Maria McHugh shares how she set boundaries, shed the notion that she “can do it all”, and that achieving a successful career while prioritising family is possible with the right mindset and support Growing up, I had a keen interest in business and enterprise. Because of this, I completed a BSc in Finance at University College Cork, and, after considering career options, I felt that becoming a Chartered Accountant was the best fit for me and a good start to my business career.  This, however, wasn’t without its challenges. Coming back after a break Like many women, I had to make a decision about having children and consider how my career would be impacted.  Between 2014 and 2021, my husband and I had three children, and during that time, we decided that I would be a full-time stay-at-home mum because of a lack of childcare availability.  This unplanned, seven-year break in my career had a much bigger impact on me mentally than I ever would have thought. I felt that I had lost my professional self. I didn’t realise how important that identity was to me.  I watched as my peers’ careers progressed and felt left behind.  After seven years at home, I started to consider what returning to work would look like; frankly, it was terrifying.  I suffered from post-natal depression after my second baby, and it left me with low confidence and self-belief. Thankfully, earlier in my career, I met Karin Lanigan in Member Services at Chartered Accountants Ireland, and I always remembered her openness and honesty.  Personal priorities While I wanted my career back on track, it was also important that I continue to be available for my children. I lost my mum at 13 years old, so it has always been especially important to me to be at home for my children. I had to consider what type of professional role I wanted and how to balance my work and home life.  I felt passionate about helping start-ups, sole traders and being involved in local enterprises. Having completed the Chartered Accountants Ireland Diploma in Tax in 2018, opening my accountancy and tax practice seemed the best fit for me and the family.  I was excited by the prospect, but I was also incredibly overwhelmed, daunted, and the self-doubt and fear were crippling.  I had three small children, was moving from Dublin back to my native Dungarvan, and was now opening my own practice. It seemed insurmountable. Karin guided me in breaking the tasks into manageable steps and helped me see that this was achievable. Professional Standards and Practice Consulting were also very supportive, and I was delighted that so much support was offered by Chartered Accountants Ireland.  While on my journey back into the workplace, I was really heartened by all the supports that were available through the Institute, and I hope these only grow and extend to more women.  In some ways, I think women put themselves under too much pressure with the social narrative that “we can do it all”. I think we are our own worst critics, and we can each have an expectation for ourselves that we should be doing everything, and when we don’t, we think we are failing.   This perception is false and needs to change. It is OK to choose to stay at home with young children, and that  decision should not feel detrimental to our career or be something we need to explain or justify.  For me, it is all about balance, and this is personal to every family. We are all just doing our best to have a career in whatever way possible to suit our family life.  Setting boundaries Since I started my business, I have always had the mindset that I am going at my own pace.  The aim of having my own practice was that I could balance both my career and my family life but I recognised early on that working in my practice full time was just not going to work for my family. As a result, I learned how to say no. I created boundaries around my work schedule, especially during school holidays, and I don’t apologise  for it.  I sometimes think that women feel they need to be singularly career-orientated and driven to succeed to be taken seriously or that admitting the kids come first is a weakness. I don’t agree at all.  At the start of the summer, I announced on social media that I was taking a step back from work for the school summer holidays. The support from peers and clients was fantastic. People told me that my being upfront about the summer break was refreshing and inspired other parents to do the same.  It’s like anything – if you don’t see it being done, you don’t realise you can do it. This doesn’t mean that I am not career-driven or don’t have aspirations for my own business. But this is a marathon, not a sprint, and I will do it in my own time. Building your tribe Networking is vital to sole practitioners for promoting themselves and, more importantly, building solid support. When I started my practice, I had no colleagues to bounce ideas off or to ask questions. I feel strongly that this kind of support is important for my personal development, so I reached out to a fellow mum in practice from my PwC days and asked how she would feel about coming together to set up a small group.  We now have a core group of four accountants (also mums) in practice. We support each other, answer technical questions and get opinions on issues we come across. This group has been vital to growing my confidence and has shown me that there are others also dealing with the same problems. In my experience, the most important qualities for women in business are self-belief and self-confidence.  I am a great champion of women and our abilities but I have struggled with self-confidence in the last few years. When left unchecked, this self-doubt can be very limiting.  I would love to see the topic of low self-confidence as ways to manage it spoken about more. My self-confidence has grown over time, but it is something I work on and still struggle with to this day.  The more it is discussed, the more women will realise, like me, that they are not alone in this mental battle.  I am also very lucky to be a member of the 2023 Chamber of the Year, Dungarvan and West Waterford Chamber. Through this membership I have found another group of like-minded women on their own business journey. We support each other, attend events together and help each other when we can.  Finding your tribe in business is so important and having that sense of community and support from different groups has had a positive impact on my own business and personal development. Maria McHugh is Founder Owner of McHugh Accounting and Consultancy

