Sustainability and ESG initiatives are a hot topic for 2021. But how can companies successfully implement them? Judith Kelly outlines four new roles on the market that bring sustainability to the forefront. Climate action is now a priority item on every board agenda. In 2020, we witnessed a dramatic escalation in activity and real urgency from every sector to plan and implement the relevant sustainable finance and Environmental, Social and Governance (ESG) initiatives. Further, the Irish government continues to position Ireland as a hub for green finance as part of the ‘Ireland for Finance’ strategy. Investors are increasingly using non-financial factors such as ESG standards as an important part of their investment screening process. The challenge for us is to understand what new positions are being created, and how we source relevant candidates when established and experienced talent pools do not already exist. By working closely with key stakeholders within client companies – including boards, executive management and investors – to understand recruitment needs, we have been able to identify four main roles and several related positions that you can expect to see this year. Chief Sustainability Officer The Chief Sustainability Officer will become a key leadership role within every organisation of sufficient scale. The office will sit alongside Risk, Finance, Treasury, Corporate Finance, and Internal Audit as a key corporate function. The office will be responsible for building sustainability frameworks and programmes across all parts of the business and embedding people to manage and setting a proactive and positive sustainability culture across the organisation. ESG Strategy Director Large corporates from all sectors are aiming to build sustainable practices into every part of their business from procurement, to supply chain and operations, to manufacturing, to packaging. You will also see a call for ESG Integration Director/Managers. ESG Investment Director/Manager/Analyst With financial services firms looking to ramp up sustainable investment research and product offerings, many need investment managers with sustainability knowledge and expertise. Similar roles such as Head of Sustainable Investment and ESG Finance Lead will also feature in 2021. Chief Impact Officer/Director This role is to oversee the measurement, verification, management, reporting and improvement of the company’s social and environmental impact and the value that these will deliver to stakeholders. You could also see listings for ESG Reporting Manager as well. Judith Kelly is a Director at FK International.

Jan 15, 2021

Attracting and retaining talented people is always a challenge, but there are specific features of family businesses that deserve special consideration. Liam Lynch reflects on how family businesses can attract and retain the brightest and the best. Talented people are the backbone of any great business. Having the right people in place is the difference between mere survival and success. A significant challenge that faces many family businesses as they plan for sustainable growth is the ability to attract and retain executive and managerial talent.  Competing in the ‘war for talent’ As a family business grows, the appetite to tap into skill sets that are outside the family is also likely to expand. In a high employment economy, the competitive experience of engaging in the ‘war for talent’ is intense. Many family businesses find that the ability to attract and retain the skills needed throughout their business is now one of their main concerns. The competition to hire and retain good people can be fierce. While family businesses must navigate the same ‘war for talent’ environment faced by all employers, finding people with both the right skills and the right cultural fit can feel like an overwhelming barrier. The vast majority of families are committed to maintaining family ownership of the business. The structure of remuneration packages on offer to attract talent can be more limited than businesses with other ownership forms. Share-based remuneration incentives can tend to be off the table, and even if they are not, the exit mechanisms can be both complex and uncertain. Therefore, it is essential that the business effectively builds and communicates its value proposition to prospective employees; what it means to be a family business and why it’s a good thing to work for one. This might include, for instance, the commitment of a community embedded family business to both its staff and, by extension, the local community. This commitment might be demonstrated by higher levels of investment in training and corporate responsibility, as well as the prospect of relatively fewer redundancies during tougher times. Common recruitment issues Proper planning can help family business owners put a framework in place that not only addresses common business issues but may also prevent potential disputes within the family. With the right policies, practices, and strategy, the sky’s the limit for attracting the best talent and retaining great people, while at the same time preparing the next generation of leaders within the family. Consider some of the following common issues in developing a broad-ranging strategy to attract and retain the best talent: Compensation – Are you offering competitive compensation? Ensure that your reward packages, including remuneration plans, are based on market-driven data. Do family members enjoy opportunities or bonuses not available to other employees? Training – Do you have adequate training in place to prepare the next generation to take over leadership roles and responsibilities? Does every employee have access to the same level of training and development for their role, regardless of family status? Decision-making – Who is involved in designing compensation packages or making hiring decisions? Do those in decision-making roles have the qualifications required and the independence needed? Governance – Is your board of directors made up of family and non-family members? Do you have an adequate succession plan in place? Have you identified all the areas of risk for your business – from economic to competition, loss of talent and cyber security? HR policies – Are there clear performance review frameworks for both family and non-family employees providing opportunities for development and progression for both? Are the policies, standards, and expectations the same for all employees? Is the workplace an equitable environment overall? Communication – Is information communicated clearly and to all levels within the business? Are there cases of perceived unfair treatment, where only certain people are ‘in the know’ in relation to decisions or plans moving forward? Blending in non-family members – How are you competing with businesses that offer share based or equity rewards as part of their compensation plans for new talent? What can your family business offer in place of equity, including the certainty of cash which can be more attractive to many employees? Are there opportunities for advancement for employees who are non-family members? Implementing an effective people policy may require tough discussions and negotiations that go beyond established family expectations and reform longstanding practices. Overall, family businesses face particular challenges that require balancing the needs of the business with the expectations of the family. By making sure that your business has a strategy to develop and retain people with the right skills and fit for your business, you can create an equitable environment where everyone has the opportunity to thrive and build a sustainable foundation for both your business and your family. Liam Lynch is Partner and Head of Private Clients in KPMG.

Jan 15, 2021

The past year has seen the fast digital growth of businesses. With it, however, comes the added risk of cyber-attacks. The best way to defend against these attacks, says Sarah Hipkin, is to invest in and plan your cybersecurity strategy. After a year of accelerated digital transformation and increased cyber-attacks, it’s time for organisations to plan their Cybersecurity Strategy and Roadmap for 2021 with critical security lessons in mind. With this rapid, unplanned shift to digital channels and changes in consumer and business behaviour, a cyber criminal’s playground has just expanded. Current cybersecurity challenges Digital transformation changes an organisation’s cybersecurity threat and risk landscape. Current cybersecurity challenges faced by organisations include: critical information assets (e.g. bulk sensitive personal data or public-facing website) could be targets of attack; motivations of cybercriminals and type of cyber threats are not fully understood; and incident response teams taking too long to reconstruct cyber-attacks and take action to stop them. Regardless of the type of nefarious activity an organisation may face, if a cyber threat materialises, a security incident can have a significant impact on an organisation in terms of cost, productivity and reputation. Being adequately prepared to detect and quickly respond to the changing nature of incidents will help to stop an attacker from inflicting further damage. Cybersecurity strategy planning 2021 is the time to plan your cybersecurity strategy with these critical security challenges in mind. The strategy should ensure alignment between threat intelligence activities and business risks. Key activities will need to cover the following: Identify critical information assets which are essential to business operations, including underlying infrastructure. Collect information on adversaries’ motivations and intentions. What type of attacker may target your most valuable information assets? While most of the bad guys want to make money, whether stealing personal data, bringing down a website or shutting down critical services, their intentions will vary. Develop knowledge of cybercriminals’ tactics which includes malware and tools for sale, sale of personal data and exchanges of new exploits. Evaluate current effectiveness of systems security, including policies, processes, security training and staff capabilities to monitor, detect, analyse, and respond to cyber-attacks. The largest gaps in defences to protect critical information assets should be prioritised in the roadmap for improvement. Prepare a strategic cybersecurity roadmap which outlines each recommendation, detailing: the effects of losing or impairing the asset in costs, revenue losses, fines, reputational damage; likely adversaries who have attacked similar organisations; current deficiencies in defence layers; and associated technical and business risks amount to be invested and its associated benefits. Test response plan Cyber-attacks can impact an organisation of any size and will often occur at a time that catches everyone off guard. Under pressure, an individual’s decision making can become clouded. Scheduling a tabletop exercise with senior management and key operational staff to understand the realities of how a cyber incident would impact an organisation is critical. It will ensure everyone has a clear understanding of their role in responding to a cyber-attack and the organisational response, especially Board members who would likely be representing the organisation in the media. Sarah Hipkin is Director of Consulting IT and Cyber at Mazars.

Jan 15, 2021

This time of year is about setting objectives and goals. However, these usually fail within the first month. How can you empower yourself to stick with them for the whole year? Dawn Leane outlines five ways that can help. It’s the time of year when we set ourselves new goals, whether personal or professional. But often, by the time spring arrives, our good intentions are just a distant memory. Setting objectives is always a good idea, but we can set ourselves up to fall short unless we have the right mindset. Here are five ways to empower yourself in 2021 and beyond. 1. Start with the end in mind A goal without a plan is just a wish, as the saying goes. Stephen Covey advises us to “begin with the end in mind”. Having a clear understanding of what ‘future-perfect’ looks like makes it easier to know where we’re going, assess where we are now, and work out all the steps in between. By breaking our journey into a series of smaller goals, we are more likely to stay on track. 2. Give yourself a break Strike a balance between having ambition and setting unrealistic expectations. For example, if you tend to leave things to the last minute, you may decide to focus on improving your time management. We usually approach this by trying to change ourselves, expending much energy in the process. Or you could accept that you work best with an impending deadline and change how you structure your time instead. Self-acceptance is the most empowering act of all. 3. Build your network There is little we can achieve alone. A strong, strategically developed network is essential to success in any endeavour. Your network should consist of people who can provide you with information and further connections, give honest feedback, provide personal support, and help you maintain a positive work-life balance. Ensure that the people in your network know what you want to accomplish. It will be easier for them to help if they can recognise the opportunity, information or introduction that will benefit you. 4. Review regularly We live in a VUCA world: volatile, uncertain, complex, and ambiguous. Review your goals regularly to ensure that they are still relevant, that you are on track, and have the right resources. If your original objective is unrealistic or your circumstances change, don’t judge yourself. Instead of doubling down or quitting, reassess what you want to achieve. Revisit your concept of ‘future-perfect’ and ask if it is still valid. If not, what can you change to make it so? 5. Just do it Motivation is a myth. John Maxwell writes: “The whole idea of motivation is a trap. Forget motivation. Just do it. Exercise, lose weight, test your blood sugar, or whatever. Do it without motivation. And then, guess what? After you start doing the thing, that’s when the motivation comes and makes it easy for you to keep on doing it.” The key to empowerment is taking control. That doesn’t mean you won’t make mistakes or have bad days. But if you learn from those experiences and refine your approach, your capacity will continually develop. Dawn Leane is CEO of Leane Leaders, supporting leadership development through training, executive coaching, mentoring and consultancy.

Jan 08, 2021

Coming back to work after the holidays is always challenging, this year especially. How can we inspire our staff to be more productive amidst the January blues? Anne Phillipson explains. Crack! That’s the sound of the spines of new 2021 diaries being opened across the island as employees face the new year with the same determined optimism that students embrace (at least for a few weeks) at the start of every term. In business, we may set new strategic objectives aligned to corporate strategy at this time of year, asking our team members to set personal objectives for 2021. But the start of this new year is unlike any other. As leaders look at the challenging landscape, they will understandably want to ensure – now more than ever – that everyone in the organisation is as productive as possible. Productivity describes various measures of the efficiency of production. Back in the industrial revolution, this was much easier to measure. It was easy to count the widgets coming off the line, or the number of units produced per person per year. But productivity is a noisy measure when it comes to knowledge workers. If productivity used to mean getting more things done each day, it now means getting more important things done consistently. As the great business guru Peter Drucker said, “There is nothing so useless as doing efficiently that which should not be done at all.” How can leaders unlock their employees’ productivity and create the best possible environment for them to thrive? Here are three suggestions that should help. 1. Prioritise Make sure that your team knows what is most important. This might seem straightforward, yet I am willing to bet that if I interviewed ten of your employees, I would get a range of answers to the question: “What are the three most important priorities right now?” For everyone to be crystal clear on the priorities, leaders must communicate consistently. It is always tempting to do the ‘urgent’ at the expense of the ‘important’, so make sure that important activities get priority. Regular check-ins with your people will help, as will progress updates on priority objectives. 2. Remove friction Ensure that people have the resources they need to get the job done. Find out what your employees need to make it easier for them to do their job, and then act on the responses. Maybe a process slows people down, or a clunky system could be simplified. Or perhaps they need a computer upgrade or training. Whatever the friction, it’s imperative that you take action to make your employee’s life easier, thereby removing a barrier to productivity and building trust with the team, so they know that you take their feedback seriously. 3. Agreed measurement Too often, bosses equate hours in the office with productivity. Those same bosses are now anxious that nobody is in the office – if they can’t see people, they feel that it is impossible to know how productive they are. However, if people are clear on the priorities, with clearly defined and agreed outputs, and have the tools and resources to do their jobs, bosses will have to trust their people to get on with their work. Isn’t that why you hired them in the first place? Anne Phillipson is a Director of People & Change Consulting at Grant Thornton NI.

