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Workplace conflict: incidence, impact and resolution

Organisational practices and culture often drive workplace conflicts. Ian Brinkley examines the impact of conflict and how it can be resolved and prevented in the future The modern workplace is often a place of harmonious or at least tolerable relationships, but sometimes things go wrong. Ranging from one-off tiffs to more serious and systematic incidents, conflict can occur even in the best run workplace. In early 2024, the Chartered Institute for Personnel Development (CIPD) conducted a large-scale workplace survey in the UK focused on the incidence, impact and resolution of conflict. What is conflict? According to the survey, conflict included feeling humiliated or undermined at work, being shouted at or in a heated argument, verbal abuse, unfair allegations, sexual and physical harassment, intimidation and assault and discrimination for a protected characteristic such as race, gender, disability or age. (The survey question did not mention religion.) About 25 percent of the UK workforce reported at least one form of conflict in the preceding 12 months. The most common conflicts involved being humiliated or undermined at work, being shouted at, followed by verbal abuse and discrimination linked to a protected characteristic. The most serious incidents, such as sexual and physical assault were thankfully rare. Most attention focuses on formal processes such as industrial tribunals, grievances and mediation as a means to resolve disputes. However, in practice, very few reported conflicts ever make it to this stage – just one percent ended up in employment tribunals, for example. The most common reactions are informal. About half of those who reported conflict reported that they let it go. Involving managers and HR was the second most common way of resolving conflict. Unresolved conflict About two-thirds of conflicts are either fully or partially resolved. However, one-third are not resolved at all. Unresolved conflicts may not be escalated because they are not serious enough, especially “one-offs”, or because people fear the repercussions if they do. The survey does not tell us directly which is more likely, though evidence on the impact of the conflict suggests the former is more common. Most people who reported conflict also said they had good working relations with managers and colleagues. However, they were more negative when it came to specific actions – for example, whether they were always treated fairly. We think this apparent contradiction is down to people making a distinction between working relations in general and specific incidents. Conflict also had relatively little impact on voluntary effort. Those who reported conflict were almost as likely to say they were willing to work harder than they needed to in order to help their organisation and just as likely to say they would help colleagues under pressure or make innovative suggestions. However, we do find a clear negative association between conflict and a range of other indicators of the quality of work. For example, those who report conflict are much more likely to say work had adversely affected their mental health and that they experienced excessive workloads and work pressures most or all of the time. We cannot tell from the survey whether the conflict was the cause of these negative impacts or whether workplaces, where work quality was already poor, are more likely to suffer conflict. Both are likely to be true. A decrease in workplace conflict The survey asked about conflict in 2019 and since then there has been a significant decrease from 30 to 25 percent of the workforce. There are, however, two important caveats. First, the improvement was largely confined to older white males in permanent, higher-skill white-collar jobs without disabilities. There was little or no improvement for the young; those in temporary or zero-hours jobs and short-hour contracts or those with disabilities, ethnic minorities and women. Non-heterosexual workers also saw less conflict over this period, but it still remains at a high level. In 2024, the latter groups reported significantly higher levels of conflict than the former, and since 2019 that gap has widened. Second, the fall in conflict has also been greatest for those groups that saw the biggest rise in home-working. Those who work at home are less likely to report conflicts such as being shouted at or subject to verbal abuse. Reducing workplace conflict No strategy to improve the quality of work can fully succeed unless the incidence of conflict is reduced, especially among the “left behind” groups. Improving the relative bargaining power of those who are more likely to report conflict may help. Legislative change focusing on formal dispute resolution may be justified but is unlikely to make much difference to the overall incidence of workplace conflict. The biggest impact is going to be from organisational practice. Improving work quality in workplaces with below-average work quality is an obvious priority, but even well-run organisations can suffer conflict. In both cases, mitigating some of the underlying causes of conflict, such as excessive workload combined with helping line managers manage conflict better in the future, will be required if progress is to be made over the next five years. Ian Brinkley is a labour market economist

Jun 25, 2024
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What you should know about the Charity VAT Compensation Scheme

Charities can reclaim a portion of their VAT costs based on non-public funding ahead of the 30 June deadline. Liam Farrell explains how to do it Charities are entitled to claim a refund of a proportion of their VAT costs based on the level of non-public funding they receive, but the deadline to submit the application – 30 June – is fast approaching. Making a claim Where the total amount of eligible claims from all charities in each year exceeds the capped amount, claims will be paid on a pro-rata basis. The cap on this has increased to €10 million from 1 January 2024. To qualify for this scheme, a charity must, at the date of claim and at the time the qualifying expenditure was incurred: be registered with Revenue and hold a charitable tax exemption (CHY) under section 207 Taxes Consolidation Act (TCA) 1997; and be registered with the Charities Regulatory Authority (CRA). For a charity to submit a claim, they must have: a tax registration number issued by Revenue; bank account details; and a registered Charity Number (issued by the Charities Regulatory Authority). A claimant must also hold a current tax clearance certificate when making a claim. Claims for VAT compensation must be submitted through e-Repayments on Revenue’s Online System (ROS). These claims, along with any supporting documentation, must adhere to the required format and meet the deadlines specified by Revenue. Claims can be submitted annually between 1 January and 30 June for eligible VAT paid in the previous calendar year. Claimants may amend their claims until 30 June of the submission year, but not thereafter. The maximum claim amount is €1,000,000, the minimum claim amount is €500, and the minimum repayment is €5. Additionally, claimants must declare and certify that all information provided is correct. To support a claim, detailed documentation is required, including a breakdown of total income, qualifying income and qualifying expenditure. VAT records, such as invoices and receipts, must be retained by charities for six years. There must be evidence that the goods and services claimed were used for charitable purposes, that the VAT was paid in the relevant year, and that the income used for calculations was received in that year. The most recent set of audited accounts, corresponding to the financial year of the claim or the claim submission year, is also necessary. Furthermore, claimants must provide evidence that the charity was not entitled to a VAT deduction or refund under other legislation and must show compliance with the VAT Consolidation Act 2010, the Taxes Consolidation Act 1997, the Stamp Duties Consolidation Act 1999, and related secondary legislation. Qualifying income The proportion of a charity’s income that is privately funded is known as ‘qualifying income’. This excludes publicly funded income and income already excluded from the total income calculation. To calculate qualifying income, a charity should deduct from its total income for the year to which the claim relates all non-qualifying income. Some examples of non-qualifying income are Charitable Donations Scheme repayments, Charities VAT Compensation Schemes refunds, county council grants and charity shop income, among others. Qualifying expenditure Expenditure in respect of which a VAT refund may be sought under this scheme is described as “qualifying expenditure”. Conditions apply to the calculation of qualifying expenditure are as follows: compensation may be sought in respect of VAT which was paid in the State on certain expenditures and in the year to which the claim relates; that expenditure must have been for goods or services used by the charity only for its charitable purpose; and if a charity is entitled to receive any relief, refund, repayment or deductibility under any other scheme or legislation administered by Revenue, it may not include that amount in the calculation of a claim. What next? Applications under the scheme should be submitted by 30 June 2024 in respect of calendar year 2023. It is important to note that claims submitted after the 30 June deadline will not be accepted under any circumstances. Liam Farrell is Director of Accounts & Business Advisory Services at Azets

Jun 21, 2024
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Getting DORA ready

As entities prepare for the introduction of the Digital Operational Resilience Act, IT security and compliance will be front of mind for many, writes Jackie Hennessy With the Digital Operational Resilience Act (DORA) on the way, entities must move from preparation to implementation and take steps towards demonstrating how their practices comply. Financial entities will need to demonstrate appropriate security and resilience of critical information and communication technology (ICT) systems and applications to comply with DORA. The level of compliance efforts will vary depending on the size and complexity of your entity. A risk-based approach, appropriate security and resilience testing are necessary to address potential vulnerabilities and to prove compliance in meeting the evidence requirements of the European Supervisory Authorities. By focusing on long-term resilience, entities can establish a resilient foundation, which will aid them in their steps towards DORA compliance. Resilience means learning from the past, to improve the present, and to prepare for the future.  To make entities ready for DORA, there are five key actions to assist those in the preparation phase. These actions will enable entities to effectively manage their digital operational resilience. 1. Determine strategic priorities To enhance business practices, organisations must aim to achieve a transformation towards a resilient end-to-end IT and operations environment. To ensure strong risk management, a focus should be placed on achieving a broad agile transformation that takes into account risks associated with ICT suppliers and continuity measures. Additionally, it is necessary to aim to increase your organisation's agility in serving digital channels by implementing strong business continuity management (BCM) measures. 2. Implement resilience and incident management measures To ensure effective implementation of your DORA program, it is crucial to ensure leadership support, as well as translation of strategic and regulatory requirements into operational measures. It is essential to enable control owners and line management to manage compliance requirements in a risk-based way, including the automation of controls related to digital resilience, to manage the complexity of (compliance) requirements effectively. Think big and start small – for example, by organising a workshop with relevant middle-management players to align and agree on the implementation strategy of your DORA program. 3. Manage third-party risks To ensure effective management of ICT risk related to third-party providers, it is essential to conduct complete monitoring of all ICT-related third-party risks throughout all relationship phases. This involves the classification and analysis of providers and their management bodies, record-keeping of relevant information, managing proportionality, managing compliance and creating a third-party risk assessment process risk strategy. By undertaking these steps, comprehensive management of ICT risk in relation to third-party providers can be ensured. 4. Test digital operational resilience To ensure operational resilience, it is crucial to test critical functions more frequently than non-critical, at least once per year. The program for testing digital operational resilience must be based on relevant threat scenarios. Best practice is to implement an appropriate test set-up for each threat, to test the resilience effectively. Moreover, every three years, entities are required to perform threat-lead penetration testing that simulates a realistic and advanced cyber-attack. This simulation helps organisations to prepare and train for real cyber-attacks. 5. Implement measures for resilience and ICT incidents To establish strong operational resilience measures and incident management, it is essential to accomplish resilience testing from a wider perspective, which – beyond technical security testing – includes regular crisis simulations. It is important to improve business continuity plans and ICT crisis scenarios to ensure that uncontrolled disruptions are avoided due to slow and ineffective incident management. Moreover, accomplishing mature threat intelligence and assessing top continuity risk scenarios is crucial to enhancing resilience and preparedness in critical situations. By understanding these measures, strong operational resilience can be established, ensuring smooth and uninterrupted operations. Jackie Hennessy is a Partner at KPMG 

Jun 21, 2024
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Four steps to avoid fraud in your organisation