Recent European heatwaves have highlighted the impact climate change has on society and the economy. Susan Rossney explores the challenges facing Irish businesses when taking steps to tackle the crisis Recent severe heatwaves in continental Europe have shown how the effects of global warming are coming ever closer to home. Forced migration, drought, forest fires and biodiversity loss are some of the many ways climate change will impact Irish society.  Its impact on the economy will be acute, affecting everything from the health and wellness of employees to the cost of raw materials, scarcity of resources and supply chain disruption.  Ireland and climate change Climate change poses risks to humans, nature and Ireland as a nation.  Ireland is legally bound to meet ambitious national and international climate targets. According to the Climate Change Advisory Council (CCAC), an independent advisory body, Ireland will not meet the climate targets it has set for itself in the first and second carbon budget periods. The Environmental Protection Agency’s (EPA) provisional estimates on 2022 greenhouse gas emissions show that Ireland already used 47 percent of the carbon budget for 2021–2025 in the past two years.  An annual reduction of 12.4 percent is now required for each of the remaining years if Ireland is to stay within budget.  However, as emissions fell only 1.9 percent in 2022, this has been described as “extremely challenging” by the EPA.  It is clear that action is required across all sectors of the economy and society, including: Mitigation: reducing activity that causes climate change, like burning fossil fuels (coal, oil and gas); and Adaptation: making changes to deal with the effects of climate change, from operational changes to cope with rising summer temperatures or winter flooding to factoring in the risk of developing stranded assets and increased carbon tax liabilities. Ireland’s perception of climate change According to Climate Change in the Irish Mind, EPA research conducted in 2021, most Irish citizens share a desire for action on the climate crisis.  However, other EPA research has found that our emissions of greenhouse gases (GHGs) continue to rise.  Environmental Indicators Ireland 2022, published by the Central Statistics Office (CSO), shows that Ireland’s 2022 emissions were 11 percent higher than in 1990.  Enterprises contributed an estimated 12.7 percent to Ireland’s overall emissions in 2018, according to the Climate Action Plan 2023. Although this is less than the contributions of other sectors, there remains a need for Ireland’s enterprises to take action to reduce their emissions.  However, a 2022 national survey of 380 SMEs and larger enterprises across industry and service sectors by Microsoft and University College Cork found that Irish businesses are underprepared to make the necessary changes to transition to a net zero future. According to the study, 86 percent have no commitments or targets to decarbonise.  Barriers to action  In the face of evidence of climate change – and Ireland’s willingness to take action – what is preventing Irish businesses from responding to the crisis?  As an issue, climate change is complicated, abstract and overwhelming. Multiple interdependent factors cause it, and it is nearly impossible to avoid contributing to it in our daily lives. Buying products, driving a car or taking a flight for a foreign family holiday (full disclosure: I’m just back from one) all add to the overall problem. The solutions to the climate crisis are also interdependent and complicated. The positive changes we can make as individuals can feel insignificant, especially compared with large countries’ continued pollution.  The European Commission’s Annual Report on European SMEs 2021/22 – SMEs and environmental sustainability identified access to finance, limited expertise and skills, and regulatory and administrative barriers among the challenges facing SMEs in particular. Businesses that want to take climate action often have limited time, cash flow, resources and support (both financial and non-financial) to take action.  Knowledge is also a barrier. Many professionals qualified at a time when climate change was not identified as a business risk. They now find themselves having to skill up mid-career in an area that is famous for changing frequently.  Finally, many citizens and businesses are still struggling with crises related to COVID-19, inflationary pressure, supply chain disruption and high energy costs. Staying afloat is a crisis in itself.  Firms, particularly SMEs, focusing on the practicalities of running a business, paying staff and grappling with cash flow and costs are more likely to see climate action as the responsibility of governments or, at the very least, large corporations rather than them.  