Jan 08, 2021

It’s almost impossible to predict the economic forecast for 2021. However, there are steps we can all take to get Ireland back to living its best life. Neil Gibson explains. When making resolutions, we inevitably start with great enthusiasm and, all too often, by February, our lives look just as they did before. With 2020 over, perhaps it is a good time to think about our collective resolutions, which will need to last well beyond January if we are to get Ireland back to living its best life. Eat and drink more Many hospitality businesses had their worst-ever year in 2020. As vaccines are introduced, thereby making it safer to be outside later in the year, it will be important to spend money in the hospitality sector. Treating yourself to a dessert in 2021 – you are doing it for the economy! Get fit Physical fitness improved for many people with time at home, while others went in the other direction. For almost everyone, mental health has been impacted due to feelings of isolation, loneliness, vulnerability and fragility. Tiredness and fatigue have become significant issues too. We need our healthcare system fit-for-purpose and our businesses sufficiently robust to survive. We all need to be adequately fit – physically, mentally and financially – to face whatever might come our way. No backsliding 2020 revealed ways to work and live better. There is unlikely to be a desire to return to pre-COVID-19 congestion levels, and many digital ways of working are simply more efficient. Embracing these improvements to free-up time for the things we enjoy should be a goal. Bring forward our goals We now know how quickly policy can be implemented and what an emergency response looks like. However, we still have other emergencies at the door, so let’s be more ambitious on timelines. Achieving carbon neutrality is an obvious one, but there are others such as the housing crisis, rural broadband roll-out, and the delivery of Metro North. Watch the spending Our Government spent record amounts on our behalf in 2020. All very necessary and, so far, there is no great urgency to balance the books. There may well be a global debate about turning a portion of the costs into perpetual debt or a form of ‘great reset’ with debt we effectively owe to ourselves being forgiven. However, that cannot breed complacency over managing spend. Maybe, to coincide with the season’s theme, we need to resolve to make a list of what we need rather than want. Plan for the future Resolutions are often limited to things we can get stuck into in January. Real change takes longer and requires a new culture and attitude. There has been criticism from the Fiscal Council and others that recent spending decisions have built up expensive future problems. We need to keep an eye on the long-term vision. Does Ireland 2040 need to be revisited? Should corporates look again at their vision? The answer should be a resounding “yes” in both cases. Be grateful for what we have There are challenges ahead, but 2020 has allowed many to appreciate what truly matters in life. This may improve our appreciation of a broader range of jobs in our society; it will undoubtedly enhance our view of the importance of government. Firms that worked hard on purpose and culture saw those principles tested and, hopefully, strengthened. Community and a value on friends and colleagues are part of the culture shift that could potentially be the biggest lesson learnt. At the heart of the word “resolution” is the concept of “resolve”. How apt that we need to be steadfast in our commitment to a better tomorrow. If we didn’t already know that real success is a mixture of economic, social and environmental progress, we do now. Ireland appears set to continue its strong economic performance. However, it will need similar strides in the other two dimensions to say with honesty that we kept our New Year resolutions. Neil Gibson is Chief Economist at EY.

Jan 08, 2021

Simon Shirley examines the recent report from the Interdepartmental Pensions Reform and Taxations Group and what it means for pension reform down the line. In 2018, the Irish government published A Roadmap for Pensions Reform 2018–2023, in respect of a proposed five-year plan for comprehensive reform of the state and private (or ‘supplementary’) pension systems. A key aim of the Roadmap is to promote long-term pension saving to address income adequacy in retirement. The Interdepartmental Pensions Reform and Taxations Group (IDPRTG) – chaired by the Department of Finance and includes representatives from the Department of Public Expenditure and Reform, the Department of Social Protection, Revenue, and the Pensions Authority – was established to carry out several tasks set out in the Roadmap, namely: proposals aimed at simplifying and harmonising the supplementary pension landscape; an assessment of the cost of State support for pension savings; and a review of the Approved Retirement Fund (ARF) structure. The group engaged in a public consultation process and received submissions from various stakeholders, including pension/life insurance companies, trustees, lawyers, advisors/brokers, investment managers, and private individuals. In recent weeks, it published a report on some of its work-to-date. This report has been broadly welcomed by the private pensions industry and contains positive and practical steps. The report contains several proposals to reform and simplify the existing supplementary pension system, i.e. the system that is relevant to most of us working in the private sector who have pension plans. This system consists of two pillars, broadly summarised as follows: Employer-arranged pension plans, known as occupational pension schemes. These are provided by employers for employees and are arranged on a “group” basis (i.e. for more than one employee and are the most common arrangements for employees in the private sector), or on an “individual” basis (i.e. for one employee only and are typically used by company owners and key executives). Individual plans, which are typically used by self-employed sole traders/partners, employees in non-pensionable employment, and employees who are changing/leaving employment. While many of the proposals make sense at a technical level, at the end of the day, many of us will always require advice on saving for our retirement, irrespective of the number of products, rules, options, etc., that are available.  As professional pension advisors/brokers, we are at the coalface of the system. For decades we have been advising employers, and individuals from all walks of life, from late teens to 90s, whether starting out or in retirement, whether running their own business to working for a multinational, on planning for retirement and planning in retirement. No matter how many technical groups are assembled, reports published, public consultations undertaken, etc., the fact remains that adequately planning for retirement will remain challenging for many of us, as we are programmed to engage more with short- to medium-term matters, rather than long-term issues and requirements. While the current system does have anomalies and inconsistencies, some of these wrinkles can often lead to improved outcomes for individuals, and can actually improve the attractiveness of saving for retirement, in conjunction with appropriate advice. I welcome that the report acknowledges the need for advice and states: “The need for independent financial advice in the lead up to, at the point of, and during retirement is widely accepted. Improving the availability of appropriate advice for pension savers received significant support in the consultation responses.” However, the danger in this process could be that the need for advice ends up being a footnote rather than being front and centre, given the various perspectives, experiences, and interests of the large stakeholders (i.e. the government, relevant state bodes, pension/life insurance companies, etc.).  Pension and retirement planning is a very personal experience, and a simplified one-size-fits-all solution may not always be in the best of interests of citizens, who tend to have very varied personal and financial backgrounds, objectives and expectations. To assist the large stakeholders in this process, the voice of the experienced professional advisor (through representative groups such as Chartered Accountants Ireland and Brokers Ireland) should be a key influencer in any changes to be made.  So far, I have been impressed overall by the preparatory work done by the government and the state bodies in recent years – however, effective ongoing communication and practical implementation of the reforms/changes to be made will be the ultimate litmus test. Simon Shirley is the Founder of Simon Shirley Advisors. He is the author of the new book, A Practical Guide to Pensions and Life Insurance, from Chartered Accountants Ireland.

Dec 11, 2020

While there’s an end in sight to the pandemic, COVID-19 has hit most businesses hard. How do we bounce back and recover over the next 12 months? The key, says Patrick Gallen, is to learn how to lead with resilience. I participated in an excellent webinar on organisational resilience and readiness last week. We were joined by guest speakers from around the world. What impacted me most about the discussion was the strong focus on how organisations, regardless of COVID-19 restrictions and a potentially hard Brexit, need to bounce back quickly as they recover from the pandemic and strive for survival and growth in 2021. Resilience is the capability of organisations to prevent (where possible) and respond effectively to crises and the ability to anticipate, adapt and take advantage of long-term trends and opportunities. A key component of resilience is leading and responding through challenge. In today’s world, where change and disruption are constant, simply bouncing back is no longer a sustainable strategy. It’s about moving from a survive to a strive mode. There is still a significant road ahead before organisations emerge from the current challenge and there will, no doubt, be new challenges that crop up. As a leader, you will need to direct with energy and purpose – and you will need to be resilient. Resilience is not only essential at an organisational level, but also at a team and an individual level. However, the way we speak about resilience at an organisational and a leadership level will influence an individual’s perception of resilience. An organisation’s resilience isn’t simply the sum of its employees’ resilience. It includes culture, leadership, beliefs and practices. Leadership needs to be shared and distributed across the organisation at all levels, with excellent communication and collaboration, avoiding silos and empowering employees to make quick and informed decisions. Here are my top tips for leaders in 2021 to be resilient and lead with purpose and energy. Balance Try to maintain a good work-life balance, which can be difficult when working from home on a continual basis. As a leader, make sure that a good work-life balance is encouraged and respected by you and the entire organisation. Connections and collaboration Encourage strong collaboration and support mechanisms within your teams and at all levels. As a leader, actively address the problem of silo-working. Belief You need to be confident in your ability to lead in challenging times, and this should be encouraged and supported by your organisation. Purpose Be sure to stay connected to your values. When you are connected to your values, you are more resilient. Rest, recovery and review After periods of intense work and focus (such as the last nine months), there is a need for rest and recovery, but just as importantly, a review of what has worked well and what needs to change. Learning from new and difficult experiences builds on your ability to navigate the next difficult experience. Self-knowledge and growth as a leader will build your resilience levels for 2021 – and beyond. Patrick Gallen is the Head of People and Change Consulting for Grant Thornton Ireland.

Dec 11, 2020

2020 was an unusual year, and 2021 will likely be just as strange. Moira Dunne emphasises the importance of setting your goals as usual, however, and gives some tips on how to stay on top of them. As we reach the end of an extraordinary year, our focus is switching to 2021. Most years we make new plans in January for the year ahead. And even though 2021 may still present plenty of uncertainty during this global pandemic, it is still important to do this to get motivated for the future. Here are some practical tips for goal setting to help maximise your chance of delivering your goals next year. Reflect on 2020 Before moving on, it is useful to reflect on what we learned in 2020. Most people were forced to rethink how they work. We adopted new working habits and routines, and found new ways to connect with each other. For many, this new way of working had benefits as well as down-sides. Consider what you learned from the changes you made in 2020. What do you want to bring forward into 2021? Here is a list of some of the key changes we encountered. Which ones are relevant for you? The power of uninterrupted time to get work done. The benefit of clearer communication with colleagues. How making quick decisions benefits business. Streamlined business processes that reduce time waste. The importance of planning ahead. The value of team interaction for problem-solving and creativity. Setting goals for 2021 Before you set your goals for 2021, review the status of the goals set for 2020. Some may never have been completed or even started given the circumstances of 2020. Some may not be relevant due to a change in business focus. Re-evaluate your priorities for the year ahead. Be realistic Take a realistic view of your workload and schedule. Where can you find extra time to work on your goals? Plan to achieve one goal at a time to avoid overwhelming yourself. Once you make progress on one goal, you will be more motivated to tackle the next one. Making progress It is hard to find time in our busy day-to-day schedules to work on extra projects or goals. The key to making progress is to work out the specific tasks or actions required to achieve the goal. With a list of tasks, it is easier to make some progress each week. Find a time block within your week that you can set aside to make progress on you goal task list. These time blocks can add up and, if well planned, will result in regular progress on your larger goal. Making a plan To help stay on track, I recommend that you create a simple goal plan with targets. This helps you stay motivated. It also provides a sense of achievement as you complete the work. Be productive Now is the time to focus on 2021 so you can finish this year feeling motivated and organised. And while 2021 may be another unusual year, having a purpose and a plan will help you get up and running in January. Happy New Year to you all. Moira Dunne is the Founder of beproductive.ie

Dec 11, 2020

Louise O’Mara considers how environmental, social and governance issues will impact on corporate decision-making in a post-COVID-19 era. As focus on climate change continues to grow, there is a greater interest in what part corporates are playing in the fight against climate change. Mindful of this, companies are transitioning their business models towards lower or net zero emission models as an expression of their desire to combat climate change. Stakeholders accelerating the sustainability agenda Mindful of the attention given to sustainability, companies are transitioning their business models towards lower or net-zero emission models as an expression of a desire to combat climate change. Asset managers and financial institutions are increasingly supportive of the sustainability transition. Funds invested in environmental, social and governance (ESG) assets are ballooning – sustainable assets under management have surpassed $30 trillion and could grow to $50 trillion by 2025. Companies are developing robust sustainability strategies so they can access this growing source of capital. In September 2020, AIB tapped this market with a €1 billion green bond. The transaction attracted significant investor interest, with the green format maximising depth of demand. Net-zero and the supply chain An increasing number of corporates are setting targets to be net-zero by a specific date. However, not all net-zero targets are created equal. The most challenging and most comprehensive target – Scope 3 – requires a company to achieve net-zero across all elements of its supply chain. In practice, this means that a company will require its suppliers to be net-zero, or it may have to purchase offsets to bridge that gap – at a cost. Consequently, the supply chain contract might be renegotiated to reflect that cost or the company may move to a different net-zero supplier, avoiding the incremental cost. This is a tangible example of sustainability impacting on cost and pricing strategies. Accordingly, what we are beginning to see (in its early stages, but with rapidly building momentum) is the creation of a ‘net-zero club’ populated by companies that are part of the solution. Green and sustainability-linked financing Companies are increasingly linking sustainability key performance indicators (KPIs) to financing, and there is an array of finance options available. The simplest form is a green bond, where the proceeds are directed solely towards eligible green projects. For example, Citi led Ireland’s inaugural green bond in October 2018. The proceeds were allocated to projects that address climate change, clean water, and wastewater treatment. Sustainability-linked bonds (SLBs) are linked to the sustainability objectives of the issuer. The cost of SLBs can vary depending on whether the company achieves its defined ESG objectives. As such, companies are committing explicitly to future sustainability outcomes and creating a financial incentive to achieve them. Finally, the ‘greenium’ or green premium refers to the pricing advantage offered to companies using green bonds/SLBs due to a higher degree of demand from investors. Co-dependency of finance and sustainability Although we have historically seen sustainability and finance as separate entities, they have often existed in parallel. What is exciting about the ‘net-zero club’ and the ‘greenium’ is that they represent tangible examples of sustainability directly improving margins – sustainability meeting finance in its most fundamental sense. As consumer sentiment continues to shift, we should expect finance and sustainability to walk hand-in-hand in the same direction. Louise O’Mara is Head of Corporate Bank Ireland at Citi.

