Meetings are a part of most people’s working days, but are they really the most productive way of working? Geraldine Dolan suggests stepping away from the traditional “talking shop” and considering alternatives. Situational Leadership Theory, a leadership model developed by Dr. Paul Hersey and Kenneth Blanchard, is predicated on the belief that there is no one best style of leadership. The best style of leadership will depend on the task at hand and the makeup of the team performing the task. In a nutshell, a single leadership size does not fit all, and this has never been more apparent than right now. A meeting isn’t always the solution to every problem. Over the course of the pandemic, virtual meetings became a way of not only exchanging information with colleagues and team members, but also a means to connect with others outside our homes. Now that some of us are back in the office, we have returned to the tried-and-true meeting to solve every problem, but are we right? Be mindful of your working environment systems From a systems perspective – meaning the working environment – leaders may be dealing with a combination of working models. Some team members may be returning to the office and others hybrid-working, while others have been coming into the office for the last two years. As a leader, resourcing oneself and being mindful of this ‘flux’ in our systems of working is important, particularly when you consider the external environment of war as well as a challenging and changing economic future. These challenges can impact people’s roles, the business in which they are working, and their day-to-day activities. Others for whom there is no professional impact may instead be dealing with personal challenges affect their performance – which can, in turn, impact team and business results. It is important to make the time to connect with your team in-person. Everyone needs feedback on their job, but it’s important to consider when is best time to give that feedback – could it be given in the moment, as a response to an email or message sent? Or does it need to be in a bi-weekly, one-to-one catch-up? Are the one-on-one meetings more important for brainstorming? What model works best for your team? As a leader, you are accountable for the productivity of your team. This doesn’t mean you are responsible for all of the work, however. The structure of your environment means your responsibility is delegation and people management – what does the team need to meet the collective goal? Keeping all this in mind – the different working models, the outside stressors and the workload – you have to ask yourself: could this team meeting be an email? Could a weekly status update serve my team better than a meeting? It’s important to give your team the opportunity to take ownership of their tasks and become mentors to other team members. This encourages collaboration, learning and growth while, at the same time, helping to get things done, supporting development opportunities, and enabling the team to be more agile — and, none of this needs a team meeting headed up by management. When done right, meetings can be very beneficial for everyone. They can help to build rapport, promote collaboration and encourage creative thinking. Done wrong, however — without mindfulness or situational leadership — unnecessary meetings can do little more than cost everyone their precious time. Geraldine Dolan is an Executive/Organisation Coach and Consultant.

If you find yourself having to conduct a financial investigation, the first steps you take can have a crucial bearing on the success or otherwise of the eventual outcome, writes Sinead O’Neill. It can be tempting to react immediately when you or a client identifies, or suspects, a problem with the company finances. Careful consideration should be given to all investigative actions from the outset to ensure that the integrity of the outcome cannot be called into question. First steps Before commencing any internal investigation, take a moment to consider the following issues: Time sensitivity – Does an investigation need to commence immediately, to prevent or reduce the damage to the business, or protect the evidence? Confidentiality – The matter must be kept confidential to maintain the robustness of the investigation process, avoid any further efforts at concealment, and comply with HR policies. The investigation could be carried out either overtly or covertly. In either case, however, confidentiality is crucial. Legal privileges – While this might not be at the forefront of your mind initially, you should seek appropriate legal advice before taking actions that might compromise the investigation. Expertise – Do you or your client have the necessary skills in-house to investigate the matter properly, or do you need to refer the matter externally or to a local authority? Objectivity – Those investigating should maintain objectivity and ensure there is no conflict of interest that might compromise the integrity of the outcome. Ideally, you or your client should document the investigation plan, assigning roles, responsibilities, and tasks, to key individuals. It’s worth bearing in mind that