Environmental, social and governance reporting is now considered paramount for many organisations. Derarca Dennis outlines five essential steps for getting it right. Irish organisations of all sizes will be affected by an ever-increasing volume of environmental, social and governance (ESG) reporting requirements. Even businesses that fall outside the scope of the regulations and reporting standards are likely to be required to align with them to meet customer and stakeholder expectations and requirements. The EY Ireland CFO Survey 2023 points to ESG still being perceived as a compliance and regulatory issue rather than an opportunity. Only six percent of the respondents say increasing the sophistication of non-financial reporting is one of the top strategic areas of focus over the next five years, down from 15 percent in 2022. Irish finance leaders will, therefore, need to increase the sophistication of their non-financial reporting and prepare for the advent of new and more exacting regulations in the coming years. They must also put in place the systems that will enable them to move the dial from compliance to value-creating opportunities for their organisations. Improved reporting It is vitally important for every Irish organisation to assess their current and potential obligations under both existing and upcoming regulations and reporting standards. To prepare for what will be an ever-increasing compliance burden, Irish organisations need to take the following steps. Gap assessment Organisations should carry out an assessment of any gaps between their current disclosures and existing and future reporting requirements to ensure compliance with the reporting regime as it stands and identify measures required to meet the requirements of upcoming regulations and standards. It will also build internal competencies to assess any gaps that might emerge. Governance Adopting a clear governance structure for sustainability reporting and management across the business is vital for ensuring accountability of key performance metrics and targets. Engagement at board level through the establishment of a sustainability reporting sub-committee is an important element of such a structure. Data and controls The creation of a centralised data management system for ESG data owners to feed into will simplify the reporting process and establish internal controls surrounding ESG data. Assurance readiness Irish organisations should keep future compliance in mind when conducting changes to their systems and controls to avoid having to make further changes later. Early involvement of organisations’ audit committees can assist in this process. Double materiality assessment A requirement under the Corporate Sustainability Reporting Directive, double materiality can allow an organisation to map the impact their business has on stakeholders and the environment, as well as the financial impact that sustainability issues will have on cash flows. Training Organisations should provide training to employees on ESG matters and regulations to engender a broader understanding of these matters and their importance across the business. Integration The ESG agenda is evolving at pace. New regulations and reporting standards along with market pressure will require CFOs to integrate non-financial reporting into their existing systems. This will place a heavy burden on finance teams, but it will also present opportunities for value creation through increased efficiencies, enhanced risk management and improved competitiveness. Derarca Dennis is Assurance Partner at EY Ireland

Despite rising inflation and interest rates, Ireland’s SMEs are prioritising innovation to stay competitive in a tough market, writes Neil Hughes Inflation is the number one threat facing Irish SMEs at present (56%), followed by rising interest rates (40%) and the availability of talent (34%). These were some of the main findings of the new Azets SME Pulse Survey undertaken with iReach, surveying senior leaders at 211 SMEs across Ireland in April and May. Forty-three percent said they were expecting the economic climate to worsen over the next 12 months. Only 18 percent are expecting an improvement. If economic uncertainty persists, one-in-three (36%) said they would consider cutting jobs. It is clear that inflation is proving to be a significant challenge for SMEs throughout the country. Every aspect of doing business is becoming more expensive and rising prices are putting a squeeze on already tight operating margins. Given the numerous challenges facing owner-managed and family businesses in Ireland, there is likely to be a greater number of SMEs needing support in the face of financial difficulty.  Rising prices, combined with the significant levels of tax warehoused during the COVID-19 pandemic that will fall due, mean that there are likely to be hundreds of SMEs facing financial difficulty that may need to be restructured.  I would encourage SMEs facing financial challenges to get advice on restructuring and find out if there are funding or finance options that might support their business. The Small Companies Administrative Rescue Process (SCARP) or examinership could help save their business and the jobs they support.  The main sources of funding SMEs expect to avail of in the coming year include their own cash (24%) and government grants or subsidies (19%). Just 13 percent are considering private equity, nine percent bank funding and four percent venture capital.  Forty-six percent of our respondents believe the government should provide additional grants and supports to help navigate the challenges ahead, and 35 percent want additional funding for skilling and upskilling initiatives. Twenty-five percent of our SME Pulse Survey respondents told us they expect the tax burden to increase, while 10 percent expect it to fall. When asked about the outlook for their own business, 19 percent said they expect their revenue and profits to increase in the year ahead, 63 percent expect no change and 18 percent are anticipating a decrease.  Despite the obstacles they are currently navigating, SME leaders believe that innovation will provide the greatest opportunity for their business over the coming six months. It is encouraging to see SMEs remain optimistic about the future of their business and committed to pivoting their business models and embracing digitalisation to fuel growth. There is no doubt that technology, whether for cybersecurity, data analytics, remote working, e-commerce or process automation, will be key to their ongoing resilience and competitive advantage. This will be critical as they continue to adapt to a rapidly evolving world.  The Azets SME Pulse Survey also reveals that only one-in-five Irish SMEs are currently measuring their carbon footprint.  They are beginning their sustainability transformation journey and ESG considerations will increasingly shape their business strategy – whether this is in the reduction of their environmental impact or promoting greater diversity.  Close to one-in-three SMEs are currently reducing the carbon footprint of their business. The main challenge they face in progressing their ESG goals is the cost involved. With Ireland committed to becoming net zero by 2050, however, SMEs will have to adapt.  Neil Hughes is CEO of Azets Ireland

Cloud computing has revolutionised how businesses operate but it has also given rise to new risks, challenging organisations to navigate security breaches, data privacy concerns and governance, writes Jackie Hennessey While cloud computing offers some great benefits such as reduced costs, flexibility, and scalability, it also introduces a unique risk profile, including information security, data protection, service availability and increasing regulatory requirements. Striking a balance between managing this risk and leveraging the power of the cloud is crucial. Effective cloud governance that promotes optimisation and does not create barriers to innovation can help organisations strike this balance. Navigating the key risks of the cloud Risks need to be governed and managed to ensure that cloud technology is being used responsibly and in compliance with regulatory expectations. As a result, it is more important than ever to understand and mitigate these potential risks to leverage cloud computing safely. Your first step to determining your cloud risk exposure is understanding the following six potential risk categories: People: Lack of available resources with the correct skill set; Data security: Failure to implement sufficient and appropriate security controls to protect data and prevent data loss through unauthorised access; Compliance: Failure to meet regulatory compliance requirements (including across multiple jurisdictions); Operational: Failure to implement cloud processes, systems and controls aligned with current policies; Financial: Failure to perform proper cloud spend management around unplanned spikes in transaction volume and traffic; Third-party: Lack of third-party oversight, including failure to acknowledge the increased risk of cloud vendor lock-in, vendor unreliability and dependencies. Cloud management Cloud-focused governance bodies Cloud governance bodies will be required to develop, monitor and evolve cloud governance over time by leveraging existing governance forums or establishing new ones with responsibility for: Cloud governance – formulating initial cloud governance policies, monitoring compliance and reviewing exceptions and proposed changes; Cloud operations – managing day-to-day cloud operations, service provision and related issues. Management of CSPs The approach to managing cloud service providers (CSPs) should be formalised and include processes for: Ensuring CSPs have adequate controls in place; Onboarding and offboarding of cloud services from CSPs; Monitoring of performance in line with Service Level Agreements (SLAs); Oversight of outsourcing arrangements carried out by CSPs (i.e. sub outsourcing); Ensuring exit strategies are in place for the termination of services (both expected and unexpected). Cloud strategy A cloud strategy should be developed or considered as part of the technology and outsourcing strategies. The cloud strategy will need to remain aligned with the business’s strategic objectives and be reviewed and updated periodically. Data privacy and security Data privacy and security policies and processes should be updated to consider the use of the cloud and additional controls that may need to be implemented as a result of this, such as: Sensitive data ownership and classification; Data flows and requirements for data transfer; Data loss prevention and rights management for cloud data at rest, in transit and in use. Cloud capabilities Mechanisms should be implemented to ensure ongoing resource availability with the right expertise and skill set. Cloud policies and processes Cloud policies and processes should be developed to define how the cloud is managed and monitored. These policies and processes should be communicated to appropriate stakeholders across your organisation to support ongoing compliance. Regulatory compliance Regulatory horizon-scanning mechanisms should be in place to identify the regulatory compliance landscape and expectations for cloud services relevant to your organisation. Jackie Hennessey is a partner in Risk Consulting at KPMG

