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The dangers of using WhatsApp for work

Blurred lines between WhatsApp use for personal communication, interaction with colleagues and business purposes can create serious risk for organisations and employers. TerriSue Cosgrove explains why Of late, WhatsApp has had a starring role in dismissals that end up in the Labour Court, official enquiries across public and private sectors and even criminal proceedings. From communication deemed unprofessional or unfortunate that damages reputations, to comments or disclosures that merit court or employment law proceedings, many are unaware of the extent to which WhatsApp messages can be risky in the workplace. From an employment law perspective, employers should be aware that they may be found vicariously liable for a claim where an employee says something problematic – for example, discriminatory or defamatory -- in a WhatsApp message. Lately, we have seen many cases coming before the Workplace Relations Commission (WRC) involving inappropriate messaging, with serious consequences, including job loss. In these cases, businesses are typically held responsible and may face WRC fines. Privacy Often when employees use WhatsApp, either on their personal phone or a business device, they are unaware their messages can be accessed and may be disclosed to judge their conduct at work.  Any message in connection with work duties, or within a WhatsApp group – even one only sometimes used for legitimate work purposes – may create liability for either party. There is some ambiguity, and employees can reasonably expect privacy, but where WhatsApp is commonly used for work purposes, not all messages will be deemed private if contentious issues arise. While messages may be encrypted, employees must remember that all written, video and audio communication can be recorded and shared. We have a misplaced belief that instant messaging disappears without a paper trail. With any work gossip shared digitally, however, it takes only a second for someone to take a screenshot to send to a line manager. And, if you use WhatsApp on a company phone, your employer can legitimately access files you send, via device management software, network monitoring or company wi-fi. Policy The practical importance of having a social media and/or electronic communications policy in the workplace cannot be underestimated. Controls to manage the online security risks of a Bring Your Own Device (BYOD) situation are also important. The company’s privacy or IT policy should inform employees about the extent to which their company devices are monitored, and that all monitoring is undertaken in line with internal policy and data protection principles.  It should also ask staff not to use private communication channels for work purposes, both to protect sensitive company data and employees themselves. A code of practice on the Right to Disconnect policy legislation should be adhered to. Continuous messaging on platforms like WhatsApp, especially outside of working hours, can prevent employees from fully disconnecting, leading to stress and burnout. Using personal WhatsApp for business, especially on public wi-fi, makes companies vulnerable to loss of business-related data on employee-owned devices. Phones must be appropriately protected with encryption, security updates, auto-screen lock and password protection.  Staff might also make unauthorised disclosures of confidential company or client information. Whether deliberately or inadvertently, this can damage the business directly, or allow client claims for breach of confidence or data. Again, this highlights the need for a strong communication policy. It is essential to not only have a policy but also train employees regularly on its use. Clear policies, robust procedures and staff training on appropriate communication and behaviour will minimise risks. This should include notifying employees that WhatsApp groups, and their use, can be monitored on work phones and that misuse can result in disciplinary action – even if the use is not specifically created or sanctioned by the employer. Own it If an employer actively encourages or allows employees to use social media as a mechanism to store business contacts, they must ensure they have control over how this information is used, especially if the employee quits work. Where an app or site is used primarily for business purposes, the employer has a stronger case in arguing ownership of it. Policy documents can make clear statements that the employer owns a social media account, and/or the data or intellectual content on it, as well as the monitoring in place to protect the legitimate interests of the business, such as client confidentiality and reputation. Companies rarely have an idea of the WhatsApp groups in operation in their organisation, or who has access to them, and 'profiles' are often just a mobile phone number. It is likely that former employees, contractors or customers may have ongoing access to business information that they shouldn’t. Employers must realise they cannot revoke access to business information once it is on WhatsApp, as data is stored on individual phones, rather than centrally. And, if employees leave, they still have company information, including potentially sensitive data, and there’s little an employer can do about it. Michael O'Connor of NexGen Cyber says it is essential that companies regularly review digital assets, assess their security controls and implement measures to protect them. This not only safeguards their assets, but also demonstrates the security protocols in place to employees, and reassures clients and business associates. Such processes ensure data is protected and clearly illustrates its value and the potential repercussions in the event that a complaint is made. TerriSue Cosgrove is Managing Director at The HR Head

Sep 13, 2024
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What does a new Labour government mean for Irish businesses?

As a new Labour government takes shape in Britain, Irish businesses are bracing for the potential ripple effects across key sectors, writes Vivian Nathan As Britain transitions to a new Labour government, Irish businesses will closely monitor the potential impacts, as we are its closest neighbour. Sectors such as construction, hospitality and retail may feel the ripple effects of Labour’s policies, especially regarding employment rights and consumer spending power, which are closely linked to broader economic conditions. Construction sector The construction sector in Ireland is paying close attention to developments in Britain, given the number of Irish construction companies operating in both jurisdictions. Baker Tilly is currently working with several UK companies interested in Irish infrastructure spend, particularly in the rail sector. Additionally, we have seen increased inquiries from UK labour companies looking to serve the Irish market, demonstrating a growing interest in cross-border opportunities. The UK has been hampered by delays in decision-making before the General Election and the collapse of several construction contractors. The cancellation of large parts of the High Speed 2 railway project has further motivated UK contractors to seek opportunities in Ireland, especially with the Irish Government’s commitment to significant infrastructure spending. Meanwhile, the Irish housing market remains strong, with demand continuing to outstrip supply. Nevertheless, local issues around capacity and planning present ongoing challenges for the construction sector in Ireland. Irish-origin construction businesses are actively tendering for work across the island, further highlighting the cross-border interest. Hospitality and retail sectors Ireland’s hospitality and retail sectors have faced significant challenges since the COVID-19 pandemic. Despite seeing increased demand, the hospitality industry has recently been rocked by rising costs, such as those experienced by Dylan McGrath and the Press Up Group. These sectors are particularly sensitive to broader economic factors like inflation and interest rates, both of which are influenced by the economic situation in Britain. Labour’s focus on enhancing employment rights in Britain, including potential increases in the National Minimum Wage and National Living Wage, could indirectly affect Irish businesses, especially those operating in both jurisdictions. The proposed Employment Rights Bill, which aims to ‘make work pay’, may introduce measures such as banning zero-hour contracts and extending parental and sick leave. These changes could increase operational costs for businesses, potentially leading to higher consumer prices, particularly in the North of Ireland, where the border economy is acutely sensitive to changes in British policy. Adapting for the future The change in government in Britain brings with it a level of economic uncertainty that is of particular concern to Ireland, given our close ties, shared border, and the fact that some Irish and UK businesses operate in both jurisdictions. While it remains to be seen if the UK Labour government will adopt a ‘tax and spend’ approach, particularly in changes to the non-domiciled regime that could make Ireland a more attractive base, the full implications of Labour’s policies remain unclear. What is clear is that key sectors in Ireland – particularly construction, hospitality, and retail – will need to stay informed and be prepared. The changes in Britain could have significant consequences for Ireland, making it essential for Irish businesses to monitor developments and adapt accordingly. Vivian Nathan is Chief Operating Officer at Baker Tilly

Sep 06, 2024
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Exploring the potential of autonomous finance

New technologies will play an essential role in supporting finance functions to become value-adding business partners for organisations, writes Vickie Wall The application of technology to automate routine and low-value tasks has been a priority for CFOs for quite some time. Many finance leaders looking beyond automation are considering the implementation of autonomous systems that can carry out tasks but make or at least suggest decisions without the necessity for human intervention. However, among the more surprising findings of the EY Ireland CFO Survey 2024, 47 percent of respondents cited manual processes and controls as an area where time is used least efficiently in the finance function. This suggests that a sizeable number of Irish organisations still have some way to go in their automation efforts and that autonomous finance is probably not even on the horizon for them. No organisation, however, wilfully persists with inefficient and costly systems that are readily amenable to automation. The reality is that organisations face numerous obstacles when it comes to automation processes, not least of them skills deficits and costs. Eye on saving time and cost The Irish business landscape is extremely varied, ranging from Irish PLCs overseeing vast global operations and subsidiaries of global multinationals that are carrying out a range of finance and business services in Global Business Service centres, to both large and mid-sized private organisations with often relatively small finance teams and scarce technology resources. It is, therefore, quite probable that organisations at the smaller end of that spectrum will be those with the most significant automation challenges. Interestingly, recent advances in technology mean that autonomous finance may offer a means of leapfrogging obstacles. Autonomous finance systems use advanced technologies such as machine learning, artificial intelligence (AI) and big data analytics to continuously learn, adapt, predict, and have the capability to operate on their own. Up until quite recently, those technologies have been prohibitively expensive for most organisations and the skills to use them effectively have been rare and in high demand. The advent of generative AI (GenAI) and the near-simultaneous retrenchment in the tech sector has brought both the technology and the ability to use it within reach of just about all organisations, regardless of size. Very importantly, low-cost and no-cost GenAI tools can help to fill skills gaps in finance functions and accelerate automation efforts or restart stalled projects. Their natural language capabilities allow them to write the code for programmes and tools to carry out tasks and execute processes based on simple instructions from a human with little or no technology expertise. This can be applied immediately to time-consuming, recurring processes like month- and year-end close. In most cases, these are highly manual processes that deal with huge numbers of journal postings and have a high potential for human error. Automating them will both save time and effort and reduce costly errors. Seven-step roadmap to adoption Finance automation is no longer an option; it is a necessity. That will also be the case for autonomous finance in the not-too-distant future. The pressure on finance functions will simply be too great to sustain without the support of automated and autonomous processes. The only remaining question is how to progress the adoption and implementation journey. There are seven steps to successfully embrace automated and autonomous finance. Understand the current process Identify those tasks and processes that take the most time for the least reward, document them and establish if they make good automation use cases. Set clear goals Decide what you hope to achieve from automation; reduced manual errors, faster processes, reduced costs, improved reporting or better resource allocation. Choose the right tools Evaluate different finance automation tools available in the market. Some off-the-shelf tools from established providers offer clear benefits. Avail of free trials where possible to assess the claims made by the provider. Work with the IT function to ensure activities and strategies align with one another. Use intelligent bots The concept of AI as an assistant to augment human capability should be embraced. Rather than focusing solely on areas where human activity can be replaced by machines, the exploration of the use of technology to assist humans in their work should be given at least equal priority. Start small It is best to automate small parts of the accounting cycle at the beginning to build confidence in the new tools and solutions. This will help gain buy-in from within the finance function as well as the C-suite level to generate savings to fund future projects. Encourage innovation If finance teams are encouraged to dabble in the technology and experiment with automation in small projects, it could help build confidence and accelerate adoption. Allowing individuals to experiment can uncover new use cases and unlock additional value. Train the team While GenAI-powered tools will make up for many existing skills gaps, finance teams will still need to be trained on how to use the new tools to optimise their value. This will support the change management process required for the adoption of any new technology. Accelerate the journey Finance functions need to accelerate their automation journeys in the face of a rapidly increasing burden brought about by a combination of new regulations and increased demands from the business. GenAI and other new technologies have the power to support automation as well as assist in the adoption of high-value-adding autonomous finance processes. Vickie Wall is Financial Accounting Advisory Services Leader at EY