On top of that, climate discussions are often politicised. They are regularly reduced to a ‘them vs us’ polarised debate in mainstream media rather than discussing how everyone can work together to deliver solutions.  Threats and opportunities  For businesses, climate change presents both threats and opportunities.  Threats The threats have been categorised as physical risks (both ‘acute’ and ‘chronic’) and transitional risks.  Opportunities  Taking action on the climate crisis enables businesses to restore lost ecosystems, improve air quality, community health and well-being, and avail of the opportunity to make a lasting positive impact. There are additional advantages to consider: Reduced costs – the Sustainable Energy Authority of Ireland (SEAI) estimates that the average SME can save up to 30 percent on its energy bill by becoming more energy efficient (improved heating and lighting, lower maintenance of electric vehicles, efficient water and materials management and using recycled materials with a lower climate impact all contribute to lower costs);  Reduced reliance on exposure to fluctuating oil and gas prices from switching from fossil fuels (coal, oil and gas) to renewable energy sources; Reduced exposure to carbon tax, which is increasing €7.50 per tonne to €100 per tonne in 2030; Access to grants, allowances and tax reliefs; Improved access to capital and finance from investors and lending looking to ‘green’ their portfolios; and A competitive edge in attracting talent, clients and customers. Steps to climate action Businesses looking to take action on the climate crisis can take several steps: Build your knowledge. There are many resources out there, several provided by the Government and Chartered Accountants Ireland. Begin measuring emissions with tools like the Government’s Climate Toolkit for Business.  Consider an internal energy audit to find ways of reducing your carbon footprint. SEAI maintains a list of registered energy auditors and offers SMEs a €2,000 voucher towards the audit cost. Consider setting up an internal environment and climate impact team to devise a decarbonisation plan.  See also the Sustainability Glossary in the Sustainability Centre of the Chartered Accountants Ireland website.  For more, see www.charteredaccountants.ie/sustainability-centre/sustainability-home Susan Rossney is Sustainability Officer at Chartered Accountants Ireland Reporting and climate change The Corporate Sustainability Reporting Directive (CSRD) is an EU Directive requiring certain companies to disclose information on sustainability-related impacts. It proposes significant changes to how entities report on their business’s environmental, social and governance (ESG) impacts. These changes will affect many enterprises – directly and indirectly.  Businesses ‘in scope’ of the CSRD are required to consider their supply chain when reporting on sustainability matters. This will mean that companies not in scope that form part of a supply chain may be asked to provide climate-related information by companies in scope. Small companies should prepare for this and have a mechanism to measure and disclose their carbon emissions. For more on the CSRD, see the Chartered Accountants Ireland Technical Hub. Dee Moran is Professional Accountancy Lead at Chartered Accountants Ireland  

Michael Diviney and Níall Fitzgerald explore the ethical challenges arising from artificial intelligence (AI), particularly ‘narrow’ AI, and highlight the importance of ethics and professional competence in its deployment Earlier this year, artificial intelligence (AI) industry leaders, leading researchers and influencers signed a succinct statement and warning: “Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war.” Was this a publicity stunt? Well, probably not, as the generative AI ChatGPT was already the fastest-adopted application in history.  Was this an over-the-top, alarmist statement by a group possibly trying to steal a march on self-regulation of a rapidly emerging technology and growing industry?  Again, this is unlikely if one considers the warnings of pioneer thinkers like Nick Bostrom, Max Tegmark, Stephen Hawking and Astronomer Royal Martin Rees. They concur that there is an existential threat to humankind if human-level or ‘general’ AI is developed and the ‘singularity’ is reached when AI surpasses human intelligence.  Autonomous weapons and targeting are a clear risk, but more broadly, unless we can ensure that the goals of a future superintelligence are aligned and remain aligned with our goals, we may be considered superfluous and dispensable by that superintelligence.  As well as the extinction threat, general AI presents other potential ethical challenges.  For example, if AI attains subjective consciousness and is capable of suffering, does it then acquire rights? Do we have the right to interfere with these, including the right to attempt to switch it off and end its digital life?  Will AI become a legal entity and have property rights? After all, much of our economy is owned by companies, another form of artificial ‘person’. Ethical challenges from ‘narrow’ AI Until general AI is here, however – and there is informed scepticism about its possibility – the AI tools currently in use are weak or ‘narrow’ AI. They are designed to perform a specific task or a group of related tasks and rely on algorithms to process data on which they have been trained.  Narrow AI presents various ethical challenges:  Unfairness arising from bias and opacity (e.g. AI used in the initial screening of job candidates include a gender bias based on historical data – in the past more men were hired); The right to privacy (AI trained with data without the consent of the data subjects); Threats to physical safety (e.g. self-driving vehicles); Intellectual property and moral rights, plagiarism and passing-off issues in the use of generative AI like ChatGPT and Bard; and Threats to human dignity from the hollowing out of work and loss of purpose. Regulation vs. ethics Such issues arising from the use of AI, particularly related to personal data, mean that regulation is inevitable.  