There is increasing evidence that strong ESG (environmental, social and governance) credentials can boost a company’s bottom line while also generating access to capital. Investors, clients and employees alike are seeking out companies with credible ESG profiles. There are many reasons why it makes sense for CFOs to take on the task of aligning financial and ESG goals. CFOs work in a variety of organisations. What unites them is that they are all trusted advisors and are core to both daily operations and long-term strategies. They recognise risks and opportunities and act on them. They are involved in critical decision-making and provide reliable information to investors and boards. They advise and influence action in others and are uniquely placed to be a positive force in driving change. What distinguishes CFOs from other financial advisors is their potential to influence and encourage greener choices at an executive level within their organisation. They have the authority to advise on procurement policies and procedures that focus on sustainability as much as cost control. CFOs also have a key role in the preparation of annual reports and in deciding on what they include. Measuring sustainability-related activities and reporting on them is an integral part of becoming a sustainable business. Choosing from among the many frameworks and standards is an example of the leadership a CFO can offer, particularly in the absence of standardised and comparable frameworks. Business models are moving away from placing shareholder value at the centre. Instead, broader sustainable measures are being embraced, and the CFO will play a critical role in this process. Susan Rossney is Public Policy Officer at Chartered Accountants Ireland.

Budget 2022 is forward-facing, but how will it impact businesses now and in the long-term? Emma Arlow comments on the key takeaways from the Budget address. In Budget 2021, we saw unprecedented levels of intervention and financial supports being provided to support the Irish economy against a challenging backdrop created by COVID-19 and the expectation of a no-deal Brexit. With more positive economic indicattaors than in prior years, Budget 2022 now looks to the post-COVID-19 era and to building recovery and confidence across all sectors of the economy. Inflation One key takeaway from the Minister for Finance’s Budget address has been the increased attention on rising inflationary pressures, notwithstanding the strong rebound in the domestic economy. The indexing of income tax bands and credits to take account of inflation will be welcome not only from the perspective of taxpayers but also for employers who, going forward, may find themselves under pressure to attract and retain the talent so vital for business growth. Business growth The need to plan for sustainable business growth also featured heavily in the Minister’s Budget address. While previous Budgets have given relatively little focus to the domestic business landscape, this year would appear to have moved the dial with respect to changes to the Employment Investment Incentive Scheme to provide greater access to funding for early-stage companies. The exact detail of the changes remains to be seen, but the Minister’s speech suggests that the future of domestic business is a key theme emerging in the medium- to long-term. Climate change The ever-present challenges in respect of climate change and sustainability were given considerable attention. As noted by the Minister: “Future generations will not tolerate inaction from the leaders of today”. We expect to see further changes and an increased focus on sustainability in the years to come. We have already seen such changes come to pass through amendments announced to the VRT system, and amendments to tax relief on certain energy efficient equipment. International tax Budget 2022 and the upcoming Finance Bill 2021 include several well-flagged changes to Irish tax law, including the imminent introduction of interest limitation rules required by the EU law. Such measures will operate to restrict a company’s net borrowing costs, and while they represent Ireland’s last remaining commitment under the EU Anti-Tax Avoidance Directive, commentary both on Budget Day and from the Minister in the days prior make it clear that this will not be the last we  hear of disruption in the international tax landscape. The recent announcement from the Minister that Ireland is to agree to the OECD international tax reform proposals on Pillars One and Two, which will alter the way in which multinationals (including Irish PLCs) tax their profits globally. A key focus in 2022 and onwards will, therefore, be on the design of such rules. We may expect to hear an update on this in next year’s Budget speech from the Minister for Finance. Early engagement with the business community on these imminent changes is vital to ensure that implementation of these rules is made as manageable as possible and continues to allow for innovation and growth in Irish business going forward. Emma Arlow is Director of Tax in Deloitte.

The most powerful tool in a networker’s arsenal is the ability to give back to your network. By following the 10 key points outlined by Jean Evans, you’re guaranteed to cultivate a strong and supportive business network. One of the first things you learn about networking is the importance of giving back to your network, and most people starting out can become overwhelmed by this notion. You might think you don’t know anyone, or you’re worried that you don’t have anything of value to give to another person in your network. However, it’s a lot easier to give back than you think. Here are 10 things you can do to give to your network. Show up consistently If you’ve taken the time to join a network, I’m going to make a bold assumption and say that you’ve done your due diligence and you know the schedule and the frequency. Put this in your diary and schedule any other meetings around your networking meetings. This time spent networking should be sacrosanct. The know, like and trust factor Schedule one-to-one time with people in your networking groups as part of your networking process. Do a minimum of one of these individual meetings each week per networking group you are a part of to consistently and constantly build up your network. It’ll be noticed and appreciated. Add value As you get to know people and their businesses in your network groups, you’ll start to understand what matters to them. For example, you might come across an article that could be of interest. Why not email it on, share it on LinkedIn, or tag the person on a social media post? Then, they’ll see the article or post and know you were thinking of them. Referrals People generally network to get referrals. Of course, it’s great to be able to refer business to your fellow networkers. A word of caution, however: don’t be hasty. Always do your one-to-ones in advance to learn about a person’s offering before giving a referral. Testimonials If you’ve used a service or product of someone in your network, think about how a testimonial might add value to them personally or to their business. For example, a personal recommendation or testimonial might be put on LinkedIn. If it’s a business testimonial, ask where is best to place a recommendation (e.g. Google Reviews, LinkedIn, or just sending a testimonial by email that can be published on their website). If you include your full name and your company, it’s a little bit of micro-networking for your business too. Get social Find out what social media channels people are on, both personally and professionally. Then, follow them and start engaging – commenting, sharing, tagging others – with relevant content. Get involved and show you care. Be a connector Everyone in business has problems and pain points they are trying to solve. You might not be in a position to help, but you might know someone who could. Make the introduction and connect the two parties. They’ll both remember you for this gesture and the fact that you took time out to help. Share your knowledge One of the amazing benefits of networking is how much you learn from other people in your groups. Most networks have an ‘ed slot’ where five minutes are assigned to a member sharing business insights with the rest of the group. Be willing to share your knowledge. Be yourself Be your authentic self. Know your values, beliefs, and what you stand for, and be sure you can articulate this. This is important as, bit by bit, you’ll want to build a network of people aligned with your values. Don’t try to be something you’re not. Follow up If you offer to do something, be it giving a testimonial, an introduction, or organising a one-to-one, make sure to follow up. This is mission-critical. Everything succeeds or fails based on our ability to follow up. This speaks to your reputation and your reliability. All these actions go towards building up your social capital. If you invest in yourself and build relationships consistently over time, you’ll become known as a stellar networker. It does take discipline, effort, energy and time, but the rewards could be great. Jean Evans is a Networking Architect and Founder at NetworkMe.

With mixed feelings about returning to the office, how can leaders inspire and invigorate their employees? Paul O’Donnell shares his five top tips to manage expectations and morale. It is difficult to think of an aspect of our existence that the COVID-19 pandemic has not impacted. A recent Harvard Business Review survey, What COVID-19 Has Done to our Wellbeing, gives stark data on mental decline in general and burnout in particular. Now organisations are reopening, leaders must address a new challenge: how to rebuild their businesses in a manner that is safe and culturally adapted to reflect the new world while also taking account of the often-unspoken elements of stress in the workplace. Every crisis intensifies the need for solid leadership competencies. If you are a new leader, it will be a rapid learning experience. Here are five steps to get you started. 1. Re-connect your team to the vision or create a new compelling ambition  Operational recovery as a purpose is short-term. It creates initial buy-in but fades quickly. Your employees want to know that the work they do matters and fits with the organisation’s long-term objectives. If your team’s mission has changed because of the pandemic, redefine what that means for your team, communicate it clearly, and work carefully to create engagement. 2. Recognise and celebrate small wins What we took for granted pre-pandemic are often key successes during a challenging return. Small wins matter. They are often achieved against greater adversity when in recovery mode. These wins help raise the bar on what your team believes is achievable. Hunt out daily progress – even small moments of recognition can ignite an employee’s engagement. 3. Be honest about challenges and failures Create a two-way communication forum and make it safe for employees to share their concerns and perspectives. Be clear about the challenges; talk about what has and hasn’t worked and why. Encourage contribution. Don’t let ill feelings or worries fester; it can turn minor personal concerns into significant team disputes. 4. Keep what works and worked well Not everything you did before the pandemic was perfect, but some of it is still fit for purpose. If your team works or worked remotely, reflect on what you did differently and any efficiencies you achieved. Work with your team to find the best blend of “before” and “during” phase activities to create the right “beyond” plan. If your team is hybrid-working, ensure time is set at least once a week for the team to meet safely and discuss any issues they wish to raise. 5. Be clear that you care Your employees may have different personal priorities now from those before the pandemic. In addition, their experiences during, and continued navigation through, the pandemic has created anxiety and altered expectations. Bridge these new needs with the needs of your business through a clear focus on employee wellbeing, transparency in all matters, and alignment with all public health directives. It is easy during these times to fall back on old ways of getting things done. However, the strongest leaders will avoid that trap and take this opportunity to grow engagement and performance. These are the leaders who know the difference between surviving and thriving. Paul O’ Donnell is the COO of HRM Search Partners.