Dec 03, 2020

Upskilling your people is the only way to cope with the future. By nurturing your workforce’s talents, explain Ciara Fallon and Ger Twomey, you will have a distinct edge over the competition. While the future of work is a topic that dominates the current business agenda, there appears to be a lack of momentum in making the necessary investments to implement effective workforce strategies. CEOs need to act now and plan how their businesses will upskill their people to thrive in a digital world. By now, we all recognise and understand that COVID-19 has fundamentally changed how people work, where they work, and what skills they require. The rapid move to a predominantly virtual working world exposed gaps in the capabilities of many organisations and their people. This is an issue that leaders were already struggling with before the pandemic. PwC’s Talent Trends 2020, based on survey data from late 2019, showed that 74% of CEOs were concerned about the availability of critical skills. But, just as the pandemic highlighted the biggest skills mismatches between organisations and their people, it provides an opportunity for CEOs to develop strategies to build the workforce they need for the future. And, given the urgency to find the right talent with the right cultural fit, more and more companies are realising the benefits of upskilling the people they already have. The acceleration of new ways of working makes it clear that upskilling people should not be a sideshow to other efforts CEOs are making to stay solvent and recover from the economic disruption caused by COVID-19. Upskilling should be a priority in a world where the speed of change is unprecedented, and the path ahead is uncertain. Here are four areas for CEOs to focus on to make the case for upskilling. 1. Deliver on business strategy When we asked more than 22,000 employees around the world about their hopes and fears for work, more than three-quarters said they wanted to improve their skills. Now is the perfect opportunity for leaders to take advantage of their people’s aspiration and align it with their upskilling initiatives and business goals. That means assessing your staff’s skills, particularly in relation to technology and other crucial skills such as problem-solving and working effectively in cross-functional teams. The CEO may need some upskilling too. 2. Prioritise employee engagement and experience There’s a measurable connection between successful upskilling and employee engagement. Among the CEOs who took part in the latest PwC Annual Global CEO Survey who had introduced an upskilling programme, 60% said it was highly effective in improving culture and employee engagement. And according to Gallup, highly engaged business units have lower rates of absenteeism (-41%) and higher rates of productivity (+17%). 3. Boost productivity Companies are expected to spend close to US$4 trillion globally this year on technology. If upskilling is done well, the digital, human and commercial capability uplift in your workforce will bring about greater use of new tools and enabling technologies, such as robotic process automation or artificial intelligence. By focusing the efforts of your workforce on value-add and enriching activities, and away from repetitive and routine tasks, you unlock greater value – such as stronger connections with customers, better innovation, or process efficiencies.  4. Embrace a growth mindset Upskilling is a medium- to long-term strategy. We live in a world beset by disruptions that will continue beyond this pandemic. The megatrends PwC has identified as critical challenges for the 21st century – such as the speed of technological change – require an agile workforce and agile management. Being prepared to weather crises with a flexible, knowledgeable workforce and a culture built on resilience will stand you in good stead. CEOs should lead with a growth mindset. They should encourage their workforce to evolve. They can start by upskilling personally and communicating what they are doing to their people. This doesn’t necessarily mean learning to code, but it does mean understanding what new technologies can do and what they can’t. Savvy leaders who value and nurture their workforce’s innate talents, ability to learn, and desire to do good work will have a greater chance of boosting their business and retaining and attracting talent. They will beat the skills gap. Ciara Fallon and Ger Twomey are Directors of PwC People and Organisation.

Dec 03, 2020

There are many reasons why you might want to exit your business – COVID-19, Brexit, retirement – but what is the cleanest way to do it? Niall Flood explains. As the year’s end approaches, and with the potential of good news on the horizon in the form of a COVID-19 vaccine, many business owners are taking the opportunity to consider their exit options. This may have been on their mind for some time, or the disruption caused by the pandemic may have accelerated their thinking, but the underlying reasons are often common across would-be sellers. These include a lack of interest from the next generation in taking over the business, or simply a desire on the part of the existing shareholders to convert the value of their shares in the business into cash to enjoy retirement fully. It many cases, there may be difficulties in finding a suitable buyer for the business, particularly in current market conditions. Good businesses can fail to attract buyers for certain reasons. COVID-19 and Brexit are creating uncertainty – this can reduce buyer appetite and the level of acquisition activity. The number of trade buyers for certain businesses may also be limited. Many buyers are focused on finding high-growth prospects, and not every business seeking a new owner is growing at a rate of 10-15% annually. An attractive option for business owners in these circumstances is to look closer to home and consider a management buyout (MBO). An MBO occurs when shareholders sell the business to the existing management team. This can often present a win-win scenario for both buyers and sellers. One of the main advantages of an MBO is discretion. Owners don’t have to advertise their intention to sell, nor spend time wondering whether buyers are simply curious ‘tyre kickers’. Another point in favour of MBOs is the potential to complete the transaction quickly. The existing management team knows the business better than any outsider and will not have to go through the usual due diligence process to complete a deal. The whole process, from inception to completion, can be carried out at pace – usually completing within six months if run properly. MBOs also have the added attraction of minimising the amount of disruption to the business during the sale process. Importantly, there are attractions for the management team as well. An MBO allows the team to benefit more fully from the dividends and profits generated by the company. It also offers management the opportunity to have more autonomy and input into the strategy of the business. For instance, the management may wish to take the business in a different strategic direction, with a view to growing it more rapidly and selling it at a higher price in future. Price is usually the critical factor when it comes to reaching agreement on an MBO, and there will naturally be a degree of tension between the seller and buyer in that regard. Owners will have their expectations and aspirations. The management team, on the other hand, will wish to minimise the amount they have to pay. A lack of funding usually reinforces that desire to minimise the price. Generally speaking, management teams don’t have a lot of cash to bring to the table and will have to finance the deal through debt, private equity or deferred consideration (or a combination of all three). Naturally, they don’t want to saddle the business with too much debt. The use of deferred consideration is a classic way to bridge the gap between the different value expectations of the seller and buyer. Under this arrangement, the management team pays a portion of the price out of future profits after the transaction closes. This can be a helpful compromise to ensure both sides get the deal done in a timely fashion – and without falling out during negotiations! While an MBO can be simpler and more straightforward to complete than a trade sale, there is typically a requirement to have advisors involved. Advisors assist with the various elements of the deal, including agreeing on valuation, determining the funding structure, raising the money, negotiating key points, and approving the legal details. Advisors also bring a level of experience and impartiality to the transaction, which can help surmount the various obstacles encountered along the way.  Niall Flood is a Director in KPMG Corporate Finance.

Dec 03, 2020

With international tax reform progressing at unprecedented speed, Susan Kilty explains why Irish businesses must continue to participate actively in the discussion. With all the global uncertainty that Ireland is facing due to COVID-19 and Brexit, there is a risk that the OECD global tax reforms – the other major threat to Irish business and the economy – will be pushed further down the corporate agenda. But to do so would be very risky. Ireland must engage with this process now, at both the political and corporate level. The world of international tax is in a state of extreme flux as governments grapple with changes in the way multinationals do business. It is worth reiterating that Ireland has attracted healthy levels of foreign direct investment (FDI) over the past 30 years, and the multinational community has contributed significantly to our economic success. According to the OECD, Ireland received more foreign direct investment in the first half of this year than any other country. Along with Ireland’s near-iconic 12.5% tax rate, a crucial element in our continuing ability to attract international investment is the stability and transparency of the corporate tax regime here. Investors from abroad who establish activities in Ireland tend to be quite sensitive to changes in the taxation system. They like certainty and stability in a tax code, which is why Ireland presents such an attractive proposition. Ireland cannot afford to lose FDI as a result of turbulence in the global tax landscape at this time. As corporation tax accounts for almost 18% of Ireland’s total tax take, any change to the regime threatens to seriously undermine the attractiveness of our FDI model and negatively impact our revenue-raising ability. The crux of the matter is that we, and many other countries, apply 20th century tax systems to 21st century e-commerce business models. Businesses have an increasingly digital presence, and many no longer trade out of brick and mortar locations. This is not limited to so-called technology companies, but can be seen across industries and in businesses of all sizes. Businesses sell freely across borders without ever needing to set up operations abroad. This new digital way of trading is not always captured in our analogue tax rules, and the rules must be realigned with the reality of modern e-commerce. However, to tax a multinational business, you need a multinational set of rules. This is where the OECD comes in, but the uncertain shape that the new rules might take brings more uncertainty for businesses at a time when it is least needed. Many clients cite the changing international tax environment as one of the top threats to potential revenue growth. And although countries now face enormous bills for COVID-19, one sure thing is that BEPS, OECD and tax reform will not go away. International corporate tax reform is happening, and it will impact many businesses and our economy. Companies need to stay on top of these changes and prioritise the issues that will affect them. OECD proposals The OECD proposals offer a two-pillar solution: one pillar to re-allocate taxing rights and ensure that profits are recorded where sales take place, and a second pillar to ensure that a minimum tax rate is paid. At the time of writing, a public consultation is open for stakeholders to share their views with the OECD on the proposals that were recently summarised by way of two “blueprint” documents, one for each pillar. Pillar One seeks to give market jurisdictions increased taxing rights (and, therefore, increased taxable income and revenues). It aims to attribute a portion of the profits of certain multinational groups to the jurisdictions in which their customers are based. It does this by introducing a new formulaic allocation mechanism for profits while ensuring that limited risk distributors take a fair share of profits. Several questions remain as to how the Pillar One proposals, which constitute a significant change from the current rules, will be applied. Pillar Two, on the other hand, seeks to impose a floor for minimum tax rates across the globe. This proposal is very complicated. It is much more than a case of setting a minimum rate of tax. It is made up partially of a system that requires shareholders of companies that pay low or no tax to “tax back” the profits to ensure that they are subject to a minimum rate. At the same time, rules will apply to ensure that payments made to related parties in low-tax-paying or no-tax-paying countries are subject to a withholding tax. Finally, it can alter the application of double tax treaty relief for companies in low-tax-paying or no-tax-paying countries. Agreeing on the application and implementation of this pillar will be incredibly difficult from a global consensus point of view. Several supposed “safety nets” in Pillar Two are also likely to be of limited application. For example, assuming that the minimum tax rate is set at 12.5%, this does not mean that businesses subject to tax in Ireland will escape further tax. Similarly, assuming that the US GILTI (global intangible low-taxed income) rules are grandfathered in the OECD’s proposal, this does not mean that the US GILTI tax applies as a tax-in-kind tax for Pillar Two purposes. Pillar Two poses a significant threat to Ireland, as it reduces the competitiveness of our 12.5% rate to attract FDI and, coupled with the Pillar One profit re-allocations, could reduce our corporate tax take. The OECD estimates that once one or both of the pillars are introduced, companies will pay more tax overall at a global level, but where this tax falls is up for negotiation – and this is why early engagement by all stakeholders is critical. While the new proposals will undoubtedly have an impact, it is not certain that Ireland’s corporation tax receipts will fall off a cliff. Ireland has already gained significantly in terms of investment from the first phase of OECD tax reform, and this has helped to drive a significant increase in corporate tax revenue. But the risks must nevertheless be addressed. There is, of course, the risk that the redistribution of tax under the rules directly under Pillar One and indirectly via Pillar Two will impact our corporate tax take. But even if the rules have no impact on a company’s tax bill, they could still impose a considerable burden from an administrative perspective, and the complexity of the rules cannot be overestimated. At a time when businesses are grappling with other tax changes, led by the EU and domestic policy changes, this would be a substantial additional burden on the business community. The OECD is progressing the rules at unprecedented speed in terms of international tax reform. The momentum behind the process comes from a political desire for a fair tax system that works for modern business. However, does this rapidity risk the international political process marching ahead of the technical tax work? This is where Ireland, both government and corporate, needs to play a vital role. While the consultation period on both pillars is open, the focus for stakeholders should be on consulting with the OECD on the technical elements of its plan. Considering the OECD’s stated objective to have a political consensus by mid-2021, this could be one of the last opportunities for stakeholders to have a say in writing the rules. The interplay between the OECD and the US Treasury cannot be ignored when considering the OECD’s ability to get the proposals over the line. The US Treasury decided to step away from the consultation process with the OECD for a period in mid-2020. This, of course, raised questions around whether the OECD proposals could generate a solution that countries would be willing to implement. Added to this, the OECD has always positioned Pillar One and Pillar Two as an overall package of measures and has stressed that one pillar would not be able to move forward without the other. The “nothing is decided until everything is decided” basis of moving forward is a risky move, but the OECD recently rowed back on this stance. If the OECD fails to reach a political consensus by 2021, we could very well see the EU act ‘en bloc’ to introduce a tax on companies with “digital” activities. This could result in differing rules within, and outside of, the EU. It would also increase global trade tensions, all of which would not be good for our competitiveness. As a small open economy, Ireland will always be susceptible to any barriers to global trade. A multilateral deal brokered by the OECD therefore remains the best option – the last thing we want to see is the EU accelerating its own tax reform or, worse still, countries taking unilateral action. For the Irish Government, providing certainty where possible about the future direction of tax is critical. Where we have a lead is in how we provide that stability and guidance where we can. The upcoming Corporate Tax Roadmap from the Department of Finance will be an opportunity to give assurances in these uncertain times. Next steps for business The public consultation will be critical for businesses to have their say in shaping the rules. Ireland Inc. must continue to engage constructively with the OECD to try to shape the outcome so that we maintain a corporate tax system that is fit for purpose, is at the forefront of global standards, and works for businesses located here. Doing so would ensure that we articulate the position of small open economies like our own. Each impacted business must take the opportunity to comment on the proposals, as this may be the last chance to have a say. Indeed, what comes out of the consultation period may be the architecture of the rules for the future. We know that difficult decisions must be made at home and abroad in terms of the new tax landscape, and made with additional pressures we could not have foreseen 12 months ago. Although it may seem that much is out of our control, Irish businesses must continue to participate actively in the discussions and ensure that their concerns are heard. The game may be in the final quarter, but the ball is in our hands. Susan Kilty is a Partner at PwC Ireland and leads the firm’s tax practice. Point of view: Fergal O'Brien Since the start of the BEPS process in 2013, Irish business has recognised the importance of the work to our business model and the country’s future prosperity. At its core, BEPS has seen a further alignment of business substance and tax structures at a global level. This has resulted in an often under-appreciated surge in business investment, quality job creation and, ultimately, higher tax revenue for the Irish State. With its strong history as a successful location for foreign direct investment, and substance in world-class manufacturing and international services, Ireland was well-placed to benefit from the new global order. The boom in business investment, which last year reached over €3 billion every week, and increase in the corporate tax yield from €4 billion in 2013 to €11 billion in 2019, are evidence of the further embedding of business substance in the Irish economy. The current round of BEPS negotiations will have further significant implications for the Irish economy, and particularly for the rapidly growing digital economy. Ibec is working directly with the OECD to ensure that any further changes to corporation tax recognise the central role of business substance and locations of real value creation. Fergal O’Brien is Director of Policy and Public Affairs at Ibec.  Point of view: Norah Collender The OECD’s proposals to address the challenges of the digitalised economy will have a disproportionate negative impact on small, open exporter economies like Ireland. Earlier consultation papers issued by the OECD on taxing the digitalised economy suggested that smaller economies could benefit from international tax reform emanating from the OECD. However, the OECD now openly admits that bigger countries stand to benefit from its proposals more than smaller countries, and the carrot has turned into the stick in terms of what will happen if smaller countries do not support the OECD. Ireland is acutely aware of the dangers ahead if countries take unilateral action to achieve their vision of international tax reform. But that does not mean that countries like Ireland should be rushed into accepting international tax rules that fundamentally hamstring Irish taxing rights. Genuine consensus must be reached to ensure that international tax reform is sustainable in the long-term. Likewise, the new tax rules must be manageable from the multinational’s perspective and from the perspective of the tax authority tasked with administrating the rules. A rushed outcome to the important work of the OECD will make for tax laws that participating countries, tax authorities, and the all-important taxpayer may not be able to withstand in the long-term. Norah Collender is Professional Tax Leader at Chartered Accountants Ireland. Point of view: Seamus Coffey How Pillar One and Pillar Two of the OECD BEPS Project will ultimately impact Ireland is uncertain. One sure thing, however, is that there will be changes to tax payments. This will be a combination of a change in the location of where taxes are paid and perhaps also an increase in tax payments in some instances. But there will likely be both winners and losers. From an Irish perspective, there might have been some comfort in that the loser could have been the residual claimant – the country at the end of the chain that gets to claim taxing rights on the profits left after other countries have made their claim. As US companies are the largest source of Irish corporation tax revenue, it might have been felt that most of the losses would fall on the US. However, significant amounts of intellectual property have been on-shored here. Ireland, therefore, has become a residual claimant for the taxing rights to some of the profits of these companies. At present, Ireland is not collecting significant taxes from these profits as capital allowances are claimed. If BEPS results in a significant reallocation of these profits, we might never collect much tax on them. Seamus Coffey is a lecturer in the Department of Economics in University College Cork and former Chair of the Irish Fiscal Advisory Council.