Sep 06, 2024
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EU Nature Restoration Law: Understanding your company’s reliance

The EU’s Nature Restoration Law mandates the restoration of 20 percent of land and sea by 2030. Irish businesses must assess their reliance on nature for resilience, writes David McGee The formal adoption of the European Union (EU) Nature Restoration Law (NRL) by the EU Council in June 2024 marks another victory for nature. Importantly, it urges Irish businesses to understand their reliance on and impact on nature and biodiversity. Understanding what legislation like this could mean for long-term business resilience is essential. What is the importance of the Nature Restoration Law? The NRL is the first continent-wide, comprehensive law of its kind. Under the NRL, EU countries must implement measures to restore at least 20 percent of the EU’s land and sea areas by 2030 and all ecosystems in need of restoration by 2050. It sets specific legally binding targets and obligations for nature restoration across various ecosystems – from terrestrial to marine, freshwater and urban environments. Member states must submit national restoration plans to the European Commission by 2026, detailing how they will achieve these targets and how they will monitor and report on their progress. New business opportunities for ecosystem resilience Businesses often struggle to connect their operations directly with nature and biodiversity. However, a thorough understanding of value and supply chains reveals that reliance and impact  on nature and biodiversity are relevant for every business. The NRL may affect companies’ suppliers, customers or individual holdings directly or indirectly. The NRL and existing biodiversity reporting requirements under the Corporate Sustainability Reporting Directive (CSRD) signal to the business world that nature and biodiversity are paramount. Understanding and investing in nature and biodiversity can also open up new opportunities. The NRL aims to support the EU’s overarching climate mitigation and adaptation objectives while enhancing food security. Restoration efforts contribute to ecosystem resilience, which can lead to more sustainable long-term business models – especially for those heavily dependent on natural resources. Creating long-term sustainability Here are four steps ESG leaders can take to understand your company’s reliance on nature and biodiversity and ensure long-term sustainability.  1. Undertake value chain mapping: Value chain mapping is a crucial tool for understanding the ecosystem of your product or business operations. Gaining visibility of your value chain will assist in identifying where nature and biodiversity intersect and how they are integrated or relied upon throughout the value chain.  2. Evaluate and assess: Once you identify nature and biodiversity throughout the value chain, dependencies and impacts should be evaluated and assessed. Assess how natural resources (land, water, air) are utilised or relied on and how this relates to the locality of the resource. Nature and biodiversity can be highly local and unique. Where are the vulnerabilities and risks to nature from using resources in the value chain? What is the impact, and what can you do to mitigate it? Equally, where are the opportunities, or where can gains be made? 3. Data and technology: Relevant data and technology will give more certainty and enable informed decision-making by providing more accurate evaluations and assessments of the impacts and opportunities of business operations on nature and biodiversity. Leveraging non-financial sustainability reporting data, public datasets and geospatial tools will help build a comprehensive and accurate understanding of the interface between businesses, nature and biodiversity. Importantly, this will inform adequate action to reduce impact and dependencies while maximising opportunities. 4. Business strategy and risk management integration: Embed identified nature and biodiversity risks and actions into your broader business strategy and risk management. Increasingly, businesses are integrating sustainability into their wider business strategy, leading to sustained value, enabling strategic decision-making, driving accountability, maintaining compliance, and setting out how the cost to the business versus the contribution to society is managed. David McGee is ESG Leader at PwC Ireland

Sep 06, 2024
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Five practical steps for becoming DORA-ready

In 2025, DORA will impose rigorous risk management standards on EU financial entities. Shane O’Neill offers five practical steps for compliance readiness From 17 January 2025, the Digital Operational Resilience Act (DORA) applies to all financial entities operating within the European Union. This wide-reaching legislation aims to strengthen the digital operational resilience of the financial services sector. Built upon five pillars, it contains rigorous requirements for information and communication technology (ICT) risk management, incident reporting, testing, third-party risk management and information sharing. Implementing DORA’s requirements can be overwhelming, and knowing where to begin can be difficult. Below are five practical steps that firms can take to become DORA-ready. Understand the principle of proportionality Because of the diverse nature of the financial services sector, DORA employs the principle of proportionality. This challenging but critical aspect of compliance means that entities’ regulatory requirements will differ depending on their size and risk profile and the scale, nature and complexity of their business. For example, large institutions providing multiple services, such as Ireland’s three-pillar banks, must establish a fully-fledged ICT risk management framework that addresses all appropriate areas from DORA’s Level 1 and Level 2 texts. However, smaller entities, such as boutique trading firms, can avail of a simplified ICT risk management framework covering only the areas relevant to their function, services and industry. Testing requirements also differ depending on proportionality. All entities must set up a general testing programme and comply with digital testing requirements, but through industry engagement with the Central Bank of Ireland (CBI) in recent months, the indication is that only about 10–15 institutions in Ireland will initially fall within scope of the advanced threat-led penetration testing requirements laid out in Articles 26 and 27. The application of proportionality seeks to create a high standard for the sector as a whole while protecting smaller organisations from unnecessary regulatory encumbrances. Since DORA does not take a one-size-fits-all approach to compliance, institutions should begin their compliance journey with a scoping exercise to confirm the right-sized approach to meet the requirements without taking on needless regulatory burdens. Perform a holistic gap assessment DORA’s five pillars touch many components of business operations, so organisations should analyse their entire operating model to determine which groups and business functions the legislation affects. They should bring together the stakeholders from each affected area to ensure that everyone understands their role in the compliance journey. Business as usual will continue throughout the implementation timeline, and having a collaborative approach to the planning stage helps stakeholders align on DORA-related priorities and responsibilities from the get-go. When conducting the business-wide gap assessment, entities should also inspect existing processes to determine if they can be used for DORA compliance. All firms practise digital operational resilience to some extent, and with a comprehensive review, in many instances, they’ll discover that they can enhance some of their existing procedures to satisfy DORA requirements. Leveraging and improving existing procedures saves time and allows entities to focus their effort and resourcing on the areas where they’ll need to start from scratch to build practices that achieve compliance. Be strategic about remediation activities When building a remediation roadmap, entities should address the compliance areas that need the most work first. Drafting new frameworks, evaluating them against the legislation and scrutinising their effectiveness will take time. Areas with significant compliance gaps must be addressed thoroughly, and an imminent implementation deadline can create unnecessary pressure on employees. Whenever possible, businesses should align their remediation plans with existing transformation roadmaps. To remain competitive, many organisations are already executing transformation roadmaps –digital, operational, environmental, etc. These businesses should ground DORA changes within their existing plans. For instance, if a current transformation roadmap has a timeframe for updating contracts with third-party suppliers, the business should incorporate the additional contractual changes required by DORA as part of that review cycle. Document decision-making While the CBI expects firms to be as compliant as possible by 17 January 2025, it has also recognised that “the regulation of digital operational resilience is not a once-and-done exercise and that is optimal to adopt a multi-year, multifaceted perspective”. When implementing large-scale change programmes, certain business realities, such as the lengthy process for updating third-party contracts, may prevent organisations from implementing all required changes within the timeframe in place. The CBI will take such issues into account when evaluating compliance, but it has firm expectations that all entities will have established and begun work on an agreed implementation roadmap by the January deadline. Firms should, therefore, be prepared to give an account of their DORA decision-making process. Ensuring oversight and alignment through risk and compliance functions and objective review and challenge from internal audit will show the application of a holistic delivery model to meet DORA requirements. Plan to test digital operational resilience regularly DORA requires that firms test digital operational resilience regularly (with the principle of proportionality determining the frequency of the review cycle), so DORA frameworks need to stay top of mind within organisations even after implementation projects stand down next year. By increasing entity-wide awareness about maintaining digital operational resilience, businesses can help all employees understand that DORA frameworks shouldn’t exist in silos; they need to evolve alongside business practices. Any large-scale change – restructuring, operational changes, systems updates, etc. – should prompt an evaluation of the existing framework. For instance, if a firm decides to overhaul its technology systems in 2026, then the DORA framework – despite only being a year old – may need updating to ensure continued compliance and meet the evolving business model of today. Shane O'Neill is Partner in Consulting at Grant Thornton

Aug 23, 2024
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The new EU deforestation regulations businesses should know about

Irish businesses in beef and forestry face challenges as new EU deforestation rules demand ‘deforestation-free’ certification, with severe penalties for non-compliance, writes Vivian Nathan Irish businesses, particularly those in the beef and forestry sectors, are set to encounter significant regulatory hurdles due to the new EU deforestation regulations. With the potential for severe penalties, the stakes have never been higher for Irish exporters. The EU Deforestation Regulation (EUDR), which will take effect on 30 December 2024, is designed to combat forest degradation by imposing strict compliance obligations on businesses trading in specific goods with the EU.   For Ireland, this means that companies exporting beef products, wood, and other related commodities will need to demonstrate that their products are ‘deforestation-free’. This regulation imposes stringent requirements on Irish businesses, particularly those in the beef and forestry sectors. Products such as  beef and processed beef items, and wood products must be certified as ‘deforestation-free’. This certification means they must not have been produced on land deforested after 31 December  2020. Failure to comply could result in severe penalties, including fines, confiscation of goods, and exclusion from public procurement opportunities. The impact on Ireland is significant due to its strong agricultural and forestry sectors. Farmers and businesses involved in beef production, wood processing, and other related industries will need to undertake rigorous due diligence to meet these new standards. This includes gathering geolocation data and other documentation to prove compliance. The new regulations represent a significant shift for Irish exporters, especially those in the beef and forestry industries. The penalties for non-compliance could severely impact businesses that do not take immediate action. Beef and processed beef products Items such as steaks, minced beef, liver, and canned luncheon meat must now be proven to come from sources that are not contributing to deforestation. Given Ireland’s significant beef export market, this regulation could place additional pressure on farmers and processors to ensure compliance. Forestry and wood products Products such as building materials (sheets of wood, laminated wood, wood flooring), wooden packaging (crates, pallets), and wooden household items (tableware, ornaments) must meet the stringent ‘deforestation-free’ criteria. The forestry sector, a cornerstone of rural Irish economies, will need to adapt quickly to avoid penalties. Other goods Chocolate products, coffee, printed materials (books, brochures, newspapers), and wooden furniture will also fall under the scope of the EUDR. For businesses exporting these goods, the compliance burden will be significant. Regulatory penalties The EUDR outlines a range of penalties for non-compliance, including: fines proportional to the environmental damage and value of the commodities, with escalating penalties for repeated offences; confiscation of non-compliant products and revenues from their sale; temporary exclusion from public procurement processes and access to public funding for up to 12 months; and prohibition from placing products on the market or exporting them in the event of serious or repeated infringements. Action required Businesses must start preparing now. The first step is understanding the EUDR’s impact on your operations and gathering the necessary data for the due diligence system (DDS). This includes verifying the geolocation of raw materials against the EUDR Map to confirm compliance. The EUDR is more than just a regulatory hurdle; it’s a transformative challenge for Irish exporters. By taking proactive steps, maintaining clear communication within supply chains, and ensuring all products meet the ‘deforestation-free’ criteria, businesses can safeguard their operations and continue to thrive in the European market. With the December 2024 deadline fast approaching, Irish businesses must adapt swiftly to the new regulations or face severe consequences in the EU market. Vivian Nathan is Chief Operating Officer at Baker Tilly Ireland