Many organisations in Ireland demonstrate a compliance-led mindset when it comes to sustainability but overlook the opportunities presented by value-led sustainability. Stephen Prendiville explains. It is time for organisations to consider why sustainability matters to them. If it only matters because governments and pressure groups are telling them they need to improve their environmental performance, then the war is already lost – not just for them but also for the planet. It may sound somewhat cliché, but organisations that are not part (and playing an active part) of the solution really are part of the problem. The EY State of Sustainability 2021 report reveals some green shoots of the value-led mindset, but compliance is the driving force for the majority. 53% of respondents believe that compliance with government regulations and requirements on sustainability is sufficient. Similarly, more than half (54%) do not utilise any form of recognised standard or benchmark to measure their sustainability performance. To boil it down, most Irish businesses, with predominantly Irish customers and operating in Ireland, see the Government as the standard-setters. They are then reporting on their own performance against their own set of standards. The EY survey was conducted before the publication of the latest report from the Intergovernmental Panel on Climate Change (IPCC) and the subsequent Met Éireann, Marine Institute and Environmental Protection Agency report, The Status of Ireland’s Climate. It is encouraging that the factor cited most often as the driving force for organisations is the desire to do good (22%), with compliance coming in second (16%). So too is the finding that just under a quarter (22%) of Irish medium-sized businesses have a science-based target to help guide them on their sustainability journeys. While initially, this could be cause for concern, setting science-based targets is a significant undertaking in itself, and we are heartened to see Irish businesses embrace this. Increasing this uptake over the next 24 months will be a defining feature of our sustainability readiness as a nation. Despite these green shoots, there is a lingering sense that organisations overlook the opportunity presented by taking a value-led approach to sustainability. There is a view still held in some quarters that sustainability actions add cost and reduce business efficiency. This needn’t be the case. Indeed, it shouldn’t be the case. Sustainability actions implemented correctly in the right place, at the right time, and using the right approach can reduce costs, improve efficiency, enhance a company’s brand, and make it more attractive to investors, customers and employees. This is what we call ‘value-led sustainability’. Unfortunately, there appears to be a low level of awareness of the opportunities on offer. For example, less than half of the organisations surveyed say they regularly assess current and emerging sustainability-related risks and opportunities. That lack of awareness means that sustainability actions and strategies are unlikely to add meaningful value to the business. Achieving sustainable performance Achieving superior sustainability performance is not as great a challenge as many people might think. The approach required is nothing new. It has been used for many years in ‘lean’ organisations. The same approach of questioning why everything is done and empowering everyone in the organisation to look for improvements in every aspect of what they do will deliver immediate and lasting sustainability gains. That requires accurate and verifiable sustainability metrics. What gets measured gets done, but in this instance, there is a dearth of such metrics. While 62% of organisations say they have management systems to record sustainability-related data, less than half (46%) say their sustainability reporting is aligned to recognised frameworks and standards. Employee buy-in is another prerequisite for value-led sustainability. Without employees at all levels embracing sustainability, understanding the targets and their importance, and believing in the organisation’s commitment, the objectives will be almost impossible to achieve. One third (33%) of respondents claim to have a sustainability-related employee incentive scheme in place. That low figure may represent an exaggeration of the true position as there is likely to be some confusion with employee benefits such as the Bike-to-Work scheme. This presents a huge opportunity for organisations to leverage a powerful cohort, who will be pivotal to the success of their sustainability efforts over the coming years as we approach 2030 and, later, 2050 sustainability targets. Overall, the findings contained in the EY State of Sustainability 2021 suggest that most Irish organisations could be missing the point when it comes to action on sustainability. Going forward The trajectory that should be followed is an acknowledgement of the scale of the crisis, accountability and responsibility at an individual level (no matter the position in the organisation), and a commitment to take real action. Organisations that fail to take a proactive approach to the issue and embrace value-led sustainability will find themselves struggling in the wake of competitors who do. It is not too late for Irish companies to share the rewards and opportunities offered by the sustainability transformation ahead. However, time is running short – both for them and the planet. Stephen Prendiville is Head of Sustainability at EY.

With the requirement to work from home soon expiring, employers must be proactive in their approach to the return to the workplace. As restrictions lift and the vaccination rollout continues, planning and preparation are needed to ensure a seamless return, says Dera McLoughlin. With the successful rollout of Ireland’s vaccination programme against COVID-19, many Irish employers and workers are now preparing to return to their physical workplace after a considerable period of working from home. To ensure that the return to work aligns with current Public Health advice and measures to keep workplaces safe, the Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar TD, has published an updated Work Safely Protocol. It will help ensure that employers and workers continue to contain and prevent the spread of COVID-19. While many retail and hospitality sectors returned to work in May 2021 in line with Government advice at the time, a phased return to the office and workplaces for those currently working from home will now take place from 22 October 2021, when the requirement to work from home will be removed. This will allow employees to return to physical attendance in the workplace on a phased and cautious basis appropriate to each sector. Lead worker representative A key component for ensuring adherence to the Protocol is the role of the Lead Worker Representative (LWR) in the workplace. Employers are required to appoint at least one LWR who will work with the employer to assist in implementing and monitoring adherence to the Protocol to prevent the spread of COVID-19 in the workplace. LWRs should be trained appropriately by their employer and be the conduit between workers and the employer for any concerns about the implementation of the Work Safety Protocol. Guidelines within the Work Safely Protocol The Work Safely Protocol sets out comprehensive steps for employers and workers to reduce the risk of exposure to COVID-19 in the workplace, including: Updating the COVID-19 response plan; Implementing and maintaining policies and procedures for prompt identification and isolation of workers who may have symptoms of COVID-19; Developing, updating, consulting, communicating and implementing workplace changes or policies; and Implementing COVID-19 Infection Prevention and Control (IPC) measures. The Protocol also provides guidance on workplace and community settings, occupational health and safety measures, and a library of resources for employers and workers. Considerations for employers Through many workplace surveys carried out in the past year, it is evident that many office-based employees wish to avail of some form of remote work in the future. Many companies also indicate that they want to adapt and accommodate their employees and continue to offer a degree of flexibility. A recent survey from CIPD Ireland outlined that one in two businesses in Ireland plans to adopt remote working in some form permanently in the future. When organisations consider their working arrangements, any decisions made must be based on several factors such as business objectives, employees’ wishes, potential office space adaptations and associated costs. Here are some key considerations. Health and safety requirements Before any employee returns to their workplace, the work environment must be safe and compliant with all relevant Government and HSE guidelines and in line with the Safety, Health and Welfare at Work Act requirements. Companies are advised to create and/or update policies that reflect the environment, health and safety, and emergency protocols to align with HSE guidance. It is also essential that the organisation establishes clear protocols for returning to the building, provides the requisite training on accessing shared workspaces and equipment, and the measures in place if an employee displays symptoms of COVID-19 while in the workplace. The price of returning to work Before returning to the workplace, an organisation must evaluate and understand the costs of bringing people back to the office. There will likely be costs such as reconfiguring office space and seating, increased cleaning costs, and potential PPE costs. Types of work and phasing the return to work Before returning to the workplace, each role and team should be reviewed strategically to identify which roles need to be on-site and which roles use technology or machinery. When determining which teams should be prioritised, an organisation will plan a phased return to ensure maximum productivity. The voice of the employee The difficulties that employees have faced over the past year while remote working cannot be understated. Therefore, before employees return to the workplace, employers must assess and understand employees’ needs, personal situations, welfare, and mental health. Where possible, businesses must understand such employee concerns while ensuring productivity is maintained. Tax Hybrid working is the future, and while employers can provide certain benefits to staff tax-free (e.g. specific office equipment, mobile phone etc.), these are limited. Employers must be conscious of published Revenue guidance on what expenses and benefits the employer can provide tax-free to remote working employees. If the employer inadvertently provides benefits not addressed in Revenue guidance, the benefit would be considered a taxable benefit, resulting in a payroll exposure for both the employer and employee. Employers should look for any potential new measures that may be announced in Budget 2022. Dera McLoughlin is Partner, Head of Consulting at Mazars.

Ireland’s attractive immigration policies and work permit procedures have drawn attention to companies wishing to expand into Europe in a post-pandemic, post-Brexit world. Emma Richmond outlines what companies should consider before making a move. As travel restrictions ease globally, many businesses are focusing on strategic expansion into Ireland in a post-pandemic, post-Brexit world. In many cases, this expansion is driven by a business need to have an English-speaking European base. In addition, the desire of key employees who, having reassessed their lifestyle over the past 18 months and now wish to relocate with their family to explore new opportunities, is also a driving factor. Compared to other EU member states, Ireland’s immigration policies and work permit procedures are relatively straightforward. This is something that continues to attract multinationals and foreign direct investment to Ireland. We have seen a significant increase in work permit applications over the past three months, driven by activity in the market. The records show that 9,526 work permits were issued to non-EEA nationals between January and August 2021, which creates a significant amount of work for business in Ireland. Here are some things companies should consider. Work permits All non-EEA citizens require a work permit to work in Ireland, and certain non-EEA citizens will also need a visa to enter the country. Typically, companies investing in Ireland are interested in the Critical Skills Work Permit and the Intra Company Transfer permit. Critical Skills Work Permit This is easily the most popular type of work permit sought by companies relocating to Ireland. The key advantage of this permit is that it provides long-term access to citizenship in the event of the employee wishing to relocate to Ireland permanently and provides easy access for the spouse or dependant of the work permit holder to the jobs market. These are all key considerations where there is a long-term goal for either the company or the employee. The role offered needs to be on the Critical Skills Occupation List and have a salary of at least €32,000 per annum. However, all roles with a salary of €64,000 and above (and not on the ineligible list) are eligible. Intra Company Transfer Permit This permit provides for the temporary transfer of key personnel to Ireland on an initial two-year basis, which may be extended up to five years. Typically, this is used for crucial personnel required to establish the business in Ireland, ensuring the right local personnel are hired and providing a key decision-maker on the ground when critical start-up decisions are made. The maximum duration of this work permit is five years, so it is ultimately not suitable for someone looking to relocate permanently or achieve citizenship. Employment documents A copy of a valid contract of employment or letter of appointment will be required as part of the permit application. The employer must also demonstrate that they have registered with Revenue as an employer, and their ERN will be needed for the application. Additional documents such as employee handbooks and policies will assist the employer in running their business as it grows but will not need to be furnished at the application stage. Emma Richmond is Employment and Immigration Partner at Whitney Moore Law Firm.

Julia Rowan answers your management, leadership, and team development questions. I recruited a team member three years ago. She had great qualifications and experience and, on many levels, was a good performer. I found it hard to give her feedback – she took it very personally. I often ended up taking work back from her and completing it rather than give her feedback. She is moving on and I’m about to recruit her replacement. How can I avoid this happening again? A. People often find it hard to hear feedback: they may see correction as failure, have come from a place (home, school, previous employer) where ‘feedback’ was a dirty word – and generally only given when things went wrong. It can be useful to set expectations by asking a feedback-related question at interview. For example: “In this firm, we share a lot of feedback. Can you give me an example of some helpful feedback that you have received in the past and what the impact of that was?”   When your recruit joins, revisit the feedback issue as part of a broader induction conversation: “We loved the example you gave at interview about the feedback you received. On this team, we share a lot of feedback about what works well and what doesn’t work well so let’s sit together regularly to reflect on how you are doing.”  Make sure to follow up on this regularly and acknowledge what they are doing well. It’s easy to overlook good performance. Give the positive feedback first and then bridge to the developmental feedback. Don’t use the word ‘but’ – it negates the positive feedback. Make sure that your body language, vocal tone and the words you use support the ‘feedback is normal’ message. Rehearse the feedback you plan to give out loud with a warm, confident tone. Your recruit has a right to know how they are doing. In my boss’s eyes, everything is urgent and important. Priorities change by the day and there is always a sense of panic. I like my boss and this firm, but I don’t want to work like this. How can I improve this situation? A. It sounds like your boss is stressed, not doing her best thinking, and unlikely to realise the impact of her behaviour. You need to think this through carefully before you talk to her and work out: what is the positive intention behind her behaviour? In this case, that could include setting high standards, giving clients great service, or avoiding a backlog.  Work out what you want in place of the current behaviour (a weekly meeting to agree priorities, an agreement that you decide on priorities etc.) and request a meeting. Give your boss a heads up on what you want to talk about. When you meet her, don’t describe her behaviour; instead, connect with her intention (“I appreciate the high standards you set”), and agree with her (“I want to meet those standards”). Then ask for a recurring meeting to plan the week ahead.  Julia Rowan is Principal Consultant at Performance Matters, a leadership and team development consultancy. To send a question to Julia, email julia@performancematters.ie.