The Lean methodology can help companies increase client satisfaction, cut costs and improve profitability, writes Willie Cleary The most important stakeholders for all companies are their clients. Without satisfied clients, there is no business, so understanding and accurately mapping your customers’ experiences is crucial. Doing so can help to ensure that your clients are getting the best possible product or service while also identifying and helping to manage aspects of your product or service that could be improved. Lean is a well-proven methodology that could help your business achieve these goals. What is Lean? Lean is a process improvement methodology that originated in manufacturing (e.g. car-maker Toyota) and has since been adopted by many other industries and professions.  At its core, Lean focuses on identifying and eliminating waste in a process, which can add value for clients and result in higher residual returns for business owners. Lean is a four-phase process involving the following steps: Identifying the client journey; Identifying value-added and non-value-added activities in a process; Removing non-value activities from the process; and Engaging in continuous improvement of the process. Step 1: Identifying the client journey The first step in mapping a client’s experience is to identify their journey from start to finish. This may include their initial consultation or onboarding and regular interactions thereafter, including the supply of goods or services.  The starting point here usually involves visually mapping out the entire process – on a whiteboard, for example.  All relevant team members must be included in this mapping phase to ensure that the necessary process improvement steps are captured, documented and fully understood by all. In a professional service setting, for example, the client’s journey after the initial consultation might include a formal letter of engagement.  If accepted by the client, this letter would lead to an onboarding process whereby the client would provide relevant information and documentation to the service provider. The service provider would then work with the client, providing regular updates in the lead-up to the final output, including a business plan, financial statements or tax returns. Step 2: Identifying value-added and non-value added activities  Once the client’s journey has been accurately mapped, the next step is to identify value-adding and non-value-adding activities.  Value-adding activities are those that contribute directly to the client experience. They may include meeting with clients to discuss their needs, preparing financial statements or business plans and providing regular updates or feedback. Non-value-adding activities do not contribute directly to the client’s experience – waiting for a response, for example, or unnecessary paperwork. All non-value activities must be clearly identified to improve the efficiency of the client’s journey. To identify value-added and non-value-added activities, you can use the “five whys” technique. This involves asking “why” five times to get to the root cause of an issue.  If you identify that waiting for a response from a client is a non-value-added activity, for example, you can ask why the response is needed. If the response is needed to complete the work, you can ask why it is needed to complete the work, and so on, until you get to the root cause of the issue. Step 3: Removing non-value activities from the process The third step in the Lean process involves removing non-value-added activities from the customer journey – streamlining processes, reducing bureaucracy and simplifying procedures, for example.  Removing these particular activities can create a more efficient process that adds value for your clients, mainly by reducing related costs.  You may be able to automate some of your client communication, for example, by using online document management systems to reduce paperwork. Step 4. Engaging in continuous process improvement The fourth step in the Lean process involves continuously improving the client’s experience of your business.  The output of this exercise may involve implementing new process changes based on client feedback or inefficiencies identified by your staff in their day-to-day work. Step four has two phases: Applying metrics or key performance indicators (KPIs) to measure the effectiveness of business processes (e.g. client satisfaction or query response times). By monitoring these metrics or KPIs, the business can more easily identify areas for further improvement. Involving core team members in continuous improvement by encouraging them to suggest improvements, solicited or unsolicited, and empowering them to make positive changes. This process can be supported by providing training and development opportunities for your team. The power of continuous improvement Lean is all about continuous improvement, so it is crucial to seek regular stakeholder feedback while reviewing business processes and identifying areas for improvement on an ongoing basis.  Mapping your clients’ experiences of your business has many potential benefits. It can help you to identify and eliminate costly inefficiencies, improve the client experience and increase profitability.  Willie Cleary, FCA is a Lean Consultant with LeanTeams

The Corporate Sustainability Reporting Directive aims to improve the quality, comparability and relevance of sustainability reporting by companies in the EU. Brendan Ringrose explains what it’s all about The pandemic, turmoil in Ukraine, stricter regulatory controls and the effects of climate change have all contributed to the heightened level of urgency surrounding environmental, social and governance (ESG) reporting. The Climate Action and Low Carbon Development (Amendment) Act was signed into law in July 2021. The Climate Act commits Ireland to reaching specific greenhouse gas emission-lowering targets by 2030 and 2050 and provides a framework for doing so. Greenwashing and reporting The European Commission’s Corporate Sustainability Reporting Directive (CSRD) is a proposed legislative measure aimed at improving the quality, comparability and relevance of sustainability reporting by companies in the EU. One of the main objectives of the CSRD is to address the problem of greenwashing, which occurs when companies make false or misleading claims about ESG performance to improve their reputation or gain competitive advantage. Greenwashing undermines the credibility and effectiveness of ESG reporting, making it difficult for investors, consumers and other stakeholders to assess the true sustainability performance of a company. The CSRD will apply to all large companies and all companies listed on regulated markets (except listed micro-enterprises). Organisations must not only disclose how sustainability issues impact them, but also how their activities impact society and the environment. Strengthening sustainability The European Commission’s Action Plan for Financing Sustainable Growth directly targets ‘strengthening sustainability disclosures and accounting for rule-making’ as one of 10 key focus areas. In tandem with the trend towards mandatory ESG reporting, more and more companies are choosing to disclose ESG information to satisfy stakeholder demands voluntarily. The CSRD obliges companies within the scope to report against common EU reporting standards adopted by the European Commission as delegated acts. Companies are likely to start reporting in 2024, based on FY 2023 information. Reporting considerations Companies will need to consider the following over the next several years. Timeline for implementation The timeline for the implementation of the standards and reporting is: FY 2023: first set of Sustainability Reporting Standards will be available by mid-2023 based on the draft standards published by the European Financial Reporting Advisory Group in November 2022; FY 2024: second set of Sustainability Reporting Standards will be available and EU Member States will adopt the EU directive; FY 2025: first reports due for the financial year 2024. Who does it apply to? The CSRD applies to all large companies governed by, or established in, the EU with: >250 employees and/or; >€40 million turnover and/or; >€20 million in total assets of listed companies. Small and medium listed companies get an extra three years to comply. What must be included? A dedicated section of the company’s management report must include the information necessary to understand its impacts as well as how sustainability matters affect its development, performance and position. Though the Non-financial Reporting Directive did not require auditing, the terms of the CSRD require sustainability reporting to be checked externally when the CSRD takes effect. Companies will need to seek limited assurance of sustainability information. This requirement is less extensive than that required for the financial audit statement but will, nonetheless, require external scrutiny. Companies must disclose information relating to intangibles (social, human and intellectual capital). Reporting should be in line with Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy Regulation. An entity will be exempt from the reporting requirements if the consolidated management report of a parent company includes the results of the company and its subsidiaries. Reporting This must be included in the management report. The bottom line Mandating standardised reporting provides for increased comparability in the public domain. This means that organisations can be held accountable by their stakeholders and, in turn, is likely to play a role in procurement processes. Brendan Ringrose is a partner with Whitney Moore LLP Law Firm

As the unsung heroes of the family unit, stay-at-home parents must be properly compensated for their work in the home with a stable retirement, says Carol Brick According to a survey conducted by Royal London Ireland in 2022, 88 percent of women believe that the role of the stay-at-home parent is undervalued or under-supported in Ireland. About 349,500 people in Ireland work as stay-at-home parents, with 94 percent being women, the survey found, highlighting a possible risk of poverty for those people upon retirement. Despite the invaluable work done by these individuals, more than eight in 10 agree that their role is undervalued or under-supported. According to the Royal London Ireland research, the annual cost to employ someone to do the household jobs usually completed by a stay-at-home parent would be an estimated €53,480. However, the survey participants estimated the potential ‘salary’ of the stay-at-home parent at an average of €28,460 per year. Those who give up work to look after a family, whether male or female, are the least likely to save for retirement. Stay-at-home mums are at the highest risk, as retirement savings are not on the agenda without an income. This is a significant concern as the state pension, after taking their years as a homemaker into account, will be approximately €12,000 per year. These individuals must consider financial protection and planning to ensure their family is financially secure, especially in the event of an unexpected death or illness. Long-term effects If stay-at-home parents in Ireland do not plan for retirement, they may face serious financial consequences in their later years. Without a steady income stream, they may struggle to cover their living expenses, healthcare costs and other essential needs. This can lead to a lower standard of living and reduced quality of life during retirement. Without a financial plan, they may have to rely on their adult children or social welfare. Furthermore, not planning for retirement can limit the options available to stay-at-home parents. They may be forced to work longer than they would like or take less-than-ideal jobs to make ends meet, limiting their ability to travel, pursue hobbies or support their families in other ways. Planning for retirement can help stay-at-home parents in Ireland achieve financial security and allow them to enjoy their later years. Lastly, not planning for retirement can affect their mental and physical health. Stay-at-home parents may experience higher stress levels, anxiety, and other adverse health outcomes without the financial resources to cover medical expenses or other healthcare needs. Planning for retirement can help stay-at-home parents in Ireland maintain their physical and mental health and enjoy a fulfilling and satisfying retirement. Society often undervalues or under-supports the role of stay-at-home parents, despite their invaluable contributions to their families and communities. I encourage individuals to prioritise financial planning and protection, no matter their employment status. Carol Brick is Managing Director of CWM Wealth Management and HerMoney.ie