Aug 23, 2024
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Three steps to explore AI business potential and regulatory impact at the same time

With the EU AI Act now in effect, businesses must navigate its regulatory challenges while unlocking AI's potential. Keith Power outlines three key strategies to ensure compliance and drive innovation With the introduction of the EU Artificial Intelligence Act, exactly three years after its first draft, organisations now face the challenge of understanding the business impact of this new regulation and determining appropriate measures to take. What contributes to this dynamic is, for the majority of organisations, thinking about the risk and compliance implications of AI while exploring its business potential. Here are three so-called steps to deal with both of these challenges. Step 1: Map your landscape of current and expected AI applications Top-down: Define current and foreseeable business opportunities and issues and compare these with the potential that generative AI technology offers. Bottom-up: Do a brainstorming session with appropriate representation of relevant business functions to identify potential AI use cases. The success factor in brainstorming is not overthinking it. Combine both categories of AI use cases and plot these against two dimensions:  overall business impact; and implementation effort required.  Highlight your ‘quick wins’ (high business impact, low implementation effort) and ‘high potentials’ (high business impact, high implementation effort) to get a strategic landscape of AI applications. Create an inventory of your current AI applications, in use and development, and add them to the strategic landscape of AI applications. Don’t forget third-party applications. The inventory should at least capture: the purpose and intended use of each AI system; the data it uses; its core functionality/workings; the processes, functions and (in)direct stakeholders it affects; and risk categorisation that is consistent with the EU AI Act. Result: A robust starting point for an AI strategy and a regulatory impact analysis. Step 2: Raise awareness and upskill employees For every job, function or role out there, the question is not if AI will change it, but when. Not having an AI strategy is not a sufficient reason to wait to offer employees upskilling opportunities or create a safe learning environment in which they can build skills in using AI and dealing with the risks of the technology. The latter is especially important because employees can start working with generative AI on their own initiative. Agile is the keyword here. Applying the latest generation of AI technology is like learning to work with a new colleague –  you have to spend time together to get attuned to each other.  What upskilling should focus on for now: Introduction to generative AI and its principles: This topic provides an overview of generative AI and explains its fundamental principles and applications. Employees will learn to understand the potential benefits and challenges associated with using generative AI. Responsible use of generative AI: This topic highlights the importance of responsible and ethical AI use. Employees will learn about risk considerations, including human impact, ethics, bias, fairness, privacy, and transparency, in the context of AI applications and the consequence(s) of their use. They will gain an understanding of the need to ensure that AI systems are developed and deployed in a responsible and accountable manner, in accordance with new legal requirements under the AI Act. Prompt engineering: This topic focuses on the concept of prompt engineering, which involves designing effective prompts or instructions to direct the behaviour of a generative AI model. Employees will learn how to craft prompts that produce desired outputs while avoiding unintended biases or undesirable outcomes. They will gain an understanding of the significance of prompt engineering for achieving reliable and ethical AI results. By covering these three key topics, organisations can provide employees with a comprehensive understanding of generative AI, responsible AI use, and the importance of prompt engineering for effective and ethical AI application. Result: An equipped workforce to execute the (future) AI strategy, to handle AI responsibly, and to shape, implement and comply with legal requirements. Step 3: Implement responsible use guidelines Responsible use of AI revolves around desired business conduct. First, it requires awareness and clarity about what that is and second, the ability to recognise the associated risks in practice and to respond effectively to them. Organisations should establish simple but clear and workable responsible use guidelines. These guidelines address what should always be done and/or what should never happen (i.e. the ‘non-negotiables’) when it comes to the use of AI and data.  To determine the working principles for daily use, organisations can draw inspiration from ethical AI principles, such as transparency, accountability, human oversight, and social and ecological well-being, as formulated in 2019 by the High-Level Expert Group of the European Commission. These principles provide broad guidance and usually need to be further operationalised to be workable in daily practice. When developing these guidelines for responsible use for the organisation, it is important to find an appropriate balance between setting boundaries and offering freedom for innovation within the organisation. Result: Clear criteria to guide the AI strategy and its execution, end-to-end through the organisational AI lifecycle. Keith Power is Partner at PwC

Aug 23, 2024
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The illusion of productivity: why monitoring employees is a step backwards

In an era of digital surveillance, employees resort to performative tactics like "mouse shuffling." True productivity thrives on trust, communication, and effective people management—not monitoring, writes Moira Dunne Have you heard of the ‘mouse shuffle’ or coffee badging’ or ‘productivity theatre’ yet? These terms refer to tactics used by employees to show that they are working hard. Why? Because they work in companies where surveillance tools are used to monitor performance. Where working visibility is valued more than actual productivity. Monitoring our employees A recent Forbes survey found that 43 percent of American employees say their online activity is being monitored in 2024. What are we doing? Why are we monitoring people and using surveillance tools? Where did it all go wrong? As a Productivity Consultant passionate about helping businesses improve by achieving productivity through employee motivation, engagement and empowerment, reading about performative tactics, surveillance and mistrust sadden me greatly. When and, perhaps more importantly, why did employers revert to such old-school thinking –  that being seen equals working hard? Of course, the shift to remote working since the pandemic has changed how we work, but matching that with intelligent thinking and planning will help us understand the implications of that change. Leaders should consider adopting an ‘old-school’ strategy to boost productivity – good old-fashioned people management! This involves communication, building one-to-one relationships, providing clear goals and direction, setting weekly targets, empowering people, and providing constructive feedback and training. Productivity tools Managers and team leaders have a key role in enabling productivity. Many of the barriers can be reduced or removed by good communication, clarity and allowing people to protect time for their priority work. Empowering employees is key to their productivity and well-being, and by providing tools to aid their productivity, you show your team that you’re all in this together, trusting them to achieve the organisation’s goals. Here are five ways to help employees feel empowered and productive: Reduce meetings and improve decisions, actions and follow-up; Put a smart email practice in place so less time is spent on email each day; Agree on team and individual priorities and plans every week; Identify distractions within the team (such as other departments taking resources, etc) and work to reduce them; and Minimise time spent on low-value activities. You need to work with your team to identify any productivity barriers and stress factors. Good people management We don’t need heavy-handed monitoring tools to manage our employees. We need human connection, leadership and to learn to trust our employees when they aren’t in our immediate eyeline. In his Forbes article about mouse shuffling, organisational consultant David Campbell stresses that only when companies start trusting employees more and focus on the work they produce—not on how much they seem to be working—will trends like the ‘mouse shuffle’ fade away. He predicts that better work-life balance and happier employees would be the result. “Businesses should measure success by results, not by how much time someone seems to be working,” Campbell advises. “They should trust employees to manage their time and focus on achieving their goals, rather than simply being online all the time.” Moira Dunne is Founder of beproductive.ie

Aug 16, 2024
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Macroeconomics and the global food industry

As the global economy faces constrained growth, high inflation, and regulatory pressures, the food industry must adapt to rising costs, technological disruptions, and geopolitical volatility, says Brian MacSweeney The 2024 economic outlook paints a mixed picture. Constrained growth across the leading economies, stubbornly high inflation, and slowness to ease the tightened monetary policy cycle mean industries are facing challenging operating environments. The food industry is no different and its relationship with these macro-economic factors is complex. For many years, the developed world has generally had a stable supply of cheap high-quality food. Recently, the status quo has been challenged. Brexit, war, labour shortages, supply chain disruption, regulation and climate change mean that the complex interlinkage will continue, but it will be more volatile than stable. Here are some of the global micro-trends and the impact they are having on the food and beverage sector. Labour availability and cost The current global labour trend is marked by shortages and increased costs. This has a ripple effect, slowing food production and distribution, and ultimately increasing the price of food. An example is the recent minimum wage increase in California for fast-food workers. This was an important step towards better living standards for workers, but the corollary is higher food prices. Fast food prices across chains in California are increasing. At a time of higher inflation, this disproportionately affects cohorts from socially disadvantaged backgrounds which is a key trend globally in the industry.  Commodity prices and inflation The FAO Food Price Index (FFPI) for June 2024 stood at 120.6 points. To put this into perspective, the FFPI averaged 125.7 points in 2021, which was a 28.1 percent increase over 2020. Therefore, the current FFPI is lower than the average for 2021, but it is still relatively high compared to historical standards. This is driven by various macroeconomic factors including climate. The poor cocoa harvest in Ghana and Ivory Coast has caused cocoa prices to spike. Coffee, too, has experienced a similar fate, with futures of coffee spiking due to heatwaves affecting major producers in South-East Asia. While we await general inflation to subside due to continuing government interest rate intervention, events like climate keep food prices elevated.  Policy and regulation Europe leads the way when it comes to the regulation of food where labelling, nitrate levels, flavour use, and unfair trade practices all have been legislated over the last number of years. The introduction of the Corporate Sustainability Reporting Directive (CSRD) in the EU is having a transformative effect. While regulation means well, it can impact food yield and cost. In terms of price, not every government is explicitly regulating food prices, but because the cost of food is one of the clear ways the population sees inflation impacting their wallets, governments are intervening because they want the price of food kept flat or even reduced. Recently, the Canadian Prime Minister summoned CEOs of Canada’s five largest retailers and gave them a deadline to reduce the price of food, warning they would be subject to heavier regulation if they didn’t comply. Similar conversations are happening in various jurisdictions around the world, putting real pressure on the margins and cash flow.  Geo-politics Geopolitical instability, particularly war, has a profound impact on consumers and producers alike. For example, the impact of Brexit on food availability in the UK and the effect of the war in Ukraine on grain prices are well documented. The simple diversion of shipping from the Strait of Hormuz because of Houthi attacks that disrupt vital shipping routes to around the Horn of Africa has added days to supply chains and cost increases for consumers. These events are becoming more frequent making outlooks more unpredictable.  Disruption and technological advancement The pace of technological advancement is a significant challenge but also an enormous opportunity. AI and weight suppressing medications are key emerging disruptors. AI can significantly impact the value chain right from crop yield monitoring to customer experience. Weight loss drugs, such as Wegovy and Ozempic are not widely available in Ireland, but the pipeline of new alternatives including orally ingested drugs may alter consumer eating habits and food preferences, leading to a decrease in the consumption of high-calorie snacks and fast food. This disruption is a prominent agenda item for the boards considering their product offerings and strategies.  Optimism and opportunity Despite the challenging macro environment, we are beginning to see an easing of inflationary pressures due to the tight monetary policies pursued by central banks around the world. As inflation calms, monetary policy and interest rates will fall. This will drive a renewed consumer demand which will stimulate economic growth. The food industry is well-versed in managing economic cycles and has always been resilient and adaptable. It has consistently demonstrated its ability to evolve through challenges and changes over the years. During this period, there is huge opportunity for the Irish food industry. Already, Ireland is leading the way in sustainability. The acquisition profile of our companies is strategic and niche in sectors like food preservation, for example. The integration between food and energy companies is becoming more pronounced, with solar farms emerging alongside food plants and ongoing trials for bio-methane production – this is to solve the emissions problem. Moreover, our universities are spearheading cutting-edge research and fostering strong industry collaborations. While the landscape presents its challenges, it also offers great opportunities. As always, the future holds promise and potential for those ready to adapt.  Brian MacSweeney is a Audit Partner at KPMG