 What is executive presence and can it be learned? Paul A. Slattery explains the three pillars of executive presence and how to put them into practice. This enigmatic and elusive notion of ‘executive presence’ (EP) may be a term surrounded by secrecy and shrouded in certain degree of mystique. Many of us may view it as something obscure and elite that is set aside for the use of leaders. How do you acquire it, and how can you project it?  A highbrow concept  What first springs to mind when thinking about executive presence is that it can’t be easily described, but it is recognised immediately when encountered. We all know people who have it. Before coming up with a list of politicians and celebrities, it may be prudent to think of someone we know or have encountered on a professional or personal level. That someone had the demeanour projecting an air of confidence and we are immediately engrossed in their presence. This person had the power of transforming rooms and conversations. That is how we know they had it. The revelation here is that EP can be learned, and it is not such an implausible dream as may be commonly thought.  No one lands a top job or develops a significant following without this subtle but necessary combination of confidence, poise, and authenticity. This amalgam of qualities subtly persuades us we’re in the presence of someone remarkable. In other words, it’s a blend of attributes projecting to others that one deserves to be in charge.  Cracking the EP code means you’ll be given a chance of doing something extraordinary with your life. What is notable about EP is that it steadily proves to be a precondition for success regardless of your social standing and your profession.  The practical stuff The first thing to know about EP is that it is a skill and not a personal characteristic, which means it’s something you can learn and nurture. EP is inarguably attainable for everyone, but as with every skill, it requires regular practice and systematic effort in order to advance. As I mentioned already, you can have all the experience and qualifications of a leader, but without EP, you won’t progress.  That said, expressing those qualities doesn’t come easily. Your topic may be universally interesting and fascinating, but unless you minimise distractions for your audience, you’ll never manage to convey that interest.  In 2013, Chia-Jung Tsay, an associate professor at the University College London School of Management, demonstrated through her piano competition experiment that the most accurate predictor of success in competition was not the musical performance itself, but whether a pianist could communicate their passion through body language and facial expressions.  Then, in 2020, she carried out a similar study, this time in a venture capital pitch competition. The participants were asked to forecast interview winners after reviewing the contestants’ presentations in different ways, which included videos with sound, silent videos, sound recordings, and transcripts. The silent videos most accurately allowed people to identify the winning entrepreneurs, showing that, in the context of entrepreneurial pitches, stage presence is more than crucial – it is fundamentally everything. That being the case, a question arises whether effective communication is more about the medium rather than the message – and EP appears to be the answer. The start Having or projecting EP begins by making the decision to start using EP. Workplace expert and professor, Sylvia Ann Hewlett lists the three areas that form the backbone of EP:  Gravitas – how you act;  Confidence – how you look; and  Communication – what you say and how you say it. She also points to how interdependent these features are: if your communication skills lend you a “command of a room”, your gravitas will proportionally expand.  Gravitas These universal dimensions are not equally important, however. According to Hewlett, gravitas is the very essence of EP. It is gravitas that helps us articulate the qualities that mark us as worthy to be entrusted with accountability and serious responsibility. Without it, you will not be seen as a leader, no matter your credentials. Gravitas is what signals to the rest of the world that we should follow you. In opposition to charisma – the former superstar term in the world of business communication – gravitas is understood as the “ability to appear calm, confident, and steady” in the face of uncertainty, and is vital for every business’s survival.  The importance of appearance As we saw from Tsay’s studies, appearance is our main critical filter. It is quite deceptive and contrary to what people may be articulating. A person’s ‘grooming and polish’ is a key contributor to executive presence. It’s very important to understand that the key to EP in the area of appearance is not a matter of what you were born with, but of what you do with what you have. The good news is that this can be learned and cultivated. The authenticity conundrum The primary struggle between conformity and authenticity is complicated. To what degree should we attempt to fit in and how much should we stand out? This tension can be particularly harrowing for women and minorities, due to the ‘straight white man’ archetype still so prevalent in the professional/corporate world. With age and experience, however, many of us notice that being different and authentic doesn’t necessarily keep us from moving up – on the contrary, it drives our progress. The three pillars of EP This ‘command-the-room and zoom’ quality essentially rests on the following three pillars:  Credibility Credibility can come in the form of your source of information and formal introduction.  When it comes to your source of information, there are a few questions you can ask yourself: where does the information you are sharing with the audience come from? Are you providing information that is current and well-researched? Are the findings and facts true, and from a reliable source? On top of your sources, it’s important when you are addressing an audience to share your background and your experience, and the longevity of your career, especially if you’re talking to external stakeholders. Sharing the credibility of your team is critical in demonstrating the integrity and authenticity that surrounds you.  Lastly, the trustworthiness of the organisation you represent – its values and vision for the future, and how well they align to your own values and outlook – will contribute substantially to yours. Approachability  You engage with the audience through your speaking skills and ability to remain amiable and authentic. Staying true to yourself and letting your enthusiasm speak through your body language connects you to your audience. Being able to look your audience in the eye when speaking and presenting has a transformative effect on your ability to meaningfully engage and inspire. Be mindful of other non-verbal cues: your tone of voice, poise and your attire can also add to, or detract from, your power to hold attention.  Structure EP relies heavily on solid structures, and without proper preparation, rehearsal and a routine that is consistently practiced, EP will become scrambled and non-existent. Thorough preparation leads to more confidence. I believe that we all need to find our own structured routine that will support us prior to connecting with our audience over video, but that also projects our EP in person, such as what social psychologist Amy Cuddy refers to as a power pose. When it comes to handling questions and objections from the audience, your EP is under the microscope. As Leil Lowndes, author of How to Talk to Anyone says, “Every smile, every frown, every syllable you utter, every arbitrary choice of word that passes between your lips, can draw others toward you, or make them want to run away.”  Hence the reasons why a structured response is vital to maintaining approachability and credibility all the way to the end of your presentation. While knowing your topic is a prerequisite, practicing your delivery is crucial.  Building and cultivating your executive presence comes down to three aspects of our behaviour that can be learned with training and practice. The crucial next step is a decision to acquire and cultivate one’s executive presence. It is a choice on how you want to act, how you want to be perceived, what to say, and most importantly, how to say it. For some people it is a strenuous process, more obvious for others. There are no quick fixes; the practice requires commitment and effort. Once you develop awareness of your behaviour, have a personal power pose, know your stuff and constantly practice your delivery, you will be on your way to finding your own EP formula. Paul A. Slattery is Founder & Managing Director of NxtGEN Executive Presence, an education company specialising in executive training, mentoring and coaching services for business leaders and company executives.

Drawing on research and global experience, Munro O’Dwyer explains why the creation of a sustainable State pension system is a knotty – but not insurmountable – challenge. The Pensions Commission was established in November 2020 to “examine sustainability and eligibility issues… and outline options for the Government to address issues including qualifying age, contribution rates, total contributions and eligibility requirements”. One of the terms of reference was to examine how private sector employment contracts specifying retirement ages below the State pension age may impact on the State’s finances and pension system. While the report is yet to be published, it is of interest to look at the retirement ages and policies of other countries to put Ireland’s approach into context. Many countries have adopted policies that seek to tap into the social and economic benefits of longer working lives. The United States abolished mandatory retirement in 1986 while, with some exceptions, New Zealand followed in 1999 and Australia in 2004. The UK followed suit in 2011, although a compulsory retirement age remains. This can apply if a job requires certain physical abilities or has an age limit set by law. The PwC Golden Age Index helps to explain the rationale for these policies. The Index is a weighted average of seven indicators, which reflect the labour market impact of workers aged over 55 in OECD countries, including employment, earnings, and training. The most recent report identifies that the OECD could achieve a $3.5 trillion boost to GDP in the long-term if countries raise the employment rates of those aged over 55 to match New Zealand levels (with New Zealand having the greatest level of employment market participation across older workers). For Ireland, the potential gain was estimated to be around 9% of GDP, or roughly €25 billion. The Index identified key drivers of employment for older workers – successful policy measures include increasing the retirement age, supporting flexible working, improving the flexibility of pensions, and further training and support for older workers to become ‘digital adopters’. So, what influences the age to which we work? Many factors influence workforce participation at older ages, from marital status to gender participation gaps and public expenditure on family benefits, among others. It is interesting to step through a few of the factors in more detail in the context of the debate in Ireland. It is reasonably intuitive that life expectancy generally has a positive impact on employment patterns for older workers as the longer people are expected to live, the more likely they are to spend more of their life working. Life expectancy also captures other factors that may influence the employment rate for older workers – the level of health, for example, which could be impacted by healthcare policies, medical advances, and technological developments. Repeated studies have shown that health influences the age at which a worker retires. Greater expenditure on pensions is expected to reduce the incentive for older workers to participate in work, as increases in State pension wealth are associated with a lower retirement age. Interestingly, studies across several countries on the effect of general employment protection laws and age discrimination laws have been mixed. Some studies argue that these laws negatively affect employment among older workers, as employers see older workers as a greater burden if they have greater protection, even though the intended effect is to help improve employment prospects for older workers. This highlights the complexity involved in setting retirement ages and supporting older workers to participate in the workforce. What burden will fall on younger generations? Much has been written about the potential for significant changes in Ireland’s demographics, with the dependency ratio (the number of persons in employment relative to those in receipt of pension benefits) projected to fall over the coming decades. This will potentially create strains around the financing of the system into the future and may create a perceived intergenerational inequity. The Pensions Commission is tasked with identifying measures to review the projected changes in demographics, earnings, and the labour market, and the associated costs of these changes. Aside from potential pension financing cost arguments, will longer working lives limit opportunities for younger workers? The argument is often made that the amount of work in an economy is fixed, so one more job for an older person means one less job for a younger person (the ‘lump of labour’ theory). Research has repeatedly shown that this theory is not observable in practice, and instead identifies that the number of jobs in an economy is elastic – labour markets are dynamic, and economies adapt to labour force changes. Simply put, an economy can and will create more employment opportunities to reflect extra participants entering the labour force. Policies enforcing mandatory retirement ages do not help create jobs for younger members of the workforce. In fact, they reduce the ability of older workers to contribute – both directly and in terms of the experience they bring. What other perspectives exist? In a recent Ibec survey, 67% of respondents believed that abolishing an employer’s right to fix a retirement age would have a negative impact on their business, although 73% of those surveyed also consider retaining staff beyond their fixed retirement age, with most of those surveyed using the option of a post-retirement fixed-term contract. Arguably, these responses are somewhat in conflict with each other, highlighting the complexity of the issues in question. A key concern of employers is that the current legislative framework presents many difficulties, particularly where an employer seeks to facilitate employee requests to work longer. Similar concerns were identified in terms of employers’ ability to conduct effective workforce planning. In contrast, the Citizens’ Assembly has called for an end to mandatory retirement ages. Allied to the introduction of pension auto-enrolment, these were seen as the most appropriate means of responding to the challenges created by the State’s ageing population. An Interdepartmental Group on Fuller Working Lives reported that retirement at the age of 65 was impractical given the potential for a gap to emerge between that age and the State pension age. To the extent that there is common ground, it is arguably around setting the retirement age at a level consistent with the State pension age. This would address the gap that would otherwise emerge for employees leaving the workforce, but who are ineligible for State pension benefits. What model should Ireland adopt? Looking at experience globally, the State pension age is simply a single aspect of a complex system. Contribution and coverage levels across the private pension system, mandatory retirement ages, the role of the State in providing social insurance benefits, employment levels more generally – the range of factors goes on and on. There is greater consensus around what “good” might look like. Where people live longer and healthier lives, the wish is that employees will want to, and will be supported to, remain in the workforce for longer, which in turn enables increases to the State pension age. Increases to the State pension age in turn allow the payment amount to keep pace with the expectations of retirees. This virtuous circle then supports greater sustainability across the social protection system. The Pension Commission report will offer several proposals for consideration. It is to be hoped that decisions made will set the course for a sustainable pension system that appropriately supports generations of retirees into the future. Munro O’Dwyer is a Partner at PwC Ireland.

