Imelda Hurley has had a challenging start to her role as CEO at Coillte, but her training and experience have proved invaluable in dealing with the fallout from COVID-19, writes Barry McCall.Imelda Hurley’s career journey to becoming CEO of Coillte in November 2019 saw her work on every continent for a range of businesses spanning food to technology. That varied background has helped prepare her for the unprecedented disruption caused by the COVID-19 pandemic.“We have been working remotely since March, and the business has kept going throughout the pandemic,” she says. “We closed the office straight away and have had 300 people working remotely since then. Our primary focus since has been on the health, safety and wellbeing of our colleagues, and against that backdrop, on ensuring that a sustainable, viable and vibrant Coillte emerges from the crisis.”A diverse challengeThis has not been as straightforward as she makes it sound. “Coillte is a very diverse business,” she adds. “We are the largest forestry business in the country, the largest outdoor recreation provider, we enable about one-third of Ireland’s wind energy, and we have our board manufacturing business as well. We needed to continue operating as an essential service provider. That remit to operate was both a challenge and an opportunity.”The company’s timber products are essential for manufacturing the pallets required to move goods into and out of the country. “Some of our board products were used in the construction of the Nightingale Hospital in London,” she adds. “And the wind energy we enable provides electricity for people’s homes and the rest of the country.”Organisationally, the task has been to enable people to continue to do their jobs. However, the challenge varied depending on the nature of the operation involved. “In forest operations, people usually work at a distance from each other anyway, so they were able to keep going. That said, we did suspend a range of activities. We needed to continue our factory operations, but we had to slow down and reconfigure the lines for social distancing. And we kept the energy business going.”Those challenges were worsened by an ongoing issue associated with delays in the licensing of forestry activities and by the unusually dry spring weather, which created ideal conditions for forest fire outbreaks. “Even a typical forest fire season is very difficult,” she notes. “But this one was particularly difficult. In one single weekend, we had 50 fires which had to be fought while maintaining physical distancing. Very early on, we put in place fire-fighting protocols, which enabled us to keep our colleagues safe while they were out there fighting fires, and to support them in every way possible.”The lure of industryHer interest in business dates back to her childhood on the family farm near Clonakilty in Cork. “I was always interested in it, and I enjoyed accountancy in school and college at the University of Limerick. I did a work placement in Glen Dimplex and that consolidated my view that Chartered Accountancy was a good qualification that would give me the basis for an interesting career.”She went on to a training contract with Arthur Andersen in Dublin. “The firm was one of the Big 6 at the time,” she recalls. “I availed of several international opportunities while I worked there and worked in every continent apart from Asia. I really enjoyed working in Arthur Andersen, but I always had a desire to sit on the other side of the table. Some accountants prefer practice, but I enjoy the cut and thrust of business life.”That desire led her to move to Greencore. “I wanted to be near the centre of decision-making and where strategy was developed. I stayed there for ten years, learning every day.”And then she moved on to something quite different. “Sometimes in life, an opportunity comes along that makes you pause and think, ‘if I turn it down, I might regret it forever’. The opportunity was to become CFO of a Silicon Valley-backed business known as PCH, which stood for Pacific Coast Highway, which was based in Hong Kong and mainland China with offices in Ireland and San Francisco. It was involved in the supply chain for the technology industry and creating, developing and delivering industry-leading products for some of the largest brands in the world.”The experience proved invaluable. “It changed the way I thought. It was a very fast-moving business that was growing very quickly. I got to live and work in Asia and understand a new culture. I took Chinese lessons and the rest of the team took English lessons. There were 15 nationalities on the team. It was remarkably diverse in terms of demographics, gender, culture, you name it. That diversity means you find solutions you would not have found otherwise.