At a time when companies are struggling with employee retention, internal networking is vital for individual and organisational growth, says Jean Evans When you open any newspaper or listen to broadcasts, podcasts or news these days, you are hit with reports of people leaving the workforce. Organisations are struggling to retain and recruit staff. This is further fuelled by negative media reports on the crises our society is currently facing, from housing shortages to energy prices. It is clear that something is simply not working. People are stressed and overwhelmed. They are feeling the pressure, they are time-stretched, and they don’t have enough balance in their lives. Organisations are unsure of how to respond, leading to managers who are ill-equipped to deal with the changes needed in the workplace.  There simply isn’t enough time to learn and understand everything in this working environment. Internal networking While there is no magic wand to solve the problem of workplace churn, helping people to understand what it means and how to connect with others can help. This is where internal networking comes in.  Organisations must make the time to coach and train employees on how to connect and learn about one another and grow to create a workplace community that supports them when they put their hand up for new projects, share ideas or need to overcome a challenge. Where there are genuine connections and support in an organisation there is psychological safety. This can help to create a happier workforce that is focused on reaching shared strategic goals. Organisational benefits There are benefits for organisations that take the time to facilitate internal networking: Knowledge sharing Internal networking can facilitate the sharing of knowledge, ideas and expertise among colleagues, which can lead to greater innovation, improved decision-making and better problem-solving. Career development Networking with colleagues can provide opportunities for career development, such as mentorship, job shadowing or exposure to new projects and initiatives. Improved communication Networking can enhance communication within an organisation by promoting open dialogue, encouraging feedback and creating a culture of transparency, trust and confidence. Increased job satisfaction Building relationships with colleagues can create a sense of community and belonging, which can improve job satisfaction, employee retention and overall well-being. Enhanced collaboration Networking can promote collaboration and teamwork, which can lead to increased productivity, better outcomes and greater job satisfaction. Professional growth Networking can provide exposure to different perspectives, experiences and approaches, which can help professionals broaden their knowledge and skills. Looking at company culture How internal networking manifests itself depends on the culture of a company. For it to work, everyone must be engaged and ready to buy into the powerful notion that having connections is crucial to any organisation’s success. Jean Evans is a Networking Architect and Founder at NetworkMe

The Work Life Balance and Miscellaneous Provisions Act 2023 (Act) has been signed into law. Moira Grassick outlines the Act’s key provisions and its implications for employers and employees Last month, the Work Life Balance and Miscellaneous Provisions Act 2023 (Act) was signed into law by President Michael D. Higgins. This new employment legislation will introduce several new statutory rights aimed at supporting a better work-life balance for employees and also supporting those with caring responsibilities. The Act also seeks to support employees who are victims of domestic violence through the introduction of a statutory paid leave entitlement of five days. New rights In summary, the Act introduces the following rights: the right to request remote working for all employees; the right to request flexible working for parents and carers; the right to breastfeeding breaks extended to two years from the date of the child’s birth; five days’ unpaid leave for medical care purposes for parents of children under 12 and carers; and five days’ paid leave for victims of domestic violence. The right to request remote work As all employees with more than six months of continuous service will soon have a right to request remote work, employers will need to plan how to manage these requests. The Workplace Relations Commission (WRC) is also developing a Code of Practice to provide further guidance for employers and employees on managing requests for remote working arrangements. An employer must respond to the request within four weeks. However, this timeframe may be extended to eight weeks if the employer is having difficulty assessing the workability of the request. While employers will be obliged to consider these requests under the new law, it should be remembered that there is no obligation to grant all requests. If employers refuse the request, the Act states they must provide a written notification to the employee confirming the reasons for the refusal. The WRC does not have jurisdiction to challenge the merits or the grounds of an employer’s decision to refuse a request for remote working. Potential impact The new rights to request flexible work for parents and carers, and remote work for all employees, are designed to promote a better work-life balance. While they represent a new development in employment law in Ireland, how these rights will operate in practice remains to be seen. Employers must develop policies for managing this type of request and prepare for negotiations with employees who want to alter their working patterns. Employers in industries that have developed remote work practices in recent years may face pressure to grant requests. If operations were largely unaffected by remote working arrangements brought in to deal with pandemic restrictions, it might be difficult to refuse a request for productivity or operational reasons. And with the jobs market remaining tight, employers who refuse requests risk losing valued employees to a competitor who does offer flexible or remote working options. Unpaid leave for medical purposes  The Act states that an employee is entitled to five days’ unpaid medical leave in a 12-month period to provide “significant care or support for a serious medical reason” for a person who is in a specified relationship with the employee, such as a spouse, civil partner, parent, sibling or person who resides in the same household as an employee. This leave is different to force majeure leave, which gives an employee three days in a 12-month period or five days in a 36-month period for an urgent family matter. Paid domestic violence leave  The Act introduces this new leave which provides for five days’ paid leave for victims of domestic violence to allow the affected employee to seek medical advice, legal representation and to engage with other specialist support services. Bespoke employment policies As it seems highly unlikely that all businesses will be able to roll out generic “one size fits all” policies to manage all these new employee rights, each company will need to tailor new policies to the specific needs of its operations. While employers should wait until the WRC Code of Practice is finalised before tailoring their remote work policies, it’s a good idea to begin preparing to update handbooks and policies to reflect these upcoming changes, making remote working more accessible for more employees. Moira Grassick is Chief Operating Officer at Peninsula

In today’s unpredictable business environment, organisations must invest in resilience to ensure they can withstand any disruption and quickly recover, writes Andy Banks  As Irish businesses grapple with a rapidly changing world, the challenges of geopolitical upheaval, soaring inflation and economic uncertainties have become ever more prevalent.   Added to this, businesses are facing the rising threat of cybercrime, supply chain challenges and the climate crisis.  To survive and thrive in this upheaval, Irish business leaders must be able to proactively anticipate and respond to disruption.  The key to success is resilience: the ability to navigate crises and the capacity to adapt and succeed in the face of disruption.   PwC’s Crisis and Resilience Survey 2023 delves into how organisations are directing their resources, efforts and investments toward building resilience to thrive in a state of permacrisis.  There are three ways organisations can embrace and invest in resilience to transform their operations in an era of constant disruption.  1. Integration: An integrated resilience programme is essential  It is no longer sufficient for organisations to operate in silos as they address today’s complex and interconnected risks. Both locally and globally, enterprises are moving towards an integrated approach to resilience.   They are centrally governing and aligning multiple resilience capabilities around what matters most to the business and embedding this programme into their operations and corporate culture.  2. Leadership: Thriving in a permacrisis means upskilling leaders and teams  Consistent with global trends, 33 percent of Irish respondents in the PwC survey said building a team with the right skills is a significant challenge in establishing a resilience programme. Fifty-seven percent of Irish organisations cite upskilling future leaders as one of the three most important elements of future-proofing resilience.  A successful resilience strategy and programme needs:  Executive sponsorship from the C-suite;  A senior leader with clear responsibility for the programme; and  A skilled team to drive the programme across the organisation.  3. Programme approach: Build operational resilience around what matters most  Organisations must build operational resilience and ensure that enterprise planning and preparation are part of a broader continuous cycle.   Irish organisations invest in teams to deliver on the resilience agenda, with 77 percent of respondents confirming at least one dedicated resource.   As more organisations integrate their resilience programmes, many firms worldwide are adopting the core principles of an operational resilience (OpRes) approach, focusing on protecting what matters most and prioritising investment based on what’s critical to their organisation and stakeholders.   This allows organisations to manage risks with high reliability and drive efficiency.  Those who have moved to an integrated resilience programme are significantly ahead in many of the core elements of OpRes: building a robust corporate immune system where an organisation can adapt, flex and grow stronger.  Technology-powered resilience   Distributed data, systems, processes and operational silos mean organisations struggle to obtain a complete view of their resilience, only identifying gaps when disruption hits.   The traditional approach to managing resilience is no longer working – simply checking off compliance with regulations does not deliver resilience.   Too many organisations miss opportunities to identify and rectify vulnerabilities before an incident occurs. What are the vulnerabilities you can and can’t live with? It’s time for a new approach.  Business leaders understand the need to underpin resilience strategies with technology that can intelligently aggregate data from across a business to provide an integrated, insight-driven single source of truth and greater agility in times of crisis.   Business leaders also want to use technology to create a living resilience programme they can continually test and evolve.  Andy Banks is Risk Assurance Solutions Partner at PwC 