Dec 01, 2020

Six Chartered Accountants assess the events of the past year and consider what could lie ahead as the New Year approaches.2020 has changed the trajectory of many lives. Some have seen their careers go in unexpected directions while others have adjusted to the new working world around them. No-one can say that they have escaped unscathed by the events of this year, personally or professionally. Patrick O’Sullivan Greene, Jude Fay, Declan Walsh, Fiona Byrne, Henry Duggan and Jennifer Harrison explain their challenges and triumphs from 2020, the changes to their personal and professional lives during the pandemic, and their predictions for the New Year. Remote working goes mainstream For Patrick O’Sullivan Greene, author and activist shareholder, 2020 has taken him away from the office, colleagues, family and friends, but a changing business world had prepared him for remote working. When COVID-19 announced itself on the world, I had already been a member of the remote working community for a number of years. When I started working in my native Killarney after returning from London, I was able to take advantage of the strong communication network in Kerry, the two direct flights a day to London and a good rail connection to Dublin. As a director of an activist fund that has invested in quoted companies across Europe and being involved in a number of early-stage businesses in Ireland and France, I was still able to conduct business from a distance.  Remote working, of course, has now become more mainstream. This has been facilitated by the rapid growth in shared office providers across the country and the ‘internationalisation’ of rural Ireland. The opening of the Box CoWork space in Killarney, combined with an emerging coffee culture in the town, has given me access to a community of similar-minded people. The enforced lockdowns have brought a major change to my work life; no office, no travel, no coffee. Of course, this is a minor inconvenience next to the impact the pandemic has had on many other people’s lives. But, COVID-19 has not just impacted negatively on my work life. I have not met some close friends and colleagues in nearly ten months, including the parents of one of my godchildren, and I am unlikely to meet them for another six.  However, there have been compensations. I was able to put the final touches to my first book – Crowdfunding the Revolution: The First Dáil Loan and the Battle for Irish Independence, the story of the founding and funding of the well-known start-up called Ireland. Going forward, I expect some structural changes in the post-pandemic world; more remote working, less international travel and a greater appreciation for the environment. Humans are social animals and we will adapt as necessary.  It is important that the Government continues to provide support to SMEs, in particular the retail, pub, restaurant and wider tourism sector. We need to ensure those businesses make it through to the other side. Embrace transformation Jude Fay, a psychotherapist and supervisor in private practice in Co. Kildare, considers the challenges and opportunities faced by the mental health sector this year and outlines the important changes she plans to make in the years ahead. Previously, psychotherapy services, therapist training and CPD were mostly delivered in person. Like other industries, we have had to adapt to providing services online. Psychotherapy can be delivered online, but it is not the same. We lose some of the visual clues, such as body language. However, the transformations are not all bad. There is greater awareness of the importance of mental health. For some, online access makes it easier to engage, both practically and emotionally. Services online do not rely on physical proximity. For practitioners or clients in rural areas, this offers greater choice. But since the pandemic began, I have been very aware of a free-floating grief, and hear others in the profession saying the same. A sense of confidence and certainty has been lost. While, intellectually, we know the future is always uncertain, the pandemic has brought that uncertainty much closer. COVID-19 losses are not just the obvious ones. I believe this pandemic is an opportunity to reflect on what is important, to look at where our lives have become unmanageable and take action to change that. Personally, the biggest impact has been the inconvenience and a restriction of my normal movements. A couple of friends contracted the virus but, thankfully, I have not lost anyone to it. A good friend died in April, and I was unable to attend the funeral. My mother was hospitalised shortly before, and again during, the lockdown, and the family was unable to visit her. Those experiences were very hard.  On a lighter note, I turned 60 this year and had many plans for celebrating, most of which had to be shelved. I should be preparing to travel to South America, but clearly that’s not going to happen! Going forward, I will look for the joy in each day and be mindful of my many blessings. I will connect more with loved ones, let small things go, and appreciate my good health.  Adjust accordingly Declan Walsh, founder of Deferno Solutions, the Chartered Accountants Northwest Society and The Neurology Support Centre, reflects on the drastic changes the charity sector was forced to undertake in 2020 and what all organisations should look forward to in 2021. COVID-19 has, and will continue to, negatively impact the charity sector. Not only has it had an impact on the charities’ ability to fundraise, but the more direct impact has been on the actual provision of services to the end-user. Over the next 12 months, charities will have to think differently about how services can be provided. New service delivery platforms will become the new short-term norm. While not ideal, the move to online service provision is becoming necessary and differing skillsets are needed. At the Neurology Support Centre, we have just launched, in conjunction with Spectrum Life, an online counselling and wellbeing service for users and their families, which provides 24/7 confidential access to a range of services. Strategic planning, both from a business and charity perspective, has been turned upside down over the past year. The five-year plan is now often replaced by a five-month or five-week plan. However, it is critical that board and management teams review their long-term goals and make sure that the short-term goals are equally aligned. The near future will continue to be uniquely challenging as we emerge slowly from COVID-19 restrictions, restart the economy, and deal with Brexit. However, this change to a new norm has, in many cases, provided time to reflect on what may be a person’s main motivator in life. Ultimately, it is all about people, connecting directly, listening, understanding and being more empathic and, perhaps, relegating the necessary, but invisible, forms of instant communication and social media to a more secondary place. Whether as the founder of a charity, or as a financial advisor, the same rules apply. You must not only listen, but also hear what is being said, and adapt accordingly. Find value in community relationships Fiona Byrne, Director of James Byrne & Company, has found that, while this year has presented challenges, it has also strengthened her relationships with her clients, community and colleagues, and given her a better work-life balance. Our industry was transformed overnight – the move to remote working has definitely been the most significant challenge. The majority of our team had previously operated entirely from the office, so there was an immediate need for IT infrastructure to be mobilised to our teams’ homes. This added to the uncertainty and stress at the time. Luckily, we had already begun the process before COVID-19 hit. It is incredible how people across the age spectrum and industries have been able to adapt and demonstrate an agility that, perhaps, we knew we had but never truly tested before.  Despite this, we all miss the social aspects of the traditional office environment, of course. Although technology keeps us in touch, the lack of daily in-person contact has been tough and I am very conscious of the mental health and wellbeing of our team. Assuming this is the new normal, we need to work on how we can continue to build our office culture while taking in these new ways of working. The current circumstances have really demonstrated the value in relationships, and I take great pride in the fact that my company has offered support to both our clients and community.  Looking at my own life, remote working allows for additional flexibility, less time is spent commuting and more time is spent with my family. I have noticed that as our professional and personal worlds have become blurred, people were extremely accepting and understanding. At the end of the day, we all have various family commitments and the fact that everyone went through this together meant that we all learned a little bit more about each other.  2021 looks challenging but, hopefully, the New Year will bring a fresh sense of optimism and new ideas. As we approach Christmas, I am mindful that we will need to be focused on people taking a break – it is clear we all need to refresh.  On the whole, the combination of virtual working and people’s adaptability is a positive development for our industry, and new innovative ideas will emerge that allow us to be fully compliant and work more efficiently. I believe remote working is here to stay and, if used properly, will allow accountants to become more efficient and have a better work-life balance.  Secure a different future Jennifer Harrison, sole practitioner at Jennifer Harrison Chartered Accountants, left the security of a “guaranteed monthly income” to set out on her own in September, leading her to walk down a more fulfilling professional path. The pandemic has probably been one of the biggest life-changing events for me professionally. Like many others, 2020 started full of optimism, working in full-time employment with the opportunity of promotion in sight. This pandemic threw a spanner in the works with cutbacks, increased workload and home-schooling. I was forced to re-evaluate the priorities in my life, allowing me the opportunity to see a different future professionally. I was a firm believer that security was in the form of a guaranteed monthly income, but this year has proven that nothing is guaranteed. Life is full of curveballs and we need to learn to change and adapt as they come.   This change in perspective encouraged me to set up my own practice. It has only been a few months since I opened my doors, but I can already see the benefits along with a steady increase in interest and commitment from new and future clients. Although the pandemic has prevented the face-to-face interaction with clients, it has allowed many clients to experiment with online communication, expanding my customer base. It has also allowed me to work alongside some amazing organisations, offering online support to businesses in Donegal. This is something I really enjoy doing and now, I hope to expand my business to include online training and support as a standard service (but it’s early days).   I have to say, this year has been challenging personally. Restricting movements, fear for the health of my loved ones, reducing my social life and so on, but it has taken me down another, more fulfilling path professionally. This is a big step for me, which is scary and exciting all at once. Utilise the tools you have Henry Duggan, Managing Director of EMEA Financial Services at FTI Consulting, has found that the agile nature of his job was ready-made for remote working, leading to greater collaboration and creativity on his team. COVID-19 has highlighted the need for flexible solutions to meet client demands. My work primarily focuses on sensitive, multi-jurisdictional investigations relating to money laundering, terrorist financing and breaches of international sanctions. My organisation has been extremely proactive in exploring how technology can facilitate such investigations during the current pandemic and been very successful in that respect. My team is leading multiple remote investigations across many jurisdictions, and COVID-19 has emphasised the need to embrace new ways of working and think about more creative tools and solutions. I relocated from the Middle East in March, so I have worked from home since then. FTI Consulting has invested in forensic technology, which has ensured that I (and my team) have been able to continue conducting our investigations work since then. Notwithstanding the inability to socialise and travel, I have found that my ability to respond to client needs has been unaffected due to advances in this firm’s forensic technology. And, while normal face-to-face interaction has been lost during the pandemic, I have found that many colleagues have embraced virtual meetings, and this has led to greater collaboration and creativity. Sure, the casual coffee chats and unexpected catch-ups have been lost, but productivity has increased in my view. Personally, given the agile nature of the work that I conduct, I don’t anticipate any major changes in the coming year. The biggest change that I have experienced so far is in relation to conferences and seminars. Previously, I would travel to other countries to deliver lectures on financial crime and money laundering. However, the increased prevalence of webinars has been refreshing and has reinforced the importance of distance and blended learning. The tools are there if you’re prepared to adapt and use them.