“I spent three years with PCH and ran up half a million air miles in that time. It had a very entrepreneurial-driven start-up culture. The philosophy is to bet big, win big or fail fast. It was a whole new dynamic for me. I also got to spend a lot of time in San Francisco, the hub of the digital industry, and that was a wonderful experience as well.”Returning to IrelandImelda then returned to Ireland to become CFO of Origin Enterprises plc. “As I built my career, I always had the ambition to become CFO of a public company. And I always believed that with hard work, determination and a willingness to take a slightly different path, you will succeed. Greencore and Origin Enterprises gave me experience at both ends of the food and agriculture business; they took me from farm to fork. A few more years in Asia might have been good, but Origin Enterprises was the right opportunity to take at the time.”Her next career move saw her take up the reins as CEO of Coillte on 4 November 2019. “I always wanted to do different things, work with different organisations and with different stakeholder groups,” she points out. “Coillte is a very different business. It is the custodian of 7% of the land in Ireland, on which we manage forests for multiple benefits including wood supply. It is a fascinating company. It is an outdoor recreation enabler, with 3,000km of trails and 12 forest parks. We get 18 million visits to forests each year. We also have our forest products business – Medite Smartply. We operate across the full lifecycle of wood. We plant it and it takes 30-40 years to produce timber.”Imelda’s varied career has given her a unique perspective, which is helping her deal with the current challenges faced by Coillte. “Throughout my career, I have worked in different ownership structures and for a variety of stakeholders. I worked for public companies, a Silicon Valley-backed business, and have been in a private equity-backed business as well. Now, I am in a commercial semi-state. That has taken me across a very broad spectrum and I have learned that a business needs to be very clear on a set of things: its strategy, its values, who its stakeholders are, and how it will deliver.”Entering the ‘new’ worldWhile Coillte has kept going during the COVID-19 pandemic, it is still affected by the economic fallout. “We are experiencing a very significant impact operationally, particularly so when building sites were closed,” she says. “There has been some domestic increase in timber requirements since then, and there has been an increasing demand for pallet wood. That has had a significant financial impact and it’s why I’m focused on delivering a sustainable, vibrant and viable Coillte. We remain very focused on our operations, business and strategy. In the new post-COVID-19 world, we will need a strategy refresh. We must look at what that new world looks like, and not just in terms of COVID-19. We still have a forestry licensing crisis and Brexit to deal with.”The business does boast certain advantages going into that new world. “Our business is very relevant to that world. The need for sustainable wood products for construction is so relevant. Forests provide a carbon sink. The recreation facilities and wind energy generated on the land we own are very valuable. It may be a difficult 12-18 months or longer, but Coillte is an excellent place to be. In business, you manage risk. What we are managing is uncertainty, and that requires a dynamic and fast-paced approach. Time is the enemy now, and we are using imperfect information to make decisions, but we have to work with that.”Coillte will begin the first phase of its office reopening programme in line with Phase 4 of the Government’s plan. “We have social distancing in place and it’s quite strange to see the floor markings in the offices. We are doing it in four phases and carried out surveys to understand employee preferences. We then overlaid our office capacity with those preferences. Our employees have been fantastic in the way they supported each other right the way through the crisis.”Words of wisdomDespite the current challenges, she says she has thoroughly enjoyed the role since day one. “It would be wrong to say it’s not a challenge to walk into a business you were never involved in before and take charge, but I have a very good team. None of us succeeds on our own. We need the support of the team around us. The only way to succeed is to debate the best ideas and when there isn’t alignment, I make the final decision, but only after listening to what others have to say. You are only as good as the people around you. You’ve got to empower those people and let them get on with it.”Imelda believes her training as a Chartered Accountant has also helped. “It facilitated me in building a blended career. The pace of change is so incredibly quick today and if we do not evolve and learn, we lose relevance. Small pieces of education are also very valuable in that respect. Over the years, I did several courses including at Harvard Business School and Stanford. I love learning and I’m not finished yet. I’m a firm believer in lifelong learning.”Her advice to other Chartered Accountants starting out in their careers is to seek opportunities to broaden their experience. “Learn to be willing to ask for what you want,” she says. “Look for opportunities outside finance in commercial, procurement or operations. Look through alternative lenses to bring value. Make sure you are learning and challenging yourself all the time. Keep asking what you have added to become the leader you want to be someday.”And don’t settle for what you don’t want. “Be sure it is the career you want, rather than the one you think you want or need. It’s too easy to look at someone successful and want to emulate them. You have to ask if that is really for you. This role particularly suits me. I love the outdoors and I get to spend time out of the office in forests and recreational areas. That resonates particularly well with me.”