Inclusive hiring has become vital to modern business practices as organisations strive to create a more diverse and equitable workplace. Fergal McPhillips argues that inclusive hiring is not just about a diverse organisation but about attracting and retaining top talent and creating an environment where employees’ unique perspectives are valued. Inclusive hiring is the act of seeking out and hiring employees who are diverse in their perspectives, backgrounds and thought processes. Generally speaking, it’s about recruiting people from underrepresented groups, such as people with disabilities, racial minorities and individuals from other marginalised groups. Organisations must overcome unconscious bias in their hiring and remain open to diversity in all forms, whether the diversity of thought, cultural background or embracing differences in gender expression. An organisation must recognise that different ways of thinking, experiences and skills can benefit it. Benefits Inclusive hiring is increasingly becoming a priority for organisations in today’s diverse business landscape. According to a study by McKinsey, companies with diverse workforces outperform their less diverse counterparts in terms of financial performance, with ethnically diverse companies being 36 percent more profitable than those who are not as diverse. Furthermore, an inclusive hiring process is a more equitable hiring process and can help reduce the risk of discrimination and legal liabilities. A report by Glassdoor found that 80 percent of jobseekers between the ages of 18 and 35 consider diversity an important factor when considering job offers. Inclusive hiring is essential for organisations that seek to create a diverse, equitable and inclusive workplace culture that can attract and retain top talent and drive long-term business success. It can also help improve employee engagement, satisfaction and morale while making a workplace more diverse, welcoming and productive. Creating an inclusive culture To engage in inclusive hiring and ensure it sticks, you must develop an inclusive company culture that truly embraces and celebrates the many differences that make people brilliant. Creating a diverse working environment is a process, not an event. It won’t happen overnight. It takes time and commitment. Your organisation must be ready to invest in the process, willing to hear new ideas, prepared to change its behaviours and encourage employees to change theirs too. Creating an inclusive company culture is critical in attracting and retaining diverse talent and driving long-term business success. This includes investing in diversity and inclusion training for all employees, ensuring equitable policies and practices, and establishing employee resource groups to provide a sense of belonging and community for underrepresented groups. In addition, fostering an open and transparent communication culture is important, where employees feel safe to voice their opinions and concerns without fear of retribution. This can be achieved through regular town hall meetings, one-on-one meetings with managers and regular employee engagement surveys. Ultimately, creating an inclusive company culture requires a commitment from leadership to prioritise diversity and inclusion in all aspects of the business and to take proactive steps to create a workplace where all employees feel valued, respected and supported. Fergal McPhillips is a Team Leader of Accounting & Finance Recruitment at Morgan McKinley

The European Union’s recently implemented Pay Transparency Directive is set to transform the way companies across the EU approach pay equity and transparency. Doone O’Doherty explores steps organisations should take to implement the Directive. At the end of March 2023, the European Parliament adopted the EU Pay Transparency Directive. This will go through the final formalisation steps, including Council adoption, and enter into force 20 days after publication in the EU Official Journal.  EU Member States will be required to transpose the Directive into national legislation within three years – very likely in 2026.  Given the proposed legislation’s complexity and implications, organisations should start preparing now to ensure a smooth transition from a legal, operational and strategic perspective. Under the Directive, greater transparency will be required in four critical areas.  Gender pay gap reporting and equal pay Organisations above a certain employee threshold will be required to publish gender pay gap figures externally.  Where a pay gap of five percent or more is found in any category of worker and other criteria are not met, a joint pay assessment must also be completed. Recruitment   Organisations will be required to provide information on pay (e.g. pay bandings) as part of the recruitment process, such as adding pay ranges to job adverts or sharing this information with applicants. They will no longer be able to ask candidates about current pay to determine offers.  Pay approach and philosophy  Employers with more than 50 workers must provide workers with information on the criteria used to determine pay and pay progression. Average pay levels Workers will have the right to request information on the average pay level of workers doing similar work to them, broken down by sex. This must be provided within two months of the request.   To whom does this apply? While local implementation may vary, the Directive suggests that the requirements listed above may apply not only to employees but also apply to other worker types (e.g. contractors and gig economy workers).  Key steps to take Given the significance of the measures to be introduced, organisations must identify their biggest risks and opportunities and prioritise activities. This will allow for developing an effective change plan to ensure readiness for the upcoming legislation and wider transparency requirements.  For some organisations, the impact of the EU Pay Transparency Directive will be significant, potentially leading to the widespread transformation of critical people policies and activities. Successful change (including impacted systems and processes) is a multi-year programme.   It will be critical for companies to: Understand the impact: Identify key stakeholders and gain a high-level understanding of key risks and opportunities for your organisation. Provide an initial briefing to identified stakeholders on the Directive and its implications for your organisation.  Assess organisational readiness: Deep dive into the key risks and opportunities identified through interviews and document reviews. Complete a readiness assessment to prioritise activities with stakeholders. Develop an implementation plan: Develop a high-level implementation plan to embed change based on agreed priorities, risks and opportunities.  Doone O’Doherty is Partner of People & Organisation at PwC 

With stakeholders pulling in different directions and competing for your time, staying focused on your daily goals can be difficult. Moira Dunne explains how to manage stakeholders trying to take time away from your scheduled tasks. Stakeholders are the key people you interact with in your role. It is essential to maintain good relationships with them, support and be responsive to them, but this can impact your work plan and put you in a tight spot. We feel pressure to respond immediately and don’t want to upset them by saying “no” to a request, even if it is not urgent. Furthermore, the stakeholder may be a senior figure, so you feel obliged to acquiesce, even if you don’t have time. As a result, you prioritise the new request but sacrifice important deliverables and your own personal time while letting others down. Overall, it can feel like the workday is out of control, leading to stress and anxiety. Here are four tips on managing requests from stakeholders. 1. Take control To help control your time, be clear about what you need to get done each week and block time in your diary for this priority work. As new requests crop up, you can assess which is the higher priority task. You may need to do both, but you will not drop the planned work without rescheduling it first. A baseline plan gives you the confidence to discuss your response regarding the work needed, and not having a plan in place makes it harder to do that. 2. Manage your response time When responding to stakeholders, the key is to say yes on your own terms. For example: Ask when they need the task completed; Inform them when you can work on the task; and Negotiate a time that suits you both – be as flexible as possible. As a result, you don’t automatically drop your planned work but still support the stakeholder as best you can. 3. Review urgent requests Urgent requests generally fall into two categories: things that couldn’t be anticipated; and things that were not done in time and became urgent. Many people don’t plan ahead. You can’t change their work style but can change your interaction with them. Take a few minutes on a Friday afternoon to check in with stakeholders who often have last-minute requests. Tell them you are planning your week and to send on any requests for the next one before close of business so it can be scheduled in. This prompts them to think ahead about requests instead of waiting until the last minute while subtly telling them that they should let you know in advance if they want time in your diary. 4. Agree expectations If starting a new relationship with stakeholders, set expectations with them beforehand. Find out what the service level agreement says and ask what timing will work best for them. Agree the response time for general queries (while acknowledging that genuinely urgent situations can be handled differently). Once agreed upon, it is easier to stick to these response times in the cut and thrust of a busy day. 5. Drop the guilt Do not feel guilty if a task from a stakeholder does not fit into your schedule. If you can’t do something, there will be a good reason, such as not qualifying as a higher priority than your current work or being within your role’s remit. Moira Dunne is the founder and director of beproductive.ie