Dec 01, 2020

Julia Rowan answers your management, leadership, and team development questions. Nine months after we started to work from home, I’m beginning to worry that my team is becoming fragmented. How can I stop that happening? Since September, I have noticed a significant change. Up to the end of the summer, lots of people were delighted that they didn’t have to commute or buy expensive lunches. Now, many long to be with their colleagues and have those informal catch-ups that knit teams together. They want to ‘go home’ rather than ‘be at home’. We have mostly defaulted to online options but meeting outside for a ‘walk and talk’ meeting (guidelines permitting) is still possible. Some find that the change in setting and activity can lead to deeper conversation and connection. If online is the only (or primary) option, think about how you can create a connection. Online picnics, coffees, or beers are nice – but think about your scheduled meetings and make space for people to talk about how they are doing. You want real discussion as opposed to ‘false positive’ engagement, which can be stressful. And the leader goes first because being honest about your experience permits the team to be honest about theirs. Don’t get stressed about the things you can’t fix. You can create a connection, and you can listen. Your one-to-one meetings are also important, so make sure that the ‘How are you?’ conversation is always high on the agenda. I was recently put in charge of a team. I love the extra responsibility, but I hate giving feedback. How can I shake this fear? Being in a position where you are leading, making decisions, distributing work, and giving feedback is both exciting and challenging. Remember that your team members have a right to know how they are doing. Their development is important, and your feedback counts. One reason why managers don’t give feedback is that they feel they don’t have permission. So, here is a framework for a conversation that can help you do just that: Context: provide the rationale for giving feedback. For example, “You’ve taken on some challenging projects” or “There is a lot of change happening” or “It’s going to be particularly busy coming up to year-end”. Conversation: outline the conversation you want to have. For example, “For that reason, it will be important for us to stay close; to talk about what’s working well and adding value, and what’s not working well and could be changed”. Consent: clear the path to provide your feedback. For example, “Would that be okay with you?” Your team members want, expect, and have a right to feedback. Reflect on how sharing feedback will be useful for both of you, and find the positives. Intention always wins out! Julia Rowan is Principal Consultant at Performance Matters, a leadership and team development consultancy. To send a question to Julia, email julia@performancematters.ie 

Nov 30, 2020

Torunn Dahl and Glenn Gillard share the secrets to purposeful inclusion, which in these challenging times is more important than ever. Good leadership has never been easy. If it were, we would all be good leaders most of the time and organisations would not need to spend millions each year developing leadership skills. In reality, leadership is always a delicate balance of making the best decisions possible given the information to hand while taking into account the context, the strategic imperatives of the organisation, and the stakeholders involved in or impacted by the decisions being made. Operating in an environment of enormous unpredictability, wrought by a pandemic, makes this challenging task even harder. Never before has that well-worn phrase from financial services advertisements, ‘past performance does not guarantee future success’, been truer. There is no quick guide to leadership for these times. We can choose many possible routes to survive or thrive in the period ahead, as we learn to operate in an environment of ongoing uncertainty and volatility. This article will outline some steps you can take to ensure the route you choose is one of inclusive leadership, to the benefit of all your key stakeholders. A new social contract In the August issue of Accountancy Ireland, our colleagues outlined how people at the start of their accountancy careers seek a broad sense of purpose in the work they do. Similarly, in society, we have seen a significant change in people’s awareness of – and lack of tolerance for – the inequalities that exist in society. There is an opportunity to reset the path we are on as a society, to reduce systemic inequalities and become more purpose-led. Last year, 200 global CEOs, including Punit Renjen of Deloitte, signed a statement of purpose. It confirmed that a corporation’s purpose is to serve all its stakeholders – employees, clients and society. The COVID-19 pandemic and the Black Lives Matter movement have reinforced the message from the general public that business cannot be a neutral bystander. Business should, and can, be at the heart of this new social contract, and business leaders need to embrace this change. This reset to how society operates and meets the expectations of its citizens will require different types of leaders to navigate and drive the changes. In addition to the critical skills associated with good leaders such as strategic thinking, commercial acumen, decisiveness and effective communication, leaders will need to understand how to be genuinely inclusive in a broad sense. They will need to understand how a change to the social contract could impact their talent pipelines, customer relationships and supply chains. How will the decisions they make today impact their ability to retain customers, attract staff, reduce their carbon impact and sustain their business viability into the future? A model of inclusive leadership provides a framework for leaders to think about the thought process and the actions they need to consider to navigate the difficult decisions they now face. In the section below, we outline the six signature traits of an inclusive leader, as identified by Deloitte, and some suggested practical steps a leader can take to operate inclusively. The six signature traits Inclusive leadership is about treating people fairly and leveraging the thinking of diverse groups of people. While leaders must treat their people fairly, a genuinely inclusive leader in a new social contract will seek to ensure that people outside the organisation are also treated fairly. They will do this by providing opportunities for them to join the organisation or sell their goods/services to the organisation on fair terms. The examples below focus on what an inclusive leader can do inside their organisation. 1. Commitment. Highly inclusive leaders are committed to the inclusion agenda because these objectives align with their personal value systems and because they believe in the business case and moral case for inclusion. Practical steps: Put inclusion on the agenda at your meetings and hold people to account on actions agreed. Set targets, and encourage debate and discussion around what the right targets are and how to meet them. Attend diversity and inclusion events within and outside your organisation. Share new knowledge with your teams and outline the actions you will take. Reference an inclusion story or moment as part of every presentation you make. 2. Courage. Highly inclusive leaders speak up and challenge the status quo. They don’t walk past inequality; they challenge it. They are willing to admit to their own vulnerabilities and remain humble about their strengths and weaknesses. Practical steps: Speak up and challenge any inappropriate behaviour you see or hear. Others may feel equally uncomfortable and are likely watching to see whether you condone (through silence) or challenge the behaviour. Apply a diversity lens to everything you do – use a checklist if necessary as a prompt. Think about your next event or meeting. Who is talking? What images are being presented? Which metrics are being used? Do they all support an inclusive environment? 3. Cognisance. Highly inclusive leaders are aware that they, and everyone else, have biases that impact their judgement. They seek to ensure that processes are put in place to manage and overcome these blind spots and to create fairer opportunities for all. Practical steps: Seek to identify your own biases. Take the Harvard Implicit Association Test or pay attention to who you naturally gravitate towards and with whom you feel less comfortable. Pay attention to your inner voice and initial judgements and ask yourself whether biases are coming into play. We all have them! Use structured processes and criteria when making decisions that relate to people (hiring, promotions or performance, for example) to ensure objective criteria are used rather than generalised impressions. 4. Curiosity. Highly inclusive leaders keep an open mind and have a desire to learn more about others. They want to understand how they view and experience the world. They also demonstrate tolerance for ambiguity and change. Practical steps: Seek out someone on your team you don’t know well or who has a different background to yours. Put in time for coffee to connect and learn more about them. They could be the perfect person for your next project or have valuable perspectives on a problem you’re grappling with. Invite different people to present to your team or organisation to broaden everyone’s perspective. Remember to suspend judgement when listening to other perspectives; seek to listen actively and understand. Acknowledge what they are saying and respect their viewpoint. 5. Cultural intelligence. Highly inclusive leaders are confident and effective in cross-cultural interactions. They may feel uncomfortable in the situation but are willing to move out of their comfort zone and focus on learning, seeking to build their cultural intelligence. Practical steps: Start by focusing on a culture or area that interests you. Search for articles and podcasts that will broaden your understanding and seek out people who can answer your questions and build on what you have learnt. Encourage people within your teams and organisation to build out their cultural intelligence, supporting mobility opportunities where relevant. 6. Collaboration. Highly inclusive leaders empower individuals to deliver their best, in addition to working across diverse groups of people to drive better solutions built from a diversity of thought. Practical steps: Let others speak first. Ensure that you have heard from everyone in the group, actively encouraging people to contribute if they haven’t already done so. Find common ground and articulate a shared purpose and objective for the group that everyone can rally around. Create physical and/or virtual opportunities for interactions that encourage sharing and collaboration. Purposeful inclusion in a pandemic The COVID-19 pandemic presents both challenges and opportunities in building an inclusive culture and following-up on commitments our businesses have made to be more inclusive. The last few months have stretched everyone and how we act as leaders, now and in the months ahead, will influence how well our organisations, our people, and we personally come through this pandemic. It may be tempting to take a short-term view and focus solely on profits and cash flow to the detriment of suppliers, employees and the local community. But those who take a longer and more inclusive view are likely to reap the rewards, as will their communities. As organisations transition to being more purpose-led than solely profit-focused, their ability to navigate the current environment inclusively to the benefit of society more broadly will be a real test of their authentic commitment to this cause. Using the traits above, we will now explore some of these challenges and opportunities. Commitment: In the short-term, it is easy to step away from the commitments we have made. Many organisations have implemented, or are looking at, measures such as reducing headcount, suspending bonuses and promotions, and deferring hiring decisions. It is important to consider these decisions in the context of inclusion and look at how these measures are implemented and affect the future shape of the organisation. During the last recession, we saw a significant reversal of some of our key diversity measures, as women stepped away from the workforce to work in the home and as many employers reverted to traditional talent pools for staff. Cognisance: Biases can quickly step back into our thinking when faced with tough decisions or working under pressure. In the working from home environment, anecdotal research already indicates biases towards female participation. As women are traditionally viewed as the primary home-maker the risk of ‘killing with kindness’ escalates as individuals make assumptions as to whether someone can handle the workload or should be given specific work because of their family situation. While having progressive policies to support people during the pandemic has been important, this must be monitored so that it does not feed through to future decisions around performance, promotion and recognition. We must recognise, and seek to work through, these potential biases. Collaboration: During this pandemic, many organisations have reported increased engagement from staff and a greater sense of belonging. However, as the lockdown measures persist and remote working is more prolonged, maintaining a sense of ‘team’ and keeping people connected becomes a more significant challenge. Through organisation-wide collaboration, new models and methods for engagement, networking and social interaction can be developed. Indeed, there is a real opportunity to break away from our default methods of corporate social interaction in Ireland, which focus heavily on the dinner and pub scene and favour those willing (and able) to socialise after hours. Capturing new ways of interacting and building them into a new, more inclusive culture is an opportunity to redefine the workplace for many that traditionally felt excluded. Courage: Undoubtedly, the forced working from home arrangement arising from the pandemic presents a real opportunity to rethink how we look at biases around presenteeism, flexible working, and the office culture, and to re-imagine fundamentals like the daily commute and international travel. While these benefits seem obvious at this point, it will require courage to stay the course and implement the necessary changes so that these benefits can be retained as we move out of the pandemic. For example, if we are to move to more hybrid models with a greater level of remote working mixed with in-office teams, maintaining the inclusiveness of a meeting for those in-office and those at home will need to be supported by real leadership. The fear that we fall back into the old ways, where if you are not in the room you are not really participating, is already being expressed by many as they assess whether they could continue to work remotely into the future. Redefined leadership The relationship between community, employees and businesses has changed, and as leaders, we will be held accountable by our people. Truly inclusive leaders will thrive in this environment and make an impact not just within their own business, but across the community. The pandemic has challenged the way we look at the world and our role within it. We now need to seize the opportunities presented, and avoid the pitfalls, to create more inclusive organisations.  Torunn Dahl is Head of Talent, Learning and Inclusion at Deloitte. Glenn Gillard is a Partner at Deloitte and member of Council at Chartered Accountants Ireland.