Swift and immense fiscal stimulus has driven equities to all-time highs in some cases, but inflation and interest rates could yet spoil the party.Having entered 2020 at nosebleed valuation levels, equities reacted sharply and suddenly to COVID-19 by falling by over 40% in Ireland, by over 35% in the UK and by just under 35% in the USA. But then stocks bounced right back. By mid-July, the Irish Stock Exchange index was down 16% compared to the beginning of the year, the FT 100 index was down 21% and in the USA, the S&P 500 index was down just 6%. The Nasdaq has even managed to hit new all-time highs.What is going on? The simple answer is that the world is witnessing an unprecedented level of official policy stimulus that is expected to trigger a sharp rebound in economic activity while interest rates (and corporates’ cost of capital) go lower than would otherwise have been expected. This stimulus is being felt first by financial markets but, if the past is an effective guide to the future, it will soon spread to an economy near you.The scale of the pandemic-induced fiscal stimulus announced by government treasuries and finance ministries is vast. According to BCA Research, a Toronto-based investment research boutique, it is more than double the level of stimulus the global economy got in the wake of the global financial crisis over a decade ago. Not only that, but it’s happening much more quickly. There was initially a delayed element of “crisis, what crisis?” to the last big downturn. The reaction this time has been swift and immense.The size of the fiscal response is dwarfed only by the scale of the monetary response. Even in Japan, where the annual rate of money growth has been under 3% for most of the last 30 years, M3 went up at an annualised rate of 10.5% in the three months to May. In the eurozone and the UK, the corresponding figure is about 20%. But the explosion in fresh money creation has been most evident in the USA where, in the three months to May, M3 rose at an annualised rate of almost 90%. The equivalent year-on-year rate of growth was the largest in modern peacetime history.Commenting on recent monetary policy, Tim Congdon and John Petley of the Institute of International Monetary Research concluded that unless the US Federal Reserve decides to withdraw or reduce some of that money injection, “upward pressures on asset prices, and then on prices of factors of production, and goods and services, will be a marked feature of 2021 and 2022.” Ironically, valuation levels may help contribute to yet higher equity values, despite most people believing that equities are currently levitating.A standard long-run measure of an equity’s value is its cyclically adjusted price earnings (CAPE) ratio. This eliminates the cyclical variability of profits as a factor that can distort the standard price earnings (PE) ratio by using average (inflation-adjusted) earnings over the previous ten years rather than earnings from just one year. Doing this compares a share’s price to an underlying ‘through the cycle’ measure of its earnings. The CAPE for the entire US market is nearly 30. It has only ever been this high twice before: in September 1929, just before The Great Crash, and during the 2000 tech bubble.However, it is not enough for us to look at PE ratios in isolation. We need to compare them to the valuation of competing assets. And right now, the value of the equities’ main asset competitor – bonds – are sky-high. Steve Sjuggerud, the author of investment newsletter True Wealth, charts the US 10-year bonds rate minus CAPE. This measure’s current level suggests that equities are relatively cheap! BCA Research has looked at that measure going back to 1955. They reckon it shows that US equities are historically cheap, relative to government bonds!To me, there are two key conclusions to take from this. First, the tsunami of fresh central bank liquidity being pumped into the global economic system means that, over the next 18 months, an equity melt-up (similar to those seen in Japan in 1989 and on the Nasdaq in early 2000) is far more likely than a meltdown. Second, this party will end abruptly if inflation stirs and interest rates start to rise significantly.Cormac Lucey FCA is an economic commentator and lecturer at Chartered Accountants Ireland.