Aug 16, 2024
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Northern Ireland's restructuring market post-pandemic

Despite severe economic challenges, Northern Ireland has avoided the wave of corporate failures seen in England and Wales, though future risks remain uncertain, writes Gareth Latimer Since the onset of the global pandemic in March 2020, assessing the restructuring market has become increasingly important. This is evident by the recent publication of The Northern Ireland Labour Market Report and The Company Insolvency Statistics for Northern Ireland, which gives a detailed analysis of redundancies and insolvencies in Northern Ireland. Below, we discuss what this trend could mean. Redundancies and insolvencies in Northern Ireland Published in July this year, The Northern Ireland Labour Market Report has put the annual number of confirmed redundancies in Northern Ireland up to June 2024 at 2,560 – almost double the figure for the previous year (1,340). Similarly, The Company Insolvency Statistics for Northern Ireland for June 2024 highlighted 17 corporate insolvencies in June 2024, which was 13 percent higher than in June 2023. Understanding the statistics As with any statistics, we must delve beyond the headlines to see their impact on the Northern Ireland market. The raw numbers tell one story, but the underlying trends and their broader implications reveal much more about our economic landscape. Initial predictions and government intervention When the COVID-19 pandemic hit the UK in March 2020, some commentators predicted a ‘tsunami of corporate failures and mass redundancies’. Thanks to the introduction of the Coronavirus Job Retention Scheme, commonly known as the Furlough Scheme, the predicted large number of redundancies did not occur. Additional liquidity measures Several other liquidity measures, including the Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS) also played their part in staving off the large number of corporate failures many had predicted. Financial lifelines, in the form of loans and grants, were available to allow companies to survive the various lockdowns and the unprecedented drop in GDP in April and June 2020. However, having recovered from the economic effects of the pandemic, we then had the Russia-Ukraine war and the subsequent energy crisis. High inflation and interest rates followed. It is no wonder, then, that companies have been struggling. New insolvency procedures To help companies facing insolvency, two new procedures were created when The Corporate Insolvency and Governance Act 2020, which also applied to Northern Ireland, was implemented. Company moratorium: Designed to give struggling businesses formal breathing space in which to explore rescue and restructuring options, free from creditor and other legal action. Except in certain circumstances, insolvency proceedings cannot be instigated against a company during the moratorium period. Restructuring plans: Introduced to support viable companies struggling with unmanageable debt obligations. These plans allow the court to sanction a plan that binds creditors to a structuring plan if it is deemed fair and equitable. Creditors vote on the plan, but the court can impose it on dissenting classes of creditors (cram down) if the necessary conditions are met. However, despite the introduction of these new procedures, between 26 June 2020 and 30 June 2024, there was only one moratorium in Northern Ireland and no restructuring plans. The figures suggest that these options may hold less relevance for the Northern Ireland market compared to more traditional restructuring options. Labour market report insights One might have expected the Northern Ireland Labour Market Report to paint a bleak picture. The UK economy slipped into a mild recession in 2023, and the cost of living crisis continues. However, the anticipated surge in redundancies due to corporate failures has not materialised.  In fact, the unemployment rate in Northern Ireland for March to May 2024 fell over the quarter and the year to 2 percent. It is useful here to analyse and compare the June 2024 insolvency statistics. Northern Ireland saw 17 company insolvencies. And while each of these cases demonstrates financial distress for the company and employees involved, considering the economic backdrop, one might have anticipated a higher number of corporate failures. Indeed, this picture contrasts sharply with the headline insolvency statistics from England and Wales, where registered company insolvencies in June 2024 reached 2,361 – 16 percent higher than in May 2024 and 17 percent higher June 2023. The number of company insolvencies in England and Wales have remained much higher than those seen both during the COVID-19 pandemic and between 2014 and 2019. The disparity suggests that Northern Ireland’s insolvency rate is proportionately lower than that of England and Wales. Whether this resilience will hold, or if the rising tide of corporate failures in England and Wales will eventually reach these shores, remains to be seen. Future outlook with new government Given the recent Labour Party landslide victory in the UK, many are wondering how this shift will impact corporate failures and job redundancies. The new Chancellor, Rachel Reeves, is poised to play a crucial role. A former Bank of England employee, Reeves has continually stressed the importance of fiscal discipline, and given the current state of public finances, she may have no choice. It appears that the economic strategy is to grow the economy, and this will improve the Treasury coffers; easy to say but harder to deliver. The future It seems that in 2024, Northern Ireland has been somewhat insulated from the wave of corporate failures sweeping through England and Wales. While specific factors contribute to this relative calm, the recent reports suggest that, despite ongoing economic pressures, we’ve seen more of a ripple than a tsunami of insolvencies. Thankfully, the anticipated surge in corporate failures has not materialised. Clearly, this is positive news for the economy. Yet, with the recent economic headwinds, one can’t help but wonder if we are simply delaying the inevitable. Will 2025 finally bring the wave of corporate failures some have been expecting? Only time will tell. Gareth Latimer is a Director at Grant Thornton NI

Aug 16, 2024
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The rise of the fractional executive

Fractional executives can bring genuine value to business leaders, offering specialised knowledge and niche experience on a flexible basis, writes Tony Dignam The business landscape has undergone significant transformation in recent years, driven by advances in technology, economic shifts and evolving work patterns.  One notable trend that has emerged is the rise of the fractional executive. These seasoned professionals offer their expertise to multiple companies on a part-time or “fractional” basis, providing strategic leadership without the commitment of a full-time role.  What is a fractional executive?  A fractional executive is an experienced leader who offer their services to businesses on a flexible basis as and when needed.  They can occupy various roles such as Chief Finance Officer, Chief Marketing Officer, Chief Technology Officer, and more.  These professionals can bring a wealth of experience and specialised skills to the table, helping companies navigate complex challenges and phases of growth or change.  Benefits of the fractional executive The concept of a fractional executive is not entirely new, but it has gained significant traction in recent years.  Economic uncertainties and the need for cost-effective solutions have driven many businesses to reconsider traditional employment models.  Hiring a full-time executive can mean a substantial overhead, especially for small and medium-sized enterprises that may not have the budget for high salaries and benefits packages.   Fractional executives offer a more affordable alternative, potentially allowing companies to access top-tier talent “on demand”.  The gig economy has revolutionised the way people work, with a particular emphasis on flexibility and project-based engagements.  Fractional executives fit perfectly into this model, offering their expertise for specific projects, limited periods or ongoing for an agreed number of days per week or per month.  This flexibility benefits both the executive, who enjoys diverse work experiences, and the company they work with, which can tap into specialised skills as needed.   Access to specialised expertise  Fractional executives often have broad subject matter expertise and plenty of relevant experience they can bring to the table and fast. Many will have held senior positions in their field and possess a deep understanding of best practices in their industry.  This knowledge can be invaluable for businesses looking to implement strategic initiatives or navigate complex change or growth.  Flexibility and scalability  One of the main advantages of fractional executives is their flexibility. Companies can engage them for specific projects, short-term needs, or on an ongoing fractional basis.  This scalability can give businesses more scope to adjust their executive resources according to their existing needs without long-term commitments.  Cost-effective leadership  Hiring a full-time executive can be a significant financial burden, especially for smaller companies. Fractional executives can offer a cost-effective alternative, potentially providing access to top-tier leadership at a lower cost.  This financial efficiency can be crucial for start-ups and SMEs operating on tight budgets, or for employers for whom long-term senior executive needs are harder to forecast.  Fresh perspectives  Fractional executives often work with multiple companies across different industries. This diverse experience means they can bring fresh and innovative perspectives to the businesses they serve.  Their ability to think outside the box can help companies to overcome challenges and seize new opportunities.  These executives sometimes also bring the benefit of fresh contacts and networks to senior teams, which can add value to scaling businesses. This means that the fractional executives can support and enhance business leadership by offering specialised expertise on a flexible, cost-effective basis.  Tony Dignam, FCA, is Managing Director of The Agile Executive

Aug 08, 2024
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How failure can fuel innovation and success