your initial suspicion or hypothesis might not have any merit. Keep an open mind and go where the evidence takes you. This may mean revisiting and revising your plan of action and timelines for the investigation, so that sufficient time and resources can be given to gathering and analysing evidence as the process unfolds. Evidence gathering An essential element in any investigation is evidence and careful consideration should be given to where the evidence is located. Is it on electronic devices? Are the devices owned by the company, or are they personal to the employee? Is the evidence password protected? Does getting the password require interviewing witnesses? Alongside these considerations, HR policies should be consulted to ensure compliance with internal policies. It is crucial that the evidence gathered is not compromised in any way. You might need to engage experts to extract the data to protect its integrity. Resist the urge to delve straight into the source of evidence. Electronic data It is rare these days that a financial investigations will not involve some element of electronic data. A forensic image should be taken of the data, where possible, and should be used for investigative analysis to maintain the data’s integrity. Data analytics can be beneficial in any investigation as it can help to identify patterns, trends, and key relationships. Keywords can be run over copied mailboxes and mapped to individuals, for example, identifying who is discussing the matter in question and to what extent. This level of analysis would be near-impossible if reliant on manual techniques alone. Full-circle reporting It is essential to acknowledge that work should not cease upon the conclusion of the investigation. The results of the investigation should be communicated, corrective action taken, and the performance of the investigation evaluated. This full-circle reporting can be invaluable to a company because it strengthens the organisation’s defences while also discouraging future in-house wrongdoing. Investigations are not only a critical component of uncovering wrongdoing, such as fraud, but also act as a deterrent to others both within and outside of the business. As such, it is vital that they be carried out correctly. Sinead O’Neill is the Director of Forensic and Investigation Services at Grant Thornton Northern Ireland. 

Understanding the current labour market is essential when it comes to business acquisition. Richard Crisp highlights four areas of due diligence to consider when buying a company. The post-Brexit exodus of European workers from the UK and ‘The Great Resignation’ have put enormous strain on the labour market. Some companies are struggling as their business models and cost bases come under pressure. When buying a company, understanding whether the target has priced in cost pressures appropriately is crucial to making the right decision. The first step in understanding a target’s future probability has traditionally been to analyse historical trends. The volatility of the current labour market dynamic means, however, that historical trading may not fully reflect some recent cost pressures. You should further analyse how this unique labour market dynamic impacts target businesses and how it can be accounted for in your due diligence. Here are four areas of due diligence that can help build confidence in the success of an acquisition. 1. Wage inflation Employers are being forced to offer lucrative packages to attract and retain talent in competitive markets, leading to exceptional increases in wages and salaries. Historically, an assumption of a two to three percent salary increase annually was relatively standard. Employers need to be aware that this may not be sufficient to maintain quality staff in the current environment, however. Comparing the salaries for recent hires to historical hires for the same role may indicate wage inflation while increasing churn or difficulty filling positions may indicate that current salaries are not sufficiently competitive. 2. Use of subcontractors Some businesses may be turning to subcontractors to plug gaps and overcome short-term resourcing constraints. Even when this is justified to allow flexibility around seasonal peaks and troughs, it tends to be more expensive. You should strive to establish a ‘normal’ level of subcontractor use for your target. This will form an important part of your due diligence, as will the tax risks associated with off-payroll labour. 3. Talent and growth The achievement of business plans is often heavily dependent on a company’s ability to grow the staff base and attract suitably experienced individuals. Consider adapting the pace of projected growth to allow some contingency in a challenging hiring environment. 