Jillian O’Sullivan sheds light on the new Irish law mandating identity verification for company directors and its potential implications for businesses The Companies (Corporate Enforcement Authority) Act 2021 contains a provision requiring the directors of Irish companies to provide their Personal Public Service (PPS) number on certain documents submitted to the Companies Registration Office (CRO) to allow for verification of a director’s identity.  The CRO has announced that this requirement will be effective from 23 April 2023. Application All directors of Irish companies will be required to provide their PPS number to the CRO when filing the following forms:  Form A1 – Incorporation application; Form B1 – Annual return; Form B10 – Change of company officers or their particulars; and Form B69 – Notice of cessation of company officer where a company has failed to file the notice. PPS number verification The CRO will verify the director’s first name, surname, date of birth and PPS number submitted electronically with the data held by the Department of Social Protection (DSP). In order for there to be a match between the two sets of data, the first name and surname submitted to the CRO must exactly match the names associated with that PPS number in the DSP database. The CRO has confirmed that it reserves the right to reject any submission where there are discrepancies between the information submitted and the information held by the DSP. PPS retention When the PPS number filed with the CRO has been validated, it will be retained securely in an irreversible hashed/encrypted format and stored securely. PPS numbers will not be accessible by any employee of the CRO or any other party, and they will never be shared with any third party. The CRO will then match the hashed/encrypted version of the PPS numbers to future filings, avoiding duplication of director records. Directors with no PPS number If a director does not have an Irish PPS number, they must apply for a Verified Identity Number (VIN) by completing a Form VIF (Declaration as to Verification of Identity) and filing it with the CRO. The Form VIF must state the director’s name, date of birth, nationality, and address, and it must be sworn in the presence of a notary in the director’s home country. Digital or electronic signatures cannot be accepted on Form VIF. Once the Form VIF has been processed successfully, the CRO will issue a VIN to the director and the presenter of the VIF. This must be used for all future CRO filings for any company to which that director is appointed. If a director does not have a PPS number but has previously been issued a Register of Beneficial Ownership (RBO) number for filings made with the Central Registrar of Beneficial Owners, then the director can use their RBO number as their VIN for CRO filings.   The VIF will not be publicly available on the CRO searching system. Non-compliance If any person fails to comply with this new requirement, they shall be guilty of a category four offence resulting in a fine of €5,000. It will also mean a company cannot complete their filings and could suffer late filing penalties and possible loss of audit exemption.  Next steps If they have not already done so, now is the time for companies to start collating their directors’ PPS numbers or RBO numbers and establish whether any of their directors will need to apply for a VIN. To avoid any unnecessary delays with filings, directors and their company secretarial providers should review information about them held by the CRO (e.g. first name and surname) and identify any inconsistencies between such information and the data stored by the DSP. Jillian O’Sullivan is Partner of Corporate Compliance at Grant Thornton

Accountants are discovering new ways to use AI for marketing purposes. Maryrose Lyons explains how they can leverage generative AI to create business content As discussed in my last article, many accountants have already taken a special interest in using generative AI, such as ChatGPT, to create opportunities for marketing growth. If you’re not already leveraging this technology within your organisation, here are six ways accountants can use this technology in their marketing efforts. 1. Market research and strategy ChatGPT can be used to identify emerging market segments and identify opportunities, potentially helping accountants to tailor their services and marketing strategies accordingly.  It can assist in developing comprehensive marketing strategies, ensuring that all marketing efforts are focused and effective. 2. Content creation Generative AI can be used to support content production, such as blog posts, articles and social media updates. These can be done in minutes, allowing an organisation to focus on clients. 3. Social media ChatGPT can be used for strategies, engagement and content production at scale for social media sites such as LinkedIn and Twitter, increasing engagement with potential clients and connections. 4. Email Email marketing can be elevated through more personalised email campaigns and client updates that do a better job of helping busy accountants stay connected with existing clients and generate new leads. 5. Marketing assets Brochures, flyers and client presentations can be made more visually engaging by using apps like Midjourney to create high-quality images based on text commands. 6. Keyword research Identifying relevant keywords and optimising website content for search engines is an important part of marketing. Accountants can leverage generative AI apps to help create content that search engines will pick up. Generative AI is an innovative tool that could help you to streamline mundane tasks while freeing up resources for more creative and complex work. Maryrose Lyons is the founder of Brightspark. Brightspark is offering a Digital Marketing with ChatGPT course on 27 April 2023

A recent survey suggests that Irish CFOs are placing less importance on ESG considerations than they did a year ago, despite growing stakeholder interest, explains Derarca Dennis Ireland’s financial leaders are optimistic about the future despite current challenges, identifying investment in talent as one of their top priorities, the EY Ireland CFO Survey 2023 has found. Interest in environmental, social and governance (ESG) issues has, however, faded over the past year and this is a cause for concern. Just six percent of the 151 finance leaders surveyed by EY Ireland cited increasing the sophistication of non-financial reporting as one of their top strategic priorities for the five years ahead, down from 15 percent in the 2022 survey. Only 10 percent saw opportunities in sustainability and decarbonisation as a priority for driving growth in the year ahead. It is essential to view these findings in the context of the timing of both surveys, however. The 2022 survey took place before the Russian invasion of Ukraine at a time when the world was emerging from COVID-19. There was a decidedly optimistic view of economic prospects and a growing focus on the need to tackle the climate emergency. Conditions in early 2023 could hardly be more different. Spiralling energy costs, inflation at levels not seen for decades, rising interest rates and continuing geopolitical volatility have combined to focus business minds on more immediate survival and growth concerns. ESG viewed as compliance The overall results of this year's EY Ireland CFO Survey suggests that ESG is still regarded as a compliance and regulatory issue rather than as a source of commercial opportunity. Forty-three percent of our respondents pointed to sustainability regulatory compliance as a key focus for the next two years, while just two percent identified non-financial and ESG reporting as a priority for the same period. What is concerning is that organisations not covered by regulations (current or imminent) could face difficulties winning new business or maintaining relationships with existing customers. Organisations that are covered by the regulations, and that have set decarbonisation targets, increasingly require their supply chains to meet the same standards, with potentially severe consequences for failing to prepare adequately, so collaboration across the supply chain is essential. Financial and training implications Organisations raising finance already have to answer questions about sustainability performance and social impact from banks, private equity houses and other potential investors. It is, therefore, imperative to make ESG/non-financial reporting an integral part of their core strategy. There was also a degree of discordance in the findings. When talking about the evolving role of the CFO, 54 percent of respondents claimed their role now includes a greater focus on ESG and non-financial reporting, and 60 percent described their non-financial/ESG performance monitoring and reporting capability as basic or not mature. Despite this, attaining non-financial/ESG reporting skills was identified as a priority for the next five years by just 15 percent of the financial leaders surveyed. Lack of leadership buy-in A lack of endorsement from senior leadership and a paucity of expertise and experience within the finance team were cited as key barriers to more effective ESG reporting at an organisational level. Some 30 percent of the finance leaders surveyed said it was not considered a priority among leadership, which may lead to unaddressed ESG risks in the future. While the current macroeconomic environment and business climate can justify some diversion of attention away from the ESG agenda, the fact remains that it cannot be divorced from the broader needs of the business. Indeed, ignoring ESG will present significant risks in an environment where a business’s ESG credentials and sustainability performance will increasingly become key competitive differentiators. Future-focused CFOs need to be aware of the importance of the ESG ecosystem and mindful of the environment in which they operate, which not only includes Ireland but also the European Union. They must ramp up resource allocation to enable their finance teams to meet rapidly growing ESG and non-financial reporting requirements. Failure to take these steps could see businesses falling behind those competitors that are addressing the ESG agenda today. You can read the full report at EY.ie. Derarca Dennis is Assurance Partner at EY Ireland

Julia Rowan answers your management, leadership and team development questions I recently moved into the public sector and am leading a department of 45 staff led by seven long-serving managers. The department is well-structured, and the segregation of duties is well-documented. However, motivating the team of managers is proving difficult. The word ‘change’ is a no-go area. I’m finding one-to-one meetings work, but in group settings, there is very little interaction.  A. There is a lot going on here, and I wonder if your team senses your frustration. It can be scary for a team when an ‘outsider’ comes in to lead them, so I would take a long-term view—going slowly, supporting your team, praising what is working, and building trust.   Read between the lines. Your one-to-ones are working, but group settings are not. What feedback are you getting here?   Use the one-to-ones to discuss what your managers want from the team meeting. Then design these very carefully.  Try to meet in person. Start each meeting with a simple ‘check-in’ question, something that connects with the managers’ real world. This could be, ‘what do you want from today’s meeting?’, ‘what’s your biggest challenge at the moment?’, or ‘what’s your long-term focus?’.  Perhaps you could give each manager five minutes to update colleagues on their work. You may find some common themes coming out of the one-to-ones that could be brought to the team meeting: problems that could be aired and shared or, even better, progress made. It could be useful to suggest a strategy session looking at what is working well and how the team can build on this, as well as current challenges. Get curious about your team’s successes and what it has achieved.  The team would need to get a clear sense that you notice what is working and are not just ‘ticking the box’ so that you can move on to the problem areas.  All of your managers have good-sized teams and people managers always need support. Be explicit and intentional about this. Building trust with you will help them to explore and accept change.  My new boss joined recently from another organisation. I applied for the promotion and did not get the role. I’m okay with that and I like my new boss. He is getting his feet under the table and beginning to make suggestions about what we should do. Often, he suggests things that we have tried before (and which didn’t work) or he overlooks important issues. I don’t know how to disagree or make suggestions without sounding negative, closed or jealous. A. This is a great example of where the feedback we want to give (like “we tried that and it didn’t work”) could sound negative, but where your intention or concern is positive (i.e. to ensure that we don’t waste time).   Be positive. Voice the concern. Share the feedback. For example, “I think revising our service offering is a great idea. I’m not sure whether you are aware that we tried that before and our clients pushed back. Would it be useful if I talked you through what happened?”.   Julia Rowan is Principal Consultant at Performance Matters Ltd, a leadership and  team development consultancy. To send a question to Julia, email julia@performancematters.ie