Construction has been hit hard by the pandemic, but with the right initiatives and supports it could also play a pivotal role in the country’s eventual recovery, writes Annette Hughes.Ireland entered 2020 in a reasonably strong economic position – preliminary GDP figures for 2019 suggest it was the fastest growing economy in the EU27 over three years, with almost full employment. However, the shock following COVID-19 has been unprecedented.The latest EY economic forecasts (released in May) expect GDP to fall by 11.1% this year. It is envisaged that government borrowing, as opposed to tax increases and public spending cuts, will finance the restart of the economy, predicted to rebound by 6.7% in 2021. Consequently, a benign international lending environment will be crucial, and a budget deficit close to €30 billion – around 10% of GDP – will be required in 2020 (Department of Finance), depending on the evolution of the virus.While the construction sector had been enjoying a consistent, healthy performance at the start of 2020, it was halted abruptly following the onset of the pandemic. All construction and housebuilding sites closed for seven weeks on 28 March, apart from around 35 social housing sites that were deemed essential. Although sites have been re-opening since 18 May, only a slow recovery can be expected. EY-DKM projections based on initial assessments (in May) across housing, non-residential buildings, offices, industrial use and public sector construction show that the volume of construction output by 2022 is forecast at just below 80% of the corresponding volume in 2019. The overall volume of construction output is forecast to decline by 37.7% this year, followed by a rebound of 17.6% in 2021 and 7.6% in 2022.The latest assessment from Euroconstruct has the Irish and UK construction sectors as the poorest performers across 19 countries. The value of construction is estimated to have reached €27.7 billion (8% of GDP) in Ireland in 2019, but the crisis is expected to result in a contraction in construction output by almost 34% in 2020 (5.9% of GDP). In the UK, construction volumes are expected to contract by over one-third. Both Ireland and the UK have the strongest recovery prospects in construction output in 2021 at 17.6% and 22.8% respectively.Meanwhile, the closure of sites is expected to reduce levels of new house building substantially. Notwithstanding supply challenges that existed pre-COVID-19, housebuilding is expected to fall to 14,000 units in 2020, down from 21,138 in 2019 and well below the requirement of 35,000 units per annum.The hope is that the industry recovers more strongly than expected, but there are downside risks, notably uncertainty regarding the virus and fear of a second wave. As such, housing supply constraints could be more significant than they were pre-COVID-19, resulting in an even greater challenge for affordability, the private rented sector, and homelessness.Ireland has the potential to lead the way in a European rebound and there is a substantial commitment of resources for public infrastructure projects by Government in the National Development Plan 2018-2027 and Project Ireland 2040.The new partnership of Government also promised to make “transformative changes” with various actions set out to drive economic recovery and place Ireland as an exemplar in decarbonising our economy. At the time of writing, the immediate actions awaited are the July Stimulus and the distribution of the EU Recovery Fund for Ireland. For construction, it will be essential that funding focuses on capital and labour-intensive projects as well as other essential pre-committed infrastructure projects. As an open economy, Ireland’s recovery is dependent on developments in our major trading partners, notably in the UK. Investing in infrastructure must be ramped up straight away and will deliver substantial economic benefits, as the multiplier spending impacts reverberate through the rest of the economy. But while the Government can transform our country economically, the responsibility for suppressing the virus ultimately rests with the whole of society.Annette Hughes is Director, EY-DKM Economic Advisory.

