Our focus on ethics and governance

In Strategy 2020, Chartered Accountants Ireland highlights the values that we feel form the foundation of our profession:

 

Reflecting the importance of these cornerstones of our profession, Chartered Accountants Ireland has recently taken important initiatives to protect and enhance our standards and the voice of the profession in these areas. The keywords we are using to describe these initiatives are ‘ethics’ and ‘governance’. Ethics, because it is so central to the five values set out above; and governance, because it is so topical and relevant to the conduct of all types of organised activity, whether public or private, commercial or not-for-profit.

An Ethics and Governance Committee was appointed by Council to oversee the work in this area, which I was asked to chair. Dr Mary Halton has recently been appointed to a managerial position to lead the development and implementation of the work plan. We are indeed fortunate to have someone of Dr Halton’s experience and expertise join Chartered Accountants Ireland.

Challenges facing Chartered Accountants

We need to recognise that many aspects of ethics in business are not black-and-white; they are more like many shades of grey and this brings its own challenges. Why do I say ‘grey’? This can especially be seen in relation to ethical dilemmas. We would all agree that we should always do the right thing or be guided by a moral compass. But in reality, working out what is the ‘right thing’, let alone actually doing it, can be difficult. Reasons include conflicts of interest; ambiguity of rules; lack of precedents; and worries about consequences.

There are also many aspects of human nature that challenge our ability to respond appropriately to ethical dilemmas, such as the tendency of individuals to justify or rationalise their actions, however apparently ‘wrong’ – often seen in instances of fraud. We also need to understand the enormous power of real or imagined consensus, sometimes called the influence of the ‘tone from the top’.

Conscious of these grey areas and of the challenges they pose to any action plan in relation to ethics and governance, Dr Halton and the Committee have distilled the possible responses of Chartered Accountants Ireland into the following five action areas:

 

Having set out our stall, so to speak, in relation to these overall aims and recognising that much good work is already routinely carried out in relation to ethics and governance in a variety of departments in Chartered Accountants Ireland – such as through organising conferences and seminars on relevant topics, publications, CPD courses, relevant education modules and so on – we are conscious of how important it will be to coordinate our efforts and also to communicate our progress and results. Our members, and indeed the public, should feel that Chartered Accountants Ireland actively fosters ethical behaviour and excellent governance, and is an eloquent voice for the profession in these areas. Some specific actions currently envisaged, both near- and longer-term, include:

Improving resources available to members and the public: members and others who visit the Chartered Accountants Ireland website should find more comprehensive and integrated access to ethics and governance materials; for example, accessing materials in relation to implementing the Code of Ethics and finding examples of documentation and guidance around board structures and leading practice.

Developing forums to facilitate knowledge-sharing and networking: members often appreciate the opportunity to share knowledge and experiences with other members and topical issues include the role of independent non-executive directors (INEDs), public disclosure of remuneration policies and details, privacy issues, and others. Many of these issues involve cross-over with other related disciplines such as compliance, data protection, IT security and legal. Chartered Accountants Ireland will have a key role in facilitating the learning and development of members through interaction with peers and experts from other disciplines and professions.

Continuing professional development (CPD): formal training via CPD courses and events should respond to members’ needs and to topical developments in ethics and governance. A relevant CPD programme that reflects the importance and relevance of ethics and governance issues is important for members. Topical issues may include governance in the public sector, the not-for-profit sector and other sectors. Specific training may address issues faced by boards and their committees such as audit, risk and remuneration.

Conferences: members frequently appreciate occasional, larger-scale events where well-known or expert speakers add weight to the content and provide a valuable forum for learning and networking.

Trusted voice: members often report feeling that Chartered Accountants Ireland should be more vocal on their behalf and, in relation to ethics and governance, possible actions include publishing thought leadership pieces based on original research and surveys, and being prepared to comment publicly on relevant and appropriate issues such as regulation, reporting and education. We already liaise extensively with other international bodies such as the International Federation of Accountants (IFAC) and we intend to keep at the forefront of research initiatives relating to ethics and governance.

Conclusion

This article has touched on some of the exciting initiatives being undertaken by Chartered Accountants Ireland in the areas of ethics and governance, and the important contribution that we intend to make to our members and to society. We look forward to engaging with members and obtaining your feedback as we roll out our action plans.

Dargan FitzGerald is a Council Member and a Partner in EY.