Scammers are targeting victims with new tactics, causing financial loss and mental distress. Ola Opoosun explains how organisations can protect themselves with the SCAM checklist From convincing phone calls and text messages requesting financial information to elaborate online scams, scammers are always looking for new ways to catch people off guard.   In 2023 alone, UK Finance reported that scammers stole £1.17 billion through unauthorised and authorised fraud. In fact, scammers target those who they perceive as more vulnerable, including the elderly, with data showing that an older person falls victim to fraud every 40 seconds.   While the financial impact of scams can be costly, they can also leave people feeling embarrassed and unsettled and can have a lasting impact on our confidence, especially in a workplace situation.  Three in ten (29%) say that being a victim of fraud has harmed their mental health, leading them to seek help with anxiety and depression.   How can organisations stay alert to scams and prevent them from happening to themselves and their clients? The golden rule of avoiding scams is to be vigilant.   Knowing what to look out for and feeling confident enough to check or challenge what you're being asked to do, especially where something doesn't feel quite right, is very important.    If you ever find yourself in a situation where you’re unsure what to do, our handy acronym “SCAM” can help you put together a quick checklist to help you work out if a request for financial and personal information is genuine or not.  S – Sender  If you receive a message out of the blue, ask yourself: is it a complicated email address, or one that's familiar yet not quite right? An unknown phone number?  Don’t assume that an email address, postal address, website or phone number is always authentic.   Always stop and check the sender’s address or number to make sure it’s legit. C – Chasing  If you get a call out from someone requesting sensitive or urgent information relating to their account, it could be a scam. Time pressure can be an obvious red flag as scammers might use tactics to convince you to make a hasty decision without thinking things through. However, a trusted organisation would never rush you into make an important decision such as transferring money or sharing credit card numbers.   Remember to stop and take the time to think through your decision and question if it seems like suspicious activity.   A – Action  An online, phone or email scammer will likely try one of a number of ways to get you to send money or personal information but it’s important to remember that a genuine organisation would never ask you for security details, especially out of the blue.   M – Mistakes  Scammers impersonate trusted companies, organisations and even people. If you receive an email or text with spelling errors or strange wording, these are tell-tale signs that can be a big giveaway that it’s a scam.  Scammers are hoping that people will overlook typos. You should carry out an online search of the number or email address to see if it's legitimate before replying to the message.   Falling victim to a scam  It’s important to remember that anyone can fall victim to a scam. Falling victim to a scam is nothing to be embarrassed about.   If you’re worried that you have been scammed online or through another method, your organisation’s financial security has been compromised, or you spot any fraudulent activity on accounts, involve your leadership team as soon as possible so they can contact the proper authorities and minimise risk to the company. With scams becoming increasingly sophisticated, it’s important to be more vigilant and feel confident to check or challenge what you're being asked to do.   Trust your instincts and remember “SCAM” to protect yourself and your organisation.   Ola Opoosun is Head of Support Services at caba

Jun 21, 2024
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Building resilience at a time of relentless change

As businesses navigate technological disruptions, economic fluctuations and global crises, leaders must prioritise investing in resilience, writes Neil Hughes Resilience is defined as the ability to adapt to change positively, recover from difficulties and persist in facing challenges. The pace of change in business today is relentless, and for business leaders, resilience is a more crucial attribute than ever. Organisations need leaders capable of staying focused, being consistent and remaining inclusive under pressure. Building a resilient workforce can help organisations to navigate change more effectively, sustaining competitive advantage, growth and long-term success. Best practice suggests several key areas of focus for leaders and organisations to consider. Prioritising wellbeing and mental health According to a 2023 survey by the Chartered Institute of Personnel and Development, 76 percent of UK employees reported that mental health support at work directly contributes to their overall job satisfaction. Mental health is foundational to resilience. Business leaders should strive to create a supportive environment that prioritises mental health through comprehensive wellness programmes. This includes providing access to mental health professionals and resilience tools to support employees in managing stress and adapting to change. Encouraging open conversations about mental health can foster a culture where employees feel safe and supported. Fostering a resilient and inclusive team culture Resilience should be embedded within the organisational culture. Leaders must foster a workplace culture that encourages collaboration, open communication and psychological safety, where small wins are recognised, feedback is encouraged and acted on and failures are seen as learning opportunities rather than setbacks. Creating an inclusive culture where diverse perspectives are valued can enhance problem-solving and innovation. Regular team-building activities, training focused on resilience, and creating a safe space for employees to voice their concerns can significantly boost team morale and cohesion. Investing in continuous learning and development Continuous learning is critical to building a resilient workforce. By investing in ongoing training and development programmes, leaders can equip employees with the skills needed to adapt to new challenges. Offering opportunities for professional growth helps employees stay current and confident in their roles. Encouraging a growth mindset, where challenges are seen as opportunities for learning, can foster resilience and innovation. Role modelling resilience and self-care To lead effectively, business leaders need to invest in their own wellbeing and resilience. Resilient leaders are those who continuously learn, adapt, and maintain their physical and mental health. This involves regular training, seeking coaching or mentorship, and embracing a growth mindset. Leaders who prioritise self-care practices such as regular exercise, adequate sleep, and mindfulness activities can manage stress more effectively, maintaining mental agility. . Leaders play a critical role in modelling resilience and those leaders who prioritise resilience not only enhance their capacity to grow and move forward in the face of adversity but also inspire their teams to do the same. Whilst building resilience involves effort, commitment and time, it can be the protective layer required to equip leaders, their teams and organisations to face the challenges of the ever-changing landscape of work. Neil Hughes is a Director in People and Change Consulting at Grant Thornton Northern Ireland

Jun 14, 2024
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Organisational culture and employee retention

Sandra Healy explains the importance of a strong organisational culture and how it can lead to satisfied and long-term employees Organisational culture is the personality of the organisation, shaping how employees interact with each other, management and customers. A strong organisational culture can have a significant impact on employee retention because it creates a sense of belonging and purpose. When employees feel that they are part of a community that shares their values and goals, they are more likely to stay with the company for the long term.  A positive organisational culture can also lead to greater employee engagement. When employees feel that their work is meaningful and that they are making a difference, they are more likely to be motivated and productive. This can lead to better business outcomes, such as increased revenue and customer satisfaction.  On the other hand, a negative organisational culture can have the opposite effect. If employees feel that they are not valued or that their contributions are not recognised, they may become disengaged and demotivated leading to high turnover rates.  Organisational culture can impact employee retention in other ways, as well. A strong culture of work-life balance can help employees feel that they are able to maintain a healthy balance between their personal and professional lives. Similarly, a culture of learning and development can help employees feel that they are growing and developing professionally.  Key components to a good organisational culture  A strong organisational culture is built on a foundation of shared values and beliefs that guide the behaviour of employees. These values and beliefs are communicated through various channels, such as company mission statements, vision statements, and core values. When employees understand and embrace these values, they are more likely to feel a sense of belonging and purpose within the organisation.  Another key component of a strong organisational culture is effective communication. Leaders who communicate regularly and transparently with their employees can help to build trust and foster a sense of community within the organisation. Employee recognition and appreciation are also important components of a strong organisational culture. When employees feel that their contributions are valued and recognised, they are more likely to feel motivated and engaged in their work. Finally, a strong organisational culture is one that promotes work-life balance and employee well-being. When employees feel that their personal needs and well-being are valued by the organisation, they are more likely to feel satisfied and committed to their work. Measuring organisational culture Measuring the current organisational culture can be done through various methods: Surveys can be distributed to employees to gather their opinions on the company's values, communication, leadership, and overall culture. Interviews with key personnel such as managers and executives can provide insight into the company's goals and how they align with the culture. Focus groups can also be conducted to gather opinions from a diverse group of employees. These methods can help identify areas where the company's culture is strong and where it needs improvement.  Another way to measure the organisational culture is to look at employee turnover rates. High turnover rates can indicate a negative or toxic culture, while low turnover rates can indicate a positive and supportive culture. Exit interviews can also provide valuable feedback on why employees are leaving and what can be improved to retain them.  Once the current organisational culture has been measured, the company can identify areas for improvement by analysing the data collected from surveys, interviews, focus groups, employee turnover and exit interviews, then create an action plan to address the areas that need improvement. Improving the organisational culture is an ongoing process. The company should regularly measure the culture and make adjustments as needed. This will help ensure that the culture remains strong and supportive, leading to greater employee engagement and retention.  Best practice One of the best practices for building a positive and inclusive organisational culture is to establish a clear set of values and principles that guide the organisation's actions and decisions and then communicated to all employees and integrated into all aspects of the company's operations. Organisations must also encourage open communication and collaboration among employees by engaging everyone in regular team-building activities, open-door policies, and opportunities for feedback and input. When employees feel that their voices are heard and their contributions are valued, they are more likely to feel invested in the success of the organisation and less likely to seek opportunities elsewhere.  Creating a supportive and inclusive work environment is also crucial for building a positive organisational culture. This means promoting diversity and inclusivity in all aspects of the workplace, from hiring practices to daily interactions among employees. Finally, it is important to create formal recognition programs, such as employee of the month awards or performance bonuses, as well as through informal gestures such as thank-you notes or public praise. When employees feel that their hard work and dedication are appreciated, they are more likely to feel motivated and committed to the organisation over the long term.  Sandra Healy is Founder of Inclusio

Jun 14, 2024
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Managing cyber threats in the AI age

Businesses need clever strategies to counter the cyber security challenges arising from the emergence of artificial intelligence, writes Puneet Kukreja The enormous power of generative artificial intelligence (GenAI) and large language models (LLMs) is just beginning to be understood. Its capacity to automate and accelerate business processes is only starting to be explored fully. As is the case with the deployment of any new technology, however, GenAI brings with it new cyber vulnerabilities. Cyber security matters are emerging as a key concern for technology leaders in Ireland amid the surge of AI-enabled cyber attacks. According to the EY Ireland Tech Leaders Outlook Survey 2024, the percentage of respondents who identified elevated cyber risks and the management of data protection and data flows as critical challenges has risen to 61 percent, up from 53 percent in 2023. Like the move to the cloud over a decade ago, the technology will create new cyber exposures and increase the attack surface for cyber criminals. For example, consideration needs to be given to securing the LLMs that gather and analyse data from various departments within the organisation. Ensuring the secure collection and transmission of this data is paramount, as is the fortification and security of the model itself. Monitoring emerging vulnerabilities closely This is not a reason to shy away from the technology. It is simply a reminder that it must be treated in the same way as any new IT investment from a cyber security point of view. Few organisations would risk connecting an unsecured PC or laptop to their network and the same approach should apply to AI. AI in cyber security is a double-edged sword. Where it empowers organisations with enhanced security capabilities, it also equips cyber criminals with similar tools by enabling individuals lacking advanced coding skills to leverage GenAI and create malicious code efficiently. With just a few prompts, GenAI can quickly generate code to identify and exploit vulnerabilities within an organisation's network, a task achievable within minutes. Change approach, not budget The good news for organisations and for Chief Information Security Officers (CISOs) is that they do not necessarily have to make significant new cyber security investments to restore the balance. The first step is to focus on what you already have. It is not a question of a new investment in cyber security, rather a new approach. In the same way as the cloud changed the shape of organisations’ networks and cyber defences had to be extended to cover the new expanded perimeter, existing defence systems will need modification to bring GenAI models within their orbit. Stolen credentials present a grave peril to organisations. To bolster security beyond passwords and multi-factor authentication (MFA), organisations can deploy AI-driven solutions that monitor user behaviour for unusual login patterns or atypical actions. These systems scrutinise user interactions with critical infrastructure and can swiftly detect unauthorised access attempts or transactions. Adopting this strategy enhances cyber security defences by integrating AI technology that can strengthen existing measures and counter new threats with speed and efficacy. Procurement processes will also play an important role. Organisations must ensure that they are not buying trouble when they invest in GenAI. They need to interrogate vendors very closely to ensure that the systems they are acquiring are secure and do not bring increased vulnerabilities with them. Of course, organisations will need to invest in upgrades to guard against the AI-driven increased sophistication of phishing and other cyberattacks, but this can be accommodated within normal cyber budgets. Finally, it cannot be emphasised enough that GenAI will not offer a silver bullet to organisations seeking to bolster their cyber defences. Humans: the last line of defence While organisations exploit the potential of advanced AI, they need to be mindful of the advent of new cyber vulnerabilities. Using existing cyber security measures to protect AI systems and applying rigorous due diligence to the purchase of such systems will help deal with the heightened threat, as will increased awareness of the new environment. While it undoubtedly offers the ability to further automate certain elements of cyber defence and to enhance threat detection, this will not replace any of the existing cyber security systems in place or the human as the last line of defence. Puneet Kukreja is Cyber Security Leader at EY