Embracing failure as a learning opportunity can drive innovation, turning business setbacks into strengths and fostering growth, writes Joanne Powell One of the challenges of innovation, advancement and continuous improvement is that sometimes getting it wrong is inevitable. No one likes to fail. We’re naturally predisposed to want to achieve and do better. Whether in life or in business, innovation, advancement and achievement are key markers of success. Traditionally, failure is either not an option or it is perceived as a sign of weakness. There is a growing body of thought that challenges traditional perspectives on failure, however. Business leadership author Simon Sinek talks about “falling” rather than “failure” – i.e. because you can get up from a fall and move forward. Amy Edmondson, Professor of Leadership at Harvard Business School, has written extensively on the notion that it “…doesn’t matter if you fail. It matters how you fail”. New York Times bestselling author, John C Maxwell, has noted that, “the difference between average people and achieving people is their perception of and response to failure.” There are any number of articles from Forbes, HBR and other notable journals in a similar vein. The key message is that failure can be a very positive catalyst for success – but only if done well. Doing failure ‘well’ means seeing it as a key part of the process: a chance to learn, to reflect and to move forward. It can also help to see lessons learned from failure as part of the inevitable tapestry of life. One of the ways I practice this myself is through inspiration from Mary Wallace, the Irish artist. Her popular Precious Bowls series is inspired by two Japanese concepts: Kintsugi: using gold or other precious metal to repair broken pottery. Wabi-sabi: seeing beauty in imperfection. For me, ideas around learning from failure really come together with the concept of wabi-sabi and the idea of “beauty in imperfection”. Some sources translate the concept of wabi-sabi as “nothing is perfect”, which is considered to be inherently positive as it suggests that there is always potential for 'more'. Kintsugi is an equally wonderful tradition, as it treats flaws and imperfections as part of the history of an object rather than something to be disguised or hidden. In the context of business, this can provide a constructive lens through which to process “failure” and to see the final product (or latest iteration) as being stronger and even more precious because of the journey it has travelled. I keep one of the Mary Wallace ‘Precious Bowls’ prints over my office desk. Every time I look at it, I’m reminded of three key principles: Every project or strategy has potential – The ethos behind any project or strategy should be one of continuous improvement. You must recognise that nothing is perfect and, instead, optimise the potential available. The ability to innovate and remain agile and open to change is key. Innovation requires us to take calculated risks and be open to the prospect of failure. It is knowing and understanding that sometimes we get it “wrong”, that strategies and innovations don't always produce the desired impacts. Wabi-sabi reminds me to take time to reflect and learn from “failure”, and to produce something better. Create and encourage strong, trust-filled and (psychologically) safe organisations. By creating a culture where stakeholders are encouraged to reflect and to find ways to improve, we are, in a way, creating our own version of kintsugi, where failure is recognised as an inevitable side-effect of any organisation that values innovation and progress. It is how we respond to these “failures” that matters most. Joanne Powell is Head of Advisor Services at QED: The Accreditation Experts

Aug 08, 2024
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Being your own advocate at work

Advocating for yourself at work is vital, especially if you're a neurodivergent person. Antje Derks explains how to navigate workplace challenges and secure the support you need Advocating for yourself in the workplace can be challenging for anyone, but it can be especially daunting for those who are neurodivergent. Neurodivergence encompasses a range of conditions, including autism, attention-deficit/hyperactivity disorder (ADHD), dyslexia and other cognitive differences that affect how individuals think, learn and interact with the world. While these differences can bring unique strengths to the workplace, they can also create specific needs and challenges. Understanding how to ask for reasonable accommodations and advocate for yourself is crucial for thriving in your professional environment. Neurodivergent individuals often have distinct ways of processing information, communicating and completing tasks. These differences can be assets, bringing innovative perspectives and problem-solving skills to a team. The traditional workplace environment may not always be conducive to neurodivergent work styles, however, leading to potential misunderstandings and obstacles. Workplace challenges Neurodivergent individuals often face specific challenges in the workplace. Sensory sensitivities, such as noise, lighting or office layouts, can overwhelm a neurodivergent brain, leading to overstimulation. Organisational and time management difficulties can also arise, as can challenges with social interactions and communication. Many neurodivergent colleagues appreciate clear, explicit instructions and feedback. The more precise and direct the language, the better. While this approach works well for many, it's important to remember that neurodivergence varies greatly from person to person. There is no one-size-fits-all solution. Self-advocacy Self-advocacy involves understanding your own needs and communicating them effectively to others. For neurodivergent individuals, self-advocacy is essential for creating a work environment that supports their success. Here are key steps to advocate for yourself effectively. Familiarise yourself with workplace policies and legal protections related to disabilities In many countries, laws provide the right to reasonable accommodations. Take time to reflect on your specific needs and how certain accommodations can help you perform your job better. This might include flexible work hours, noise-cancelling headphones or written instructions for tasks. Schedule a meeting with your manager or HR representative to discuss your needs. Prepare to explain your neurodivergence in a way that highlights both your strengths and the challenges you face. Remember to use clear and specific language when requesting accommodations. For example, instead of saying, "I need a quieter workspace," you might say, "I need a desk in a quieter area of the office to help me concentrate better." It is important to try and frame your requests in a way that shows you are looking for solutions that benefit both you and the company. Emphasise how the adjustments will help you to be more productive and contribute effectively to the team by suggesting reasonable accommodations that are specific and actionable. For example, "Can I have a standing desk to help me stay focused?" or "Can we have a weekly check-in meeting to ensure I am on track with my projects?" will show your manager that you are actively seeking to take responsibility for yourself rather than shifting all the expectation on to them. Make reasonable adjustments depending on your needs Reasonable adjustments vary depending on individual needs and job requirements. Flexible work arrangements, such as remote work, flexible hours or modified schedules, can help manage sensory overload and align work with peak productivity times. Assistive technology, including speech-to-text software, organisational apps or noise-cancelling headphones, can aid concentration and efficiency. Physical workspace adjustments, like a quieter workspace, a standing desk or specific lighting, can create a more comfortable and productive environment. Structured communication, with clear, written instructions and regular feedback, ensures understanding and proper task execution, while regular check-ins can provide ongoing support and clarification. Additionally, access to a mentor or job coach who understands neurodiversity can offer valuable support and guidance. Monitor the effectiveness of the adjustments Communicate with your manager or HR about how well (or not) the adjustments are working for you. If things need tweaking slightly, don't hesitate to request them. Keep records Keep a record of your communications and any agreements made. This documentation can be helpful if you need to revisit the discussion or if there are any disputes. Promoting an inclusive workplace culture Advocating for yourself is an important step, but fostering a more inclusive workplace culture requires broader efforts from the whole organisation. Employers and colleagues can contribute by promoting awareness and understanding of neurodiversity through training and education, as well as encouraging open dialogue about individual needs and adjustments. But most importantly, it is about helping to create a supportive environment where all employees feel valued and included – whether they’re neurodivergent or not. By advocating for yourself and working towards a more inclusive workplace, you can not only enhance your own job satisfaction and performance but also contribute to a diverse and dynamic work environment where everyone's unique strengths are recognised and valued. Antje Derks is a Marketing Executive with Chartered Accountants Worldwide

Aug 08, 2024
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The coach’s corner -- August/September 2024

Julia Rowan answers your management, leadership and team development questions A long-standing member of my team works to a good standard, but does the bare minimum. She is retiring soon. She takes no part in social outings and at team meetings, both in person and online, she works on her computer, only lifting her head to respond to direct questions. I have new people joining the team soon and I don’t want her muddying the water. I’m afraid if I tackle this, she will ‘go sick’. She has done this before. My team is under huge and growing pressure. A. It is so easy to feel undermined by one person, so pay close attention to where your energy goes. It’s essential to prioritise creating a positive experience for your new joiners as well as the rest of the team.  During interviews, induction and early reviews with your new team members, communicate this by organising a team lunch, bringing treats to meetings or refreshing the team meeting format. Also, take a look at the agenda: What is discussed? Who gets to talk, present, discuss or consult?  If you decide to deal directly with the issue, remember her behaviour has evolved for a reason and, in her head, makes perfect sense. Whether it’s discomfort, disrespect, payback or self-protection, there is a message in her behaviour. It could be interesting to find out why she seems disinterested in engaging with the team.  You need to be genuinely curious – this can be hard when you feel undermined and anxious. It’s possible the team member may need help getting back into the group. Consider pairing her up with someone on a project, asking her to train a new team member, or finding ways to acknowledge her long service and experience. If you decide to discuss this with her, start with the context (which you have outlined in your question): she is retiring soon, new people are starting and pressure is growing.  For those reasons, you need everyone to be fully present to onboard new joiners, deal with important issues and prepare for the future. This means putting the work away for a while.  You can be firm, gentle and respectful in this conversation. She may give you a range of reasons for her behaviour – for example, she’s too busy, the meeting takes too long, it’s not interesting, it doesn’t concern her or she knows all this stuff already.  Don’t argue with her. Agree and go back to your request: “I know you are busy but I need you there. So, how can we make it a more useful meeting?”   Be sure to have an exit strategy ready to avoid going round in circles.  The request you are making to this long-serving team member is reasonable. If you receive an outright refusal, the stakes get very high (and we are firmly in ‘going sick’ territory).  Consider your options: Do you stick with the status quo? Insist she engages with the team? Ask her not to attend team meetings if she can’t pay attention?   Telling her, “I’d rather have you there than not there, but I’d really appreciate it if you were fully present,” might be the safest option and keeps the door open. Julia Rowan is Principal Consultant with Performance Matters Ltd, a leadership and  team development consultancy. To send a question to Julia, email julia@performancematters.ie

Aug 02, 2024
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The ethics and governance of AI