Des Peelo explains why Chartered Accountants have a responsibility to work hard at good communications.Accountants produce figures; that is our professional function. However, the ability to analyse and communicate those figures is the important role. The circumstances that give rise to the necessity of a report or analysis obviously range widely, but all result in the compilation and sharing of information to be understood by others.If you are in an accounting position and want the world to understand and appreciate your good work, remember that accounting figures – no matter the circumstances – are no more than an outcome and are not in themselves a decision, a conclusion or an explanation.Figures are just that, figures. They carry no intrinsic knowledge or purpose. The real skill for a Chartered Accountant (and in my opinion, we are not good at it) is to present an understandable interpretation and communication of the figures.The higher or greater the decision to be made in business, and sometimes in politics, the more the figures will influence the decision. In my experience, however, you cannot assume – even at the highest levels of business or political life (or, for that matter, in a courtroom) – that all are capable of looking at an array of numbers and knowing what they mean.Financial illiteracy is widespread and rarely admitted. I believe that this illiteracy explains many poor business and economic decisions. It is up to us as Chartered Accountants to work hard at good communications, and as a skill, it should be top of the continuing professional development agenda.In presenting figures, remember the audience. What is the purpose of compiling the figures? Who will read them and what is expected of the audience having read the figures? This last question is most important of all. The accountant must be very careful indeed when it comes to interpretation and presentation as the outcome decision, based on the figures, may be significant capital outlays, a court judgment, a misdemeanour identified, a monetary claim pursued, and so on.What sometimes gets lost in translation is the difference between presenting facts and presenting conclusions. It is important to know and understand whether the accountant, in presentation, is being asked to present facts for the audience to make a decision or draw a conclusion, or whether the accountant is being asked to make that decision or conclusion, as supported by the facts in the presentation. A muddled financial analysis without a clear purpose is of little help to anyone, but in my experience, this is a common scenarioThe audience is not there to be impressed by the detailed calculations or workings in the presentation. A straightforward one- or two-page summary should clearly state the outcome as to the purpose of the presented figures. The detailed calculations or workings should always be shown as appendices and cross-referenced in the summary.Compiling and interpreting figures usually involves making some assumptions. These too should be listed in a separate appendix. Figures are only as good as the likely validity of any assumptions underlying them. Outcomes do not always have to be precise. A range based on valid assumptions such as ‘best’ and ‘worst’, or ‘high’ and ‘low’ is often wise as singular figures, in themselves, can give an impression of being definitive.An enduring bugbear in poor presentations is the numbering of paragraphs. The use of sections, sub-sections and Roman numerals can end up with the likes of “Paragraph 5,2(B)iv”. Most reports require cross-referencing such as “please refer to paragraphs 10 and 16 above”.There is nothing to prevent someone from presenting an entire report as simply paragraph 1, 2, 3 and so on. There can be interspersed chapters or section headings as the report goes along, but the simple numbering is continued. Some readers will be aware that simple numbering is common practice in Germany, the United States, and within multinationals and international organisations. This is standard practice when it comes to emails, as it allows for easily cross-referenced responses.Des Peelo FCA is the author of  The Valuation of Businesses and Shares, which is published by Chartered Accountants Ireland and now in its second edition.

The pandemic and Brexit both provide momentum for bigger government – but don’t expect any protestations from the public, writes Dr Brian Keegan.The late US president, Ronald Reagan, never tired of giving out about big government. It’s a crude measure of the influence of government, but the level of national debt gives us some indication of the gap between what it costs to run a nation and what that nation can legitimately collect in taxes from its citizens.National debt suffers from spikes and fluctuations from wars, recessions and – as we are now seeing – pandemics. Such things are outside our control. But even when they are within our control, the national debt can grow unexpectedly. Despite Reagan’s protestations, the US national debt grew almost threefold during his eight years in office.The current pandemic will not grow the national debt of either Ireland or the UK by a comparable amount, but that is a factor of the scale of the existing national debt. Perhaps a better way to assess the impact of government is to look at the number of government agencies we now must deal with. Ireland’s Comptroller and Auditor General has almost 300 departments and organisations to scrutinise during his audit and assurance work. The UK National Audit Office looks over 400 or so UK government entities. As if to catch up, the new Irish Government’s programme makes over 20 references to the creation of new agencies or to increasing