Jun 14, 2024
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Global elections 2024: what corporate governance leaders need to consider

As 2024’s global elections shape business, corporate governance professionals must anticipate changes to compliance and ESG regulations, says Dan Byrne We are in full election mode in 2024. About 50 countries – representing around half of the world’s population – are expected to hold elections this year. Indonesia went to the polls in February, and Mexico, South Africa and India have just finished. The European Union cast votes for bloc-wide representatives on 7 June, and the United Kingdom will follow with a general election in July. Then there’s the small matter of the US Presidential Election in November, rounding off a truly remarkable year for democracy. Corporate governance and elections It’s crucial to recognise that this year’s elections will shape the leadership landscape for the rest of the decade and significantly impact corporate leaders, who will be observing them with keen interest. So, what should corporate governance professionals watch for in these elections? The intensity of regulations It’s the defining question of this corporate generation: how many rules will come down from elected officials? Before going any further, we should acknowledge that the volume of government regulations worldwide has generally increased, meaning more responsibility for directors and more robust penalties for getting it wrong. That said, regulations are broad, and there will always be political tug-of-war over how much control should be placed on businesses. Take the UK, for example. The current Conservative government promised to strengthen the country’s corporate reporting system, but in November 2023, it rolled back many of these proposals amid fears that Britain’s competitiveness would be harmed. Corporate leaders should watch prominent politicians to see how they plan to strike this careful balance between integrity and competitiveness. For many boards, it’s not about whether regulations will strengthen; it’s about the pace of that strengthening. A fiscally conservative government, less prone to market intervention, could easily slow the pace, perhaps prompting a rethink of strategy. ESG Beyond any doubt, these global elections will have a significant impact in shaping the future focus on ESG. There are two main reasons for this: The EU has seized on ESG over the last decade, if not in name, then in principle. Efforts to reach net zero, advance diversity initiatives and enhance reporting requirements through CSRD have dominated the bloc’s political agenda. The sheer scale of ESG-related initiatives means these trends will likely continue no matter what the next European Parliament looks like. That said, the political climate in Europe is changing. Corporate leaders should watch to see how pushback against reporting requirements and net-zero transitions, as well as hot-topic issues like immigration, will translate into votes. Will it mean more seats won by parties on the right or by those with other vested interests such as protecting agriculture? If so, the pro-ESG agenda may suffer from greater political pressure, hampering things like directive adoption and implementation, potentially meaning your corporate strategy might need to change or rewind in the short term. Make or break in the US The United States has become an ESG battleground – a distant landscape from the EU. In the US, politicians fight over its very existence rather than its pace of implementation. Critics of ESG in the US claim it harms investors’ returns and infringes on their free market rights. In some states, laws have already been enacted to prevent ESG investing where possible. The composition of the next US Congress and the person in the White House will ultimately decide whether the anti-ESG movement will take hold on a national level. If it does happen, US companies will then be in a different environment, and their corporate strategies will have to reflect that.  Will your company continue to incorporate ESG? If yes, will you be public with it or approach it under a different name to avoid politics? These questions have been raised before in the US; we just need to wait and see what kind of political landscape is forming around them. What will the changes be? For corporate leaders, the strength and pace of regulations regarding governance and ESG are the things to watch. The 2020s are proving highly polarised politically, and big changes in government will likely mean your strategies will see a change on the ground in some shape or form. Your job is to be clear on what that change will be, and how your organisation will manage and capitalise. Remember, though, that regulations are just one part of the story. And your company still needs to stay in touch with shareholder, consumer and community moods. It’s a hard game, but a rewarding one if you get it right. Dan Byrne is a writer with the Corporate Governance Institute

Jun 07, 2024
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Navigating the storm: geopolitical risks top business threats in 2024

C-suite leaders must navigate the geopolitical landscape to mitigate business risks, writes Enda McDonagh According to a recent poll conducted at The PwC Leadership Exchange, C-suite executives view geopolitical risks as the most significant threat to their businesses in the coming year. As global uncertainties persist, leaders must negotiate an increasingly complex landscape to ensure the resilience and success of their organisations. The poll results reveal that after geopolitical risks (41%), the top concerns for C-suite executives are macroeconomic volatility (28%), climate change (18%), cybersecurity (6%), skills/talent shortages (5%) and supply chain disruption (2%). These findings underscore the multifaceted nature of the challenges facing business leaders today. Addressing geopolitical risks requires a proactive and strategic approach by C-suite executives. By staying informed about global developments, fostering relationships with key stakeholders and developing contingency plans, leaders can better position their organisations to weather potential storms. Additionally, investing in risk management processes and building a culture of resilience can help companies adapt to changing circumstances and emerge stronger. Key takeaways for navigating geopolitical risks 1. Continuously monitor the geopolitical landscape and assess potential impacts on your business Stay informed about global events, regulatory changes and shifting power dynamics that could affect your operations, supply chains or market access. Regularly update your risk assessments and adapt your strategies to minimise exposure to geopolitical disruptions. 2. Foster a culture of resilience and agility within your organisation Encourage cross-functional collaboration in your organisation, empower teams to make decisions quickly and invest in training and development to build a workforce that can adapt to changing circumstances. By cultivating a resilient and agile mindset, your organisation will be better equipped to manage the challenges posed by geopolitical risks. 3. Develop comprehensive contingency plans to mitigate potential disruptions Identify critical vulnerabilities in your operations, supply chains and market presence, and create detailed plans to address potential disruptions. These may include diversifying supplier networks, exploring alternative markets or investing in risk transfer mechanisms such as insurance. By proactively planning for various scenarios, you can minimise the impact of geopolitical risks on your business. As C-suite leaders navigate an increasingly complex global landscape, it is crucial that they remain vigilant and adaptable. By prioritising risk management, building resilience and developing robust contingency plans, executives can position their organisations for success in the face of geopolitical uncertainties. Enda McDonagh is Managing Partner at PwC Ireland

Jun 07, 2024
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Capitalising on the seas: Ireland’s tonnage tax regime

In the world of international shipping, the Irish tonnage tax regime stands out as a cornerstone policy supporting the maritime sector. Fidelma Cosgrove explains why Introduced in 2002, the EU-approved Irish tonnage tax regime aligns with broader EU efforts to promote a robust and competitive maritime industry across EU member states. The regime continues to support economic growth and sustain employment in the Irish maritime sector. The Irish tonnage tax system replaces traditional corporation tax calculations with a formula based on a qualifying ship’s net tonnage. The regime provides certainty and predictability to companies operating in a highly cyclical sector within the domestic and global economies. It not only stabilises financial planning for qualifying companies but also helps those companies remain competitive internationally. Alternative method of taxation The regime is currently utilised by a range of companies across the dry bulk, tanker and liner trades amongst others, playing a crucial role in strengthening Ireland’s maritime industry. It operates as an alternative method of taxing the profits of qualifying shipping companies. Instead of being taxed on trading profits (as under normal corporation tax rules), qualifying companies are taxed on a nominal notional profit computed as a profit per day based on the net tonnage of the ships operated by them. The standard corporation tax rate of 12.5 percent, or 15 percent (if within the scope of the OECD Pillar Two GloBE rules), is then applied to the notional profit. Foreign exchange and other financial gains associated with the shipping business are included in the regime. Advantages of the tax regime There are several advantages to this tax regime. ‘Relevant shipping income’ is exempt from regular corporation tax and the term is broadly defined. Ireland’s tonnage tax is not a tax deferral, representing the final corporation tax liability on those profits and results in permanent savings. There are no tax barriers to the establishment of an Irish operation and start-up costs are generally low. Repatriation of profits is facilitated by Ireland’s comprehensive network of tax treaties, which provide favourable dividend and interest withholding tax rates. A full exemption from capital gains tax applies on gains arising on qualifying ships provided those assets have always been used within the company’s tonnage tax trade and financing into the tonnage tax company is not restricted. There is normally no exit charge when a company leaves the regime by ceasing to carry on shipping operations within Ireland. The Irish regime offers benefits to ship managers and pools over EU competitors. There is no requirement for the ships to be Irish registered or Irish flagged. Profits from ship management activities also benefit from the regime. Furthermore, there is no vessel ownership requirement for ship managers. The strategic and commercial management tests under which the regime operates are EU-approved and align with the OECD Pillar Two GloBE requirements. The regime does not impose training requirements. Finally, a tonnage tax company may charter up to three times the amount of tonnage it owns/bareboat charters in. A thriving industry The Irish tonnage tax regime stands as a pivotal framework for fostering a thriving maritime industry within Ireland. By offering a stable and predictable taxation environment, it supports long-term financial planning and enhances the international competitiveness of Irish shipping companies. As the regime continues to evolve, it will undoubtedly remain integral to the sustained growth and innovation in Ireland’s maritime economy. Fidelma Cosgrove is Tax Director at KPMG

Jun 07, 2024
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Diversity, equity and inclusion toolkit for start-ups and SMEs