The ethical use of AI and how it is governed today and as it continues to evolve in the years ahead is top of mind for many in the profession. Accountancy Ireland asks three Chartered Accountants for their take on the ethics of AI Owen Lewis  Head of AI and Management Consulting KPMG in Ireland It is crucial for all of us in the profession to ensure the integrity and transparency of solutions driven by artificial intelligence (AI).  We must audit and validate AI algorithms to ensure they comply with regulatory standards and ethical guidelines. Monitoring systems for biases and inaccuracies is also crucial to ensuring that financial data and decisions remain fair and reliable. By providing independent oversight, we can help to maintain trust in AI-driven financial processes and outcomes for clients.  Where AI is used to inform large-scale decisions, it should be supplemented with significant governance measures, such as explainability, transparency, human oversight, data quality and model robustness and performance requirements. This technology is continuing to advance rapidly, and we need to be open to both its current and potential capabilities.  By putting the correct governance mechanisms and controls in place – beginning with low-risk test applications and building from there – organisations can adopt AI safely and obtain real benefits from its use. I am working with organisations to help them think through what AI means for them, develop strategies for its adoption, put the necessary governance and controls in place, scale solutions sensibly and ensure business leaders get real value from their investment.  Whatever their goal may be – more efficient operations, accelerated content generation or improved engagement with stakeholders – we help organisations decide if AI can help, and if it can, how to use it in the right way. >Bob Semple Experienced Director Governance and Risk Management Artificial Intelligence (AI) is one of the most misunderstood, yet transformative, technologies impacting the way we work today. Here are 10 essential steps Chartered Accountants should take to navigate the landscape of AI effectively. Take a leadership role – If we don’t take the lead, we risk missing the golden opportunity AI presents. Conduct an AI “stocktake” –According to a recent Microsoft survey, 75 percent of employees are already using AI. Identifying current AI usage within your organisation is essential. Assess the downside risks of AI – Legislative and regulatory requirements are exploding (e.g. NIS 2, the AI Act, DORA and more) and risks abound (AI bias, explainability, privacy, IP, GDPR, cyber security, resilience, misuse, model drift and more). Organisations must act on their AI responsibilities. Conduct a dataset stocktake – Just as the Y2K challenge was about identifying IT systems, today’s challenge is to catalogue all datasets, as these are crucial for AI functionality. Draft appropriate policies and procedures – Establish clear responsibilities and accountability for AI initiatives. Pay special attention to how AI impacts decision-making processes. Strengthen data curation – Implement new processes to improve how data is collected and used. Identify opportunities for the smart use of AI – Brainstorm and prioritise AI use-cases that can drive efficiency and innovation. Provide training – Ensure that board members, management and staff are all adequately trained on AI principles and applications. Manage the realisation of benefits – Safeguard against excessive costs and subpar returns by carefully managing the implementation of AI projects. Update audit and assurance approaches – Seek independent assurance on AI applications and leverage AI to enhance risk, control and audit processes. As we adopt AI, it is critical that we pay particular attention to distorted agency – i.e. giving too much agency to, or relying unduly on, AI outputs and doubting our own agency to make the most important decisions. Exercising professional judgement is the key to minimising the risks associated with AI and realising its benefits, and that surely is the strength of every Chartered Accountant. *Note: GPT4 was used to assist in drafting this article.   Níall Fitzgerald Head of Ethics and Governance Chartered Accountants Ireland Artificial intelligence (AI) is proving to be transformative, impacting competitiveness and how business is done.  Chartered Accountants Ireland has engaged with members working in various finance and C-suite positions, including chief executives, chief financial officers and board members, to understand how AI is impacting their day-to-day work.  One thing is clear. AI is being used in some shape or form in many businesses across the country.  In 2023, the Institute’s response to the UK’s Financial Reporting Council proposals on introducing governance requirements for the use of AI noted several governance mechanisms that are likely to be impacted by AI currently or in the very near future in many organisations.  We highlighted the focus on corporate purpose and how market forces, emerging threats and opportunities driven by AI, may challenge the purpose of an organisation and its long-term objectives.  AI may impact how organisations decide on their strategic focus in terms of how they deliver their product or service and, indeed, how their product or service is designed in the first instance.  It may also impact these organisations’ values as they consider how to deploy and use AI in an ethical manner. The EU AI Act, which enters into force on 1 August 2024 over a phased basis, introduces requirements for the development of codes of conducts, risk and impact assessments and staff training to ensure adequate human oversight around the use of AI systems within organisations. This has specific resonance for Chartered Accountants who are members of a profession bound by a code of ethics governing objectivity, confidentiality, integrity, professional behaviour and competence and due care. Chartered Accountants must now ensure that they understand how AI uses, analyses and then outputs data.  Organisations must ensure that any AI-driven information they share, and how they deploy the technology itself, satisfies principles of integrity, honesty and transparency.  Chartered Accountants are well-positioned, with their ethical mindsets, to ensure the integrity of AI systems, and their use within organisations.

Aug 02, 2024
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Counting the cost of global tax reform in “the year of elections”

As the “year of elections” continues to unfold, Ireland faces a changing global tax environment, but with change comes the opportunity to position the country as a beacon of stability for continued FDI. Cillein Barry and Susan Buggle dig into the details As a small, open economy, Ireland is a competitive location for foreign direct investment (FDI). However, we are also subject to the impact of changes to tax regimes globally, most notably those driven by the Organisation for Economic Cooperation and Development (OECD), the European Union (EU) and the US. Changes to the tax regime in the US, in particular, have an indirect material impact on Ireland’s attractiveness as a location for FDI.  This year has been cited as “the year of elections”, with roughly half the world’s population going to the polls in 2024. The outcome of elections across the EU and, later this year, in the US may serve to shape future tax policy impacting Ireland.  Here at home, though the Irish Government has denied claims of an early election in 2024, an anticipated “giveaway” budget on 1 October means an early Irish election remains a distinct possibility. The US presidential election and tax policy While the outcome of the US presidential election cannot be predicted with any certainty at this time, we do have some insight into the tax policy objectives of both the Democrats and the Republicans should they come to power this year.  In considering possible changes to US tax policy, it is important to note that the approval of tax legislation generally requires 60 votes out of 100 in the US Senate.  This means that one party must hold a large majority or, alternatively, there must be bi-partisan co-operation to approve any proposed changes to tax policy. Neither of these scenarios seems likely in the aftermath of the upcoming presidential election.  While tax legislation may also be passed by a simple majority using a process known as “budget reconciliation”, the relevant tax measures cannot increase the long-term deficit of the US.  In an era of limited bi-partisan co-operation, significant US tax reform is therefore unlikely, as it would require either a super-majority in the Senate or the introduction of tax measures regarded as fiscally neutral over the long-term.  Understanding the Tax Cuts and Jobs Act In 2017, then US President Donald Trump’s Republican administration introduced some of the most significant reforms to the US tax code in three decades under the Tax Cuts and Jobs Act (TCJA).  The key measures for US businesses were broadly designed to lower the US corporate tax rate to one more comparable with competitors among OECD member countries and to protect the US tax base. These included: Corporate income tax rate: a reduction of the US corporate income tax rate from 28 to 21 percent. Global Intangible Low-Taxed Income (GILTI): a 10.5 percent tax on a portion of the income earned by foreign subsidiaries of US companies. Foreign-Derived Intangible Income (FDII): a preferential rate of 13.25 percent for income earned by US companies outside the US on certain intellectual property. Base Erosion and Anti-Abuse Tax (BEAT): a minimum 10 percent tax on base erosion payments made by US entities to related parties outside the US. The TCJA was introduced using the budget reconciliation process at a time when there was a Republican congressional majority combined with a Republican president – not a single Democrat voted in its favour.  Having already introduced such significant reform, what more could the Republican side seek to introduce in 2025? In answering this question, it is important to note that a large part of the TCJA measures were temporary, with 25 of the tax cuts introduced under the Act due to expire in 2025. This includes a slated increase in the rate of GILTI (10.5% to 13.125%), BEAT (10% to 12.5%) and FDII (13.125% to 16.406%). The Republicans are likely to face pressure from US businesses to reverse these planned increases and preserve the impact of the TCJA.  However, the Republicans are also likely to face pressure to extend several individual tax cuts included in the TCJA, which together impact more than half of US households. Indeed, both Democrats and Republicans are in favour of retaining at least some of these measures. The Democrats’ tax proposals The Democrats’ preferred tax policy was outlined in March 2024 in Joe Biden’s “Green Book” budget proposals. These proposals seek to reverse many of the TCJA tax cuts and include: Increasing the corporate tax rate from 21 to 28 percent; Increasing to the GILTI rate from 10.5 to 21 percent; and A repeal of the preferential rate for FDII. To introduce such tax proposals under a new leader, the Democrats would likely require a significant majority, as it would be challenging to introduce such measures while balancing the books to achieve a fiscally neutral outcome.  US Presidential elections: the likely outcome Many US commentators predict a split government in the aftermath of the US presidential elections, with neither party controlling the House and Senate.  Marrying this with the complex procedures required to pass tax legislation and the political pressure to preserve tax cuts for individuals, the most likely outcome for US business taxation is little change to the status quo regardless of who will be elected as the new US President.  Though Republican rhetoric has centred on cutting the federal corporate income tax rate to 15 percent, this should be viewed in a similar light, although the threat of 10 percent tariffs and the EU’s response will need to be monitored closely.  The other key area to watch is US engagement with the OECD’s Base Erosion and Profit Shifting (BEPS) 2.0 tax proposals. Under Pillar Two of BEPS 2.0, this year has seen the most significant change in international tax in recent memory, with many countries, including Ireland, introducing a minimum 15 percent tax on the corporate profits of large multinational groups.  Despite positive indications from the US Treasury, achieving sufficient political support to introduce the Pillar Two proposals in the US has proved elusive. However, the mechanics of these rules will mean that US-headquartered groups are likely to be affected by the global minimum tax rules from 2026 onwards.  If Pillar Two plans proceed as anticipated, it remains to be seen how the US will react and whether the party in power will seek to introduce retaliatory measures.  Republicans sitting on the powerful Ways and Means Committee have already outlined proposals to impose an additional five percent tax rate each year on the US income of entities located in foreign jurisdictions applying the Pillar Two rules.  The outlook in Europe We have witnessed significant political developments across Europe in recent weeks, including the election of a new European Parliament in June and domestic parliamentary elections taking place in several neighbouring European countries, most notably France and the UK.  In July, Hungary took over its Presidency of the Council of the European Union and Ursula von der Leyen was re-elected as the President of the European Commission. EU commissioners and working groups will be appointed in the coming weeks. These developments will play a key role in shaping the future direction of taxation policy in the EU.  Recent years have seen the introduction of a swathe of EU-wide tax initiatives, including measures aimed at tackling tax avoidance (e.g. the Anti-Tax Avoidance Directive), measures to increase transparency (e.g. the EU public Country-by-Country Reporting Directive) and measures to introduce OECD BEPS 2.0 Pillar Two provisions across the EU via the Minimum Tax Directive.  While Pillar Two has progressed, work on the OECD’s other key initiative to reallocate a portion of the profits of the largest multinational groups to jurisdictions in which customers are located (known as Pillar One) is at best delayed, but more likely dead.   With progress on Pillar One potentially stalling, a renewed focus may be placed on introducing alternative Digital Service Taxes (DSTs), either unilaterally or on an EU-wide basis. In this regard, the current moratorium on introducing DSTs at an EU level is due to expire on 31 December 2024. EU-wide tax measures EU institutions are continuing to work on a range of other tax measures, including Business in Europe: Framework for Income Taxation (BEFIT), a proposal for a consolidated EU tax base that would be allocated to Member States, and the proposed “Unshell Directive” aimed at tackling the potential misuse of entities without sufficient substance for tax purposes. It remains to be seen which tax initiatives will get priority treatment under the incoming Hungarian Presidency of the Council of the EU, with its stated slogan – “Make Europe Great Again” – focusing on European competitiveness as a key priority.  This is likely to signal shifting sands ahead for EU taxation policies, particularly in the context of Hungarian Prime Minister Victor Orban publicly calling BEPS 2.0 Pillar Two “a catastrophic failure,” serving to dampen competitiveness.  EU Member States have also advised the European Commission to slow the pace of development of direct tax proposals, given the significant volume of measures introduced in recent years. Therefore, a more benign approach to tax policy is expected at an EU level for the foreseeable future. Shifting taxation policy: the Irish impact  In an environment of increasing uncertainty, it is worth bearing in mind Ireland’s unique position as an economic gateway for both Europe and the US.  While US investment in Ireland is well-publicised with more than 950 US companies located here, Ireland now also ranks as the ninth largest foreign direct investor in the US, employing about 100,000 people in the States.  Ireland is also the only English-speaking common law trade and investment gateway to the EU. Ireland’s competitive corporate tax rate and transparent and stable tax policies have been a crucial factor in attracting FDI. This tax policy has consistent cross-party support.  Other key factors include our highly educated and skilled pool of graduates, particularly in science, technology, engineering and mathematics (STEM), our clear and consistent regulatory environment in key areas such as data protection, and Ireland’s attractiveness as a place to live and work. Ireland must, however, guard against complacency. In a constantly evolving environment, it is essential that we focus on ensuring that Ireland remains a competitive and attractive location for FDI. This includes reducing the cost of doing business and facilitating access to talent.  On a global basis, tax competition remains alive and well and a new wave of incentives and subsidies is being introduced by competing jurisdictions.  Our regimes for attracting high-value jobs and businesses – particularly our research and development (R&D) tax credit, reliefs for intellectual property and international assignees – continue to be key pillars in this space.  With ongoing uncertainty within the EU and across the Atlantic, we now have an opportunity to position Ireland as a beacon of stability and a safe harbour jurisdiction for foreign direct investment. This opportunity must be grasped.    Cillein Barry is Tax Partner with KPMG  Susan Buggle is Tax Principal with KPMG