With the launch of the 1,000 Chartered Accountants campaign, four members explain what they are doing personally to combat the climate crisis and share their advice to help others in the profession do the same. Kate van der Merwe Sustainability advocate I grew up with an appreciation of nature, its power and our place in it. As my awareness of the climate crisis and biodiversity loss grew, so did my frustration and sadness with the inequitable, one-dimensional systems we’ve become embedded in and their repercussions. However, the recent emphasis on holistic, inclusive, multidisciplinary thinking gives me hope. Over time, as I learn more about sustainability, I have adapted my personal and professional choices to minimise my carbon footprint and drive positive impact. I’ve been pleasantly surprised that these changes often yield unanticipated benefits. Personally, I focused on my consumption (energy use, diet, travel, consumer choices) and finances (pensions and savings). Professionally, I brought a sustainability perspective to my roles, such as flagging future regulatory considerations and chairing the Young Professionals 2017 sustainability-themed year. I went on to do a MSc in Renewable Energy and Environmental Finance and am exploring roles that will give me more direct sustainability scope and impact. There’s a growing acceptance that business-as-usual won’t continue, as it will be transformed either by devastating climate breakdown or deliberate, significant lifestyle and system changes to avoid the worst. When people are informed about issues, they can have a very strong will for action, as demonstrated by the Citizens Assembly which proposed the most stringent climate action, subsequently diluted within the Climate Action Plan. Each individual has a unique set of strengths and sphere of influence to make their positive climate impact, be it towards personal or system change. Considerations may include democratic action (e.g. voting), consumption habits and financial decision-making. Within the workplace, every decision – budget allocation/investment, targets etc. – must incorporate a sustainability perspective. How does the decision benefit society? What are the emissions/energy/biodiversity impacts across the product/service lifecycle? Is the impact equitable? These considerations are key for the future and align with the EU sustainable finance trajectory (green and socially inclusive). We need holistic and multidisciplinary approaches for comprehensive solutions. It’s time to ask questions, get creative and collaborate. We urgently need bold and brave action! Dr Judith Wylie Senior Lecturer, Ulster University Business School I love the great outdoors – living near the beach has given me an appreciation of the importance of blue water, clear sky and green space. Having local spaces where we can walk, swim, explore and find peace have become even more important to us all in recent times. My interest in sustainability has led me to researching Irish companies’ approach to corporate social responsibility. At the beginning of my studies, almost 10 years ago, I was told “you can’t study ‘hugging dolphins!’” What is pleasing, however, is how much this attitude has changed over the last decade with increased corporate action and public awareness of sustainability issues. My own research indicates that many Irish companies are listening to stakeholder concerns and are providing innovative solutions on climate change as well as committing to important sustainability goals.  It can be overwhelming when we hear news of the climate crisis and how much we have damaged our planet already; it can be easy to wonder what difference a single action can make. However, taking responsibility for small things can collectively have a big impact. I love fashion but I am conscious that the World Bank reported that the fashion industry is responsible for 10% of annual global carbon emissions, more than all international flights and maritime shipping combined. By moving away from ‘fast fashion’ and being more conscious about investing in sustainable brands, hiring clothes for special occasions and buying second-hand, I can make a difference and have fun in the process! We can all try to reduce our carbon footprints both at home and in our workplaces. Set the example for your family, friends, and co-workers. For example, eat less red meat each week, take public transport or cycle to work, or encourage the businesses you engage with to operate more sustainably. Although making changes can be difficult, use your hope for a better world to drive you and bring others along on the journey to a more sustainable society.  Tommy McLoughlin Founder & CEO at ButterflyCup My colleague, Joe Lu, invented ButterflyCup to eliminate the need for plastic lids and was looking for a business partner to help commercialise his invention. When introduced, I immediately saw its potential in the takeaway coffee and cold drinks sectors. Our cup does not require a water-proof laminated plastic coating, thereby eliminating the plastic normally required for both regular plastic-coated paper cups and for plastic lids. 600 billion cups and 600 billion lids are used globally each year between hot and cold drinks – that’s a lot of plastic. People are generally well-intentioned, but change happens relatively slowly – even when the facts are compelling. The key to rapidly altering behaviours at the pace now required because of climate change is a combination of meaningful (rather than token) regulatory incentives, disincentives and bans. Rebalancing business and customer costs is critical to changed behaviour.  For example, most people are now favourably disposed to switching to electric cars, but the cost differential remains prohibitive. This also applies to the over-use of plastic, which has a high negative environmental impact in both its production and disposal. If changes are made so that plastic costs more, it will be used less.  Improved infrastructure in areas such as vehicle electrification, waste segregation and recycling is also key to progress.  It is vital that businesses operate for the greater good rather than focusing on narrow and short-term self-interest. Unfortunately, many big corporates that are motivated by share price, CEO bonuses and so on act to protect the status quo by engaging in ‘greenwashing’ and often misleading PR while at the same time lobbying legislators in order to delay and derail environmentally positive progress – similar to how the tobacco and oil industries behaved in the past.  The voluntary actions of businesses and consumers alone is inadequate to achieve vital climate targets. Real environmental reform must be driven by legislation and regulation.  Probably the most effective contribution individuals can make is to call out bad practices and advocate for positive change, both within their work and business networks and on social media. Plus, as consumers, people need to ‘vote with their feet’ by actively supporting ethically sustainable businesses, products and practices. Prof. Pat Barker Lecturer in Business Ethics, DCU   Chartered Accountants, as professional individuals, should take a lead in focusing on what they, as individuals, are doing when it comes to fighting climate change. It’s not enough to look to big corporations and government, loudly demanding that they need to do something. Neither is it enough for us to wave generally in the direction of turning off lights at home, reducing food waste, flying less and investing in green pension funds. We need to change our lifestyles in ways that really pinch and evoke the ‘ouch’ response.   My ouch response was caused by my 11-year-old granddaughter’s suggestion that I, her mother and she adopt the One Dress for 100 Days Challenge. She hit me with this climate change challenge just as I contemplated the impending opening of the shops and the delicious prospect of buying myself some new clothes, footwear, underwear, makeup and some accessories after 14 months of lockdown. She scrambled up onto her Zoom soapbox and told me that I still have a wardrobe of perfectly wearable clothes, there’s no need to have a different outfit every day; that I wash my clothes too much and that nobody notices what I wear anyway. She delivered the killer blow – I was supporting the waste of scarce resources, encouraging child labour, and unnecessarily filling up landfill. So, I agreed to give it a shot and the three of us are now on day 20 as I write this. The feeling of doing something positive for the environment is accentuated by a sense of finding contentment in a life of less. I have recognised that 90% of the clothes we wash are not dirty enough to be put into a washing machine. I have been digging into the depths of my wardrobe to change the look of the dress and have not bought anything new. I don’t know how I will feel after 100 days, but I notice that my focus has shifted from how I look in my clothes to feeling comfortable in my own skin. Most people have not noticed that I am wearing the same dress day after day and I have embraced my own rejection of a life of unsustainable over-consumption.   I am definitely experiencing the ‘ouch’, but I do expect the lessons (if not the dress!) to persist beyond the 100 days.

Dawn McLaughlin explains how the north-west’s reputation as a prime location for foreign direct investment has been sixty years in the making. Sixty years ago, the US industrial fibre giant, DuPont, established a base on the outskirts of Derry/Londonderry. At the time, few international corporations were based in Northern Ireland, and very few would have considered this part of the world when choosing where to invest. DuPont’s decision was not only courageous but helped kick-start and sustain economic growth and development for nearly half a century. The company remained in the region throughout the dark days of the Troubles, sustaining jobs and keeping families in work at a time when our economy was underdeveloped and primitive in many respects. For 30 years, the company put the city at the cutting edge of innovation and technology by producing Kevlar, one of the world’s most important materials, at the site. As important as the jobs were to thousands of local working-class families, DuPont’s presence was almost more important for its role in attracting other global companies to the region. DuPont became an ambassador for the north-west and strengthened its status as a region well-equipped for foreign direct investment (FDI), with its low-cost structure, strong talent pool and high standard of living. Other American and European companies were encouraged by DuPont’s positive experience in the north-west and saw Northern Ireland as a viable and strategic place to invest. FDI has been a significant driver of the North-West City Region’s economic growth over the past three or four decades. The late John Hume’s role in bringing Seagate to the city is well-known, and it has gone on to be an integral part of the local economy. By the company’s 20th anniversary in the city in 2013, it had invested over £720 million in the region, contributed nearly £50 million in annual wages, and boomed to become the city’s largest employer with a workforce of almost 1,400. To this day, Seagate remains one of the region’s most important organisations. US tech giant and insurance company, Allstate, was one of the first foreign companies to invest in Northern Ireland after the signing of the Good Friday Agreement. Starting with an initial staff of just 20 in Derry, the firm has blossomed into one of the north-west’s most recognisable employers and has spread further into the region with its Strabane office. Taking a leap of faith like Allstate’s is a brave one for a business, but one that has generated great gains for both the company and the community. With more and more companies choosing to invest in the north-west, the economy has diversified and matured. We now have a cluster of cutting-edge and exciting tech, fintech, health and life-sciences, artificial intelligence, and diagnostics firms. The Derry and Strabane City Deal is a once-in-a-lifetime capital investment package, which will help attract even more companies and nurture this ecosystem of innovation, research and development, and technology. Inward investment and FDI have played a key role in our local economy over the past sixty years and will continue to do so. As we emerge from the pandemic, partners within the city will be working hard to attract more investment, jobs, start-ups, and business. Thanks largely to the courageous decisions of companies like DuPont to come to the north-west all those years ago, this region now has a diverse and innovative economy and is an ideal location for FDI. Dawn McLaughlin FCA is Founder of Dawn McLaughlin & Co. Chartered Accountants and President of Londonderry Chamber of Commerce.