Small businesses don’t need big budgets to kickstart DEI initiatives. Conor Hudson and Hugo Slevin outline some practical first steps to success from the outset Last year in Ireland, close to 1.2 million people around the country were employed by small- and medium-sized enterprises (SMEs), representing more than 90 percent of all businesses in Ireland.  While Chartered Accountants play a pivotal role in working with these firms and supporting their needs and requirements, many are also operating as, or directly employed by, SMEs.  As diversity, equity and inclusion (DEI) initiatives become increasingly important in today’s workplace, there is a need to ensure that support is provided to SMEs and start-ups developing and implementing their own DEI strategies.  Larger employers will have substantial resources dedicated to DEI, whereas SMEs and start-ups are more likely to face challenges in developing successful strategies due to limited budgets and often already stretched employee time.  This does not mean that these challenges are insurmountable, however. Numerous resources are available to support smaller businesses in their DEI journey, and with the right approach, many will find that a good DEI strategy will support a happier and more productive workforce. Why is it important for SMEs to have a DEI Strategy?  Having a DEI strategy can bring many benefits for employees and business owners alike.  From an employee standpoint, being recognised and supported – and feeling able to bring their true selves to work – results in greater engagement and trust in their employer, leading to stronger performance.   For businesses, having a recognised DEI strategy can enable access to a wider and more inclusive pool of talent, while also helping to improve innovation due to a diversified workforce with a wider range of views and perspectives.   How should an SME approach developing a DEI Strategy?  In developing DEI strategies, it is recognised that SMEs may face some constraints. It is important that they set realistic goals in the development and implementation of this strategy. Trying to make too many changes or developing a superficial plan is of little benefit and can be damaging in the longer term.  The first steps to DEI success Here are some practical steps SMEs can take to develop an effective DEI strategy:  Identify a leader and ensure ownership of the DEI strategy It is important that a recognised leader within the organisation takes ownership of its DEI strategy. This illustrates that, from a senior level, the strategy is being afforded a high level of priority. While others within the organisation can actively support development, a bottom-up approach may not be as successful. Foster a culture of openness and communication Openly encouraging dialogue and actively listening to employees’ experiences will create a sense of belonging and support diverse perspectives. An internal social group could be a good starting point for this.  Provide DEI training to all staff DEI training can help raise awareness, promote understanding among staff members and kickstart conversations about the business need for an effective DEI strategy. Several non-profit organisations such as ShoutOut (shoutout.ie) offer a wide range of workshops that are affordable and can make an immediate impact. Work with existing groups and organisations Many business groups and representative bodies – Chartered Accountants Ireland and IBEC, for example – offer diversity resource hubs and forums SMEs can leverage to support their DEI journey. It is also worth encouraging employees to volunteer their time and skills to organisations such as BelongTo (belongto.org). Review policies regularly Reviewing your policies, with buy-in from your employees, can help to identify potential biases or barriers to inclusion, including hiring practices, as well as helping you to gauge the success of your DEI initiatives through engagement with your workforce. Make adjustments as required to ensure all employees are treated fairly and make sure any policy changes you introduce are communicated clearly across the board. Conduct employee surveys Conducting regular employee DEI surveys can help you to determine the success, or otherwise, of your diversity efforts by gauging how your employees perceive them and view any supports they are receiving. It is important to make sure these surveys are anonymous to protect employees who might otherwise be hesitant to provide honest feedback. Establish an Employee Resource Group Encourage and support the formation of Employee Resource Groups, allowing employees from minorities to come together and advocate for positive change within your organisation. Regardless of budget limitations, SMEs can make significant strides in advancing DEI by prioritising a commitment to inclusivity, fostering open dialogue, exploring community resources and implementing thoughtful initiatives.  Diverse teams greatly improve talent acquisition and retention, decision-making quality, innovation and insight. True and authentic DEI initiatives will motivate your employees to really sponsor your brand, ensuring your SME thrives in a competitive world.  Conor Hudson and Hugo Slevin are Chartered Accountants and members of members of BALANCE, the Institute’s LGBTQ+ Allies network group The many advantages of DEI strategies for SMEs With Pride 2024 celebrations getting around the world for the month of June, four members of BALANCE, the LGBTQ+ Allies network group of Chartered Accountants Ireland, share their personal views and insights into the importance of effective diversity, equity and inclusion (DEI) strategies in all businesses, including SMEs. Sarah McAleese, KPMG Inclusive DEI initiatives need not always entail significant financial investment for SMEs. From an accessibility standpoint, a standardised email sign-off for meeting invitations, such as, “should you require any additional accessibility accommodations or support, please do not hesitate to let us know,” can serve as an initial step in cultivating an open environment, where employees and clients alike can bring their “true selves” to work.  Offering and providing readily available additional support upfront demonstrates a proactive commitment to ensuring everyone feels supported in the workplace.  Another example of a low-cost accessibility initiative may be introducing designated sensory-friendly hours in specific office areas to cater to the needs of neurodiverse individuals.  It is crucial, however, that while individuals are encouraged to avail of any additional supports, they should never feel pressured to disclose information they are uncomfortable sharing. Cian McKenna, AXA Ireland Creating an inclusive culture in the workplace can start with the smallest acts spurring valuable conversation across an organisation.  Even in a hybrid workplace, watercooler moments are alive and well, with the topic of the day always including new initiatives the company is putting into place.  I have been fortunate during my time as part of the finance team at AXA Ireland to see firsthand the impact DEI initiatives can have across the board. Since starting at AXA, I have seen regular initiatives focused on LGBTQ+ inclusion, such as the introduction of email signatures with the AXA logo in Pride colours, Pride lanyards and our Sports and Social Committee using a Pride theme for their annual summer party (with proceeds going to LGBTQ+ charities).  Most recently, AXA introduced a campaign to suggest the inclusion of pronouns in email signatures.  While these may seem at first like small acts, all have naturally fostered a sense of allyship, encouraging an invaluable sense of belonging and acceptance in our workplace. Eimer Proctor, ASM Implementing DEI initiatives is not just about celebrating Pride, changing your company logo for Pride month or purchasing rainbow lanyards. DEI is an ongoing, inclusive process and small steps can lead to significant, positive change. At ASM (B) Ltd, we have recently embarked on our own DEI journey, and we signed the Diversity Mark NI Charter to demonstrate our commitment to this.  In seeking the Bronze accreditation and demonstrating that we are a gender diverse professional services firm, the first target requires us to develop a DEI strategy with supporting actions to measure what success looks like.  As accountants, we like numbers and data, so – in setting clear and measurable targets for gender diversity – we consider that this will allow us to take those crucial small steps in progressing our DEI efforts. Paul Cassidy, SKY Leasing SKY Leasing has created a DEI policy that is reviewed and refreshed annually. This commitment demonstrates that embedding diversity and inclusivity across people, policies, processes and practices is a key priority for the organisation.  Some of SKY Leasing’s many DEI initiatives include encouraging our female workforce to join and contribute to industry bodies championing women in the workplace, such as Women in Aviation (AWAR).  SKY Leasing’s CFO, Ailbhe Kenny, is a participating AWAR mentor and some of the female members of our team have also participated as mentees, sharing knowledge on best practice and acting as champions and ambassadors for other women in our workplace. Our company also promotes diverse experiences, backgrounds and work styles among employees. This encourages us to embrace how we authentically and naturally approach our own work as well as how we work together.    

Jun 05, 2024
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Ireland’s recognition of Palestine: symbol or substance?

European countries that have recognised Palestinian statehood have to decide what impact they will have on achieving a two-state solution, writes Judy Dempsey In May, the governments of Ireland, Norway and Spain recognised a Palestinian state. The war between Israel and Hamas was the catalyst.  Dublin, Oslo and Madrid had lobbied other European governments to be consistent in recognising the state of Palestine and in trying to push forward the idea of two states – Israel and Palestine, living side by side. Their efforts, so far, have come to nought. Now that they have unilaterally recognised Palestine, they face tough questions. First, what do they want this decision to achieve for it not to be just a symbolic gesture?  A state needs land, sovereignty, independence and internationally recognised borders. Palestine has none of these.  The illegal Israeli settlements entrenched in the occupied West Bank, which have continued during the Israel-Hamas war, make a viable Palestinian state impossible.  And, despite support from the Biden administration for a two-state solution, Israeli Prime Minister Benjamin Netanyahu has consistently rejected the idea.  Second, what role will Europeans play, if any, in making a Palestinian state viable?  For decades, the EU paid lip service to the two-state idea, but it was toothless in stopping the expansion of settlements and the flow of funds to the corrupt Palestinian Authority at the expense of genuinely independent civil society movements. The longer the settlement expansion continued, the more radicalised Palestinian society became. Hamas found fertile ground in Gaza, which it has controlled since 2007 following Israel’s withdrawal from the settlements in 2005.  Since then, Gaza’s population has been subject to the dictates of Hamas, which has tolerated no dissent, and to Israel, which has strictly controlled the movement of people, trade, goods and food in and out of Gaza. Now, EU divisions over the conflict are deeper than ever with little prospect of unity on the issue of ending the war or recognising Palestine.  Some other EU countries may follow Ireland, Norway and Spain – but don’t expect unanimity. Spain, Greece, Cyprus, Slovakia and Romania have yet to recognise the independence of Kosovo, which was declared as far back as 2008. If unity is impossible over Israel and Gaza, maybe it is time to find interim options.  What about forming coalitions of the willing instead of enduring endless disagreements and diluted foreign policy decisions? The EU’s differences over how Ukraine could restore its sovereignty and the ongoing disputes over the Israel-Palestinian conflict highlight the need for such coalitions to overcome deadlocks.  While not ideal, this approach may prompt EU policymakers to realise that constant disunity makes Europe weak and ineffective. *Disclaimer: The views expressed in this column published in the June/July 2024 issue of Accountancy Ireland are the author’s own. The views of contributors to Accountancy Ireland may differ from official Institute policies and do not reflect the views of Chartered Accountants Ireland, its Council, its committees, or the editor. Judy Dempsey is a Non-Resident Senior Fellow at Carnegie Europe and Editor-in-Chief of Strategic Europe

Jun 05, 2024
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Planning ahead for the best outcome