Nov 30, 2020

Rachel Hussey explains how well-defined and inclusive work allocation practices can boost your colleagues’ career potential. One of the most common and unconscious ways in which old hierarchies are preserved in professional services firms is through the allocation of work, often at the early stage of careers. A well-defined work allocation process ensures a balanced portfolio of experience for future progression. But suppose a person is consistently allocated more challenging projects involving novel issues or premium clients. In that case, their career path is likely to take quite a different course to that of a person assigned more routine tasks, which can result in tremendous and unintended damage to the career paths of individuals. Research conducted by McKinsey in the UK in 2012 across professional services firms found that a man was three times more likely to be made a partner in an accountancy firm than a woman and ten times more likely in a law firm. McKinsey made several recommendations to address the imbalance, one of which was that women have equal access to the right career development opportunities through a systematic work allocation process based on objective criteria, such as competencies or experience. Work allocation goes to the very heart of the operation of a professional services firm. Changes to work allocation practices are hard to implement, but can have a considerable impact on the progression of female talent. McKinsey conducted follow-up research in 2015 and found that work allocation was an ongoing challenge. 70% of women in both law and accounting firms said that their firm’s work allocation process was unfair, and 86% of law firms had no formal work allocation process in place. In the absence of a systematic process, work allocation is a subtle concept that can be difficult to do in a way that promotes diversity and creates a level playing field for men and women. In deciding to whom work should be allocated, partners can make assumptions about women’s desire or capacity to do certain kinds of work or transactions. The result can be to ‘kill women with kindness’ by allocating the more challenging work to men on the team so as not to put too much pressure on a woman. A woman can ultimately end up with less experience, weaker client relationships, and lower revenue – all of which are career-limiting in a professional services firm. This phenomenon is also referred to as unconscious benevolence. Research conducted by the 30% Club in Ireland across 14 of the top Irish professional services firms in December 2019 contained some fascinating findings. For example, 21% of equity partners in accountancy firms are women, and that figure is 40% at the non-equity partner level. The research found that only four of the 14 firms that participated in the research had a formal work allocation process in place. On foot of that research, the 30% Club recommends that where firms have not adopted work allocation policies, they should pilot the introduction of such policies. They should also review work allocation practices to ensure that equal opportunities to gain expertise and experience are available to all. Finally, it urges firms to ensure that family-related absence does not impact work allocation and recognise leaders who successfully manage work allocation on their teams. Across professional services firms internationally, work allocation processes are becoming more formal and technology-enabled. Many resource management consultancies provide services and systems to firms to assist in this critical aspect of a firm’s work. Formal processes can have a significant impact on the development of female talent in firms and should, therefore, be considered as part of a firm’s diversity strategy.     Rachel Hussey is Chair of 30% Club Ireland and a Partner at Arthur Cox.

Nov 30, 2020

A lot of work today simply can’t be done well without high-touch collaboration – a challenge when many people are working from home. New tools are helping, though, write Ryan Kaiser, David Schatsky and Robin Jones. The pandemic, with an impact lasting far longer than initially expected, is forcing organisations to rethink how their teams can collaborate from a distance. Some widely used digital tools make certain forms of collaboration – such as sharing and editing documents – easy. But other, critically important types of collaboration remain challenging when colleagues are not sharing physical space, or even time zones. Organisations can experiment with a newer breed of tools, some still experimental, that aim to support remote, high-touch collaboration. In view but out of sync “Did he hear what I just said?” “Was that a smirk?” “She’s looking down – is she texting?” It’s safe to assume that these questions cross the minds of many workers during days of endless video calls. The concentration required to process these virtual interactions can be taxing, leaving workers exhausted. But with so many professionals working from home due to the pandemic, it’s imperative that organisations find effective ways for remote workers to collaborate. New technologies are answering this call: from immersive environments to virtualised offices that facilitate casual interactions, organisations may soon have many more options for helping their teams collaborate effectively at a distance. Collaboration is key, but challenged by remote work Most organisations accept that effective collaboration is essential for high performance. Apple leaders considered collaboration to be so important that they designed its headquarters building to promote creativity and collaboration. Even workers’ perceptions that they are working collectively, according to a 2014 study, can enhance their performance. Thus, collaboration activities are pervasive in the modern office. Indeed, some researchers believe “collaboration is taking over the workplace”, with time spent by managers and employees in collaborative activities increasing by 50% or more in recent years. It’s no surprise that collaboration is among the soft skills that employers seek most. But with the pandemic forcing millions of people to work from home, collaboration has become more challenging. Remote working obscures body language and distorts verbal cues that can be crucial to understanding intent. Formal, scheduled video calls – or more frequent instant messages or texts – are no substitute for quick, spontaneous exchanges of information. Professionals working in sales, customer service, management, design, and other roles in which impromptu and collaborative interactions are integral to the job may be particularly challenged. Some workers feel isolated. Managers are struggling to onboard, integrate, and teach office norms to new staffers, and building and sustaining an organisation’s culture has rarely been more difficult. Even when the crisis is behind us, the need for better remote collaboration will persist. High-touch collaboration still works best in person Of course, many, even most collaborative activities don’t require face-to-face interaction. A wide range of digital communication and project management tools support sharing files, editing documents, and communicating project status. But other valuable collaborative activities – scrum meetings for coordinating software development, brainstorming sessions to generate product ideas, hallway conversations to quickly exchange useful information – have tended to rely on face-to-face interactions. We call such activities high-touch collaboration. High-touch collaboration activities are typically synchronous, spontaneous, or sensory. Synchronous means two or more people are present in the moment when the activity is conducted, allowing for a free-flowing exchange of information. Spontaneous means unscheduled, low-overhead interactions that may occur outside the confines of a formally scheduled meeting. Some of the best ideas, and even businesses, started as impromptu thoughts or interactions between colleagues. Sensory refers to the non-verbal communication or body language we unconsciously decipher when interacting with others. Arm positions, posture, and tone of voice can influence how or when others choose to engage with or respond to us. Leaders can use this simple three-S model to identify the high-touch collaboration activities in their organisation that remote working arrangements may impair. Below are some common examples. They are important in our work and the work of many of our clients – and they can be difficult to perform when collaborators are just faces on a screen. Structured, interactive sessions. Some types of workshops or labs, employing techniques such as design thinking, aim to solve complex problems or help a group achieve consensus on a designated topic. In addition to typically needing a skilled facilitator, participants often need to read the room to assess group understanding, alignment, and engagement. Example: a lab may be used to forge consensus about the vision of a new firm-wide initiative. Ideation and co-creation. Many workers need to brainstorm and exchange information spontaneously, typically in a shared space with a visual aid such as whiteboards or sticky notes. Example: co-creation may be useful for brainstorming new product features to include in future releases. Spontaneous information exchanges. Employees may need to exchange information directly outside a formally scheduled meeting – perhaps as quickly and casually as poking one’s head in an office to ask a brief question. Example: spontaneously exchanging information with colleagues can be helpful when finalising an important client presentation. Informal connections. Conversations that typically take place in the elevator, office kitchen, or other common areas can foster a sense of connection and community; walking the halls can help cultivate relationships with clients and co-workers. Informal connections tend to rely on interpreting sensory and contextual information. Example: managers may informally check in with teams during a stressful time period to gauge well-being and engagement. To bolster collaboration among remote workers, we need tools that provide better support for these kinds of activities. Collaboration tools are proliferating A new crop of digital collaboration tools has emerged in response to the needs of companies with remote workforces. Vendors launched or enhanced at least 100 digital remote collaboration products in the first eight months of 2020, compared to the 24 product introductions we tallied in the fourth quarter of 2019. Established collaboration vendors are rapidly rolling out new features in response to user requests, and some have released free versions of products in an effort to gain market share. Some of this activity involves familiar categories of collaboration tools such as video-conferencing. Other types of tools – such as digital whiteboards, virtual offices, and immersive environments – may be less familiar, but they can provide crucial support to synchronous, spontaneous, and sensory collaboration activities. We scanned the offerings of hundreds of vendors and spoke with more than a dozen of them to learn more about their capabilities. Video-conferencing. When the COVID-19 pandemic forced millions of workers to work from home, many companies responded by substantially increasing their use of video-conferencing Google, Microsoft, and Zoom have all reported a surge in usage of their platforms. Allowing colleagues, clients, and partners to see each other over video can mitigate the feeling of isolation that some remote workers feel and can build and maintain the rapport crucial for collaborative efforts. Recent innovations in this category include the use of artificial intelligence to frame a caller’s face, background obfuscation to prevent distractions, and the use of avatars. But video-conferencing has its drawbacks. Not all work interactions occur in the confines of a formal meeting. Any given video-conference likely includes at least one participant battling audio and video quality issues, including lags that can jumble non-verbal cues and distracting background noise – especially for people sharing space with partners and children. Workers also report feeling exhausted at the end of a day filled with numerous video calls due to the mental focus required to concentrate on a grid of colleagues. Ideation and whiteboarding. Because it supports problem-solving, design, and strategic planning, ideation can be a critically important collaboration activity. A classic setting features a blank whiteboard, markers, and a team with ideas to share. Vendors such as Microsoft, Miro, and Mural offer digital tools that aim to provide the benefits of in-person ideation in a remote environment. Such tools typically feature an interactive workspace designed for visually oriented ideation and problem-solving. They are best suited for co-creation and ideation activities but can also be used to facilitate labs and similar sessions. A variety of features help spur thinking. For example, users may have access to templates or frameworks tailored to a variety of meeting types such as a scrum call or a design thinking session, time-keeping features to keep a group focused, virtual sticky notes to jot down ideas, and polling to streamline the decision-making process. These tools share little contextual information about users, however, making it hard for facilitators to read a room and determine how to best engage participants. Legibility can sometimes be difficult, and employees may need to consider a touchscreen, stylus, or other peripheral to maximise their capabilities. Virtual offices. Other types of tools attempt to replicate office spaces on your computer screen. Virtual offices are intended to run continuously in the background, showing in real-time what your colleagues are doing through the medium of digital aerial views of office floor plans, avatars, or even 3D worlds. And they aim to emulate the natural, rapid types of interactions that frequently take place in a physical workplace like tapping someone’s shoulder to ask a question. These platforms display context about colleagues – are they meeting with a client right now, or are they listening to music? – and they provide multiple pathways by which co-workers can informally connect. Sample virtual office vendors include Pragli, Sococo, Virbela, and Wurkr. Virtual offices typically allow significant customisation (avatars, floor layout, branding, etc.) and integrate with a growing list of social and collaboration applications one might use throughout the workday, such as Microsoft Teams, Slack, and Spotify. These vendors also enable informal interactions through emotive digital gestures such as high-fives or dance movements, allow users to tap each other to instantly join a virtual meeting room, and offer the ability to lock spaces for more private conversations. Many also allow screen-sharing and the uploading of files. Some virtual offices currently lack the ability to integrate with common office software such as Google or Microsoft and may lack common ideation mediums such as whiteboards. Some tools use much of a laptop’s processing power when rendering a 3D office, potentially affecting other applications. Immersive environments. This is an emerging category of tools that aim to enable workers to connect, share experiences, and participate in simulated real-life scenarios using augmented or virtual reality (AR/VR) technologies. Some studies have shown that VR is a promising medium for remote collaborative work. Users experience a 3D shared environment where they can see representations of themselves and colleagues and conduct meetings. Immersive environments are best suited for interactive sessions and co-creation/ideation. The virtual environments provided by tools such as Arthur, HoloMeeting, and Spatial can range from basic rooms to non-cubical architecturally complex spaces that expand creative possibilities. Some vendors make it possible for users to take a selfie and upload and wrap the image around an avatar for a personalised, life-like presence. Combined with spatial audio and visible mouth or hand movements, these technologies can give one the impression of being in the same space as a colleague. Interacting with the environment and accessing menus using one’s hands or controllers is highly intuitive. Typical features include 2D or 3D whiteboarding options, 3D process flows, and the ability to access content from the web, including images and 3D models. While some platforms are accessible by smartphones and laptops, the full experience is typically only available with the use of an AR/VR headset – a factor that may limit adoption in the near term. Early-stage tools may suffer from distracting latency – or lags in refreshing the display – or lack integration with other applications, which limits the type of work one can do, such as co-edit a PowerPoint slide, and most have smaller capacities (usually under 20 participants) when compared to virtual offices. What to watch The descriptions above are a snapshot of a rapidly moving market. Progress in the underlying technology of AR/VR, and increasingly affordable hardware, will likely boost the appeal of immersive environments over the next couple of years, for instance. Other developments in the domain of remote collaboration are worth watching. New features. With so many workers affected by the pandemic, collaboration vendors are quickly responding to user needs and rolling out new features. For instance, Microsoft recently deployed ‘Together mode’, using AI to place meeting participants side-by-side as if they were sitting in a virtual auditorium. Other advances include attention tracking, which alerts a host if an attendee goes more than a few seconds without having an application open; intelligent capture, which can make a person’s video image transparent so users can see content being written or drawn on a whiteboard as it happens; and real-time translation. Organisations should take note of this rapid pace and consider product road maps when evaluating tools. New mediums and uses. Remote collaboration tools are evolving, and organisations are likely to experiment with them in various ways. Some executives have used popular video games such as Animal Crossing, Grand Theft Auto, and Minecraft to conduct meetings, for instance. While some may not be inclined to use video games for collaboration or are unfamiliar with the format, others feel they help people think differently and bond with colleagues. The education sector may be another testing ground as teachers, students, and parents around the globe are now being forced to learn how to use virtual collaboration tools. Other formats are likely to emerge. New insights. Collaborating via software enables novel analytical applications not possible with conventional in-person conversations. For example, Gong uses speech recognition and natural language understanding technology to transcribe, annotate, and analyse data from sales calls to coach salespeople toward better performance. YVA.ai uses artificial intelligence to predict burnout and enhance employee engagement. Talent leaders may want to consider how data within these tools can help inform their talent strategies or improve employee performance. New shortcomings. Improved tools may eventually solve the video-conference fatigue problem, but it’s possible that emerging remote collaboration technologies may give rise to other unpleasant technology-induced side effects such as the dizziness or nausea that can accompany immersive environments. When choosing a collaboration tool, organisations should take these into account and design mitigation strategies such as time limits where applicable. New risks. As workers migrated to home networks and personal devices after the onset of the pandemic, firms faced an increase in hacking attempts, and many are enhancing their cybersecurity posture accordingly. The amount and type of information generated by remote collaboration tools could be especially sensitive, and companies should strive to ensure that such data is secure while meeting workers’ reasonable expectations of privacy. Preparing for a (somewhat more) remote future Many workers will not return to the office or may work from a company office only part of the time. According to a June 2020 Fortune/Deloitte CEO survey, CEOs expect 36% of their employees on average to still be working remotely by January 2022, three times as many as before the pandemic. One forecast suggests that through 2024, around 30% of all employees currently working remotely will permanently work at home. Many organisations are likely to need effective remote collaboration tools and approaches. Managers, particularly those in industries where remote working is already familiar, such as technology, financial services, and business and professional services, should begin exploring the use of remote high-touch collaboration tools, especially for collaborative activities that are synchronous, spontaneous, or sensory. As workers’ exposure to, and comfort with, these tools varies, organisations should consider implementing effective training and adoption strategies as well as policies guiding effective use. It may be helpful to think of remote collaboration as more than just a way of coping with the pandemic. To be sure, the pandemic triggered a surge of interest in remote collaboration and a burst of activity in the market for remote collaboration tools. But even after the crisis subsides, the need to support high-touch collaboration for remote workers will likely remain. This trend may carry the seeds of new opportunities. It may bring greater flexibility to talent models, offer workers new opportunities to balance professional and personal needs, help reduce the carbon footprint of work, and enable entirely new business models and industries. The development of remote collaboration could eventually change how we work in surprising and beneficial ways. Ryan Kaiser is a senior manager in Deloitte’s US Innovation group, where his efforts focus on digital transformation, strategy, and product/solution incubation. David Schatsky, Managing Director of Deloitte US, analyses emerging technology and business trends for Deloitte’s leaders and clients. Robin Jones is a Principal in Deloitte’s Workforce Transformation division, with 22 years of organisation and workforce transformation consulting experience.