Ambrose Shannon explains how CFOs can play a lead role in limiting the future impacts of climate change during what he describes as “the decade of action”. Throughout the summer of 2021, heat waves, wildfires, droughts, and hurricanes served as stark reminders that we should not take our planet for granted. The recently published report from the United Nations’ Intergovernmental Panel on Climate Change (IPCC) has made it very clear that unless immediate and large-scale actions are taken to reduce greenhouse gas emissions, these weather patterns, and the corresponding commercial impacts, will only become more severe. In Ireland, like elsewhere, companies are looking at their own commitments to environmental, social and governance (ESG) objectives (see sidebar) encouraged by both regulatory initiatives and wider societal pressures. For example, the Climate Action and Low Carbon Development (Amendment) Bill 2021 is intended to achieve net-zero carbon by no later than 2050 throughout the entire Irish economy. This entails the introduction of five-year carbon budgets on a rolling 15-year basis. In China and South Korea, where similar measures have been deployed, companies have seen significant impacts on their business models, strategies, and performance. Furthermore, the required Local Authority Climate Action Plans are expected to set out ambitious measures to significantly increase renewable energy production, decrease transport emissions, and reduce the impact of agriculture on the environment. Irish businesses have a critical role in achieving this climate-driven transition. And CFOs can play a pivotal role in areas such as leading strategic reviews, allocating capital investment, securing funding lines, protecting credit ratings and driving sustainable business performance. According to Accenture’s 2021 report, CFO Now – Breakthrough Speed for Breakout Value: 73% of respondents claim that the CFO is best placed to ensure the resilience of the organisation in today’s operating climate; and 68% of CFOs globally are now responsible for ESG monitoring and reporting. And momentum is accelerating. In November, the United Nations Climate Change Conference of the Parties (COP26) will bring world leaders together to accelerate movement toward the goals of the 2015 Paris Agreement. We expect agreement on ambitious goals, meaning that politicians, policymakers, regulators, and investors will need to work together with businesses to deliver on ESG objectives. Failure to act on climate change represents an existential risk to society and the global economy and poses a clear financial risk to businesses themselves. The impetus for business to act is time-sensitive and will likely be driven by four key factors: Governments setting legally binding emission reductions and net-zero targets; Investors and financiers wanting to understand climate-related financial risks and long-term business model viability; Employees placing increased importance on the ESG values and actions of their employer; and Customers placing ever more importance on the sustainability of the products they consume – with many seeking “champion brands”.  For business to meet these demands, CFOs and executives need to create and operationalise a comprehensive ESG strategy. Key considerations Regulators have for some time now warned about the threat that climate change poses to the stability of the financial system. Mark Carney, formerly Governor of the Bank of England, is leading a World Economic Forum (WEF) initiative to explore the risk posed to global financial systems associated with the energy transition. According to the Bank of England, as much as $20 trillion of assets could be at risk from climate change alone. The progress of delivery against ESG transition plans varies greatly from sector to sector and geography to geography. A report by Arabesque S-Ray found that just 25% of public companies worldwide are on track to deliver on their ESG-related commitments. Our research and work in this space suggest that CFOs and the wider finance team are uniquely positioned to guide their organisations in the following ways: Assessing the ESG impact on existing business models. CFOs can play a crucial role in assessing and measuring the potential impacts of ESG on current business operations. For example, identifying and modelling risks could include scenarios on the P&L impacts of a 1.5-degree world, the impacts of a higher carbon tax on profitability, the introduction of subsidies, or pricing signals to parts of the supply chain. Highlighting risks associated with ownership of certain assets. It is rational to expect the valuations of certain assets on the balance sheet to fluctuate as we progress through the transition towards net-zero. For example, we have seen large write-downs in valuations among many of the global oil majors. On the other hand, it is equally rational to expect certain asset classes to rise in value, such as those parts of the economy that support the electrification or home insulation agendas. Either way, CFOs will want to avoid holding stranded assets and will need to make more material bets on a more frequent basis over the coming decade. Identifying where investment will be needed to transition to a sustainable economy. Ireland’s transition to a more sustainable future is expected to have a wide-reaching impact on key sectors of the economy. For example, Ibec’s report, Building a Low-Carbon Economy, suggests that Ireland’s electricity and transport systems will need to reduce emissions from 1990 levels by up to 92% by 2050 and that buildings and factories will need to reduce emissions by up to 99%. Decarbonisation needs to go hand-in-hand with technological innovation, and CFOs will play a key role in identifying where investment is needed to ensure that business outcomes are achieved in a way that is economically and environmentally sustainable. Responding to investor demands and attracting investment. In the US, one-third of the $50 trillion of assets under professional management is invested in ESG strategies, according to research by the NewClimate Institute. ESG considerations are increasingly being adopted in assessing the sustainability and risk of investment decisions. At the same time, investors and pension funds are applying pressure on companies to provide products and services aligned with the UN’s Sustainable Development Goals (SDGs). Turning ESG commitments into action. Credibility is not a new concept to finance but is vital in the ESG space. As a profession, we can help our organisations avoid even the suggestion of ‘greenwashing’. Credibility is enabled by robust transition plans with regular and transparent disclosures on progress against them. Some CFOs are investing now to create enterprise-wide data provisioning and analytics solutions for ESG. This will enable them to model multiple commercial scenarios and inform the optimal pace and sequence of the pivot. Conclusion While executing a successful ESG pivot depends upon a strategy that is unique to the qualities and context of the organisation, there are a few best practices you can leverage: Conduct a materiality assessment. These sometimes behind-the-scenes assessments are a data-driven, holistic view of ESG risks and opportunities to identify gaps and prioritise the issues of focus against business and stakeholder importance. Build an effective communication method for the company’s ESG commitments and progress. This typically takes the form of a disclosure with a newly crafted framework and reporting metrics for standalone ESG disclosures, leveraging industry-leading practices. Formalise ESG governance. Stakeholders must be identified as explicitly responsible for new associated ESG activities. The company needs to craft a defined governance model and roadmap for execution, mobilising internal resources and data for ongoing assessment and reporting. These three steps have helped organisations successfully navigate and focus an ESG pivot and capture the associated resiliency and revenue potential. This is the decade of action to dramatically limit the future impacts of climate change – time is of the essence, and the time to act is now. Ambrose Shannon is a Managing Director at Accenture and CFO and Enterprise Value Lead for Ireland and the UK.

Each year, the Irish Auditing and Accounting Supervisory Authority (IAASA) publishes a paper outlining areas to which entities should give extra attention when preparing their annual financial statements. Maurice Barrett explains the most recent findings. In September, IAASA published its most recent Observations paper, Observations on Selected Financial Reporting Issues – Years Ending On or After 31 December 2021. While directed primarily at the comparatively small number of issuers falling within IAASA’s accounting enforcement remit, the topics covered in the paper are relevant to a wide population of entities. The Observations paper is written primarily from an IFRS perspective. However, most of the topics covered apply equally to entities applying FRSs. To that extent, IAASA encourages the broadest distribution and application of the topics referenced in the Observations paper. Recurring themes There are recurring themes that appear in the Observations paper year after year, the more common of these being: Tailoring of disclosures to the specific circumstances of the entity and avoiding boilerplate disclosures; and Disclosing the significant judgements and sources of estimation uncertainty and changes in the key assumptions underpinning assets, liabilities, income, expenses and cash flows. The objective of financial statements is to provide financial information about the reporting entity that is useful to users of the reports in deciding to provide resources to the entity. That objective is achieved, at least in part, by ensuring that disclosures are tailored to the specific circumstances applying to the entity in the reporting period. The provision of boilerplate information by, for example, repeating large tracts of IFRSs in the accounting policies section of financial statements is unlikely to be seen by users as useful information. Similarly, devoting time to crafting the disclosures around the significant judgements and sources of estimation uncertainty and changes in the key assumptions should result in user-relevant information being given. Judgements and uncertainty vary from entity to entity and over time, sometimes with speed (the COVID-19 pandemic illustrated just how quickly the economic landscape can change and just how flexible and adaptable business models can be). Financial statement disclosures need to be continually examined and adapted to the business environment as circumstances evolve. The disclosures that were appropriate last year may no longer provide users with decision-useful information this year. COVID-19 COVID-19 and the public health measures put in place to contain its spread had different impacts on different sectors of the economy. Similarly, the speed and duration of any recovery are expected to impact various sectors differently. It is important for issuers to clearly explain in the management report both the impact COVID-19 has had on the development and performance of its business and the position of the issuer, and management’s views as to the path to recovery. Depending on the specific circumstances of the issuer, some of the COVID-19 matters that IAASA expects issuers might disclose in their financial statements are: A discussion of the impact of COVID-19 restrictions on the economies or markets in which the issuer operates; The continued impact of COVID-19 restrictions on the entity’s broader financial performance such as raw material price increases, margin reduction, or supply chain constraints; and How financial performance, financial position, and cash flows will likely be impacted by the pandemic and/or the economic recovery. These disclosures should reflect the impact of the pandemic on the recognition, measurement, presentation and disclosures in the financial statements, including impairments (IAS 36), expected credit losses (IFRS 9), going concern (IAS 1) and provisions (IAS 37). Climate change The IASB published Effects of Climate-Related Matters on Financial Statements, highlighting how IFRS require entities to consider climate-related matters when the impact is material to their financial statements. This educational material complements an article that IASB member, Nick Anderson, wrote on this subject in 2019. The IASB paper and the related educational material are available on the IASB website. The educational material contains a non-exhaustive list of examples of when entities may need to consider climate-related matters in their financial reporting. It aims to support the consistent application of IFRS, but it does not add to or change the requirements in the standards. The list of examples provides guidance on how issuers might consider the effects of climate-related matters when applying IFRS, including IAS 1, IAS 2, IAS 12, IAS 16, IAS 38, IAS 36, IAS 37, IFRS 7, IFRS 9, IFRS 13 and IFRS 17. Entities, recognising that investors are increasingly demanding ESG (environmental, social and governance) information, should consider this educational material when assessing the impacts of climate change and risks in their financial statements. This is particularly relevant in the areas of judgements, provisions and measurement of assets (asset lives and recoverable amounts). Impairment Impairment continues to be an area of focus in IAASA’s financial statement examinations and is a recurring theme in our annual Observations paper. IAASA challenged issuers where no impairment testing was performed, yet impairment indicators in the context of COVID-19 restrictions (travel restrictions, non-essential activities closed) were in place; the decline in certain issuers’ revenues, profits and operational activities; and issuers operating at less than normal capacity. IAASA concluded that these happenings were indicators of impairment, and these issuers should have carried out an impairment review. Accordingly, IAASA required such issuers to perform an impairment review in accordance with IAS 36. Management, directors and audit committees must ensure that impairment reviews are performed when indicators of impairment are identified to ensure that an asset or cash-generating unit (CGU) is carried at not more than its recoverable amount. IAASA will continue to challenge issuers on IAS 36-related topics, including: Whether or not CGUs have been tested for impairment at an appropriate level; The discount rate used to measure the recoverable amount and whether or not that rate has been appropriately set; The determination of the key assumptions used, the long-term growth rates used and the disclosure of sensitivities; and Whether or not all key assumptions are realistic and consistent with other information in the financial statements. While the depth and duration of the impact of COVID-19 restrictions and the trajectory of any recovery remain uncertain, there are signs that restrictions are being eased and the Irish vaccination programme is enabling a re-opening of society. Consequently, relief and supports will be unwound over time and the longer-term impacts on expected credit losses will become apparent. IAASA reminds entities to continue to consider ESMA’s public statement Accounting Implications of the COVID-19 Outbreak on the Calculation of Expected Credit Losses in Accordance with IFRS 9. IAASA expects financial institutions to distinguish between measures and reliefs that impact the credit risk of financial instruments over the expected life of financial assets and those that address the temporary liquidity constraints of borrowers and apply IFRS 9 accordingly in preparing their financial statements. Fair values COVID-19 restrictions continue to pose challenges to fair valuation measurement (including the fair valuation of non-financial assets and liabilities) for many entities. The impacts of the pandemic are likely to result in changes to the valuation methodologies used, as well as to fair valuation assumptions. Entities should continue to consider: Changes in valuation techniques; Independent valuation reports and pre- or post-COVID-19 fair value assumptions and transactions; and COVID-19 expanded fair value disclosures – sensitivity. IAASA has noted certain issuers recognising deferred contingent liabilities arising from past acquisitions. It observes that volatility in the expected future EBITDA, forecast cash flows, and/or risk-adjusted discount rate(s) due to COVID-19, Brexit and economic disruption may result in volatility in the fair value measurement of deferred contingent liabilities. IAASA expects issuers to ensure deferred contingent liabilities are measured in accordance with the requirements of IFRS 13 and disclosed in line with the requirements of IFRS 13.93(d). Alternative performance measures ESMA’s Guidelines on Alternative Performance Measures (APM) have been in force since 2016. These APM guidelines are supplemented by a series of questions and answers, which provide guidance on the practical application of the APM guidelines. IAASA continues to examine issuers’ use of APMs and continues to identify shortcomings in the application of, and non-compliance with, the requirements of the APM guidelines, including instances where issuers: Present APMs with more prominence and emphasis or authority than measures directly stemming from the IFRS-based financial statements; Fail to provide reconciliations for all APMs presented; Use incorrect labels to describe APMs (e.g. the expression ‘EBITDA’ is used rather than ‘Adjusted EBITDA’); Fail to define an APM or fail to set out the basis of the calculation applied, including details of any material hypotheses or assumptions used; Fail to explain the use of APMs; and Fail to present prior period comparative amounts for APMs. Conclusion I believe that, to use a saying of our times, “we’re all in this together” and that preparers, management, audit committees, directors, auditors and regulators all can, and generally do, work together to achieve high-quality financial reports. IAASA’s assessment is that the quality of the financial reports it examines is generally high and compares favourably with European issuers. It is hoped that our Observations paper will in some way contribute to that continued high quality. Maurice Barrett FCA is Senior Financial Reporting Manager at the Irish Auditing & Accounting Supervisory Authority. IAASA’s Observations paper is available at www.iaasa.ie.