We can see this, for example, with the EU’s landmark AI Act, due to apply by the end of 2025, which aims to regulate AI’s potential to cause harm and to hold companies accountable for how their systems are used. However, as Professor Pat Barker explained at a recent Consultative Committee of Accountancy Bodies (CCAB) webinar, until such laws are in place, and in the absence of clear rules, ethics are required for deciding on the right way to use AI.  Even when the regulation is in place, there are likely to be cases and dilemmas that it has not anticipated or about which it is unclear. Legal compliance should not be assumed to have all the ethical issues covered, and as AI is evolving so quickly, new ethical issues and choices will inevitably emerge.  Ethics involves the application of a decision-making framework to a dilemma or choice about the right thing to do. While such a framework or philosophy can reflect one’s values, it must also be objective, considered, universalisable and not just based on an instinctual response or what may be expedient. Established ethics frameworks include: the consequentialist or utilitarian approach – in the case of AI, does it maximise benefits for the greatest number of people?; and the deontological approach, which is based on first principles, such as the inalienable rights of the individual (an underlying philosophy of the EU’s AI Act). (The Institute’s Ethics Quick Reference Guide, found on the charteredaccountants.ie website, outlines five steps to prepare for ethical dilemmas and decision-making.)  A practical approach While such philosophical approaches are effective for questions like “Should we do this?” and “Is it good for society”, as Reid Blackman argues in Harvard Business Review, businesses and professionals may need a more practical approach, asking: “Given that we are going to [use AI], how can we do it without making ourselves vulnerable to ethical risks?”  Clear protocols, policies, due diligence and an emphasis on ethical risk management and mitigation are required, for example responsible AI clauses in agreements with suppliers. In this respect, accountants have an arguably competitive advantage in being members of a profession; they can access and apply an existing ethical framework, which is evolving and adapting as the technology, its opportunities and challenges change.  The Code of Ethics The International Ethics Standards Board for Accountants (IESBA) recently revised the Code of Ethics for Professional Accountants (Code) to reflect the impact of technology, including AI, on the profession. The Chartered Accountants Ireland Code of Ethics will ultimately reflect these revisions.  IESBA has identified the two types of AI likely to have the most impact on the ethical behaviour of accountants:  Assisted intelligence or robotic process automation (RPA) in which machines carry out tasks previously done by humans, who continue to make decisions; and  Augmented intelligence, which involves collaboration between human and machine in decision-making. The revisions also include guidance on how accountants might address the risks presented by AI to ethical behaviour and decision-making in performing their role and responsibilities.  Professional competence and due care The Code requires an accountant to ensure they have an appropriate level of understanding relevant to their role and responsibilities and the work they undertake. The revisions acknowledge that the accountant’s role is evolving and that many of the activities they undertake can be impacted by AI.  The degree of competency required in relation to AI will be commensurate with the extent of an accountant’s use of and/or reliance on it. While programming AI may be beyond the competency of many accountants, they have the skill set to:  identify and articulate the problem the AI is being used to solve;  understand the type, source and integrity of the data required; and assess the utility and reasonableness of the output.  This makes accountants well placed to advise on aspects of the use of AI. The Code provides some examples of risks and considerations to be managed by professional accountants using AI, including: The data available might not be sufficient for the effective use of the AI tool. The accountant needs to consider the appropriateness of the source data (e.g. relevance, completeness and integrity) and other inputs, such as the decisions and assumptions being used as inputs by the AI. This includes identifying any underlying bias so that it can be addressed in final decision-making. The AI might not be appropriate for the purpose for which the organisation intends to use it. Is it the right tool for the job and designed for that particular purpose? Are users of the AI tool authorised and trained in its correct use within the organisation’s control framework? (One chief technology officer has suggested not only considering the capabilities of the AI tool but also its limitations to be better aware of the risks of something going wrong or where its use may not be appropriate.) The accountant may not have the ability, or have access to an expert with that ability, to understand and explain the AI and its appropriate use.  If the AI has been appropriately tested and evaluated for the purpose intended. The controls relating to the source data and the AI’s design, implementation and use, including user access. So, how does the accountant apply their skills and expertise in this context?  