4. Staff training and development Some companies may choose to take a long-term approach and invest in developing junior staff rather than pay a premium for experienced talent. While this will likely be cheaper in the short term, junior staff will take longer to get up to speed. This can lead to a slower ramp to optimum revenue generation and profitability. Make sure you understand the hiring strategy and that this is appropriately reflected in your forecasts. And the rest… In addition to labour market issues, your acquisition target may also be dealing with other challenges. Imminent cost increases, such as the National Living Wage and NIC rises scheduled for the UK in April 2022, could materially impact a company’s gross and EBITDA margins. Soaring energy prices and Brexit-related import and export difficulties are also impacting some sectors. Understanding these issues will be paramount to forming a complete view of your target’s future maintainable earnings. These issues have affected our recent due diligence deals and may continue to do so for some time. It is important, therefore, that your projections model is flexible and robust enough to model scenarios and sensitivities. This will help you to avoid any nasty surprises. Richard Crisp is Director of Corporate Finance Director at BDO UK

Land use, land-use change and forestry is becoming increasingly important when it comes to climate change, but what is it, and how does it impact your organisation? Orlaith Delargy dives in. It might be strange to think of Ireland’s land and forestry as a ‘sector’, but under Ireland’s Climate Bill 2021, emissions from this sector will need to reach net zero by 2050. Land use, land-use change and forestry (LULUCF) is a vital part of Ireland’s climate challenge – and solution. What is LULUCF? LULUCF is one of the categories in the UN’s greenhouse gas accounting framework. Emissions from forests, grasslands, croplands, wetlands and land-use change are reported under this category. We often think that areas such as forests and wetlands absorb carbon, but the LULUCF sector in Ireland has been a net source of GHG emissions in all years from 1990 to 2019. In 2018, for example, the LULUCF sector emitted 4.8 megatonnes of CO2 equivalent (MtCO2e). That’s on par with total emissions from combustion in the manufacturing industry. In particular, grasslands and wetlands are considerable sources of emissions due to the drainage of organic soils and peatlands, which releases carbon and increases emissions. LULUCF in the Climate Action Plan 2021 Under the new Climate Action Plan 2021, the LULUCF sector will have to cut two to three Metric tons of carbon dioxide equivalent (MtCO2e) by 2030. The challenge could be even greater if Ireland’s forest sink continues to decline – cuts of 4.6 MtCO2e may be required.  How does the Climate Action Plan 2021 propose to meet this challenge? Rapidly increasing afforestation and rehabilitating and restoring peatlands are key pillars of the proposed actions. We will see the publication of the National Land Cover Map and the National Land Use Review, which will support decision making around Ireland’s land use. A new Forestry Strategy and Programme will be launched in 2023, along with agri-environmental schemes encouraging farmers to establish and maintain forests on their land. The Government will support the development and use of timber and harvested wood products, with knock-on effects for the construction industry. The role of agriculture A range of agricultural measures will be introduced to increase carbon sequestration, and a National Agricultural Soil Carbon Observatory will be established. Measures to increase carbon sequestration include incorporating straw and cover crops in tillage, using multi-species swards on Ireland’s grasslands, and increasing the number of hedgerows and trees on farms. The next National Biodiversity Action Plan is under development and will include a range of measures to support the delivery of the Climate Action Plan 2021. The role of oceans The role of the oceans in carbon sequestration will also be reviewed, with efforts to increase public and scientific understanding of the effects of climate change on the sea. What’s the takeaway for businesses? Businesses in all sectors depend directly or indirectly on natural capital (the land, the sea and everything in between) for essential goods and services such as clean air, clean water, food, timber, and well-being. Climate change and biodiversity loss seriously threaten these goods and services. According to the Global Reporting Initiative (GRI), less than 25 percent of large companies at risk of biodiversity loss disclose their impacts. This year, GRI and CDP are ramping up their expectations for corporate reporting on biodiversity. The Taskforce for Nature-related Financial Disclosures (a global initiative to provide organisations with a framework to address environmental risks) will publish the first draft of its recommendations. To keep pace, businesses need to begin mapping their dependencies and impacts on natural capital to ensure that everyone can continue to benefit from ecosystem goods and services into the future. Businesses should assess and disclose nature-related financial risks and incorporate these factors into their risk management and investment decision-making. Companies with land holdings of any size should consider what they can do – and who they can partner with – to improve carbon sequestration and biodiversity and support Ireland’s LULUCF targets. Orlaith Delargy is Associate Director at KPMG Sustainable Futures.

