functions but we’re now moving to a situation where finance, HR and other functions will be professionalised.” One seemingly obvious obstacle to the recruitment of external specialists, however, is public sector pay policy – but Robert insists that its effects are under constant review. “The Public Service Pay Commission looked at this issue in detail and we don’t have a generalised challenge in terms of attracting people into the public service – we’re quite attractive for graduates and entry levels – but we do have an issue when it comes to specialist staff, senior leadership roles and certain other professional areas,” he said. “That’s something that we’re having an ongoing dialogue about. We keep [the cap] under review but we’re very much aware that pay policy needs to be market-facing in relevant areas.” Tackling poor performance While Robert is keen to drive the professionalisation of the public service, he is acutely aware that the wider issue of performance needs to be tackled more consistently. “There’s a question for us around how we address performance and under-performance, and how we sanction people who aren’t delivering for us,” he said. “It’s one of those issues where, in the past, the public service has had difficulty having robust conversations with people about performance, putting improvement plans in place, and exiting people who aren’t performing – but it’s an area we’re going to focus more on.” Public servants have been laid off for under-performance, according to Robert, but he hopes for an improvement in this area in the years ahead. “It’s very hard to have a robust performance culture in an organisation if you don’t have a properly-funded and professionalised HR function, but it’s something we’re very keen to improve upon,” he added. “Under-performance should not be accepted and needs to be addressed. Indeed, the people who are performing and who work hard on behalf of the State want to see us address the people who aren’t performing.” In the broader context of departmental productivity, Robert is more upbeat. “The civil service has gone through enormous reforms over the past few years and it’s in a much better place than it was,” he said. “We’ve seen significant improvements in performance and productivity… but we want to do better.” To do better, according to Robert, more leadership is required as opposed to structural change within the public service. “There’s nothing within our structures that inhibits us in terms of doing more or driving change and productivity. It’s really about culture and leadership, having the right people and the right incentives and the right mind-set to drive change… it’s really a question of having the leadership capacity and the skills to make the changes that are necessary.” Public sector pensions Robert’s focus on the future is evident and in that context, the future obligations in relation to public sector pensions is worthy of consideration. Indeed, Robert notes that much has already been done to put the State’s public service pensions on a more sustainable footing. “Public sector pensions have gone through a lot of reform over the past number of years. In 2012, we had the single pension scheme and new entrants are now on very different terms and conditions compared to those who joined the civil service before 2012,” he said. “We also have career averaging, which has reduced the benefit of those pensions considerably compared to people who came in before and, under the new Public Service Agreement, about 70% of public servants will be asked to pay a further contribution towards their pension.” This contribution, a proposal Robert hopes will be accepted, will mean that the temporary pension levy which was introduced for most public servants will evolve into a pension contribution. Robert regards public sector pensions as “very valuable”. “There is a cost to the Exchequer; that cost will increase, but the measures we have taken put the system on a much more sustainable basis than has been the case in the past,” he said. “We’ve made a lot of changes and are happy with them. Obviously, we have to keep these things under review but for the moment, we will see how the main changes bed down and benefit the Exchequer.” And while sustainability is the main goal, Robert isn’t concerned about the depletion of the National Pension Reserve Fund when it comes to the sustainability of public sector pensions into the future. “The Fund is there to meet future liabilities. It’s unclear at this stage the extent to which it will be helping to fund pensions or might be used to fund other liabilities the State might have in the future,” he said. “So it doesn’t really impact on the sustainability of the system. The changes we’ve made to reduce the cost of pensions and the higher contributions that people are making toward their pensions are critical from a sustainability perspective.” A growing culture of good governance As another Budget approaches, with all the preparatory work that entails for the Department of Public Expenditure & Reform, Robert is keeping his eye on some longer-term goals: modernising and professionalising the State’s HR function; maximising the value of data to improve policy outcomes and the lives of the State’s citizens; and developing new standards for governance. Given the governance failures of the past across a range of public and private bodies, this will come in for particular scrutiny in the years ahead. “The question for us is: do we have the right culture to ensure that people are adhering to the governance standard we’ve set out? It’s about continuing that process of cultural improvement and learning, where people accept and understand that there are certain ways in which they can operate and certain ways in which they can’t.” All this will require a change of thinking at all levels of the public sector but as the English theologian, John Henry Newman, once said, “To live is to change, and to be perfect is to have changed often.” A perfect public service might be a tall order, but the ambition is certainly there. Robert Watt is Secretary General at the Department of Public Expenditure & Reform.