Nov 30, 2020

As the global accountancy profession began adapting to the COVID-19 pandemic and its consequences, the International Federation of Accountants convened a series of round-table discussions to understand the implications of the pandemic for professional accountants and leaders. Kevin Dancey and Alta Prinsloo outline the findings. Crises inevitably demand that difficult decisions be made. Yet, the preferred conditions for making such decisions – time to deliberate or a clear sense of focus, for example – are in short supply. Countless small business owners, CEOs, government leaders and more confronted this reality in 2020. For many of them, professional accountants were there as trusted advisors when there was no semblance of certainty. Like every profession, accountancy will emerge from COVID-19 changed. We will be accustomed to digital processes we once thought impossible. Our change management abilities will be sharper than ever. How we anticipate the future will be informed by an experience many of us never imagined would happen. Right now, the profession has the opportunity to transform for the benefit of business, government, and society. It is also a critical moment to nurture existing talent and attract new talent. We must achieve this progress collectively, with clear and measurable goals. Through it all, the pandemic highlighted the importance of future-proofed skills that can anticipate challenges and opportunities, and are agile in a new world where professional accountants are established as strategic leaders. A shock to the system In the Netherlands, virtual work has been commonplace for more than a decade. When COVID-19 forced lockdowns, professional accountants were ready. In other regions, the transformations were not as simple. In South Africa, workers embraced change very quickly, but the more remote areas of the country found it difficult to find immediate solutions. In China, meanwhile, the shift to remote work was rapid. In the US and many other countries, new systems took root overnight, but with them came new-found concerns about security and the availability of technology. 94% of the global workforce live in areas where workplaces closed in 2020 due to lockdowns, according to the International Labour Organisation. These challenges impacted governments, businesses, and employees. In our new hybridised workplaces, preserving the tenets of trust and integrity while also embracing opportunities that virtual environments introduce is key. For example, when firms are not bound to a physical office, hiring more diverse talent from different geographies is possible. Educators and students were also disrupted and had to manage through a wide range of trials. On the one hand, universities and professors moved faster than ever to online instruction and, in some jurisdictions, had to overcome legal limitations in administering examinations online. On the other, students had not only to navigate internet bandwidth challenges, but also the mental health toll, personal economic hardships, and more, which the pandemic inflicted. One silver lining of remote learning is that classes not bound to a physical classroom can capitalise on the connective power of technology. In academia, as in the workforce, it has become clear that much of the accountancy profession’s infrastructure needed to transform – not just for the immediate future, but also the long-term. While the core skills of the professional accountant have not drastically changed due to COVID-19, the profession is changing. This crisis cast a spotlight on anticipation and agility, making it clear that the profession must take the opportunity now to rethink our curricula, our business models, and how professional accountants maintain their competency and relevancy so that they are ready for anything. Evolving technology, regulations and standards In early 2020, digital transformation was either in progress or identified as a strategic growth driver across businesses, accounting firms, governments, and beyond. Through the crisis, however, technology and data have been imperative not only to stay operational, but also to inform new and evolving strategies and ways of working. In a Deloitte survey, more than one-third of financial services industry firms in the US said technology upgrades were the top priority emerging from COVID-19. Meanwhile, more than half cited digitising client interactions as the first imperative. Across all industries, according to PwC, more than 60% of global CEOs acknowledge that they need a more digital business model for the future and that working outside of an office is here to stay. The way businesses everywhere operate is altered forever, and that reality has shifted how professional accountants engage with stakeholders. Professional accountants are the custodians of information that drives long-term strategy and, as businesses transform to stay relevant, professional accountants must be at the centre of that transformation. With change comes uncertainty, both for professional accountants and our stakeholders – especially the public. In this moment, the profession must align around clear goals for our members so we can collectively meet the changing demand around us. This is critical as we aim to leverage technology in new ways, and as we continue to champion trust and transparency in businesses and governments worldwide. As a profession, we cannot passively accept change; we must seize the opportunities change creates while also anticipating and mitigating risks. We have the guiding principles to do this and international standards for financial reporting, audit and assurance, ethics, public sector, and, hopefully soon, sustainability, will continue to help the profession evolve. Even regulators are being challenged to adapt to how accountancy work has changed, especially in light of 2020. In round-table sessions, we discussed how accounting firms should consider advocating for a way forward by partnering with regulators on the latest approach to financial reporting and auditing in a digital-first world. This will also serve us well as we align ourselves with a shared vision of the role sustainability reporting, focused on environmental, social, and governance (ESG)-related matters, will play in the future of the accountancy profession and our stakeholders. Accountancy is directly tied to prosperity, and a more holistic view of how people and planet fit into our profession is imperative. According to many stakeholders, sustainability is now an indisputable necessity. A long-term strategy rooted in sustainability helps guarantee any organisation’s place in the future. Indeed, two-thirds of global respondents in a recent BCG study on how the pandemic heightened awareness of environmental challenges agreed that economic recovery plans should prioritise environmental concerns. To that end, we must evolve our mindsets and reporting, and perhaps most importantly, our curricula for future talent. In particular, the students we spoke with were passionate about a much larger focus on ESG in the accountancy profession. As one student from Hong Kong said, “We are not prepared to handle ESG because there are no strict standards to hold us accountable”. For the future of the profession, transparency and accountability concerning ESG and long-term sustainability must be ingrained in high-quality reporting and assurance practices globally. IFAC is committed to advocating for new sustainability standards that would offer a reliable and assurable framework relevant to enterprise value creation, sustainable development, and evolving expectations. This is an opportunity for accountancy to evolve and to offer the next generation of professional accountants, many of whom identify as global citizens and environmental advocates, a strong foundation to make a difference. The important marriage of technical and professional skills Change management and sharp communications: From every region, discipline, and position, one skill was referred to more often than any other in every round-table we convened in the past three months: change management. We were in a rapid state of evolution before COVID-19. At the start of 2020, McKinsey & Co. noted that nine in ten business managers said skills gaps existed in their organisations or soon would. That reality has only become more evident. Accountancy is not a profession operating in a static world, and the skills learned have to reflect an equal measure of agility. There is a clear need for well-rounded skillsets that combine technical skills and professional skills that are rooted in relationship-building and communication. Doing so means placing more emphasis on stronger, trust-based relationships with key partners. This requires a focus on interdisciplinary skills when engaging with colleagues and in our strategic discussions with clients. Stronger communication skills will help professional accountants manage risks and garner buy-in for solutions. Scenario planning and storytelling: Professional accountants are dynamic thinkers with an aptitude for proactive planning. We are trusted partners in times of change and uncertainty, and we must be prepared for that demand to continue. We have to maintain the momentum 2020 created and the renewed trust imparted on our profession. Many round-table discussions spent significant time on the importance of accountants continuing to build in the areas of professional skills and focusing on new techniques for analysing and interpreting data in differing circumstances, and aptitudes for strategising on increasing priorities such as ESG. Our stakeholders agreed that the profession must become better storytellers, able to effectively show how all the pieces fit together and how the finance function bolsters resiliency and growth. The basics of this can be taught in classrooms, but this skill will largely be shaped on the job. Upskilling: How we compete in the learning and development space – with dynamic curricula, more agile credentialing and continuous learning models that are suited to a hybrid world – will be a differentiator moving forward. “Professions that invest [in education] now are going to come out of this with a competitive advantage,” said one academic leader. We have to show aspiring accountants and those who might be upskilling during their career that the profession is anticipating, adapting with agility, and remaining a step ahead. Affirming the need for agile, future-proofed skills, one professional accountancy organisation CEO said, “I’ve worked through three pretty major crises in my career, and the common theme through all of them is that you must use it as an opportunity for change. A crisis gives you license to adapt”. Defining the accountant of the future Professional accountants are, and will continue to be, strategic partners in any setting, be it in the private or public sector. The pandemic tested our capacity as business drivers, and we rose to the occasion. This is a pivotal moment for the accountancy profession, one where we will change old paradigms and embrace new skills for the digital and rapidly evolving world in which we live. How we act in this moment will define the future of the profession, and the opportunity for positive change is immense. Right now, societies and economies around the world are trying to find a way to move forward from a crisis-laden year. Professional accountants are the highly strategic and collaborative problem solvers who will help businesses and governments, large and small, move forward. In the round-tables IFAC conducted in recent months, CEOs, auditors, academics, students and more from around the world shared a clear vision: we, as a profession, must accelerate new ways of working, embrace technology, align our work to new and evolving societal demands and, above all, ensure we are investing in the right balance of skills that will fortify the profession for whatever the future holds.   Kevin Dancey is Chief Executive at IFAC, and Alta Prinsloo is Chief Executive at the  Pan African Federation of Accountants and former Executive Director at IFAC. The research process The International Federation of Accountants (IFAC) spent the past three months engaging with dozens of people associated with the accountancy profession across more than 20 countries with a range of perspectives. They included chief executives of professional accountancy organisations, chief executives in business, chief financial officers, audit committee members, auditors general, accounting firm leaders, academics and students.  By convening these various stakeholders, IFAC set out to understand the implications of the pandemic for professional accountants and leaders, and how their experiences will affect the future of accountancy and, more specifically, accountancy skills. The global COVID-19 pandemic has accelerated change and forced us to reconsider the role of professional accountants. We heard from our stakeholders about the transformation of organisations, the agility of business, and the resilience of professional accountants managing through unanticipated change.