Aug 02, 2024
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A testing time for shifting transatlantic relations

Joe Biden’s withdrawal from the US presidential race marked the departure of the last “Atlanticist” in American politics and Europe is ill-prepared for what lies ahead, writes Judy Dempsey  The decision by Joe Biden not to run against Donald Trump has upturned American politics. There are so many uncertainties about who will be elected as the next president of the United States on 5 November.  Until then, America will be preoccupied with domestic politics. It’s going to demand huge effort by the departments of state and defence to keep the focus on Ukraine, Israel and what is happening in the Middle East, not to mention China.   With the exception of Ukraine, Europe is a bystander, but Biden’s decision could change the transatlantic relationship.  Few European leaders, apart from French President Emmanuel Macron, understand how this fundamental shift in transatlantic dynamics could affect Europe’s defence, security and intelligence gathering.  Biden is the last “Atlanticist.” His career, experience in foreign policy and age made him a believer in the enduring bonds between the United States and Europe. Yes, his administration complained about Europeans not taking their defence or security seriously, but intellectually and emotionally, he is an Atlanticist.  Donald Trump cares little about Europe, the EU, NATO, or the idea of “the West”. Even if Europe increased its share of defence spending to NATO, it would never be enough. For Trump, Europeans are free-riders and unable collectively to think and act defensively. For him, this is Europe’s problem, not America’s. Just as Ukraine is not America’s problem either. If a Democrat wins the US presidential election, they will likely belong to the younger generation whose past has no connection with Europe and which is more attuned to the emerging competition between the United States and China, Russia and other countries resentful of America and what it represents.  This shift also has major implications for Europe’s security, its economy and future developments in Ukraine. Yet, Europe is not prepared for the changes taking place across the Atlantic.  The post-1945 era that was built on multilateral institutions, arms control and a confident West is ending, so what can Europe do to deal with such irreversible change?  EU Commission President Ursula von der Leyen wants Europe to have a Defense Tsar and a collective defense-spending policy. Neither is likely to fly – and not just because neutral countries would not buy into them.  Germany has rejected proposals to finance new defence purchases through joint borrowing, arguing that there is already enough industrial and research funding for defence.  On top of this, because defence is such a national issue, it is hard to see member states ceding any of this sovereignty to Brussels. The real issue here is Europe. The 27 member states can’t agree on which direction the union should take. More political and economic integration would make sense, but several countries want to regain more sovereignty at the expense of making Europe capable of speaking with one voice.   As the United States and the West decline, there is a chance for Europe to step in. Unfortunately, member states and EU leaders lack the courage to do what is needed.  Judy Dempsey is a Non-Resident Senior Fellow at Carnegie Europe and Editor-in-Chief of Strategic Europe *Disclaimer: The views expressed in this column published in the August/September 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.

Aug 02, 2024
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Catching up with this year’s Chartered Star

Chartered Star 2024 winner Evan O’Donnell talks to Susan Rossney, Sustainability Advocacy Manager with Chartered Accountants Ireland, about the future of sustainability in the profession Evan O’Donnell was recently named Chartered Star 2024, an annual designation recognising outstanding work in support of the UN Sustainable Development Goals (SDGs).   Run in partnership with One Young World and Chartered Accountants Worldwide, the aim of the annual Chartered Star competition is to celebrate the difference-makers in the profession who are helping to combat the climate crisis by bringing real, positive change to their workplaces and communities. As Chartered Star 2024, O’Donnell will attend the One Young World Summit, representing Chartered Accountants Ireland and Chartered Accountants Worldwide, in Montreal, Canada, in September. Here, he talks to Susan Rossney about his interest in sustainability and social responsibility. Tell us about your decision to become a Chartered Accountant. What attracted you to the profession? I loved accounting in secondary school – that “yes” moment when you know your inputs are the same as your outputs! My mother was a mathematics teacher, and my father was a banker, so figures are certainly in my DNA.  I studied accounting at University College Cork, but it wasn’t until I attended a careers fair that I understood the versatility of a career in accounting and the many doors Chartered Accountancy can open.  Have you always been interested in sustainability?  I’ve been interested in social responsibility from the time I was 16 when I travelled to India and worked with street and slum children in Calcutta.  Since then, I’ve volunteered for a range of charities, including Trócaire, Mary’s Meals, HOPE, Cork Penny Dinners, Pieta, Irish Guide Dogs for the Blind, the Irish Cancer Society and Breakthrough Cancer Research.  My interest in sustainability started when I led a sustainable gardening project at college. Volunteers completed training certificates and visited local nursing homes to assist the elderly residents in planting flowers and growing vegetables. It showed me what was possible. Since then, I’ve looked for opportunities to do more and was delighted when I got the chance to host a sustainability networking event at the Apple headquarters in Cork when I was Co-Chairperson of Chartered Accountants Student Society Cork. What initially sparked your interest in becoming a Chartered Star? I heard about the Chartered Star competition during the first year of my training contract with PwC.  In 2020, I was fortunate to be part of a fantastic network, the Irish FinBiz Task Force, with 30 finance and business professionals across Ireland. It had been founded by two previous Chartered Stars and, as the years went on, more Chartered Stars emerged from the network. I was on the network’s SDG Awareness Team where Patrycja Jurkowska (2019 winner) provided us with great insight and knowledge on the topic.  I saw how the competition opened many doors for my colleagues, and I felt it was an opportunity to meet amazing ambassadors of sustainability, be part of a knowledge platform and share key learnings with my network.  I am very proud to be part of the Chartered Accountants Ireland Chartered Star family! What do you see as the greatest sustainability-related impacts, risks and opportunities for Ireland?  Ireland faces significant sustainability challenges, but also has many opportunities. Climate change is causing more extreme weather, threatening infrastructure and agriculture. Biodiversity loss, due to urbanisation and intensive farming, is reducing ecosystem services like pollination and water purification. Resource depletion, including water scarcity and soil degradation, is harming agriculture and water supplies. Economic risks include the vulnerability of agriculture to climate variability and potential negative impacts on tourism from environmental degradation.  Dependence on fossil fuels poses a risk as global policies shift towards renewables.  Social risks involve health issues from heatwaves and pollution, as well as displacement due to coastal erosion.  Regulatory risks stem from the high costs of complying with EU environmental regulations. However, through all this, there are significant opportunities.  Renewable energy development, particularly wind and marine energy, can reduce fossil fuel dependence and create jobs.  Sustainable agriculture, including organic farming and agroforestry, can boost biodiversity and resilience.  Green technology and innovation, such as circular economy practices and smart grids, can enhance sustainability and efficiency.  By implementing robust policies through the Climate Action Plan and participating in the EU Green Deal, Ireland can lead in global sustainability efforts, attract investment and build a resilient future. Where do you see opportunities for young professional Chartered Accountants in sustainability? Chartered Accountants have many opportunities to help meet sustainability challenges. We can leverage our skills in financial analysis and reporting to enhance transparency in sustainability metrics, ensuring that companies’ environmental and social impacts are accurately reported and assessed.  We can specialise in sustainability assurance, auditing environmental, social and governance (ESG) reports to provide stakeholders with credible information. We can advise businesses on integrating sustainable practices into their operations and strategies and identify cost-saving measures through energy efficiency, waste reduction and sustainable supply chain management.  We can also influence policy by working with regulatory bodies to shape sustainability standards and frameworks.  Additionally, we can drive innovation by supporting the development of green finance products, such as green bonds and sustainable investment funds.  By combining our financial expertise with a commitment to sustainability, young professional Chartered Accountants can play a crucial role in fostering sustainable economic growth and addressing global environmental challenges. Can you tell us about your sustainability role with PwC? I always had a passion for sustainability, and I wanted to incorporate this into my day-to-day life at PwC.  During my time with PwC Cork, I worked in the Assurance Department specialising in high-technology and pharmaceutical company audits along with pensions and grant engagements.  In 2019, while on placement, I was on the Corporate Social Responsibility Committee, and worked under the food pillar of PwC Ireland’s Sustainability Council, focusing on food waste reduction initiatives primarily in PwC offices around Ireland.  I also became an SDG Champion with PwC by completing ‘The Sustainable Life School’ course. This course inspired me to apply for, and later become, a Climate Ambassador earlier this year, where I have equipped myself with education about climate. What does being named Chartered Star 2024 mean to you?  Being the Chartered Star, an ambassador of Chartered Accountants, means representing my profession and country on a global stage.  Having been selected to attend the One Young World Summit in Montreal this September, I am deeply honoured and grateful to have this opportunity.  The Summit brings together young leaders from around the world to discuss and address critical global issues, including sustainability, innovation and social impact. I am committed to making both my profession and my country proud by actively participating in the Summit, sharing insights and learning from global peers. This unique experience will enable me to bring valuable knowledge and innovative ideas back to my colleagues, fostering growth and development within our community.  I look forward to leveraging this platform to highlight the pivotal role of Chartered Accountants in driving sustainable and ethical business practices, ultimately contributing to a better future for all.