A shared passion for business and sustainability has helped David and Marguerite Lawlor make a success of their growing venture Watermark Coffee Husband and wife David and Marguerite Lawlor own and run Watermark Coffee, which supplies and services coffee machines for corporate and hospitality clients and sells sustainable coffee brands Woodland Coffee and Green Ocean Coffee wholesale and online. The Lawlors are both Chartered Accountants who trained with KPMG and employ 19 people in Dublin. Here, they tell Accountancy Ireland about their experience running a business. You acquired Watermark Coffee in 2007. What prompted you to go into business together?  Marguerite: During my time with KPMG, I gained valuable exposure to the financial services sector, and then I moved into life assurance. When we came across Watermark, it seemed like the business could have potential. Even though we had a small child at the time, we weighed it all up and decided to go for it. We negotiated a Put and Call option to purchase Watermark Coffee from the previous owners in November 2005. This involved David starting as Managing Director with the option to purchase the business with an agreed price for assets, goodwill, and a formula to allow for any further movement in net assets.  At the time, the business employed six people selling and servicing coffee equipment. Just three customers accounted for 80 percent of sales. The option was for a five-year period, but allowed us to walk away with no contractual commitment.  David: I’ve always enjoyed the cut and thrust of business. My father was one of the founding partners of JPA Brenson Lawlor in Dublin and my brother, Ian Lawlor, is the Managing Partner there now.  I realised early on that being a Chartered Accountant gives you a great edge in business and instils confidence and knowledge at a young age.  I received fantastic and varied training with KPMG and worked with really clever people, but like Marguerite, my heart leaned towards a career in business, rather than business advisory.  I worked for a few years in industry before starting to look for opportunities to run our own business. We started talking to the previous owners of Watermark two years before I seriously got into talks to buy it.  What was the process of acquiring an existing business like? David: It was challenging. There were numerous operational, contractual, and sales-related challenges. With any small business, there is also a concentration of technical knowledge, contacts, and know-how.  We couldn’t justify purchasing the business in a normal share transfer arrangement. There were just too many risks.  Instead, we proposed the Put and Call option, which allowed us to get a start on addressing any challenges while working on a strategic way forward.  One year later, in early 2007, we exercised the option and acquired Watermark Coffee.  Would we recommend this method of acquiring a business now? In a word, yes.  Buying an existing company can save you a lot of time setting up basic business structures—from running stock management systems to developing terms and conditions of employment and everything in between.  There are significant risks involved in acquiring a small business, however, so it’s really important to structure an agreement that helps to mitigate as many as possible.  How has Watermark evolved in the years since?  David: The financial crisis hit just after we bought the business. Eight months in, the subprime mortgage crisis was taking hold in Europe and we had acquired a business dependant on finance being available to our customers.  Our response was to keep reinventing ourselves. We changed the way we engaged with the market. Rather than just selling equipment, which is fine if there is available credit, we started renting our machines in 2011. We were only selling commercial coffee equipment at that time and we had a small group of customers, so we tried to broaden our customer base and access new markets, such as the UK, and became a distributor for commercial Gaggia coffee machines over there in 2009.  That was a fantastic opportunity as there wasn’t a lot happening in Ireland at the time, but it did involve setting up a UK business from scratch.  After several attempts in 2011, we managed to successfully launch an equipment rental option in the Irish market, which was still deeply impacted by the lack of available credit. This increased our relevance in the market and the phone started ringing a bit more.  By 2014, we launched our first coffee range. It was a great supplementary product to our coffee equipment and it allowed us to maintain a much closer relationship with our customers. Woodland Coffee launched in 2020. A sustainably sourced coffee, Woodland funds tree-planting on a 30-acre site we purchased near Pallasgreen in Limerick.  Our customers for this speciality grade arabica coffee include Virgin Media, Docusign and Twitter. Buoyed by our success with Woodland Coffee, we decided to launch our second range, Green Ocean, this year. It is our most ambitious endeavour yet. Tell us about the sustainable aspects of your business? David: Green Ocean Coffee went on sale in January with three speciality grade arabica coffees, including single origin and blended coffees.  For every 1kg of Green Ocean Coffee sold, one square metre of seabed in Clew Bay, Co. Mayo, is being restored.  We commenced this restoration project last July with Clew Bay Oyster Co-Op. We are reseeding the ancient oyster and seagrass beds in special areas of conservation in Clew Bay.    Seagrass sequesters carbon 35 times faster than the same area of rainforest. Oysters also sequester carbon, but filter the water, enabling sea grass and other marine plants and fish to thrive.  As divers and sailors ourselves, we have witnessed enormous change to the marine environment over the past 20 years and sustainability is at the heart of everything we do.  The projects we support have to be authentic, worthwhile, local, and transparent. When it comes to climate action, authenticity trumps everything else. What has your strategy for the business been to date? David: Our strategy has been to stay relevant to the market. We are never going to be the biggest.  Globalisation will ensure that others take that spot, but we can be one of the best and, with Green Ocean Coffee, we can involve our customers in our restoration activities.  This can be as basic as providing simple updates on their contribution to the restoration, hosting talks by the marine biologists working with us, or organising site visits to Clew Bay—and, if they are really interested, a scuba dive over the reefs! We want to make the restoration work real and fun for our customers and their staff. Green Ocean Coffee is about the positive steps we can take and how that makes a meaningful difference.  How do you divide up the responsibilities involved in running the business? Marguerite: We both have very different skill sets. David works on the sales and creative side of the business as he loves talking. I take the lead on operations and finance—basically, making sure that we are meeting our promises to our customers.  We have a great operational team. After our engineers go on the road to service and install machines, I will ring each customer to ask about their experience. We get a lot of feedback that way.  I also oversee the financial side of the business, which allows David to focus more on sales, marketing, and creativity.  I’ve found that my training as a Chartered Accountant has really helped me to set up and manage processes for new staff as we’ve expanded and to deliver on our promises to customers. We really try to keep business talk to the office and make decisions with our staff rather than over the dinner table and we meet with our sales team and operational managers every two weeks to discuss how we are doing.  The coffee business is very competitive and fast-moving, so fast effective communication is a real strength in our customer service delivery.  Tell us about the biggest business lessons you have learned so far? David: First, if I see something wrong, I try to act upon it immediately, even if it is painful. If I’m not sure what to do there and then, I sleep on it and act on it the following day.  Second, I’ve learned the importance of continually reinventing what our business means. This is really necessary, but also a lot of fun.  Third, discomfort comes with the job spec. As soon as I realised this, I become much happier co-running the business. Marguerite: Keep in touch with your customers and listen to their feedback. Customer service is at the heart of every business and every role within our business is crucial.  It was open discussion with our team that led to the development of Woodland Coffee and Green Ocean Coffee.  Do you think there is a specific mindset you need to run a business successfully? David: You have to be incredibly enthusiastic and driven to be self-employed. This mindset is contagious, and customers will get it and want to be involved, so it really works.  Running your own business is also a little ‘all or nothing’. You need to throw yourself in 100 percent. Once you have a genuine interest in what you’re doing and you do it with enthusiasm, entrepreneurship will come easily.  What are your plans for Watermark Coffee in 2023 and beyond? David: We want to restore 180 more hectares of seabed in Clew Bay by getting as many like-minded businesses as possible to partner with Green Ocean Coffee in the year ahead. After that, I’m sure we’ll find another couple of hundred hectares of seabed somewhere else!