Nov 30, 2020

The changing of the US political guard has been broadly welcomed internationally, and by Irish commentators in particular. However, a Biden presidency may not have an immediate impact on Irish companies, writes Barry Flanagan. Fans of Malcolm Gladwell’s Revisionist History podcast will know the answer to this one immediately: who is the only NBA player to score 100 points in a single game? LeBron James may have just won his fourth NBA Championship, but his career high is 61. Michael Jordan, widely regarded as the greatest of all time, once hit 69. The extraordinary Kobe Bryant sits second on the all-time list with 81 – 19 short of that magic 100. I’m not sure how many NBA fanatics read Accountancy Ireland, so it’s probably best if I share the answer now – it’s Wilt Chamberlain, who achieved the feat back in 1962. What is extraordinary about Chamberlain’s record is not just the number but, as Gladwell explains, how it was achieved. Chamberlain, a notoriously poor free-shot taker with a mid-40% success rate, had that season resolved to abandon the standard overhand free-shot technique used by all professional players. Instead, he used the underhanded or ‘granny shot’ method. It worked. Chamberlain’s 28 from 32 that night (87.5% success rate) doubled his average and endures as the NBA record – which is what made Chamberlain’s next move so surprising. Despite the new technique bringing him that historic record, the next season, Chamberlain went back to the old, inconsistent and trajectorially challenged overhand shot. Even though he knew it would cost him points and his team matches, he couldn’t stomach being seen as a “sissy”. The overhand technique was revived, and predictably his percentage dropped – perception over payoff. Donald Trump used that same overhand technique that when throwing out paper towels to a bewildered Puerto Rican press corps in the aftermath of Hurricane Maria, which devastated the island. Just like Chamberlain, Trump was far more concerned about looking good than making a difference. In fact, handing out paper towels in the aftermath of a hurricane could be emblematic for Trump’s entire presidency: ineffective and often damaging policies, enacted without any real concern for consequences but with a very real emphasis on how he was perceived while implementing them. Protectionism is probably the best example from a trade perspective. Protectionism and the pandemic There is little doubt that Trump’s protectionism cost America economically, but the policy was never about winning. Imposing tariffs and bringing the US to the brink of a trade war with China over the last two years was always more about how it would be perceived by his supporter base than the economic benefit. ‘America First’ was the slogan that propelled him to The White House in 2016, convincing Rust-Belters that he could protect and regenerate industrial jobs. It also demolished the ‘Blue Wall’ and delivered Michigan, Wisconsin and Pennsylvania in the process. Trump’s failure to fulfil those promises over the past four years is the reason those states flipped back. Whether that was because Trump’s tariffs rendered Chinese steel too expensive for rust-belt industries (Trump imposed tariffs on roughly three-quarters of everything China sells to the US) or because the COVID-19 pandemic swept away the economic gains of the last three years is moot. The interaction of those two factors – protectionism and the pandemic – will shape American economic policy for the next two years at least. Those expecting a Biden administration to implement any quick reversals to US foreign trade policy will be disappointed. Several agents are impacting, with none at present favouring a dramatic swing. Economic priorities For starters, students of Bidenomics will know that, like the candidate himself, pragmatism and prudence are valued over radical change. Biden has been an elected official for 47 years and like most career politicians, his innate inertia would counter any reactionary instincts. His tax plan seeks to raise taxes only on the top 2% who earn more than $400,000 per annum. Second, and perhaps more pertinently, both his own and the Democratic party’s views on protectionism are far closer to Trump’s than outside observers may realise. Don’t be fooled by the toxicity of US political ‘debate’. Republicans mock the Democrats as being ‘globalist socialists’, but the Democratic party is well aware which side its bread is buttered on. The Pew Research Centre revealed last year the depth of the consensus across the American political divide on this very topic. ‘Protecting the jobs of American workers’ was ranked as the second-highest bi-partisan priority out of the 30 options presented (only ‘preventing terrorist attacks’ is rated higher by the political establishment). Republicans and Democrats alike are keenly aware that their electability depends on both the perception and reality of protecting jobs. Third, notwithstanding that he may not wish to change much in this regard, the likelihood of a Republican-controlled Senate may stymie any change Biden does want to make (we will know more after the Georgia run-offs in January). While it is true that presidential executive orders can be used to effect change unilaterally, any such orders will likely focus on the more polarising issues facing the US Executive such as the perennial battleground of healthcare, Biden’s own cause célèbre of renewable energy and, most immediately, the domestic stimulus package that has eluded agreement so far. Lastly, as Biden and the impressive and progressive Vice President, Kamala Harris, clearly signalled in their victory speeches, getting the pandemic under control will be the first and only priority for the new administration. The administration’s focus will initially be internal, and Biden has pledged to avoid any new trade agreements “until we’ve made major investments here at home, in our workers and our communities.” All of this provides Irish companies with little reason for optimism, but there will be opportunities in the Biden era. The renewable energy, infrastructure regeneration, and healthcare industries will undoubtedly benefit from this regime change, and further trade deals will eventually follow. While Biden is by no means a globalist, the rest of the world can at least look forward to the Trumpian trend towards isolationism being halted with some moderate reversals deliberately deployed early. Biden has repeatedly stated his intention to re-join the Paris Accord on his first day in office. He has also indicated his intention to re-join the World Health Organisation, which Trump distanced the US from this year. Although Biden may reverse travel bans on Muslim countries and enact some degree of immigration reform, meaningful progress in these areas will depend on Republican consent, which will be hard-won. Irish opportunities From an Irish perspective, a particular area of interest will be the US corporate tax rate and any potential changes to US tax policy. Trump targeted tax inversion by US companies that relocated internationally by dramatically cutting corporate tax from 35% to 21% back in 2017, effectively eroding the delta a company gained by shifting its headquarters to Ireland to take advantage of the country’s 12.5% rate. Biden has proposed raising the corporate tax rate back up to 28% from 21%, reversing half of Trump’s cut. Such a move would again increase Ireland’s attractiveness as a destination for foreign direct investment, but it would be unwise to expect too much too soon. Tax reform in the US is notoriously slow. Trump’s Tax Cuts and Jobs Act was probably his signature accomplishment, but the parties had broadly agreed the basis for it before the 2016 election. A reduced corporate rate would therefore have been delivered in any event, regardless of the election’s outcome. Brían O’Cuiv, Tax Partner at PwC San Francisco, foresees opportunities for Irish companies independent of tax reform. “The reality is that US companies continue to be among the most innovative in the world. And with a seemingly endless supply of venture funding available, we will see new businesses with global ambitions emerge,” he said. “Irrespective of any changes to the US tax system, companies will need to establish operations overseas to access foreign markets and tap into the local knowledge base. Jurisdictions that position themselves as an attractive location for inward investment and provide some degree of certainty are likely to continue to benefit disproportionately from this trend.” Finally, once he assumes office on 20 January 2021, President Biden’s close ties to Ireland will at least deliver the perception of increased opportunity, even if his control over the payoff is not as strong as Ireland Inc. would like it to be. Ireland and Biden In 2016, Biden wrote in his ‘Letter to Ireland’ that “When I die, Northeast Pennsylvania will be written on my heart. But Ireland will be written on my soul”. A testament to this close relationship is the fact that An Taoiseach, Micheál Martin, was one of the first political leaders Biden contacted after his projected win. During their 20-minute call, they covered the global economic recovery, relations with the EU, and tackling climate change. Most tellingly, they also discussed the importance of a Brexit outcome that respects the Good Friday Agreement and ensures no return of a physical border on the island of Ireland. Ireland’s profile will benefit exponentially from having a US president that is favourably disposed to the country, which Trump most certainly was not. The annual St Patrick’s Day summit in the White House may not restart until 2022, and a presidential visit to Ireland is unlikely before 2023. That said, the negativity towards Ireland will cease almost immediately and in terms of Brexit, to use Biden’s favourite quote from Yeats, “all changed, changed utterly”. Cummings and goings The next few weeks will tell more, but it is already possible that almost two months before he has even been sworn in, we may have already witnessed the first effects of a Biden presidency on the global stage. The UK Conservative government courted Trump shamelessly and desperately hoped that a Republican-controlled government could deliver the holy grail of a US/UK trade deal. They hoped that it could be achieved in advance of any EU deal and sold to the British public as a significant victory. That hope has been utterly dashed. The resignations of Dominic Cummings and Lee Cain may signal a seismic shift in the UK’s Brexit strategy. Cummings had served as campaign director of the ‘Vote Leave’ campaign in 2016 and is credited with the memorable (if potentially misleading) slogan, “Take back control”. Cain had been tipped as Johnson’s next chief of staff, an important position as it would effectively have given Cain control over access to Johnson. Their departure may be the most immediate macro consequence of Biden’s election on the global economy. The likelihood now is that Johnson and Britain will be forced back to the negotiating table with the EU. At the time of writing, the chance of a last-minute UK/EU deal had increased, and this may be the most immediate payoff from Biden’s presidency. In terms of how that presidency might benefit Ireland, it might also be the most important. Barry Flanagan is President of US Operations and Global Head of Customer Engagement at Immedis. The importance of the Georgia run-off While the US waits for President Trump to accept the results of the presidential race, the focus of the political world has already shifted to Georgia where two run-off elections set for early January will determine which party has control of the Senate. The current state of play is 50-48 in favour of the Republicans, so the Democrats must win both to draw level. The result of the contests, which will take place two weeks before Biden’s inauguration, could lead to two distinct outcomes. On the one hand, two Democrat victories could re-centre power to the Democrats by giving Harris, as the new vice president, the casting vote. This would provide Biden with broad power to carry out his policy agenda and push through nominations as he sees fit. On the other hand, a Republican win could cement Republican control, thereby allowing Mitch McConnell to remain as Speaker with the power to continue his policy of obstructionism that was so effective during President Obama’s second term. Georgia may have flipped Blue for the first time in 28 years, but the margin of victory was a tiny 14,000 votes or 0.3% of votes cast. Accordingly, anticipating a double defeat for down-ballot Republicans who outperformed Trump is not advisable.

Nov 30, 2020

Cormac Lucey explains why, as societal fissures and inequality grow, we must no longer be satisfied with unduly simple answers to complex questions. The biblical story of the Tower of Babel explains how humans across the world speak different languages. In the generations following the Great Flood, humans spoke a single language and migrated to the land of Shinar, where they decided to build a tower tall enough to reach heaven. Unhappy at this impudence, God intervened so that humans spoke several different languages, were unable to understand each other and were thus unable to build their idolatrous tower. Today, it is not different languages, but several other aspects of life, that risk pulling us apart. Specialisation has been one of the key ingredients of dramatic economic growth in recent centuries. But growing vocational differences and technical specialisation make it more and more difficult for national leaderships comprised of generalists to manage and control a society increasingly comprised of technical specialists. Consider the economic disaster of the financial crash just over a decade ago, and the failure of the Central Bank of Ireland and the Financial Regulator to take corrective action. Consider the current lockdown and reflect on the fact that, if everyone in the Republic contracted COVID-19 and we suffered the median fatality rate estimated by the World Health Organisation (0.23%), the resulting fatalities would equal around one-third of total fatalities that we suffered from all causes in 2019. Another serious societal fissure is growing economic inequality and the increasing role of education in determining an individual’s earning capacity. Here in Ireland, we are lucky that income inequality has not grown over recent decades. But it has grown substantially in the US. We can see the political polarisation that has followed and, increasingly, political affiliation in the US follows education. This pattern was very evident when the UK voted for Brexit. The political and media establishments may dismiss those who dared to vote for Brexit or Trump. But if the pandemic has taught us one thing, it is that in an ever more complex world, our fates are increasingly interdependent. In such a world, it makes little sense to dismiss large blocs of fellow citizens as if they are fools. Yet that is what has happened. This sneering reaction feeds another fissure, that which separates insiders from outsiders. We can see this in the rise and rise of monopolies and quasi-monopolies in the US. A paper published recently by two Federal Reserve economists found that the concentration of market power in a handful of companies lies behind several disturbing trends in the US economy such as a falling share of national GDP going to labour, a rising share going to capital, increasing inequality, rising financial leverage, and an increase in financial instability. Here in Ireland, we are confronted by a different monopolistic power, that of the State. At the end of Q2 this year, average weekly earnings in the Irish public sector exceeded those in the private sector by 32.6%. In the UK in 2019, (pre-pension) public and private sector earnings were approximately equal with public sector earnings 3% ahead before consideration of bonuses and 3% behind after their consideration. The stark public/private gap in Ireland arouses little public commentary, but feeds the fissures in our society. What can we do as we face this increasingly divided world? We should be careful of those who suggest simple answers to complex questions that generally don’t have yes/no answers but, rather, difficult trade-offs. Independence of judgement matters just as much for our public life as it does for our auditors. Cormac Lucey is an economic commentator and lecturer at Chartered Accountants Ireland.

Nov 30, 2020
Show Me More News