You don’t have to listen very carefully to hear the rattle of bandwagons being boarded as governments, quangos and interest groups issue their calls to action on behalf of Planet Earth, writes Dr Brian Keegan. It is over 20 years since the Kyoto Protocol was signed. With hindsight, the aspirations back then were relatively modest, amounting to little more than a commitment by governments to reduce carbon output. That hasn’t got us very far, as highlighted by the report over the summer from the Intergovernmental Panel on Climate Change (IPCC). There is no one to blame except us when it comes to increases in planetary temperature. The political difficulty with the climate crisis is akin to the political difficulty facing many countries in relation to pensions. Everybody knows there is a problem, but the crisis is happening too slowly for urgent remedies to be acceptable. It is painful to increase the retirement age (an approach currently under examination in Ireland and the UK) or add to the tax burden. Both or either option would correct the ratio of pension beneficiaries to pension funders. Yet, there will be no immediate political benefit. The political dilemma is the same when it comes to decisions over climate policy. We have fixed climate problems before. Forty years ago, the big environmental concern was the hole in the ozone layer. Changes in industrial policy resulted in the virtual banning of chlorofluorocarbons in refrigeration and other industries to help repair it. But where is the political dividend for those who took these actions? This is the nub of the problem for both the Kyoto Protocol and, more recently, the 2016 Paris Accord. Both initiatives depended primarily on government action, but government action on its own isn’t sufficient. A similar fate awaits the Irish Government’s Climate Action Act and the British Government’s Climate Action Act of 2019. It is all very well setting legally binding emissions targets – net-zero by 2050 in both cases – but people still have to travel, work, eat, and stay warm. Even when governments mandated the curtailment of normal life, as was the case with successive lockdowns in the past 18 months across the world, the impact on global carbon emissions fell short of the 7% reduction per annum promoted as necessary by the UN. Preparations for the next international gathering on climate change, known as COP26, are being finalised for November 2021 in Glasgow. However, while all this activity and wordsmithery is happening, the real progress on climate change may be taking place elsewhere. There is evidence that private sector financing for non-sustainable business activity could dry up. Speaking to a TASC think-tank event recently, the chief executive of AIB, Colin Hunt, put the matter succinctly: “Companies that don’t take this seriously won’t be around to talk about it in ten years’ time”. He is echoing a sentiment that seems increasingly prevalent in the investment community and is supported by academic research. Of course, all this comment could be mere virtue signalling and a form of greenwashing in itself. Nevertheless, it does seem that environmental investment considerations are genuinely more prevalent. It follows that environmental, social and governance (ESG) reporting will come more to the fore, even without government prompting. The chief executive of the International Accounting Standards Board has suggested that if ESG reporting for investors is correct, by addressing investor concerns, we will also address broader societal concerns. Government carbon targets might indeed be met, but by private investment strategies rather than climate legislation. Dr Brian Keegan is Director of Advocacy & Voice at Chartered Accountants Ireland.

People management has been evolving over the generations, paving the way for productive development conversations that benefit both the organisation and the employee, writes Michelle Halloran. There has been a gradual sea-change in the role of the people manager over the last few decades, but it has taken a global pandemic to catapult us into a new way of working. Now, as we optimistically enter the post-pandemic world, it is time for a radical break with the past, to ditch our outmoded perspectives on people management and take a hard look at the role of the 21st-century people manager. From the top down, organisations must stop pretending that managers with staff reporting to them can perform a fully loaded, 40-hour-a-week job, with a bit of ‘HR soft stuff’ thrown in on the side. Organisations need to start budgeting – in terms of time and money – for the investment required for their people to properly function and perform well in the new world of hybrid working. Old habits die hard Many of us have inherited a view of ‘people management’ involving uniform nine-to-five working hours, little flexibility, a strict dress code, and the expectation of often-unquestioning respect and compliance. Structured, objective performance management and review processes are a relatively new replacement for the once-a-year ‘quick chat’ to be told whether or not you were going to get the much longed-for pay rise. Your boss was typically a white male in his forties or fifties – benevolent when you did well; strict and disciplinarian when you did not. This model of people management has its roots in the traditionalism of the generation born from 1928 to 1944, at a time of economic hardship, when the old class system was still prevalent, and you respected authority unquestioningly. Evolving workforce generations The ‘Baby-Boomer’ generation (born 1945 to 1964) wanted much more from their working lives. They had learned from the experiences of the previous generation, seeing them gain very little in terms of improved quality of work and life in the post-war years, despite their sacrifices. However, while they may have done some hell-raising in their youth, and instigated the beginnings of a more equitable society, by the time they hit their mid-twenties, most were settled down and working even harder than their parents in evolving white-collar roles – you didn’t have to be American to buy into the American Dream. While their style and tone were less formal, and there was a shift in the gender balance at work, they (male and female) continued the patriarchal style of people management. Generation X (born 1965 to 1979) threw down the gauntlet in the area of gender equality, and achieved some real change in terms of family-friendly working hours. They also introduced and implemented performance management in the workforce, a concept driven by increased global business competition, where pay was linked to the achievement of targets, and an employee review was conducted once a year at which an employee’s rating was discussed and explained. Then came Generation Y, or the ‘Millennials’, (born 1980 to 1994). Since 2016, ‘Gen Y’ has comprised the majority of the workforce; therefore, knowing how to lead and motivate them is vital to the success of any people manager. The first ‘digital natives’, with access to vast resources of information and opinion, they do not unquestioningly accept what their boss tells them. With businesses driven hard to compete by rapidly advancing technology and globalisation, Gen Y has to work smarter, harder and faster than any previous generation. To maintain this level of productivity – adapting to unprecedented levels and speed of change – today’s employees need a lot of time, emotional sustenance and practical support from their managers, without which they will feel let down and move on to another employer. The early indications for Generation Z, born after 1994, are that they view being an employee and having their own professional ‘gigs’ on the side as not being mutually exclusive. Understanding how precarious job security can be, they are emerging as self-reliant and flexible but needing at least as much emotional support at work as Gen Y. The 21st-century people manager As a 21st-century people manager, your language and approach needs to move away from performance reviews towards ‘development conversations’, or even, simply, ‘check-ins’. These should be planned and scheduled. The more frequently you, the manager, make these calls, the shorter they will be, as they become part of a running conversation between you and your team member. This is especially important in a hybrid work environment where we cannot avail of ad hoc, informal conversations as we could pre-pandemic.  Allocate roughly a day a week into your schedule to have these employee check-ins. These should be strategic, not tactical conversations, with the emphasis on how the team member feels they are performing and coping with their work. This discussion must sit outside other routine discussions and communications about what needs to get done. In Table 1, I set out a suggested plan for managing development conversations with each of your team members (reporting to you as their line manager), outlining the frequency and purpose of each conversation, and useful questions to ask. (Quarterly and monthly meetings can encompass weekly check-ins as they fall due.) The business case So, you may be asking, if I am going to spend all this time talking to my team members, helping them to perform, how do I get my own job done? I can’t afford to spend a day a week on employee development conversations! Well, you can’t afford not to. There is extensive research on the positive impact of proper employee engagement on profitability and productivity. For example, a comprehensive report published by Gallup in 2017, involving meta-analysis of 339 research studies across 230 organisations in 49 industries and 73 countries, found that business or work units in the top quartile of employee engagement outperformed bottom-quartile units by 10% on customer ratings, 17% in productivity and 21% in profitability. Work units in the top quartile also saw significantly lower staff turnover, theft, absenteeism, and fewer safety incidents and quality defects. Taking as the baseline Gallup’s 21% increase in profitability as a result of higher employee engagement, if one day per week is allocated for people managers to have development conversations with their team members, costing 20% of the organisation’s people managers’ time, the impact on profit will be positive. Further gains and savings are available from increased productivity and customer satisfaction, lower staff turnover and absenteeism, reduced wastage, higher quality adherence, and so on. The business case for allowing people managers time to manage their people is clear. Human nature being what it is, however, such change will be resisted, despite the pressures from the generational transition outlined and the recent acceleration towards complex, individually tailored working arrangements. An organisation could introduce such change through a pilot scheme, evaluating results after 12 months using metrics like internal and external customer satisfaction, team productivity, absentee rates, staff turnover and quality of output. Budgeting time for people management is a change in approach that is long overdue. We have the motive – a more profitable business and a happier place to work – and with the shift towards hybrid working, we now have the opportunity. Michelle Halloran is an independent HR and people management consultant.