If the European Union is to protect its democratic way of life, the bloc must transition from soft power actor to hard power player, writes Judy Dempsey “Europe has never been so prosperous, so secure nor so free. The violence of the first half of the 20th Century has given way to a period of peace and stability unprecedented in European history.”  So begins the opening sentence of the EU’s first ever security strategy document, presented in December 2003. Nearly two decades on, it’s worth revisiting this pithy analysis. It is optimistic. It speaks of an “arc of stability” around Europe.  It is realistic. Europe has to consider terrorism, migration, hunger, conflicts, and bad governance. EU member states cannot go it alone in tackling these problems. Now, however, this document must be reconsidered in the light of Russia’s brutal invasion of Ukraine in February 2022. This war taking place in Europe right now has several repercussions for the EU.  It is not just about providing as much financial, political and moral support as possible to Ukraine and its refugees. Nor is it about increasing the sanctions on Russia (if indeed they will change Russian president Vladimir Putin’s attitude towards destroying Ukraine).  The war in Ukraine is about the future security of Europe—and this includes the EU, NATO, all non-EU and NATO members and the countries of Eastern Europe.  If Europe wants to protect its democratic way of life, it has to start embracing hard power, but hard power has never been an intrinsic component of the EU.  Its foundations were built on democracy and a peace project—intentionally so, after the appalling destruction of World War II, the Holocaust and the centuries of wars and rivalry between France and Germany. The peace project should have been revisited during the Balkan Wars of the 1990s. The status quo prevailed. Yes, the EU began establishing defence structures, but they were focused on peacekeeping and crisis management missions. Hard power was not part of the kit.  Defence was instead anchored in soft power. This entailed training national police forces in the neighbourhood, providing substantial amounts of development aid, and lifting trade restrictions.  Ultimately, the EU attitude toward Eastern Europe was benign and meant different things to different member states, depending on their geographic location. And there was a perception that Eastern Europe was a part of Europe that straddled the EU and Russia.  The war in Ukraine is finally changing this mindset. Across the EU, with variations of urgency, there is an emerging consensus that the war is about the security of Europe.  When the war began, the EU went into overdrive, mobilising €1 billion for military assistance to Ukraine that would be taken from the European Peace Facility.  This is an off-EU budget set up to fund emergency assistance measures. Essentially, it amounts to a military fund.  There are several other defence packages, which include training the Ukrainian armed forces. This military assistance to Ukraine says two things about the EU.  First, its soft power has been ‘upgraded’ to providing hard power support for Ukraine. It is sinking in that a Russian victory in Ukraine would have devastating consequences for the rest of Eastern Europe and, by implication, for the EU.  EU member states are also slowly realising that the original peace project based on stability, security and democracy, has to be quickly overhauled. Soft power now needs hard power to defend values, citizens and democracy.  Judy Dempsey is a Non-Resident Senior Fellow at Carnegie Europe and Editor-in-Chief of Strategic Europe

Clever branding can mean the difference between success and failure for small businesses competing in a crowded market, writes Gerard Tannam Branding is a tool available to every business. Every type of business can compete for their best customers with a strong brand that influences choice.  Because a smaller business can play to the singular strengths of its brand relationships with customers to distinguish it from others, it can level the playing field with its own competitive advantage. A strong brand is good for business. It provides an advantage over competitors by distinguishing a business from them in a way that matters to customers and influences their choices.  Despite its importance, however, this simple business tool, which is available to every business, is often misunderstood, underestimated, and underused, particularly by smaller companies. ‘Brand’ can be defined in many ways: as a mark of origin or quality, as image or reputation, as a proposition or promise, and even as a badge of community or a shared belief system.   None of these definitions is entirely satisfactory, however. While each definition says something true about what a brand is or can be, none captures the part a brand plays in choice. A definition of brand As well as being a tool that businesses use to influence choice, brand is also the tool that customers use to make their choices and reassure themselves that they are correct.  When customers are spoilt for choice or do not have the time or inclination to analyse every buying decision, they often rely on brand to help them choose. And so, the brand tool is used in two different though complementary ways:  a business uses brand to help it become the natural choice of its customers;  its customers use brand to help them make the right choice of product or service.  A brand is a tool that influences choice by reflecting the relationship between buyer and seller and the value they exchange. Marks of quality or identity, such as names, symbols or logos, are means of representing the brand relationship and its value, rather than being the brand. Wedding rings, for example, symbolise a relationship (marriage) between two people – they are not the relationship itself.  The brand bridge To understand brand and how it works, consider the relationship between buyer and seller as a ‘bridge’. Just as a bridge is designed to enable people to cross over safely, quickly, and easily from one side to the other, a brand bridge enables people to exchange value safely, quickly, and easily. The two-way traffic on the bridge of give-and-take between buyer and seller suggests a partnership of equals, both of whom want something the other has and must agree on the value to be exchanged through the transaction. Brand bridges are more handshake than arm wrestle, a basis for good and sustainable business. A definition of branding Defining brand as a tool for business leads to a definition of ‘branding’ as the influencing of choice by building a relationship between buyer and seller based on the value they exchange. A brand relationship establishes a connection between a business and its customers around the value each understands the other is offering.  Branding involves putting the brand relationship to work to build and maintain the commercial relationship with existing customers and turn potential buyers into new customers. Why branding matters to small businesses Success in business comes down to an ability to influence choice. A superior product or service only takes a business so far.  Many hardworking businesses have brought an exceptional offering to market and failed. To be successful, a business must influence enough of the right kind of customer to choose what it brings to market. Brand relationship plays a critical role in the choices customers make. Even in a busy marketplace, where customers are spoilt for choice, a strongly branded business can lead its market and command a premium for its product or service.  Every business has a brand, strong or weak. The brand’s strength or weakness results from actions taken by the business in building the relationship with its customers.  A strong brand is especially important for small businesses, which are unlikely to have the spending power or marketing resources available to larger competitors.  The smaller business can play to the strengths of its brand relationship with its customers to distinguish it from other businesses in the marketplace, and so level the playing field.  Five steps to defining a brand 1. Define the value to be exchanged The value to be realised through the brand relationship is not set by one side or the other but must be agreed. For any relationship to work both parties must continue to see and realise its value.  However, while the brand relationship is defined by the value sought by the buyer and offered by the seller, this must at least match the seller’s asking price for the exchange to work.  The asking price, which the business requires for the exchange to be profitable, is a useful starting point for defining value.  This is typically based on the costs of the resources the business must invest in the relationship, plus its margin or premium.  Then the business considers how the customer is likely to rate the benefits on offer, if this accumulated value matches or tops the asking price, and whether they are likely to  pay it.  2. Identify and target the ‘best customer’ For the brand relationship to work, it is vital that the business carefully chooses the type of customer with whom it and its value proposition are best matched.  When business development lacks focus, a business will attract a wide variety of prospective customers, some well matched with it, but many not.  A business that deals with too broad a mix of customers will struggle to profitably realise the value in many of its individual transactions.  A well-matched or ‘best customer’, on the other hand, will add predictable and significant value to the exchange and deliver the premium that the business needs. Your best customer:  needs what you have to offer, considers it essential;  wants what you are offering, finds it highly desirable; values what you offer, prioritises it above all others; engages fully with all of the elements of your offering, not just its purchase; can pay for it (an ability not confined to affordability). 3. Identify and fix the customer’s ‘key problem’ People buy from other people to fix what they experience as a problem and to enjoy the benefits that result. Potential customers are more likely to be ‘best customers’ when they consider that the product or service offered by a business fixes their key problem. There are two aspects or sides to a customers’ key problems: the practical and the social.  The practical is what the product or service does and the direct, functional benefits it provides, while the social is how the customer relates to others and the world through their choice of that product or service and can be understood in terms of how it makes them feel.   For example, someone is thirsty and buys bottled water. Any bottled water will do. Another customer is thirsty but is concerned that many bottled water products use irreplaceable natural resources.  They choose a brand of water that is carbon-neutral with recycled packaging. The business with the sustainable brand has found its best customer; the customer has used brand value to meet all their needs and fix their problem. 4. Identify and fix both aspects of the key problem More customers are choosing products and services that fix the practical and social aspects of their problems, so it is important that a business identifies both aspects and determines the role that it will play in fixing them. This role must go deeper than the complementary role of seller to the customer’s buyer, and deeper too than the functional role played by the business in fixing the practical problem. When the product or service offered by a business is largely the same as that offered by its competitors, it is the role that the business plays in resolving the social aspect of its customer’s key problem that adds real value, and greater profitability, to the transaction. For example, a business owner seeks an accountant to prepare monthly accounts to support their management of the business. Any suitably qualified accountant can answer this practical aspect of the business owner’s problem.  However, the owner struggles to make sense of how accounts relate to their business and can feel overwhelmed and helpless.  They will choose an accountant that fixes this personal (social) part of the problem, guiding and advising the owner to help them to understand the numbers and the performance of their business. 5. Provide information required for the buying decision When customers are considering which product or service to choose, they will search for some or all of 10 types of information about how a business solves their key problem: Attraction – ‘What is it about this offer that appeals to me?’ Engagement – ‘What tells me that it is right for me?’ Demonstration – ‘How does this offer work?’ Sample – ‘How can I try it for myself?’ Testimonial – ‘Who else has benefitted from this offer?’ Proposition – ‘How do I take up this offer?’ Delivery – ‘How is this offer provided to me?’ Support – ‘How will you help me make the most of it?’ Recovery – ‘What will you do to help me if something goes wrong?’ Feedback – ‘How will I let you know what I think of your offer?’ Final word When the success of a business depends on the effectiveness of its brand in influencing choice, building brand relationships should not be left to chance.  Branding is a tool available to every business. Every type of business can compete for their best customers with a strong brand that influences choice.  Because a smaller business can play to the singular strengths of its brand relationships with customers to distinguish it from others, it can level the playing field with its own competitive advantage.   Gerard Tannam is founder of Islandbridge, a brand planning and strategic development company