Julia Rowan answers your management, leadership, and team development questions. I try to be a good leader to my team – I coach, give feedback, help them develop new skills, etc. A few things have happened at company level (e.g. policy changes, unpopular decisions, team members not getting a promotion), and I feel I am getting the blame. As a result, there’s a lot of negative talk about the company, and the spark has gone out of the team. How do I get it back? Leaders often find themselves working very hard to defend, explain, and compensate for organisational issues over which they have no control. You have done a lot of good legwork here, and now you need to trust yourself. Lean into the discomfort, acknowledge the difficulty, offer support and put the ball back in your team members’ court.  For example, if somebody talks about “crazy promotion decisions” you might say, “I’m sorry you did not get that role. How can I help you be successful next time?”  Or, if someone talks about “stupid policies”, you might say something like, “It’s tough when these things don’t make sense. Is there something I can do to help?”   The critical thing here is to catch the moment of the criticism and change your response from explanation to acknowledgement. This is easy to write but hard to do, and you will kick yourself more than once as you realise you’ve launched into an explanation. One day you’ll stop doing it – and your team will feel heard. You might consider respectfully bringing the issue up with the team: “I feel that some organisational issues are impinging on our motivation. At our next meeting, should we talk about how we get our mojo back?” Listen to each person and ask the team how they want to move on. My guess is that the team will have arrived at that point themselves. I am pretty good at my job, but my manager micro-manages me. Nothing can be complete without her checking it. She makes irrelevant changes to my work, and even internal documents are drafted and redrafted. Apart from the frustration, it takes up huge time. How can I get her to back off? There are a lot of ways to answer this: we could look at your performance, the pressure your manager is under from their boss and your manager’s personality.  We could say that trying to change other people is generally a waste of time. The only person you can change is yourself, meaning you need to decide to live with, address or leave the situation.  Suppose you want to address the situation. Try to see beyond your manager’s behaviour and look at her intention: what is she trying to achieve? What hopes and fears lie beyond her behaviour? What does her behaviour tell you about what is important? Connect her behaviour with her intention and use it. For example, when she delegates work to you, explore what is important to her (accuracy, completeness, speed, etc.). Then let her know that you have heard her concerns and priorities. My read of this situation is that she is concerned about being (seen to be) good enough. You should ask yourself how you can usefully connect with and ease those concerns.  Julia Rowan is Principal Consultant at Performance Matters, a leadership and team development consultancy. To send a question to Julia, email julia@performancematters.ie.

SMEs hit hard by the pandemic must now grapple with the economic fall-out of the war in Ukraine, signalling fresh uncertainty for the year ahead, so what’s the best plan of action? COVID-19 lockdowns, global supply chain disruption, inflationary pressure – and now the economic fallout from the Russian invasion of Ukraine.  The headwinds facing Ireland’s small- and medium-sized enterprises (SMEs) show no signs of easing as we enter the third quarter of 2022. Even as the year began, the imminent winding down of Government supports for COVID-hit businesses was already prompting speculation of a spike in insolvencies just around the corner. Now, Gabriel Makhlouf, Governor of the Central Bank of Ireland, has called on a “patient” approach from policymakers and creditors to help ensure that “unnecessary liquidations of viable SMEs are avoided over the coming months.” Speaking at a recent event in Dublin co-hosted by the Central Bank of Ireland, Economic and Social Research Institute, and the European Investment Bank, Makhlouf pointed to the need to “channel distressed but viable businesses towards restructuring opportunities and unviable businesses towards liquidation.” Uncertain outlook For those SMEs in the sectors hit hardest by the pandemic, the fresh economic turmoil sparked by the Ukraine invasion will be a cause for concern. “The outlook right now for SMEs generally in Ireland is very hard to determine,” said Neil McDonnell, Chief Executive of the Irish SME Association (ISME). “It will vary considerably from sector to sector, but after two bad years for hospitality and tourism due to the pandemic, the war in Ukraine is likely to mean volumes will remain low into the summer.”  Pandemic-related insolvencies have yet to spike. Research released by PwC in February found that Government support had saved at least 4,500 Irish companies from going bust during the pandemic, representing an average of 50 companies per week during the period. Insolvency rates are likely to rise in the months ahead, however, as pandemic supports are withdrawn from businesses with significant debts, and PwC estimates that there is a debt overhang of at least €10 billion among Ireland’s SMEs, made up of warehoused revenue debt, loans in forbearance, supplier debt, landlords, rates and general utilities.  “Government supports have to end at some point. We realise this, but it will be accompanied by a significant uptick in insolvencies. This is natural and to be expected, since 2020 and 2021 both had lower levels of insolvency than 2019,” said Neil McDonnell. “Aside from hard macroeconomics, however, we can’t ignore the element of sentiment in how businesses will cope. This is the third year in a row of bad news.” Confidence in the market Before taking on his current role as Managing Partner of Grant Thornton Ireland, Michael McAteer led the firm’s advisory services offering, specialising insolvency and corporate recovery. “What I’ve learned is that you really cannot underestimate the importance of confidence in the market,” said McAteer. “If we go back to 2008 – the start of the last recession – or to 2000, when the Dotcom Bubble burst, we can see that, when confidence is lacking, the pendulum can swing very quickly. “If you’d asked me a few weeks ago, before the Ukraine invasion, what lay ahead for the Irish economy this year, I would have been much more optimistic than I am now. “Yes, we were going to see some companies struggling once COVID-19 supports were withdrawn, particularly those that hadn’t kept up with changes in the marketplace that occurred during the pandemic, such as the shift to online retail – but, overall, I would have been confident. Now, it is harder to judge.” Government supports Neil McDonnell welcomed the recent introduction of the Companies (Rescue Process for Small and Micro Companies) Act 2021, which provides for a new dedicated rescue process for small companies. Introduced last December by the Department of Enterprise, Trade and Employment, the legislation provides for a new simplified restructuring process for viable small companies in difficulty. The Small Company Administrative Rescue Process (SCARP) is a more cost-effective alternative to the existing restructuring and rescue mechanisms available to SMEs, who can initiate the process themselves without the need for Court approval. “We lobbied hard for the Small Company Administrative Rescue Process legislation. The key to keeping costs down is that it avoids the necessity for parties to ‘lawyer up’ at the start of the insolvency process,” said McDonnell. “Its efficacy now will be down to the extent to which creditors engage with it and, of course, it has yet to be tested in the courts. We hope creditors will engage positively with it.” McDonnell said further government measures would be needed to help distressed SMEs in the months ahead. “We already see that SMEs are risk-averse at least as far as demand for debt is concerned. Now is the time we should be looking at the tax system to incentivise small businesses,” he said.  “Our Capital Gains Tax (CGT) rate is ridiculously high, and is losing the Exchequer potential yield. Our marginal rate cut-off must be increased to offset wage increases.  “Other supports, such as the Key Employee Engagement Programme (KEEP) and the Research and Development (R&D) Tax Credit need substantial reform to make them usable for the SME sector.” Advice for SMEs For businesses facing into a challenging trading period in the months ahead, Michael McAteer advised a proactive approach. “The advice I give everyone is to try to avoid ‘being in’ the distressed part of the business. By that, I mean: don’t wait until everything goes wrong.  “Deal with what’s in front of you – the current set of circumstances and how it is impacting your business today.  “Ask yourself: what do I need to do to protect my business in this uncertain climate, and do I have a plan A, B and C, depending on how things might play out? “Once you have your playbook, you need to communicate it – and I really can’t overstate how important the communication is.  “Talk to your bank, your suppliers, creditors, and your employees. Sometimes, we can be poor at communicating with our stakeholders. We think that if we keep the head down and keep plugging away, it will be grand.  “By taking time to communicate your plans and telling your stakeholders ‘here’s what we intend to do if A, B or C happens,’ you will bring more confidence into those relationships and that can have a really positive impact on the outlook for your business. “Your bank, your creditors and suppliers are more likely to think: ‘These people know their business. They know what they’re doing.’ If something does go wrong, they know that there is already a plan in place to deal with it.” Role of accountants Accountants and financial advisors will have an important role to play in the months ahead as distressed SMEs seek advice on the best way forward. “We are about to experience levels of inflation we have not seen since the 1980s. This will force businesses to address their cost base and prices,” said Neil McDonnell. “My advice to SMEs would be: talk to your customers, to your bank, and your accountant. Your accountant is not just there for your annual returns. They are a source of business expertise, and businesses should be willing to pay for this professional advice. No business will experience an issue their accountant will not have not come across before.” As inflation rises, SMEs are also likely to see an increase in the number of employees seeking pay increases, McDonnell added. “Anticipate those conversations, if they haven’t occurred already,” he said. “Any conversation about wages is a good time to address efficiency and productivity – is there more your business could be doing to operate more efficiently, for example, thereby mitigating inbound cost increases?”