the remit of existing ones.The creation of agencies drives public sector jobs. The Institute of Public Administration recently noted that public sector employment in the Republic of Ireland exceeded 300,000 back in 2018, thus restoring staffing to pre-great recession levels. Before the pandemic struck, public sector employment in Northern Ireland exceeded 200,000. While most of our fellow citizens in the public sector are involved in service delivery, a lot of them are involved in regulation.We are already seeing how the pandemic is driving government size. Over the past few months, much of the Institute’s advocacy work has been about brokering arrangements with government – both north and south – to make things like the Temporary Wage Subsidy Scheme and the Job Retention Scheme work better on the ground. Ensuring that these schemes work well is vital, but they take up time, eating into the capacity of both our members in business and our members in practice to deliver other added-value services. Other business supports like state-backed loan guarantee schemes are also going to bring an additional burden of compliance, assurance and red tape.Brexit too is providing momentum for bigger government. The UK Government is duplicating many control and regulatory functions that were previously unnecessary because of EU treaty arrangements or because they were within the purlieu of European institutions. This pattern is being replicated across Europe. For instance, the Revenue Commissioners were to hire 500 additional customs officers to do the additional cross-border trade checks along with apparently 750 in the Netherlands, 700 in France, and close to 400 in Belgium.By and large, business on the island of Ireland benefits from the degree of State regulation. Yet, its role in attracting and securing foreign direct investment by creating a safer investment environment can get overlooked. On the other hand, businesses do not exist to carry out paperwork. This tension was always there. What the pandemic has changed is the political appetite to increase regulation.I think any Reaganesque political campaign promising smaller government would be unlikely to succeed these days. Even if politicians were minded to rein in the regulatory horses, the pandemic has created a greater willingness among the general public on this island to be governed, as evidenced by the almost blanket acceptance of the strictures of lockdown.Dr Brian Keegan is Director of Advocacy & Voice at Chartered Accountants Ireland.

This is my first Accountancy Ireland comment piece as President. First off, I would like to say that it is a tremendous honour to be elected President of our Institute.I would like to thank my predecessor, Conall O’Halloran, for his exceptional leadership throughout a tremendously successful year. Conall can look back with great pride on his term in office.Bouncing backThe current priority remains one of public health but soon, the huge economic challenge of preserving jobs and rebalancing public and private finances will emerge. This has been made even more difficult by the constraints on both consumption and production.As we move to the next phase in continuing to suppress COVID-19, we as Chartered Accountants will have a pivotal role to play in helping to drive the economy forward and in generating growth.Working in collaboration with business, political leaders and the public sector, Chartered Accountants Ireland will be a strong supporter and advocate for the business community and the positive impact that a renewed economy can have for all in our society.I believe that our 28,500 members working in leadership, finance or advisory roles throughout Irish business will play a key role in kick-starting the recovery and ensuring that businesses bounce back strongly.Priorities for the year aheadAs President, I want to harness the ability, experience, and expertise of our membership network to support economic recovery in the aftermath of the pandemic.The strengthening of our role with the public sector will be the first of my key themes for the year. I see our profession having a much stronger role to play here.The second priority will be maintaining and enhancing the relevance of the Institute to our members from the start of their career through to retirement. We must stay connected. It is good to feel part of something, to feel a belonging to the family that is Chartered Accountants Ireland. I am proud to belong.Members will see that this sense of belonging and active participation is at the heart of the Institute’s new Strategy24, the document that will direct our work over the next four years.As Strategy24 is rolled out, members will see their Institute become more digitally driven. We believe that members will find a greater sense of connection and will see the Institute focus on being a financially sustainable, digitally-enabled organisation with an agile culture that supports innovation and collaboration.My final priority is access to our profession for potential students. We will continue to work to highlight the opportunities available to a new generation of potential trainees within an innovative, forward-looking profession.Looking forwardFollowing May’s annual general meeting, the gender balance of the Institute’s Council now stands at 50:50. I will seek to promote balance more widely across the Institute. It is worth noting that the overall membership is currently 42% female and 58% male.I am looking forward to the year ahead. Of course, there are challenges – but we have a great team at the Institute, and we will drive ahead. I am counting on your support as we work for members across the island of Ireland and beyond.Paul HenryPresident