As Artificial Intelligence continues to advance, it’s inevitable that it will have an impact on the accountancy profession. Three Chartered Accountants tell us about their expectations Teresa Gallagher Finance AI Senior Manager EY Ireland   Artificial intelligence (AI) can remove repetitive tasks such as data entry, account reconciliation or report preparation and allow accountants to focus on advisory, analysis and business partnering, along with building broader business knowledge.  Equally, natural language processing can extract data from unstructured text documents and input it into accounting systems, reducing time and increasing accuracy.  Aside from the time savings presented by AI functionality, the profession can leverage the innate knowledge garnered in the past to design and develop programs that reduce risk and drive real-time insight and efficiency.  While AI can process vast amounts of data at a rapid pace, it is not capable of the critical thinking and decision-making that human accountants are trained to do. Accountants who embrace AI will thrive as the human skills required to address bias in data will still be key.  Accountants’ expertise in design and understanding data biases can also be used to serve other departments in the organisation as they seek to embrace AI. Moving forward, accountants will work together with AI, but their core analytical and advisory skills will remain essential in understanding their client’s or stakeholder’s objectives and which data will serve them best. Shuning Li  Director, Audit & Assurance Deloitte  Imagine asking a chatbot a complex accounting question and instantly getting a well-written, well-considered answer – similar to what you would receive from someone with 20 years of experience.  Well, there’s no need to imagine it anymore; it’s possible with ChatGPT.  To put the technology to the test, my colleague and I recently entered a real-life accounting scenario under IFRS 10 to ChatGPT.  It returned a detailed analysis with correct reference to the accounting standard. While the answer wasn’t perfect, it did wow us with its depth of knowledge and how quickly it was delivered.  This prompted us to consider what it means for accounting professionals and how our role will evolve together with the technology.  In this early stage of Generative AI (the underlying technology of ChatGPT), the first step is to understand its potential and consider its limitations.  As Chartered Accountants, we apply our professional judgement to scenarios every day and when assessing the outputs of Generative AI, this is no different.  We have a role to play in co-creating and training an AI model to create the new role of “AI model auditor”. This role will not only audit the algorithm of the model but also the ethics behind the training of the model – it requires an individual to lead the professional consultation. Trust is a critical issue as we leverage these advanced technologies, no matter what the stage of maturity. Furthermore, we must also consider the AI’s independence and ensure the technology is monitored and assessed to provide independent advice.  There is huge potential for Generative AI to enhance the workplace, but it will not replace professional specialists. Instead, it will raise the bar for these specialists.  The role of the specialist will evolve, and deeper knowledge and a better understanding of accounting implications that can constantly challenge and verify the answers generated from the AI model will be crucial.  Although there has been heightened discussion about Generative AI in recent months, we are still in the very early days of its adoption and development. Its potential implications, with the right levels of trust, are significant for the profession.  Keith Stafford  IT Audit Partner KPMG Ireland The proliferation of AI technology, automation and bots touches all aspects of how we use and interact with technology today.  AI is having a disruptive impact across many industries, and it would be naïve to assume that the accounting and auditing industries would be immune to the level of change that AI can offer, but neither should the profession fear it.    A significant opportunity for the profession is the ability to automate repetitive tasks, particularly in respect of data entry and analysis.  AI will provide more opportunity and time to focus on more complex tasks, such as data interpretation, decision making and strategy development.   AI can also be used to efficiently support the audit process through the analysis of large data sets and the identification of patterns, outliers, and anomalies within the Financial Statements’ data, enhancing audit quality.   To take advantage of what AI has to offer, the profession needs to embrace the technology and invest in training programs and the creation of opportunities for accountants to understand and utilise these new AI technologies.     AI will look to automate some of the compliance and technical tasks that accountants currently perform. Accountants will need to shift their skill set to analytical, strategic and soft skills rather than pure technical accounting knowledge.      AI has the potential to transform the accounting profession, and rather than shying away, accountants need to understand how it will change the way they work and what they do.   While job security will remain a concern, it is likely that the role of the accountant will evolve to work alongside AI technologies to create new opportunities and skills.  

The benefits of higher incomes are being cancelled out by Ireland’s spiralling cost of living and housing is the biggest culprit, writes Cormac Lucey Once in a while, you come across information that forces you to fundamentally reconsider a firmly held viewpoint. This happened to me recently. Ireland’s economic history over the last four decades has been one of spectacular growth.  The first stirrings that the recent performance of the Republic’s economy might fall short of spectacular success came in an article written two years ago by Patrick Honohan, titled: ‘Is Ireland really the most prosperous country in Europe?’ Take a look at Gross Domestic Product (GDP) figures and you might think so, but they have long been dismissed as an accurate measure of the output that is actually under the ownership and control of Irish people and entities.   That’s why the Central Statistics Office (CSO) gathered a group of expert economists to compile a more realistic alternative measure of Irish economic output. In late 2016, the CSO unveiled modified Gross National Income (GNI).  Honohan’s article questioned whether we—having lost faith in GDP as an accurate measure of Irish output—should put all our trust in this new GNI measure.  The former governor of the Central Bank of Ireland highlighted the impact Ireland’s extraordinarily high cost levels have in reducing the purchasing power of people with higher incomes.  According to Eurostat, the EU’s statistics agency, cost levels in Ireland were 41.4 percent higher than the EU average at the end of 2021. Most of Ireland’s higher cost level is the result of higher housing costs.  Comparing Irish GNI per capita data to EU GDP per capita data, Honohan showed that Ireland was the eighth richest EU member state in income terms. Using Actual Individual Consumption at Purchasing Power Parities, however, put us in 12th place.  In other words, recent economic growth has seen strong income growth, but an awful lot of this has been eaten up by higher costs, especially higher housing costs.  That paper caused a tremor in my rosy view of Ireland’s economic performance over the last few decades.  That tremor became an earthquake when I considered the more recent assertion by Holly Cairns TD, the new leader of the Social Democrats, that she was “a member of the first ever generation” that would be worse off than their parents.  I examined Actual Individual Consumption levels per head adjusted for inflation to test whether, in real terms, people today are worse off than a generation (or 25 years) ago.  The data contradicts Cairns’ assertion. It shows that, in 2020, peoples’ real consumption levels (including housing) were 87 percent higher than in 1995. Far from being worse off, people today are nearly twice as well off compared to a generation ago.  It was only when I examined Eurostat data, comparing Ireland’s Actual Individual Consumption (AIC) level with that of the EU (27) average, that I got an unpleasant surprise.  Between 1995 and 2007, this rose from 96 percent to 118 percent. Three quarters of a century of economic underperformance by the independent Irish state was triumphantly reversed.  The Celtic Tiger was followed by the crash, however. This saw income levels drop and consumption levels fall even more sharply as Ireland switched into deleveraging mode.  Between 2007 and 2021, real Irish AIC as a percentage of EU levels fell from 118 per cent to just 88 percent. We are further behind than we were in 1995. Our economic development model promotes substantial immigration through the mechanisms of EU membership, substantial foreign direct investment and large refugee numbers.  Between 2012 and 2022, the population of Ireland grew by 10.3 percent while that of the EU 27 grew by just 1.4 percent.  Add in a hopeless Department of Housing and you get a housing crisis that is getting worse, not better. This benefits older property-owning generations but disadvantages younger, non-property owners.  No wonder Holly Cairns and Generation Rent are left so exasperated when Official Ireland celebrates its economic success.    Cormac Lucey is an economic commentator and lecturer at Chartered Accountants Ireland