Business owners must consider the tax implications of key business decisions to avoid pitfalls and realise the full benefits, advises Kerri O’Connell  For many successful business owners, tax planning and wealth management will be inextricably linked, requiring a careful approach to future considerations at a relatively early stage in the development of their business. According to Kerri O’Connell, Tax Adviser and Principal at Obvio Tax Services, not all owners are aware of the tax implications of the decisions they make as they build their business, however. “The time for considering these issues is before significant value has built up in the business as problems can arise when there has been no consideration of the potential sale of some or all of the business, or the investment assets, or for the future reliance on tax reliefs on business transfer,” says O’Connell. A Registered Trust and Estate Practitioner with the Society of Trust and Estate Practitioners Ireland, O’Connell has been advising SMEs in Ireland for over 25 years as both a Chartered Accountant and Chartered Tax Advisor. She founded Obvio Tax Services in 2015 to advise business owners on tax matters at each phase of the business cycle from start-up through to expansion and sale or succession. “What I’ve learned is that, for many owners, their focus understandably will be on getting their business onto a sound footing and then building it from there,” she says. “When their business becomes valuable, however, problems can arise if they fail to focus on their personal finances. This issue can be particularly acute when the business is incorporated, the owner has no pension scheme or some of the business surpluses have been used for investments.”  It is crucial, therefore, that business owners consider their exit plans at a relatively early stage in the development of their business and avail of good tax advice. “It is very important to get tax advice specific to your business when it is growing and making profits,” O’Connell says. Access to retirement relief on Capital Gains Tax (CGT) could potentially exempt the transfer from CGT. Alternatively, CGT entrepreneur relief may apply: “this relief applies a 10 percent CGT rate on the first €1 million of gains with the usual 33 percent CGT rate applicable to any surpluses,” O’Connell explains. Several conditions must be met in order for these CGT reliefs to apply, requiring advance planning.  “In a family succession situation, the beneficiaries, be they children or grandchildren, will look to rely on Capital Acquisitions Tax (CAT) business property relief or CAT agricultural relief,” O’Connell says. “Again, many conditions must be met, but if either of these reliefs are available, they can potentially reduce the taxable value by 90 percent and so potentially reduce the effective CAT rate to 3.3 percent.” Other exit options open to owners include selling their business, or passing ownership on to senior leaders in the business through an internal takeover. “If you are selling your business, pre-sale restructuring may be required to separate different trades, or to separate business and investment assets. This restructuring will attract tax liabilities unless various restricting reliefs can be relied upon,” O’Connell says.  If your exit involves an internal takeover, meanwhile, pre-sale restructuring may be required to isolate the sale asset.  “You may also need to consider the potential impact of some anti-avoidance legislation, which can operate to turn a capital event – subject to CGT and potentially attracting CGT reliefs – into an income distribution, taxable to full income taxes, USC and PRSI,” O’Connell says. Business structure As businesses grow and expand into new markets, it is also important to consider tax implications from the point-of-view of business structure, O’Connell advises. “Once the decision has been made to develop a new income stream or enter a new market, it is important to stop and think first about the right business structure going forward,” she says. “Don’t put off thinking about structure until a year or two of trading to ‘see how it goes’ – you’re potentially storing up tax problems. “If you have identified new income streams with different plans for each stream, a group structure may be appropriate in terms of the retention of different businesses, their future sale or the introduction of key employees as shareholders.” Tax issues arising from the creation of a group structure can be managed if conditions are met for the relevant tax reliefs to apply, O’Connell says.  “You will also need to think about business structure if you are expanding into overseas markets and deciding whether to set up a separate company or overseas branch in a new country. Tax advice in that country will be required either way and you will also need to consider the tax implications of profit repatriation. “Do bear in mind that, if you have sales staff operating in another country, this will likely create payroll tax issues in that country as well as potential exposure to corporation tax.” As growth ramps up and business owners look to the next stage of their company’s development, it is a good idea to consider the tax-based financing options open to them – for example, the Employment Investment Incentive Scheme (EIIS) or repayable tax credits for research and development (R&D) activities. Employment Investment Incentive Scheme “Changes introduced in Finance Act 2019 resulted in the entire EIIS becoming self-assessed so there is no longer a requirement to secure advance approval from Revenue,” O’Connell says. “In my view, this was a positive step as the timeframes for securing approval had become unworkable. Recent Finance Act 2023 changes will potentially continue this positive momentum, with the maximum investment on which an individual can claim income tax relief now increased to €500,000.” A tiered system of relief has also been introduced depending on a company’s stage of development, as follows: 50 percent income tax relief for entirely new businesses; 35 percent tax relief for businesses operating for less than seven years; 20 percent tax relief for expansion/follow-on investment in businesses in operation for more than seven years.  “EIIS investors are used to the previous 40 percent rate of tax relief. In order to achieve more than a 35 percent rate now, they must invest in entirely new businesses,” O’Connell says. “It remains to be seen if there will be increased EIIS funding available for younger riskier businesses and if this will change when an EIIS scheme might fit into the financing mix for a young business.” R&D repayable tax credits  Changes to the R&D tax credit regime, introduced in recent years, mean that this credit may be wholly repayable to the recipient, making it a de facto source of finance for companies. “Finance Act 2023 changes introduce an uplift in the rate of R&D tax credit from 25 percent to 30 percent,” O’Connell explains.  “For SMEs with claims of up to €100,000, the repayments continue to be made across three instalments, but more of the repayment can now be frontloaded with up to €50,000 repayable in the first instalment.” Tax incentives: recent developments Finance Act 2023 introduced changes to retirement relief on Capital Gains Tax (CGT), effective from 1 January 2025, writes Kerri O’Connell The relief available on a transfer to anyone other than a child was previously subject to a cap of €750,000 total proceeds from qualifying assets, as long as the transfer took place after the owner turned 55 years of age and before they turned 66.  This later age restriction has been pushed out to 70. Any transfer made once the owner has turned 70 will be subject to a €500,000 cap.  For higher value businesses, the changes are negative as they introduce a maximum cap on retirement relief of €10 million total value of qualifying assets on any transfer to a child where the business owner is aged between 55 and 69. This cap is reduced to €3 million from age 70 onwards.  Previously, a claim for retirement relief on a transfer to a child before the age of 66 was unlimited as to the value of the qualifying assets transferred.  The reason for introducing different tax treatment depending on the age of the owner is to encourage the earlier transfer of businesses, but this policy aim may yet be defeated by the introduction of the new €10 million value cap.  Business lobby groups have come out firmly against the changes and understandably so, as the gift of a business to the next generation may now trigger significant tax charges, without any cash proceeds available to cover this.  While the 2022 Commission on Taxation and Welfare recommended such a cap, it did not set a proposed figure, and many would view the €10 million value as too low.  The Commission did, however, note that it should be ensured that the payment of tax on these gifts ‘does not undermine the viability of the enterprise’ and suggested the introduction of deferral arrangements or long payment schedules with low/no interest. These recommendations have not, to date, been taken up.  Another recommendation from the Commission is also worth highlighting. Typically, taxpayers will look to rely on CAT agricultural relief or CAT business property relief when receiving a gift of a farm or business.  The Commission recommended that these 90 percent reliefs be reduced and that the conditions attaching amended to ensure that the beneficiary actively participates in the farm/business they have been gifted. At the time of writing, however, this recommendation has not been taken up by the Department of Finance.

Jun 05, 2024
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“I’m passionate about organisations becoming more neuro-inclusive”

Mark Scully founded his own executive coaching firm to raise awareness of the benefits of neurodiversity in the workplace and support young professionals. For Mark Scully, his path to entrepreneurship as the owner of his own consulting business has been a highly personal endeavour. A qualified barrister, Chartered Accountant and Chartered Tax Advisor, Scully launched Braver Coaching and Consulting (gobraver.com) in February 2024 to promote neurodiversity in Irish workplaces and provide executive coaching to young professionals. The move followed his own autism diagnosis in 2021, which prompted Scully to leave behind a successful career as a Tax Director with KPMG in Dublin to set out on his own. “I’m passionate about organisations becoming more neuro-inclusive for the benefit of all employees and this is very much down to my own experience,” Scully explains. “Before I set up Braver, I found I loved coaching people at KPMG and raising people up. Looking out for others and wanting to help them – that was really the start of my focus on people development.” Originally from Cork, Scully studied law at UCC and was called to the bar shortly after. He went on to join KPMG aged 22 to train as a Chartered Accountant specialising in tax. Following his qualification, he worked elsewhere as a tax lawyer before rejoining KPMG 18 months later. “KPMG and Chartered Accountants Ireland had been brilliant to train with, especially as I had zero accounting knowledge before joining. I found I really missed the sheer scale of support on offer in a Big Four tax department, so I decided to go back to KPMG in 2016 as a manager,” he says. Overcoming challenges Scully was promoted to Associate Director in 2018 followed by Tax Director in 2021. Despite this impressive career progression, however, he found himself struggling with some aspects of his work and his mental health took a hit. “I had a perfectionist mindset and would sometimes find myself researching to the ‘nth degree’, getting into the details without seeing the big picture. I also didn’t realise that multitasking or shifting from one task to another ate up a lot of mental energy for me, but I wasn’t approaching work in a way which factored that in,” he explains. At times, Scully says he also found it difficult to navigate social dynamics in the workplace. “I was very social, but certain dynamics I just didn’t ‘get’ and I was expending a lot of energy trying to get that right, which I didn’t realise at the time. I just had this notion in my head of, ‘It’s coming so easy to others but not me. I don’t know what’s wrong with me.’ “I stopped taking proper care of myself, working long hours, and in the end that really impacted my mental health, so I sought out professional counselling and coaching.” The experience was, Scully says, “transformational”. “It really opened my eyes to the meaning and importance of mental health. I realised I was in a hole and, once I got out of that hole, I had this drive to help other people avoid the same. “Mental health was a big thing on my agenda, and I was always looking out for others in the department and making sure that their mental health was being looked after.” Scully became a mental health advocate at work, co-leading a wellbeing committee in his department. “I also received some excellent coaching which I found to be such a powerful tool for helping me implement positive changes in work and my personal life. So I studied it and became a coach myself and joined KPMG’s internal coaching panel to provide those benefits to others.” Genesis of Braver It was during a counselling session that the prospect of autism was first raised to Scully. This started him on his journey to educating himself about neurodiversity. This journey, combined with his years spent leading teams and coaching experience, formed the genesis of Braver, which he would go on to found in February 2024. “Getting the diagnosis really allowed me to have compassion for myself. Others may not need the diagnosis to feel that way, but I did. It allowed me to understand, ‘okay, this is why I am the way I am. I don’t have to berate myself for these areas I feel like I’m falling down’. “In fact, maybe I can learn to ask for help or focus more on the things I am good at. I don’t think it’s a coincidence that the year I was diagnosed was also the first year I received a top rating in my annual performance review at KPMG, and I got that rating ever since,” he says. “I had dropped my own negative coping strategies and started playing to my strengths. I had also started opening up to people about my diagnosis. “The feedback I was getting was pretty much entirely positive, and I count myself lucky for that. At the same time, I could see that awareness of neurodiversity in Irish workplaces simply wasn’t there yet and I wanted to do something to change that.” Neurodiversity awareness and training In addition to executive coaching for individuals and teams, Braver offers a range of neurodiversity awareness and training services for organisations, teams and individuals. “When I go into an organisation for a neurodiversity awareness session, I bring them through some of the traits of various neurodivergences, but also their strengths,” Scully explains. “I then go through some useful, high-level dos and don’ts everyone in the organisation can take away with them. I also deliver a more in-depth neuro-inclusion management training workshops for HR, people managers and leaders. As Scully sees it, neurodiversity is “just a way of saying we all have different ways of thinking and experiencing the world. “For some people, these different ways of experiencing the world have been medically pathologised as autism, ADHD, dyslexia or dyspraxia, for example,” he says. “All have been framed purely in a deficit-based manner historically. However, we can adopt a different lens and view them simply as ‘difference’. For people like me who are neurodivergent, viewing our experience as a difference rather than a deficit can change our entire outlook. “When I was first diagnosed, I thought, ‘I can’t be autistic’. I had preconceptions of what autism looked like, and it looked nothing like me, so I was taken aback. “Once I looked into it further, however, I realised those autistic traits had always been there, and I was drained from masking them. I came to terms with it and I was kinder to myself and learned to adopt ways of working that suited me and changed my environment. “I knew I wasn’t going to be good for two intense meetings in one day, for example, so I learned to move those things around to expend my energy more wisely. “I learned that I needed a lot of certainty when it came to communication, expectations and timelines, so I was very clear with my bosses and team about this and requested communication in a way that would leave nothing ambiguous.” Implementing these different ways of communicating and introducing clear boundaries around expectations allowed Scully to work more effectively. “At this point, I hadn’t told them I was autistic. They just accepted I was trying out a new way of working. It was really just good people management on everyone’s part, and it made a massive difference to my ability to perform.” Benefits for all employees Above all, Scully says he wants his work with Braver to make employers in Ireland realise that a neuro-inclusive workplace doesn’t just benefit neurodivergent employees, it benefits everyone. Scully sees neurodiversity training as “just one step” towards a more inclusive and adaptable management framework for all employees. “We spend so long training people to be subject matter experts, but I don’t think we dedicate enough time to training them how to be effective managers,” he says. “Learning to be a neuro-inclusive manager and leader is all about communication and adaptation – handling sensitive conversations and approaching adjustments to ways of working or communication that best suit the individual, for example. “When you’re training your managers to be neuro-inclusive, they will be better managers to all staff, not just those who are neurodivergent.” First steps for employers For employers considering neurodiversity for the first time, it can be overwhelming. There are many organisational and environmental aspects to be considered, such as removing barriers to the recruitment process, workplace accessibility and the adequacy of policies and procedures. “I believe there are many employers out there who want to make their workplaces more neuro-inclusive but don’t know where to start. I want to help and Braver is my way of doing so,” he says. Scully says a good first step is simply letting your people know you want to have a conversation about how you can be more inclusive. “Make neurodiversity a topic of conversation and create a space where your employees, particularly your neurodivergent employees, feel safe to participate in that conversation,” he advises. “As part of this, train your people on how they can exercise inclusive management so that both the manager and the employee feel safe and confident to approach different ways of working that suit that individual. “It’s a small step, but such an important one, and you will be on your way to supporting greater inclusion in your workforce and realising the benefits.”