Brendan McGurgan FCA explains the four facets of Sebastien Tondeur’s Magic Diamond of Performance, which has helped the MCI chief’s company scale at speed and generate annual revenue of over $500 million. Sebastien Tondeur, CEO of MCI, has led the company on an incredible scale-up journey. From a team of 30 operating in his home country of Switzerland, MCI has grown to employ almost 2,500 across 60 cities in 30 countries. Today, the company has revenue of over $500 million. There are, of course, many facets to this success, but I want to focus on the novel way Sebastien manages company performance. The Magic Diamond of Performance, as he calls it, focuses on four areas: Financial success; Employee promoter score (eNPS); Customer promoter score (cNPS); and Sustainability (aligned to purpose). Sebastien argues that you don’t need to measure and manage hundreds of different metrics. Instead, focus on these four areas and you will save time, energy, and resources. You will also remain acutely sensitive to the pulse of the business. Let’s look at each in turn. Financial success Anyone leading a high-growth or scaling organisation understands the importance of financial metrics. As a Chartered Accountant, I am only too familiar with ROCE, ROE, EBITDA, ROI, APT, etc. Put just about any three letters together, and it will likely be an acronym for yet another financial measurement. The question, of course, is which should you focus on? Sebastien cites four, which combine to capture financial performance. This is positioned at the apex of the diamond. Sales growth; Gross profit margin; Net profit margin; and Cash headroom. Sales growth Sales growth indicates the sales team’s ability to increase revenue over a fixed period (current month vs prior month, current quarter vs prior quarter, current month vs same month prior year etc.) It is calculated as follows: As a benchmark, a scaling company has average annualised sales growth of 20% over three years. Gross profit margin Gross profit margin indicates the amount of money remaining in sales after deducting the costs of goods sold. The calculation is as follows: Gross profit margin assesses how efficiently the company generates profit from sales. For example, suppose your gross profit margin is low compared to your peers in your industry. In that case, it may point to inefficiencies in your manufacturing or lost opportunities in terms of realisable sales price vis-à-vis the value you are delivering to your customers. Net profit margin Net profit is arrived at by deducting all company expenses (excluding the cost of goods sold) from gross profit. Net profit margin is the ratio of the net profit that is generated as a percentage of revenue. It indicates how much of the revenue you earn is actual profit. Here is the formula: Net profit margin = net profit/total revenue x 100 Net profit margins vary by business size and industry. As a rule of thumb, a 10% net profit margin is considered average, a 20% margin is considered good, and a 5% margin is considered low. A consistent net profit margin aligned with sales growth is reflective of a successful scale-up. Significant fluctuations in net profit margin while a company is growing is often symptomatic of deficient processes and systems capable of supporting sustainable growth. Cash headroom There is an old saying in business: “sales is vanity, profit is sanity, and cash is reality”. This is very much the case in a scaling business, where cash is the fuel for growth. I led the finance function of a dot-com company through the boom and bust of the early 2000s. It was my first taste of industry, and it provided a lasting and salutary lesson in the importance of cash. It was there that I learned the golden rule: “s/he who has the gold makes the rules”. Cash headroom refers to the difference between a business’s required monthly cash resources and the available cash resources. For example: assume a business must pay out £1,000 per month to cover overheads and expenses. If, after payments from customers, it has £5,000 in the bank, the business has cash headroom of five months. To put it another way, if there are no further customer orders, there is sufficient cash in the bank to cover five months of committed overheads and expenses. In my previous business, we targeted a business KPI of six months’ cash headroom. Anything more would trigger a conversation about where to better deploy the surplus cash. Anything less triggered a deeper look at the reasons why. Are orders declining? Are customer payments late? Have we seen a general increase in costs? Employee net promoter score (eNPS) If people are the most important asset in business, then leadership should protect and nurture that asset. To do this, you need to know how happy your team is and how engaged they are with your business. Good business leaders want their people to bounce into their workplaces, to bring high energy levels and a keen desire to provide amazing service to customers. A good leader wants to provide fulfilling, meaningful, vision-aligned work to the people they employ. One of the world’s leading experts on customer and employee loyalty is Fred Reichheld, the founder of Bain & Company’s loyalty practice. Fred created the Net Promoter System (NPS) in 2003 and since then, it has been used by a range of leading companies such as Apple Retail, Philips, Charles Schwab, Allianz, American Express and Intuit to generate extraordinary results. In essence, Fred’s work laid bare the link between loyalty and profits. eNPS measures employees’ willingness to recommend the organisation to others as a great place to work. It indicates engagement levels, motivation, and intent to remain with the company. It also uncovers the likes and dislikes of employees as they pertain to the company. How do you calculate it? The genius of eNPS lies in its simplicity. In an era of survey fatigue, it provides an incredibly easy and efficient way to survey employees. First, they are asked one quantitative-based question: “How much would you recommend working here to a friend or colleague?” The employee uses an 11-point scale from zero (not at all likely) to ten (extremely likely). Follow this up with an open-ended question: “Why do you feel this way?” Those who score between zero and six are detractors. They are unhappy, disengaged, and could be looking for roles elsewhere. Those who score seven or eight are passives. They don’t love working for you, but nor are they entirely disengaged. Those who score nine or ten are promoters. They love their work and won’t hesitate to tell everyone. The eNPS score for a period – typically a month – is calculated by subtracting the percentage of detractors from promoters, omitting the passives from the calculation. The score is then displayed as a number rather than a percentage. eNPS: a worked example There are ten employee responses in ‘Improve Your Workplace Inc.’: 3, 4, 5, 6, 8, 8, 8, 9, 10, 10. This equates to: • Four detractors (3, 4, 5, 6) = 40% • Three passives (8, 8, 8) • Three promoters (9, 10, 10) = 30% The calculation: 30% – 40% = -10 What is a good score? Jennifer Willy, Editor at Etia.com, says that anything above zero is generally acceptable: “Different companies and organisations have different standards and benchmarks to measure their performances. But generally, a score between 10 and 30 is considered good while anything near 50 is excellent.” Why is eNPS important? A State of the Global Workforce report published by Gallup in 2017 showed that 85% of employees worldwide are either not engaged with their work or are actively disengaged. Disengaged staff are less productive and are more likely to make mistakes. Worse, negative attitudes can contaminate an otherwise positive workplace culture. Conversely, employees engaged in their work are more productive and tend to positively influence their teammates. Consequently, employee retention rates will improve, and your team will produce better results for your clients. To put it simply, happy staff means happy clients. Customer net promoter score (cNPS) Successful scalers are obsessive about delivering value to customers. They are consciously tuned into why they do what they do and how that impacts their customers’ lives or businesses. Assessing the customer’s engagement with you is critical. It helps guide and inform loyalty initiatives and overall brand-building, and it forms the third area of focus in the Magic Diamond of Performance. How do you calculate it? cNPS is calculated the same way as eNPS. It is defined as the willingness of customers to recommend a company’s products or services to others. Like eNPS, customers are asked a single question: to rate on an 11-point scale (zero to ten) the likelihood of recommending the company or brand to a friend or colleague. Based on their rating, customers are classified into three categories: detractors, passives, and promoters. As with eNPS, cNPS is found by subtracting the percentage of detractors from the percentage of promoters. The result will be a number between -100 and +100. A cNPS score above zero is considered good, as it indicates that your audience is more loyal than not, and anything above 20 is considered favourable. Bain & Co., which pioneered this methodology, suggest that above 50 is excellent and above 80 is world-class. These are general guidelines, however. A good cNPS will depend on the industry and country in which the business operates. Sustainability (aligned to purpose) MCI’s purpose is as simple as it is profound: “when people come together, magic happens”. This purpose permeates every part of the business and is the slide-rule for all decisions. The company may have pivoted several times in its evolution, but that core purpose – bringing people together to build communities and create experiences – has remained. Sebastien explains that with growth came a consciousness of the company’s impact on the world. As MCI’s reach became global, it began to understand that it could accelerate change and promote a more sustainable and inclusive society. Anchored by its purpose, the company’s goal is to encourage an active culture of care and responsibility, backed up by concrete actions. This forms the last area of focus in the Magic Diamond of Performance. Why is sustainability important? A view common in SMEs is that sustainability issues are for governments and larger corporates, as smaller entities are simply too busy wrestling with the day-to-day demands of the business. Sebastien, however, sees sustainability as an enabler of company growth. “I don’t think we have a single under-25-year-old candidate that hasn’t asked us about the sustainability programme. I don’t even think it’s an option for any business. You just have to have an answer when the question is asked.” Sebastien is not alone in this view. Marga Hoek, author of The Trillion Dollar Shift, puts it like this: “Business for good is good for business”. What do you measure? Sebastien’s mantra is “think big, start small, scale fast”. It’s all about learning as you go. MCI used the UN Sustainable Development Goals (SDGs) to guide their sustainability initiatives, picking a small number of the entire 17 to make a start. “We give a lot to the community as a business – doing volunteer work, helping kids, working on cleaning projects… and then, over time, we became more sophisticated. Now, we have a large community of what we call sustainability leaders. They cover a range of areas – environmental, social, diversity, inclusion. Belonging is a big topic right now. I give them a budget, I give them approval, and I rely on them to give me recommendations. They communicate to the company and engage the people.” MCI’s sustainability journey, which started with a single small step, has become a hugely impactful sustainability strategy based on four SDG-aligned pillars: people, planet, profit and governance. For example, under the ‘planet’ pillar, the company successfully reduced its carbon footprint by 20% in 2020. And as Sebastien points out, the most sustainable companies are the least wasteful. Waste is tangible in some industries, but how do you reduce waste in a knowledge-based company? In my previous business, we put our pre-sales function under the microscope and found that only 7% of sales leads converted into sales orders at our worst. That’s 93% wasted effort in customer calls, follow-ups, budget quotations, design drawings etc. So we zeroed in on our customer conversion ratio and, over time, increased our conversion rate to 20% – not by generating new leads, but by becoming more efficient in processing the leads we already had. Have fun with this aspect of the Magic Diamond of Performance. You don’t need headline-grabbing initiatives or noble sustainability targets, not at the start at least. Instead, look for an area of your business where you generate waste and aim to reduce it. In so doing, you will leverage your people’s time and creativity. In time, this process will compound to greater employee engagement and productivity, customer advocacy, and an improved bottom line. Conclusion Sarah Kennedy is Vice-President of Global Marketing at Adobe Experience Cloud. She says: “The companies that will excel long-term are the ones that know it’s not just about shareholder value… it’s also about focusing on the customer and employee experience, and how those, in turn, contribute to society”. If you’ve found yourself drowning in the vast sea of performance measurement options, then the Magic Diamond of Performance could be the lifeboat you and your business need. Brendan McGurgan FCA is Co-Founder of Simple Scaling, a company dedicated to inspiring, connecting and enabling ambitious leaders of SMEs to scale with purpose.