While a niche choice for Chartered Accountants, academia offers unique opportunities for career fulfilment. A role in academia after your training contract is not the typical route for most newly qualified Chartered Accountants. However, it does have its attractions. While many Chartered Accountants will seek job satisfaction from closing deals, winning new clients or helping to grow their own or their client’s business, the job satisfaction associated with a role in academia is of a different nature. The ability to follow the development of students from their early days in third level to the completion of their professional exams and onto a broad variety of roles brings a great sense of accomplishment. Add to this the opportunity to engage in research that can provide an input into policy development and make a practical contribution to the business world, and you have a role that provides its holder with a unique sense of contribution and achievement. Creating an appreciation of accounting Although the career path offers a different structure and set of challenges to the more traditional practice and industry-based roles, the training received as a Chartered Accountant in terms of technical, commercial and communication skills remains very relevant. The lecturing aspect of the role involves a variety of accounting topics and student profiles, from introducing basic accounting concepts to first years to focusing on practical accounting methods and tools for experienced managers on Executive MBA programmes. While many students will not specialise in accounting, creating an appreciation of the value that accounting information can bring to an organisation and the role Chartered Accountants play in the broader business environment is an important insight for their development as future business professionals. Rigorous research Another significant part of the role is focused on research and, in the initial years of your academic career in particular, on your PhD. This is one of the unique attractions of a role in academia for many who see the inherent value in undertaking a significant research project that allows you to stand back from the usual task-based nature of the business world to examine in detail how and why certain phenomena occur. For many PhD students, the topic of their research will emerge from their own real world experiences, some of which they may wish to examine more rigorously. The beauty of a PhD is the freedom it gives the student to focus on topics and issues of particular interest to them, which of course is an important point considering many part-time PhDs can run for five or six years in duration. The focus of my own research has allowed me to bring together my experiences in accounting education and agriculture to examine the area of financial literacy in farming enterprises in collaboration with Teagasc. The PhD aims to provide an insight into financial practices at a farm level and will contribute to an evidence-based approach to designing future financial education programmes for farmers. This is an important issue in the agriculture sector with an increased focus on low farm incomes, uncertainty around future EU supports given the forthcoming CAP reform, and increased price volatility all drawing attention to the financial management and viability of farming enterprises. The next generation Accountancy academics also play a key role in the development of the next generation of Chartered Accountants. A significant cohort of students will seek career advice in the first instance from their accountancy lecturers at third level. Talking to students about choosing firms, departments and roles is very much a regular part of this job. Developing a student’s technical skillset is an important objective during their time in third level, but it is not the only objective. The role of the modern professional accountant encompasses a much broader range of competencies than mere technical knowledge. It includes areas such as communication skills, teamwork and commercial awareness, and we focus on developing these skills in all students throughout their studies at third level. Gatekeepers to new areas of knowledge The rapidly changing nature of today’s business world and the adaptive nature of the accounting profession to the needs of business means we must continue to update our course and programme offerings to prepare our students for the demands of 21st century commerce. Emerging areas such as data analytics, social and environmental performance measurement, and tax morality are just some of the new topics that the next generation of Chartered Accountants will be dealing with and where demand is increasing for accountants with such skills. Academics in many ways can be seen as the gatekeepers to these new areas for the next generation of the profession. The hybrid nature of our role as both researchers and teachers places us in a highly influential position as an important conduit of knowledge between the latest research impacting the accounting profession and the current and future generations of the profession. A symbiotic relationship Maintaining strong links between the academic community and the broader profession in practice and industry should be an important objective for the continued development of our profession. The regular dissemination of the latest research in the field to the broader population of Chartered Accountants (for example, via Accountancy Ireland), the incorporation of this research into the educational offerings at both pre- and post-qualification levels, and the active promotion of practice and industry-focused collaborative academic research projects (such as those supported by the Chartered Accountants Ireland Educational Trust, for example) are all avenues to further strengthen this important symbiotic relationship. Pushing the boundaries of knowledge A career path in academia is undoubtedly a niche one in the context of the broad range of accountancy-based roles available. It does, however, offer a unique set of opportunities to a Chartered Accountant in terms of playing a role in developing the next generation of the profession while also making a contribution to policy development and practice in areas of business and society of interest to you. Pushing the boundaries of knowledge in the discipline of accounting and ensuring the effective transfer of this new knowledge to the broader population of Chartered Accountants is an important role within the profession. To borrow a line from Benjamin Franklin, “An investment in knowledge pays the best interest”. While Franklin may have been focused on the individual, his words also hold true for the accountancy profession as a whole. John Nolan is a Lecturer at Dublin City University Business School and Chartered Accountants Ireland.