Aug 02, 2024
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“I am proud to be able to champion and sponsor female talent within our profession”

Lindsay Russell, a Partner with EY Northern Ireland, talks to Liz Riley about the evolution of her career, professional inspiration and constant thirst for knowledge, variety and challenge in her working life  My interest in accountancy was first sparked as a teenager. During school holidays, while doing my GCSEs and A Levels, my parents encouraged me to gain valuable work experience, which led to a job with WHR Accountants in Armagh under the tutelage of Ken Harrison, one of the founding partners.  WHR had a fantastic team of about 15 who took me under their wing and got me started with the basics of accounting.  After writing out many cheque journals, cash books and extended trial balances manually, I learned that “balancing” numbers gave me a great sense of satisfaction. Something clicked and I realised that accountancy was a career I wanted to pursue.  This summer job continued for four years and greatly influenced my decision to study accountancy at university in Scotland. After graduating, I was fortunate to secure a position with EY Northern Ireland in 2004 and completed my professional exams in 2006. It has been a real privilege to become a Chartered Accountant, specifically an auditor in practice.  As auditors, we are afforded an insight into so many successful organisations across sectors and industries and are in a unique position to support and work with talented individuals through complex and interesting transactions and business initiatives.   The trust we provide as accountants, auditors and business advisors is something that is often underplayed, but is vital to the capital markets and the success of organisations, and I still consider myself lucky to say I play a part in that.  Almost 20 years later in this profession, and I have not looked back. Championing women In those 20 years, I have seen significant changes in the gender profile of our profession, particularly in the last decade.  I am pleased to have been part of this change personally, but what I am really proud of is being able to champion and sponsor female talent within our profession to ensure that others can share in the experiences and opportunities I was afforded early in my career.  As a female partner and leader, I am acutely aware of the responsibility I have in championing other women in our profession. In the long term, my goal is that we create a profession, industry and world in which such an active focus on gender diversity is no longer essential because we have created an environment where opportunities are afforded equally to all people and are fulfilled based on the right person for the role, regardless of gender or any other characteristics.  However, I know we still have some way to travel to make this a reality. I fully appreciate and understand that we must create the right environment for all our talented people to flourish.  For example, organisations must take parental responsibilities and flexible working into consideration. They must do all they can to provide a workplace in which working mothers know they can have a sustainable and rewarding career. I would also highlight that, while gender diversity is important to me as a female leader, I believe that diversity of thought, background and experience is the basis for excellence in any team.  It is not only the experiences of diverse groups, but also their willingness to be open to the views and experiences of others, that creates the best and highest-performing teams, delivering the most for clients and helping to build a better working environment for all.  Embracing education in your career I believe professional development is achieved via a combination of formal learning and on-the-job development.  Formal learning is very important, particularly in our changing regulatory environment, and I find it useful to check my own Continuing Professional Development (CPD) monthly and quarterly to ensure I am on track for compliance.  However, I also find on-the-job learning critical in putting all the theory we learn into practice, and developing the wider skill set that is so valuable and necessary for the accountants of today and tomorrow.  We are living in a world in which technology and the way we work is continuing to evolve, particularly with the advent of generative artificial intelligence. My advice is to embrace change and learn as much as you can from those around you.  Lastly, I would say it’s important to remember that the accountancy skill set remains as valuable today as it ever was and will remain a key part of the workplaces and businesses of tomorrow.  The fluidity of work-life balance There is no magic answer to work-life balance. For me, work-life balance is something that is fluid and needs to be reassessed and flexed regularly and continuously.  I learned an important lesson early in my career: your work-life balance will have ebbs and flows depending on what is going on in both your work and home life.  It is important to be flexible at times and, at others, to know and stand by your “non-negotiables.”  I recognise that at certain times I will have busier and more demanding times in the office, and that it is important to stay focused for the benefit of my teams and my clients.  Equally as important is the need to have planned downtime. I am protective of this downtime when it arrives so I can make sure my family and friends get a fully committed version of me. Everyone will have different styles and different ways of working. My advice is to ensure you understand your own style. Know your peak times, take time out and ensure you communicate clearly with those around you, both personally and professionally, about your work-life balance needs.  Stepping outside your comfort zone When I look back over my career, I can see that my biggest development has come about when I have embraced new opportunities (or challenges) and have been pushed out of my comfort zone.  It is very easy to stay comfortable, but trying new things, seeking out new learning opportunities and working with different people and teams is what accelerates our development, and ultimately, our career prospects.  My career advice is to say “yes” and give it your all. You will always be amazed at where it can take you! It is sometimes the tasks or roles that you think you didn’t want – or didn’t think you would be good at – that are the ones that help you progress and move on to your next role.  I also like to remind people that variety and new opportunities can come from staying in the same job or profession and do not always require drastic change.  I have been with EY for almost 20 years now, which feels increasingly rare in a world where new opportunities are everywhere. I am proof that you can have a varied career with many different roles and opportunities all with the same employer and within the same profession. My final piece of advice is to be honest and true to yourself. Someone once told me to hold a mirror up and be honest with myself about my strengths and weaknesses and what I ultimately want from my career.  I realised early on that I get easily bored and need variety in my work. I know that I am competitive, hard-working and need to feel I am adding value. I recognise that this combination of attributes means I often work too hard.  However, it also means that I am continuously rewarded with challenging opportunities for development, which keeps me motivated and stimulated.  Everyone in our profession must figure out what works for them and remember that their career path, regardless of direction, should be unique to them. Your career doesn’t have to replicate what anyone else before you has done, or what those around you are doing today.

Aug 02, 2024
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Ireland’s multinational mirage

Cormac Lucey explores the misunderstood roots of Ireland’s FDI success and questionable management of surging tax revenues against the backdrop of rising state spending Two important aspects of Ireland’s multinational success story are generally misunderstood.  The first concerns the low-tax strategy that has been the key reason many multinationals have located in Ireland.  As Professor Frank Barry of Trinity College Dublin revealed in his essay “Foreign Investment and the Politics of Export Profits Tax Relief 1956”, this low-tax strategy resulted from then Taoiseach John A. Costello overruling the Department of Finance and forcing an idea promoted by the Department of Industry and Commerce into the Budget.  Underlining the precariousness and capriciousness of life, this strategy didn’t begin to really function until the 1990s.  The second aspect of our multinational story, not generally understood, is how utterly dependent our economy is on American business.  While it is widely known that more than 85 percent of the state’s corporation tax revenues come from multinationals, their contribution to other tax headings is not so well-known.  When you consider multinationals’ 55 percent share of Ireland’s income taxes and 54 percent share of VAT – and apply this lower 54 percent rate to other tax headings – you will see that the multinational sector contributes over 60 percent of the State’s total tax revenues.  How well is the state managing the resulting surge in tax revenues? Well, it’s all being spent, and then some.  According to the Irish Fiscal Advisory Council’s Fiscal Assessment Report published in June 2024, “Excluding excess corporation tax receipts, a deficit of €2.7 billion (0.9% GNI) is forecast for this year. This comes despite a strong economy, with record high employment and historically low unemployment. The question arises: if underlying surpluses are not being run now that the economy is strong, when would they be run?” The quality of much of this spending is highly questionable. The epicentre of rampant State spending growth is occurring in healthcare. A recent Department of Health report analysed hospital activity and expenditure between 2016 and 2022.  It reported a 3.8 percent increase in overall activity, compared with an inflation-adjusted rise in expenditure of 45 percent (nominal rise of 68 percent) and a 29 percent increase in staffing numbers. The Department of Health badly needs budgetary incontinence pads. Or maybe members of the Irish public service simply need to learn how to manage.  Consequence-free management is the key obstacle to effective budgetary control. When staff are treated the same regardless of whether they perform extraordinarily well or extraordinarily badly, should we be surprised when mediocrity results?  The Republic’s governing political class is happy to bask in the reflected glory of multinational-induced prosperity. However, according to the 2023 annual report from the IDA, Ireland’s inward investment agency, the global foreign direct investment landscape is becoming “increasingly challenging and complex.”  And, if he becomes the next US President, Donald Trump plans to significantly undermine Ireland’s attractiveness to US multinationals by putting a 10 percent tariff on US imports. Even though it accounts for 69 percent of employment, Ireland’s domestic sector of small and medium-sized enterprises (SMEs) is the orphan of this story. SMEs need targeted tax incentives along the lines of those outlined by Deloitte’s Kim Doyle in the Accountancy Ireland newsletter Briefly. The SME sector also needs a systematic programme to reduce the regulatory burden imposed upon it. Under the guidance of Michael Diviney, Chartered Accountants Ireland recently published Reducing Red Tape, a detailed position paper showing just how that could be done.  The instinctive mindset of government – that ministers are in charge of a great national trainset they can play with at will – flies in the face of the reality that policy decisions involve tricky trade-offs not amenable to facile headlines.  Cormac Lucey is an economic commentator and lecturer at Chartered Accountants Ireland *Disclaimer: The views expressed in this column published in the August/September 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.  

Aug 02, 2024
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Irish companies lead on resilience but fall behind on ambition

Ireland’s medium-sized businesses are more optimistic than their global peers but a more ambitious approach is needed to deliver their expectations, writes Patrick Dillon Ireland’s medium-sized businesses are uniquely optimistic in their outlook ahead of the upcoming US presidential elections and in the wake of the recent elections in France and the UK.  Just 17 percent see geopolitical disruptions as a barrier to growth, compared to 42 percent in the Eurozone and 49 percent globally. This confidence follows through in the main findings among the Irish respondents to our latest Grant Thornton International Business Report (IBR), which captures insights into the outlook of 10,000 mid-market firms across the globe.  Our Irish IBR respondents are optimistic about the outlook for the Irish economy in the 12 months ahead. Close to three-quarters (73%) of the Irish medium-sized companies we surveyed predict a positive future. The findings are reflective of the resilience of Irish companies that have had to navigate a polycrisis in a short period of time, trading through the pandemic, cost-of-living challenges and disruption to global supply chains. This is not just a case of looking at the world through rose-tinted glasses, however. Irish medium-sized companies are anticipating a healthy bottom line over the next year.  Close to three-fifths of the Irish companies we surveyed predict a rise in revenues (57%), profits (59%), and headcount (52%) in the 12 months ahead. While it is fantastic to see such a strong sense of confidence among this cornerstone of the Irish economy, if the last few years have taught us anything, it is that none of us knows what’s around the corner.  To this end, the companies that will continue to succeed in the future will be those that remain hyper-focused on staying one step ahead of the competition – and this is where our International Business Report makes for slightly more concerning reading.  There is a significant difference in attitudes to innovation among Irish firms compared to their international peers. Just under a quarter (24%) of Irish businesses are preparing to increase investment in research and development over the next twelve months compared to three-fifths (60%) of their global peers.  We found a similar gap in levels of planned technology investment, with just under half (48%) of Ireland’s medium-sized firms budgeting for an increase, compared to 67 percent globally. Ireland is a small pool compared to the ocean that is the global marketplace. If Irish firms are to realise their ambition and potential, then they need to look to new markets.  Investing in innovation is key to unlocking these opportunities, whether it is leveraging digital channels to reach customers in every corner of the world or developing tailored products or services for a specific customer segment internationally.  A confident economic outlook is great, but it doesn’t put money in your pocket. To paraphrase Benjamin Franklin, an investment in innovation pays the best interest.   Patrick Dillon is Head of Deal Advisory with Grant Thornton Ireland *Disclaimer: The views expressed in this column published in the August/September 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.

Aug 02, 2024
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