Jun 05, 2024
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Does Ireland do enough to support SMEs?

Three Chartered Accountants consider the Government support on offer to SMEs in the North and south and the wider environment for entrepreneurship on the island of Ireland Shaun McGlade Managing Director SMCG Ltd Homegrown businesses in Ireland, North and south, face a myriad of challenges. These include geopolitical, environmental and economic uncertainties in addition to the impact of digital disruption, skills shortages and the evolving needs of the workforce – and all while they continue to grapple with inflationary pressures.  Government-backed organisations such as Invest Northern Ireland and Enterprise Ireland provide valuable support to businesses, with a focus on export-oriented companies and high-potential start-ups, both of which are seen as vehicles to boost the economy of the island of Ireland. Businesses across Ireland have been navigating the post-Brexit landscape, while businesses in Northern Ireland are also dealing with challenges and opportunities presented by the Northern Ireland Protocol – now the Windsor Framework – which provides access to both the British and EU markets.  This represents a significant opportunity for businesses in Northern Ireland, but it also introduces complexity and uncertainty in completing transactions across borders.  One key strand of Government support for businesses in Northern Ireland has been the establishment of the Trader Support Service. This is aimed at helping companies to contend with changes in the way goods move under the Windsor Framework.  Thousands of businesses have registered with the free-to-use platform since its launch in 2020. This service is due to end after December 2024, however, and this is something the recently restored Northern Ireland Executive must lobby the British Government to retain so that businesses in Northern Ireland can continue to avail of it beyond the end of the year. As a relatively small practice, we at SMCG Ltd have found that the professional network built over time with colleagues in the profession, along with professionals in other industries, has been a source of great support.  This is reflective of the ethos and culture prevalent in Irish society down through the generations to “help your neighbour” even though they may also be a competitor.  It is even more imperative, therefore, that the governments in the North and south proactively address the challenges facing our community of SMEs on the island of Ireland.  This requires a strategic approach, avoiding reactionary politics, and fostering an environment that encourages business investment and provides critical infrastructure for homegrown businesses to flourish. Susan HayesCulleton Managing Director The HayesCulleton Group Our company started in September 2010 and in the years since, I believe Ireland has steadily improved as a place to do business. The entrepreneurial ecosystem has become far more inclusive. In the past, the broad supports offered by the Local Enterprise Offices (LEOs) were tailored towards internationally traded services and manufacturing, but this has changed drastically.  The Local Enterprise Offices Policy Statement 2024–2030, released in May, stated that the LEOs would have an increased capital budget of €44.8 million in 2024 available to 37,000 businesses, excluding those supported by IDA, Enterprise Ireland and Udarás na Gaeltachta. Further, we are now seeing far more trade missions, funded initiatives for environmental and social sustainability, and opportunities to build relationships across borders.  At the time of writing, Enterprise Europe Network has 5,659 available partnering opportunities, enabling us to partner with distributors and procure goods from around the world.  InterTradeIreland has a target to help 10,000 businesses every year with comprehensive online cross-border trade information. The expanding diplomatic footprint of the Department of Foreign Affairs – with 57 Embassies and 108 Consulates – also offers a landing pad for Irish businesses that want to export. While Ireland is perhaps better known for accommodating foreign direct investment, I think the ecosystem for homegrown businesses here is hugely supportive. Enterprise Ireland does a fantastic job in the provision of seed investment, advice and – in my experience – has a passionate team of people at home and abroad who take as much pleasure in seeing homegrown businesses win in international markets, as the business founders themselves.  At HayesCulleton, we have encountered some wonderful people and they have led us to engagement opportunities that have resulted in new business for our firm. If I were to make one change, however, it would be to making it easier to navigate the SME support system in Ireland.  Kealan Lennon Chief Executive CleverCards Ireland has tax incentives to drive investment in research and development and well-educated talent coming out of our universities and colleges.      The big challenge for homegrown business support in Ireland is not at the early seed stage, however, but at the scaling stage – particularly for ambitious founders with a global vision.  The number one challenge for businesses scaling up is access to capital. The Government and Enterprise Ireland have funded several venture capital funds in Ireland to deploy investment at the seed and Series A stages. There is a complete gap from the Series B stage and onwards, however, and this has been the case for years.  Bridging this gap, in my view, would be the difference between scaling companies “exiting” through acquisition by international players (in the absence of capital to scale further) and continuing further along the journey themselves to build global businesses that are “homegrown” in Ireland.  CleverCards has developed a digital payments platform that enables businesses and public sector organisations to configure digital Mastercard accounts themselves.  By serving many multinational companies headquartered in Ireland, the US is our nearest market to the west while Britain and the European Union represent a huge market to the east.  So, our experience is that Ireland is a great place from which to scale internationally. However, early-stage growth and expansion requires risk capital to bridge the gap where later-stage private equity and debt markets are more readily available.

Jun 05, 2024
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Supporting SMEs ‘critical’ to Ireland’s economic success

The Institute’s latest thought leadership papers outline a series of measures needed to support Ireland’s SMEs, write Cróna Clohisey and Michael Diviney. The Institute has published the latest in its series of thought leadership papers. Supporting SMEs was informed by the views of our 33,000 members and sets out the measures that we believe are needed to achieve strategic, systemic improvements for SMEs operating across Ireland. SMEs make up the vast majority of all businesses in Ireland, and collectively they employ close to seven out of 10 people working in the business economy. It is clear from engagement with members that a critical marker of Ireland’s future economic success will be supporting our SME sector by reducing the cost and complexity of doing business. SMEs have faced an unprecedented number of new legislative requirements in recent months which significantly adds to their cost and administrative burden. In 2024 alone, the minimum wage has increased by 12 percent and additional sick leave entitlements have added one percent to payroll costs. From 1 October, the rate of Employer, Self-Employed and Employee PRSI will increase by 0.1 percent, while pensions auto-enrolment will add a further 1.5 percent in costs during 2025. Supporting SMEs calls on the Government to be cognisant of the challenges all of the above brings. While the measures are extremely important for employees, consideration must be given to the timing of implementing new employment law, and the impact on SMEs when all are introduced within a short timeframe. The paper sets out a series of proposals, grouped under four headings: Resilience and growth; Government supports and funding; Sources of business finance; and Reducing the cost of business through the tax system. Alleviating the administrative and cost burden for SMEs is at the forefront of our asks which include the following proposals: Minimum wage workers, working a full week, should be exempted from Employers’ PRSI. Tax discrimination against professional service companies must end so that they can benefit from the various investment reliefs available to comparable trading companies. Reducing Capital Gains Tax from 33 percent to 25 percent to stimulate business and personal transactions that will bring additional funds into the Exchequer. The real time reporting requirement for enhanced reporting requirements (ERR) for employers should be removed and replaced with monthly or even annual returns. Additionally, we ask for a commitment from Government not to extend ERR for at least three years until the system is embedded and an appropriate cost-benefit analysis of the current system has been properly completed. Chartered Accountants Ireland believes that more resilient businesses will be better positioned to weather crises and uncertainty, and have confidence to invest, to scale, and to create employment. Financial stability is paramount to this. The Institute is calling on Government to support SMEs in accessing finance, optimising governance structures, and investing in developing their workforces. Proposed measures to ensure resilience and the continued growth of this vital sector of the economy include: Widening the eligibility criteria for the broad range of grants available to include more ‘traditional’ industries and the service sector. Ensuring more consistent availability of grants and supports nationwide. Our members tell us that services provided in one part of the country may not be available to similar businesses elsewhere; much depends on the approach and funding at a local level. With the advent of remote working, a common approach to supporting all small businesses, regardless of location, is needed. Promoting healthy competition in the business lending market, by enhancing the role community-based lenders and alternative lenders can play in addition to the pillar banks. It is well documented that record corporation tax receipts will not always be with us and there is a strategic imperative to ensure long-term economic health for SMEs. This can only come from understanding the unique challenges facing them, not simply by virtue of their size, but also specific to the sector they operate in, and supports they need. CCAB-I’s Pre-Budget 2025 submission focuses on supporting and sustaining our SME sector Continuing the focus on the importance of the SME contribution to the Irish economy, the Institute, under the auspices of the CCAB-I, delivered its pre-Budget 2025 submission to Minister McGrath last month. The paper highlights the constraints experienced by SMEs as a result of increasing labour costs and also states that a lack of supply of housing and childcare places, in addition to high personal tax rates, are making it increasingly difficult for people to live and work affordably in Ireland. The submission identifies four key areas for budgetary focus: support SMEs by exempting minimum wage workers from employers’ PRSI and simplifying tax legislation; increase the number of childcare places available and offer working parents a €1,000 tax credit to return to the workforce; introduce a 30 percent intermediate rate of income tax to retain and attract workers and help people live affordably; continue to stimulate and support the completion of new houses. The CCAB-I believes that Ireland’s tax code has become increasingly complex in recent years and is calling for simplification of the tax rules to support businesses, enable them to grow and also ensure that Ireland remains competitive on an international stage. Childcare provision In terms of childcare, the submission includes measures to improve the supply of childcare places for pre-school children. To address the impact of working parents leaving the workforce following the birth of their children on the labour supply, the CCAB-I is calling for the introduction of a €1,000 tax credit for working parents to encourage them to return to the workforce. The CCAB-I also asks that the government plans for adequate capacity in the childcare sector by analysing local needs and ensuring adequate funding for the sector. Income tax reforms The CCAB-I believes that introducing a third rate of income tax of 30 percent would make the system more equitable. Workers in Ireland pay income tax at a rate of 40 percent once they earn €42,000. This entry point is below the average wage and is significantly lower than most countries across the UK and Europe, where incidentally having more than two tax rates is extremely common. We are a mobile profession where many are in the early stages of their careers and are planning their futures. Introducing an intermediate 30 percent rate would make the system more attractive and more equitable, lessening the tax burden on workers and putting more money in their pockets. Housing measures The submission proposes: extending the Help-to-Buy Scheme by two years to 31 December 2027; abolishing vacant homes tax; increasing the rent-a-room relief from €14,000 to €20,000 and removing the cliff-edge; abolishing the non-resident landlord withholding tax system. Cróna Clohisey is Acting Director of Advocacy and Voice at Chartered Accountants Ireland Michael Diviney is Head of Thought Leadership at Chartered Accountants Ireland.