As ever, this is a busy time of year when the Institute commences its CPD programme for the autumn and we unveil our programme of events and conferences. The business environment has continued to change substantially in the last year, and we have formulated this programme of events, courses and specialist qualifications with a keen eye on equipping members to leverage that change in their professional lives. We have engaged closely with our members to ensure we are addressing your needs in our new programme. I look forward to your feedback. After a lengthy period of virtual engagement necessitated by the pandemic, we surveyed our members in recent weeks to hear your preferences on engagement in the coming months. It is clear from your feedback that a shift has taken place when it comes to events. We see an appetite to attend larger conferences, awards ceremonies, and social events in person, but it is also clear that the virtual option will remain a preferred one for many when it comes to CPD courses, briefings, and other smaller-format meetings. This feedback will inform our planning in the months ahead. As we move out of the shadow of COVID-19, another crisis will dominate this coming quarter – the climate crisis. COP26, which will take place in November, will drive this focus. Accountants’ skills and expertise strongly position them to help businesses adapt to meeting the sustainability challenge. The evolution of the CFO role in recent times is proof of this, but sustainability expertise is equally becoming critical among accountants at every level. The Institute will maintain its focus on equipping members for this task. Finally, I would like to direct your attention to our recently published position paper, The Next Financial Year, which details policy measures the Institute is calling for in the months ahead. Informed by extensive engagement with members in business, practice, and the public sector, it focuses on improving government policy for businesses on the island of Ireland without demanding additional exchequer funding or support. I look forward to engaging with you all in the coming weeks and months. Barry Dempsey Chief Executive  

Now that October heralds people returning to the office, leaders need to communicate with their employees to understand their preferred way of working. To ignore this, says Louisa Meehan, risks staff disengagement and demotivation. It is wonderful to see Ireland reopening and returning to working together in person, albeit with all the necessary COVID-19 precautions. However, it will not be quite the same as the workplace of 2019, and leaders should remember that. For instance, there will be three distinct groups in the office: Those who want to make a total return to the office; Colleagues who wish to work remotely on a permanent basis; and The hybrid model we have all been preparing for and hearing about for 18 months – a balance between home and office working. According to the Second Annual National Remote Working Survey carried out by NUI Galway in May 2021, more than 95% of employees want to continue to work remotely. The most popular work pattern identified was a hybrid model of attending the workplace for part of the week and working remotely for the remainder. There are many clear benefits to remote working for both the employer and the employee, with flexibility and high productivity at the top for many. Additionally, we have seen broader environmental and community benefits over the last 18 months. However, many leaders are concerned about keeping employees motivated and engaged while working away from the office. Employee engagement Author Daniel H. Pink identified three core elements to individual motivation: Ability to obtain mastery in your chosen area. Having a clear purpose; a shared vision of the future. Autonomy, or a degree of control over your work. Flexibility and remote working have been something the lucky have benefited from for several years. They have avoided long commutes, which has enabled a better work-life balance. That level of flexibility is often a key motivator and ups the level of engagement for those able to take advantage of it. Remote and hybrid working as elements of a broader flexible working strategy clearly aligns to staff autonomy. This kind of work can also encourage the development of – and proficiency in – skills, allowing additional time for study or personal growth activities. Finally, hybrid working should complement the company ethos, values, and purpose. Thus, when handled well, remote working has the potential to drive up employee motivation and engagement and organisational productivity. People management One of the biggest concerns from leaders today is the ability to effectively manage staff remotely. For most leadership teams, this is a journey, and taking time to focus on enhancing people management skills, focusing on employee motivation and engagement, is time well spent. In the end, it’s essential to focus on what drives your team to do better – is it a good work-life balance? Flexibility? Now, we have the means to meet those needs. Effective people managers with positive leadership skills can enable productive remote working. Louisa Meehan is the Founder of Woodview HRM.

With Ireland putting its climate goals into law, businesses will find it tough to meet their targets. Although it will undoubtedly be a challenge, says Michael Hayes, there are ways Irish companies can act now – not only for themselves but for their stakeholders too. One of the key objectives of COP26 is to provide a forum to create a globally co-ordinated climate response, where all nations commit to ambitious emissions reductions plans (also known as Nationally Determined Contributions or NDCs). Achieving this globally co-ordinated response, including the creation of an internationally agreed carbon market (which COP25 failed to achieve), will be one of the key measures of the success of COP26. Ireland has joined a select few countries in enshrining its climate goals in law. The Climate Bill, ratified this summer, commits to a 51% reduction in emissions by 2030 relative to a baseline of 2018, with the Climate Action Plan and the first round of sectoral carbon budgets due in the final quarter of this year. Nonetheless, Ireland remains an outlier in pollution with the third-highest emissions per capita in the EU. Where carbon leakage is a concern, partnerships and collective action across governments, businesses, and civil society are essential. Why does climate matter to business? Too often, we think of far-off impacts of climate change such as wildfires in California or Australia – but Ireland is not immune to the climate crisis. The EPA’s recent Status of Ireland’s Climate study showed that the decade between 2006 and 2015 was the wettest on record, while 15 of the top 20 warmest years on record have occurred since 1990. Meanwhile, KPMG’s most recent CEO survey shows that in both the Republic of Ireland (40%) and Northern Ireland (44%), a noticeably higher percentage of respondents than the global average (27%) are concerned that not meeting climate change expectations will result in public market investors shying away from their organisation. Financial risk Businesses and listed corporates, in particular, are getting it from all sides in terms of ESG. Companies face a genuine and immediate financial risk if they don’t address ESG concerns. Investors may walk away, customers may not buy their products and services, consumer sentiment is changing rapidly, and employees want to work for companies with purpose. Companies that do not address the climate change and ESG agendas in a meaningful way will suffer. This has become even more serious in the aftermath of the IPCC report and its ‘Code Red for the Planet’ warning, and regulators and governments will force the agenda. Businesses that don’t appreciate the scale of new policies and regulations coming down the tracks run a real risk of being left out in the cold. Meanwhile, the most immediate pressure comes from investors who often manage other people’s money. Government stimulus required CEOs in Ireland and worldwide indicate that a multifaceted approach will be required to address climate change. Over three-quarters of leaders surveyed globally (77%) believe that government stimulus is needed to turbocharge their goals of reaching net-zero. This figure is even higher in the Republic of Ireland (80%) and Northern Ireland (82%). That so many CEOs say government stimulus and assistance will be required to help their organisations reach climate targets is interesting. There is a clear message there that most corporates believe they will not get to net-zero alone. No one should be under any illusions about how difficult it’s going to be.  What can business do? The same research showed that 84% of business leaders in the Republic of Ireland and 76% of their counterparts in Northern Ireland are focused on locking in the sustainability and climate change gains made during the pandemic. Companies with huge air miles before the pandemic simply stopped flying, with resulting cost savings and environmental gains. COVID-19 provided a unique test-bed for accelerating and testing new ways of working, and it’s hard to see how we could revert completely to where we were before. Furthermore, many organisations will be consciously working to ensure that they don’t slip back to old ways of working. Measure the gains Companies that wish to hold onto gains made during COVID-19 must know what they want to lock in. They need to set out clear KPIs and metrics for those gains. Many companies implemented good ad hoc climate initiatives during COVID-19, but the absence of a structured framework or programme means many of the gains are unlikely to persist. Creating frameworks and programmes now will help companies bed down those gains and build on them in the future. However, it should be noted that gains from climate action tend predominantly to be long-term in nature. Therefore, organisations should put governance structures in place to recognise such long-term gains. Michael Hayes is the Global Head of Renewables at KPMG.

Summer has faded and we’re now full swing into autumn, which is the perfect time to re-examine your goals and focus on what you can achieve by the end of the year. Moira Dunne outlines five easy steps to a more productive you. Autumn is a great time to reset and refocus. The summer months are often filled with distractions, especially as most will take the time to recharge and refresh. Now October has arrived, it is an excellent time to consider the final three months of the year. Review your goals Consider the goals you set at the start of the year. There may be goals you haven’t started yet or new goals that emerged as the year progressed. Now is the time to re-evaluate your priorities so you can focus on the most important things between now and December. Be realistic By this point, you should have a realistic view of your busy schedule. Where can you find extra time to work on your goals? Set one goal to achieve over a realistic timeframe. Once you make progress, you will feel productive and motivated to tackle the next one. Remove the vague The key to making progress is to break down a big goal into smaller actions; that way, you can begin to make gradual progress every week. Use short gaps in your schedule to work through a few tasks each day. They all add up and, if well planned, will result in you achieving the overall goal by your deadline. As Tim Herrera recently said in his Smarter Living article in the New York Times: “Rather than looking at tasks, projects or decisions as items that must be completed, slice them into the smallest possible units of progress, then knock them out one at a time”. Setting goals Here are five simple questions to help you set a good goal. What is the change I want to make? Be clear and specific. This will help you decide the work that needs to get done to achieve the goal. Why do I want to do it? What is my motivation? What difference will it make? Does this fit with my overall vision and purpose? When does this goal need to be achieved? Set a deadline for completion and then work backwards to set interim deadlines for smaller tasks along the way. This helps you stay motivated and focused throughout. What are the risks, the stumbling blocks or things that may prevent you from succeeding? List anything that may get in the way – things that could cause you to give up, things that blocked you in the past, things to avoid this time. What actual work needs to be done to achieve the goal? This will help you develop an action plan – essentially, to map out the work you need to get done. Action plan Once you work out the above steps, you can start to build your action plan. Add target dates, measures and resource names for who will complete the work. A simple table or an Excel spreadsheet will help you track your progress against the plan. How great would it feel to finish the year on a high? Now is the time to focus so you can have a productive fourth quarter. Moira Dunne is the Founder of BeProductive.ie.