Jun 05, 2024
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The coach's corner - June/July 2024

Julia Rowan answers your management, leadership and team development questions Q. I am head of function in a large organisation. My career has gone well, and I’ve been recognised and promoted several times. I am a quiet person who puts the head down and works hard – as does my team. However, I have a new boss. He came in with a lot of fanfare and even made a presentation about the way he likes to do things. He recently told me that he doesn’t think I drive my part of the business enough. I feel I drive my team hard – but I don’t shout about it. A. This could be a personal style issue. He comes in with fanfare and clearly communicates how he likes to do things. He could be overlooking you because his style is different and time might help him see your value.  But it might also be time to recognise that as we rise in organisations, sometimes new skills need to come to the fore.  There are a couple of things you can do: Wait and see: As your manager gets to know you and the work you do, their concern about how you lead your team may abate. Talk to your manager: Say “I want to have a conversation about how we work together. You’ve probably noticed that I’m a quiet person, so what kind of information and communication do you want about the work that I do?”   Show them otherwise: Send a short email at the end of every week or fortnight sharing three successes (e.g. projects completed/moved on), and three priorities for next week. This will create a sense of momentum and a record of progress and achievement over the year. However, this could be a useful time to look at the skills that senior leaders need to develop.  Your current approach has served you well up to now. But does the organisation need a bit more? How would your stakeholders (your team, the teams you serve, your peers, etc.) benefit if you shared what you did more broadly? Not just sharing what you do, but the value add: what you have learned, the insights, information and support you can offer to stakeholders. The scope and focus of how we communicate naturally changes as we rise through organisations, reflecting what is needed from us at our level: the connection between the work of our team/function and the organisation’s strategic vision, the complexity of the decisions we make in a fast changing environment, the risks we need to mitigate and manage, and how we develop talent and ensure smooth succession. The temptation is to fall into the binary of “I can either be true to my natural style OR give my manager what he wants”. The trick is to see beyond that and to find a way to showcase your work from that quiet and hard-working place you inhabit.  I wonder what would happen if you discussed this with your team: my guess is that they would have a ton of ideas.

Jun 05, 2024
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Ireland and the MNC golden goose

Ireland’s economic reliance on foreign multinationals is stark, posing significant risks for our future stability, writes Cormac Lucey. The Revenue Commissioners recently published the report, Corporation Tax: 2023 Payments and 2022 Returns. Despite its relatively innocuous title, however, the information contained in this report has critical implications for the Irish economy and Ireland’s public finances. It has long been known that the multinational corporation (MNC) sector pays a disproportionate share of corporation tax in Ireland and this new report from Revenue confirms it. When it comes to corporation tax, the foreign MNC sector paid 87 percent of all corporation tax in Ireland in 2022. What is startling is the extent of MNC contribution compared to our two other major tax sources: income tax and value added tax (VAT). According to a 2022 report by IDA Ireland, there are a total of 301,475 people working for foreign multinationals in the country. That year, there were 2,121,300 working across the entire economy, according to the Central Statistics Office (CSO). Hence, just 14.2 percent of the workforce was employed by the MNC sector at that time. Yet, thanks to the highly progressive nature of our income tax system and the much higher wages paid by our MNC sector, that cohort paid 54.6 percent of total income tax. The cherry on the cake is that, according to Revenue, the MNC sector also accounted for more than half of all VAT payments (53.8%). When you examine all of Ireland’s varying tax heads and apply these percentages to the expected actual 2023 tax take (as set out in the Budget 2024 documentation), it emerges that the MNC sector contributed 55 percent of Ireland’s total tax revenues that year – even if we assume that it did not contribute at all to customs, excise duty, capital gains tax, capital acquisitions tax, stamp duty or motor tax. If we make the more realistic assumption that the MNC contribution to those other tax heads was the same as its contribution to VAT, the MNC contribution to the state’s total tax take rises to a staggering 62 percent. There are two slow-motion dangers facing our MNC sector. The first is that our native incapacity drives away mobile international investment. We are already bursting at the seams in terms of the supply of housing (we can’t build enough), skilled personnel (we don’t have enough) and electricity (we’re at risk of not having enough). The second danger is that the US takes action to seize the eggs that our MNC golden goose has been laying for us by legislating for a global minimum rate of corporation tax on the worldwide earnings of all US multinationals at its current corporate tax rate of 21 percent. MNCs might save tax by paying 15 percent in Ireland only to face a six percent surcharge in the US. This measure would undermine any tax rationale for locating in Ireland and reduce our attractiveness as an investment destination. If we are at risk of having maxed out our extraction of eggs from the MNC golden goose, how stands our indigenous sector of Irish-owned operations? A recent report, published jointly by the Nevin Economic Research Institute (NERI) and trade union SIPTU, revisited the CSO analysis and concluded that the average value-added per hour of indigenous sector workers was just €28. This report shows sectoral productivity in the Republic compared to that in Northern Ireland. Apart from sectors dominated by MNC activity, productivity levels in the south lag those in the North, sometimes quite markedly. In the construction sector in the south, for example, productivity is less than half that north of the border. However unpalatable a conclusion, the economic rise of the Republic seems entirely down to foreign multinationals and appears to owe little to native endeavour. Disclaimer: The views expressed in this column published in the June/July 2024 issue of Accountancy Ireland are the author’s own. The views of contributors to Accountancy Ireland may differ from official Institute policies and do not reflect the views of Chartered Accountants Ireland, its Council, its committees, or the editor. Cormac Lucey is an economic commentator and lecturer at Chartered Accountants Ireland.

Jun 05, 2024
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“Our mission is to help organisations improve financial decision-making”

Brian Feighan, FCA, set up LearnAltus to help executives from all backgrounds understand the key financial drivers underpinning business decisions. I think most people yearn to be their own boss at some point and I was no different, but the reality of following your dream can be very daunting initially. There is no “mothership” and nothing happens unless you make it happen. You realise quickly that you will have to work harder than you have ever worked before just to get your business off the ground. Above all, you need to be passionate and commit completely. Otherwise, you won’t have the motivation to persist through the start-up phase. I started my own business in 2015. At the time, I was Head of Asset Finance with Ulster Bank. I had started my career with Ulster International Finance in Dublin after qualifying as a Chartered Accountant with EY Ireland. I was part of a specialist team designing solutions to help multinationals centralise their global financing activities in Dublin. I really enjoyed the work and spent the next 14 years working in the sector, including stints as a Director with AIB International Financial Services and Executive Vice President at Demica, an international financial advisory firm, before rejoining Ulster Bank in 2006 as an Investment Director in its wealth management division. Business inspiration Throughout those years, I noticed something: I would be sitting in a board room in London or New York closing a major financing transaction, but – apart from the CFO – the other (non-financial) executives around the table often had significant blind spots in their understanding of what was really happening. It might be a failure to appreciate the implications of taking on additional leverage, not grasping the opportunity cost of a commercial decision or not realising how a thinly capitalised entity carries very high financial risk. It struck me that many executives rise to leadership positions due to their talent and success in non-financial disciplines like sales or relationship management. As managers, however, they must also assume responsibility for key financial decisions such as capital expenditure, management of working capital and ownership of financial performance and budget delivery. It can be a scary position to be in if you don’t have a solid foundation in finance. While most leadership training programmes include a financial component to upskill non-financial managers, in my experience this training tends to be light and conceptual – when it actually needs to be deep and practical. The result is that many managers have a poor understanding of the key financial drivers in their business and lack the confidence necessary to make good financial decisions – and the inevitable poor decision-making that ensues can prove very costly for companies. LearnAltus mission That experience was really the inspiration for LearnAltus, the financial training business I established in 2015, branded initially as ProTutor. By that stage, I had decided I wasn’t getting any younger and, if I was ever going to set up my own business, now was the time. So, I left the corporate world and jumped into the unknown. I had no grand plan at the outset and it took me a while before I settled on building an online financial training platform. LearnAltus’ mission is to help organisations improve their financial decision-making. We design and deliver training programmes that, we believe, can transform an organisation’s financial capability. Our training is centred around ensuring managers can understand and interpret key financial indicators and that they are confident enough to challenge and contribute to the financial aspects of key business decisions. We build immersive decision-making scenarios and game these scenarios out in our training to help managers grasp the potential financial implications. Lasting relationships One of the biggest lessons I’ve learned running my own business is the importance of building high quality, lasting business relationships. You will always achieve much more through collaboration than you can on your own. You need to identify good people to partner with and work continuously on enhancing the value of these relationships – your team, your business partners and your clients. Ultimately, success is defined not by how you see yourself but by the value you create for others. Being a Chartered Accountant has been a big advantage in this sense. I have been fortunate to develop close relationships with key personnel at the Institute. Much of the work I do aligns with the strategic goals of Chartered Accountants Ireland so there is a natural fit. A key milestone was the introduction of the Finance for Managers suite of qualifications, developed in partnership with the Institute’s Professional Development team. With over 33,000 members worldwide, the Institute has an exceptional reach in the business community. Before I set up my own business, I was oblivious to the capabilities the Institute has, which has been a key enabler for the success of the Finance for Managers programme. We have been fortunate to work with some very committed clients too, which is key to ensuring employees are engaged learners. Boot Camp I have supported the Institute’s outreach work with secondary schools for many years. It is a fantastic initiative, which helps promote the accounting profession and make it more accessible to students. Back in 2018, we learned from conversations with business and accounting teachers about their growing concern of the perception of accounting among students and parents, particularly in senior cycle, where the current Leaving Certificate Accounting syllabus is nearly 30 years old. This led us to develop the Institute’s online Boot Camp programme. Boot Camp provides a foundation in accounting fundamentals for Transition Year and Senior Cycle students. It also incorporates an online, interactive business simulation called “Be the Boss” where students take on the role of CEO of a “real life” company faced with a major strategic decision. Since its launch in 2019, Boot Camp has exceeded all our expectations, with over 8,000 students enrolled to date. It has become a prerequisite for many schools as part of their Transition Year programmes. Further, a growing number of accounting firms now incorporate Boot Camp into their internship programmes for Transition Year students during their work placements. We also run “Be the Boss” as a national school competition. This provides a fascinating insight into the level of entrepreneurial talent and business leadership capability out there in Gen Z. Foundation for success As a business owner, I have learned that you really need to be very disciplined about how you allocate your time. There is a view that success in business comes from achieving that big breakthrough, be it a key product innovation or a major customer win. In my view, however, overnight success is a myth. The truth is that those breakthrough moments happen only because you’ve been plugging away, improving and refining your proposition every day for a long time. If you look under the bonnet of any successful enterprise, you will find a lot of hard yards being fought every day. This is what positions you to execute well on the opportunities when they arise – and they always do.

Jun 05, 2024
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Whole of business approach pays dividends for Accelerate

Accelerate Accounting Solutions partners with clients to help them make better business decisions, explains founder Edel Hayes. Accelerate Accounting Solutions founder Edel Hayes, FCA, describes her business as an accounting service with a business partner approach. “Bookkeeping is very transactional,” Hayes explains. “It’s something that has to be done. End of year accounts and CRO returns are the same and business owners can get an external accountant to do them – but it’s the bit in the middle that really makes the difference.” This piece in the middle is using financial information to provide insights to support budgeting, goal setting, performance analysis, forecasting and other key business decisions. “Finance flows through the business. A lot of people don’t get that and it’s to the detriment of their business,” Hayes explains. “We work with our clients as a genuine business partner. It’s about understanding their business and what they want to achieve and supporting them in that.” Hayes established Accelerate Accounting Solutions in 2018 having worked as financial controller with several firms. Her decision was prompted by a few factors, not least of them family. “I’m originally from Dublin but live in Kildare. We have two young children, and I was commuting to Dublin every day. It became a nonsense for me,” Hayes says. “I was looking for something with no dead time spent in traffic or on trains. Time is precious. You need time to spend with your children and on outside interests. I didn’t want to waste that time and I got to thinking about starting my own business.” She also wanted more flexibility in her life. “Monday to Friday, nine-to-five. It doesn’t need to be that way for certain types of work. I was thinking that way pre-COVID even before everything changed.” Entrepreneurial spark The entrepreneurial spark was there as well. “I always had that,” Hayes says. “I had been involved in a small way in several businesses owned by family and friends. I gave them support and advice. I was dipping my toe in and out of the water but had never gone in the whole way.” The decision to strike out on her own was very much a family one. “I had a chat with my husband,” she recalls. “We decided that I should give it six months. If it didn’t work out, I would go back into employment. The jobs market was very good at the time.” She needn’t have worried. “I got clients straight away. I had a good reputation in the market and once people knew I was open for business they came to me.” Business vision Hayes’ vision for the business was to provide a lot more than just a bookkeeping or statutory accounts services. “A lot of SME owners are focused on keeping the tax authorities happy, they are ticking boxes and not going any further with finance,” she says. “A bit of effort and more commercial thinking can really make a difference. Business owners can be very reactive because they don’t have time to think. In many cases, they can’t afford a full-time accountant and they need a bit of external support. “That external help can make so much of a difference. It can give the business new insights, improve cash flows, and help with business planning and the business model. It can also help to identify areas for improvement.” Hayes initially cast the net quite wide in search of clients but this quickly changed. “I ended up with clients from a lot of different industries who were using different platforms and so on,” she notes. “Within a year, I realised that a lot of my clients were women who found me online or through referrals. I have focused on that since.” Today, the majority of Hayes’ clients come to her through referrals. “Referrals really started to take off in year two, just before COVID,” she says. “Sometimes, it was people coming from an existing external accountant who didn’t quite understand the business and where it wanted to go. Accountants in practice sometimes don’t understand new industries or the motivations of entrepreneurs. “A lot of entrepreneurs are motivated by multiple factors – time, impact, creativity – it’s not just about profits. We understand our clients at a much deeper level. We wouldn’t recommend a target of a million euro in revenue if a client wants to manage a small team and work a 30 hour week. It’s about finding what motivates the business owner and building that into our plans.” Hayes says she always advises potential new clients to shop around. “There are lots of accountants out there and it’s very important to find the right fit for your business. We want to be a proper business partner and be able to have non-judgemental frank conversations with clients. You need to be comfortable with each other to do that.” Investing in technology An early decision to invest in technology and cloud-based systems that could support a much larger practice paid dividends during the pandemic. “We had the technology platforms and standard operating procedures in place almost from the beginning. When COVID came, because we were already online and had a client portal in place, it was business as usual for us,” Hayes says. “Clients who were not yet in the virtual space felt a sense of calm from me. This is what we do. The concept of virtual accounting firms was already well established in the US but not so much here at the time. Some people got the idea, some didn’t. When COVID came, everyone got it.” Hayes gets real satisfaction from seeing the positive impact her service can have for clients. “You can see amazing results from tracking the numbers. For example, a business owner can see if they are leaking profits in certain areas and do something about it. They can see if people are working in the wrong areas,” she says. “They could spend months making the same mistake over and over again because they are not tracking the numbers. If that’s costing money, it could push the business into trouble.” It is also important to adapt to clients’ changing needs, she adds. “A business in year one has completely different needs than it will have in years three or four. It will have grown and changed. We understand that and adapt with our clients’ needs.” Crucial lessons Looking back, Hayes believes she probably cast the net a little too wide at the outset. “That can have a detrimental effect on a business. That was a lesson learned. It took me two full years to realise it.” Hayes advises those contemplating starting a business to take advice where they can get it and to leverage their own networks where possible. “People think it’s easy to set up and get running, but it’s not. I had a chat with Chartered Accountants Ireland’s Practice Advisory Team, and I found I was clueless. They were a great help. “You need to lean into your existing network. You will get clients through that. One hard lesson is not to be afraid to let a client go if they are a bad fit. It’s better to clear the space for other clients who are the right fit.” Another piece of advice is not to undercharge. “Everyone is tempted to do it but try to avoid it. Also set up your systems as if you have a bigger business from the start. That will set you up for growth.” Accelerate Accounting Solutions is continuing to grow. “Demand is twofold. We have people looking to switch accountants for a better fit and people starting up their own businesses,” Hayes says. “The entrepreneurial spirit is there. COVID made people realise that they can take a risk and set up their own business. If it doesn’t work out, it’s not the end of the world. “There is a lot of consolidation in the accounting market. Smaller practices are being bought up. Many clients don’t want to move to a bigger firm because they want a more hands-on approach from their accountant. People come to us for our model, which offers a more individualised service.” Interview by Barry McCall.

Jun 05, 2024
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“We were in it to win it – the only way was forward”

Pure Telecom co-founder and CEO Paul Connell talks ambition, business strategy and lessons in entrepreneurship. Paul Connell is Chief Executive of Pure Telecom, the Irish-owned provider of high-speed broadband and fixed line telecoms to homes and businesses nationwide. Established in 2002 by Connell and his business partner Alan McGonnell, Pure Telecom employs 80 people and has annual revenues of about €30 million. Connell is also Chair of the Dublin Society for the Prevention of Cruelty to Animals. Here, he talks to Accountancy Ireland about his experiences as an entrepreneur and co-owner of a successful business. Question: Can you tell us a bit about your early career? I qualified as a Chartered Accountant with BDO Simpson Xavier (now BDO Ireland) in the nineties and worked in accountancy and finance for a few years. In 1996, when I was Group Accountant with Iretex Packaging, I brought the group to a full public listing on the London Stock Exchange and, after that, I joined Global Telesystems (GTS) as Financial Director for Ireland. Global Telesystems was an American multinational supplying telecom services to the European market. At its peak in the late nineties, it supplied over 25 percent of telecoms services in Ireland through other national carriers. That’s how I got into telecoms. It was very exciting at that time because the Government deregulated the market in Ireland and opened it up to competition. Sean Bolger set up ITL and Denis O’Brien started Esat Telecom. I nearly blessed myself that I was a Chartered Accountant when I joined GTS because they understood numbers. I spoke their language, so I got on very well with them. It was a great place for me and, from there, I decided to partner with Alan to set up our own telecoms business in 2002. Question: What was your experience like going from being an employee to a business owner? I said to myself at the time, ‘I’ll give this a year and, if it doesn’t work, I’ll give it up.’ I had a young family and I needed a steady income. It doesn’t matter how big your bucket is if there is a hole in the bottom. We needed to make money like any other business. We actually lost money in the first year, but we were profitable in year two and we never looked back. It was all terribly exciting. As a business owner, you are everything – financier, salesperson, HR manager, cleaner – all rolled into one, so we stuck at it and we were very lucky that we didn’t need to draw any money for the first year or two. I don’t think I have ever worked as hard as I did in those earlier years. Question: Why do you think Pure Telecom was so successful from the get-go? We just kept it tight. When I worked with GTS, the company was losing money every quarter. I remember asking them, ‘Would we not be better investing the money rather than losing it? Just shutting things down would make more money’, and they said, ‘You don’t understand telecoms – we’re all about market share’. When we set up Pure Telecom, we knew we didn’t have that luxury. We weren’t big enough and we needed to have a profitable business. We went after everything that moved. If a guy in Kerry wanted to talk to me about giving us business, I’d get into the car, drive that morning to Kerry, meet him, get the business and come back to Dublin. Once we acquired any new customer, we wrapped them up in cotton wool. Customer service was a very big priority for us. We started out selling to businesses and then, in 2007, an Australian company selling residential services approached us and we acquired their business here in Ireland. That’s how we got into the residential telecoms market. It was completely different. Selling to domestic customers is a volume-based business, so you can’t look after every single customer like you can with business customers. It took us about two years to get a handle on it. We brought it back down to basics and, over time, our base started to grow by 25 percent every year. It was phenomenal. Today, we employ about 80 people and we have an annual turnover of approximately €30 million split roughly 15/85 between business and residential. The telecoms market has changed a lot since we started. We could just as easily be called ‘Pure Broadband’ or ‘Pure Data’. Voice and ‘plain old telecoms’ are gone and our big focus now is on higher broadband speeds for customers. Question: What advice do you have for other entrepreneurs starting a business? When I was leaving BDO Simpson Xavier, I remember the Managing Partner David Simpson sitting me down and asking, ‘what are you thinking of doing?’ I told him I might start my own business and he said to me, ‘look, if you do that, you must have no fear. Don’t be afraid to gear up. If you don’t, you’ll just become a bookkeeper. You have to be prepared to take risks with any business’. So, when we started Pure Telecom, I knew we would need to have the courage of our convictions. I’m very lucky that both Alan and I were prepared to take the risks we needed to take. We both had young families at the time, but we were in it to win it, so the only way was forward. I have a great wife and I remember her saying to me, ‘the worst thing that can happen is that you fail and, if you do, you just get up, dust yourself off and start again’. When you start a business, you find out very quickly who is friend and who is foe. More often than not, people are your friends and they will help you, support you and keep you going. It’s a big learning curve though so, these days, when someone starting a business asks for my advice, I try to make time to help them. Question: Were you ever afraid your business might fail? We were lucky in that Pure Telecom was making money from a very early stage, but I wouldn’t say I was afraid of failure either. In Ireland, we admire people who try something and fail. If they put their best foot forward and it doesn’t work out, we support that. You can only do your best. If you look into the past of any one individual in this country who has done well for themselves, you will find failures. That’s how we learn. When we started out, I remember saying to Alan, ‘maybe this will fail but, if it does, we won’t leave anyone in debt. We will move on, but we won’t leave a bad legacy behind us.’ As long as you are honest and you don’t try to cheat the system, there is nothing to be ashamed about if it doesn’t work out. Question What was the biggest challenge you faced building the business? Trying to get finance initially to get the business off the ground was tough. When I worked with GTS, I had bank managers offering me tens of millions of euros. Then, when we started Pure Telecom, I was dragged over the coals looking for just €100,000. In the end, I went elsewhere. I think a lot of people will tell a similar story. That’s where the courage and determination really comes in. If you want to fulfil your dreams of starting your own business, there are people out there who will help you to do it. There are ways and means of getting your project up and running. My advice is follow your gut. Don’t be afraid – just go for it.

Jun 05, 2024
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