It is expected that accountants will use many of the established skills for which the profession is known to assess the input and interpret the output of an AI tool, including interpersonal, communication and organisational skills, but also technical knowledge relevant to the activity they are performing, whether it is an accounting, tax, auditing, compliance, strategic or operational business decision that is being made.  Data and confidentiality According to the Code, when an accountant receives or acquires confidential information, their duty of confidentiality begins. AI requires data, usually lots of it, with which it is trained. It also requires decisions by individuals in relation to how the AI should work (programming), when it should be used, how its use should be controlled, etc.  The use of confidential information with AI presents several confidentiality challenges for accountants. The Code includes several considerations for accountants in this regard, including: Obtaining authorisation from the source (e.g. clients or customers) for the use of confidential information, whether anonymised or otherwise, for purposes other than those for which it was provided. This includes whether the information can be used for training AI tools.  Considering controls to safeguard confidentiality, including anonymising data, encryption and access controls, and security policies to protect against data leaks.  Ensuring controls are in place for the coding and updating of the AI used in the organisation. Outdated code, bugs and irregular updates to the software can pose a security risk. Reviewing the security certification of the AI tool and ensuring it is up to date can offer some comfort.  Many data breaches result from human error, e.g. inputting confidential information into an open-access web-based application is a confidentiality breach if that information is saved, stored and later used by that application. Staff need to be trained in the correct use and purpose of AI applications and the safeguarding of confidential information. Dealing with complexity The Code acknowledges that technology, including AI, can help manage complexity.  AI tools can be particularly useful for performing complex analysis or financial modelling to inform decision-making or alerting the accountant to any developments or changes that require a re-assessment of a situation. In doing so, vast amounts of data are collected and used by AI, and the ability to check and verify the integrity of the data introduces another level of complexity.  The Code makes frequent reference to “relevancy” in relation to the analysis of information, scenarios, variables, relationships, etc., and highlights the importance of ensuring that data is relevant to the problem or issue being addressed. IESBA was mindful, when revising the Code, that there are various conceivable ways AI tools can be designed and developed to use and interpret data.  For example, objectivity can be challenged when faced with the complexity of divergent views supported by data, making it difficult to come to a decision. AI can present additional complexity for accountants, but the considerations set out in the Code are useful reminders of the essential skills necessary to manage complexity. Changing how we work As well as its hugely beneficial applications in, for example, healthcare and science, AI is proving to be transformative as a source of business value.  With a range of significant new tools launched daily, from personal effectiveness to analysis and process optimisation, AI is changing how we work. These are powerful tools, but with power comes responsibility. For the professional accountant, certain skills will be brought to the fore, including adaptability, change and risk management, and leadership amidst rapidly evolving work practices and business models. Accountants are well placed to provide these skills and support the responsible and ethical use of AI.  Rather than fearing being replaced by AI, accountants can prepare to meet expectations to provide added value and be at the helm of using AI tools for finance, management, strategic decision-making and other opportunities. Michael Diviney is Executive Head of Thought Leadership at Chartered Accountants Ireland Níall Fitzgerald is Head of Ethics and Governance at Chartered Accountants Ireland

Governments may opt for more quantitative easing to prevent global inflation from turning into a recession, writes Cormac Lucey Speaking about the Republic’s budgetary position in 1979, Charles Haughey famously declared that “as a community, we are living beyond our means”. But his remarks might just as well be applied today to Western world democracies.  An article in a June issue of The Economist proclaimed that “Fiscal policy in the rich world is mind-bogglingly reckless”. Global fiscal policy is unsuited to today’s economic circumstances. “High inflation and low unemployment mean the world needs tight policy, not loose,” it said.  Last month, the Department of Finance’s chief economist indicated that between 2019–2070, annual age-related expenditure is projected to increase from 21.4 to 31.5 percent of Irish national output. With a projected 2023 modified gross national income of €284 billion this year, that rise would cost €28.4 billion today. That’s over €10,000 annually for every person working, more than the budgetary damage done by the financial crash 15 years ago and roughly equal to one-third of total budgeted tax revenues this year.  The situation in the UK isn’t much better.  A report on “Fiscal Risks and Sustainability” from the Office for Budget Responsibility in July, projected an increase in primary spending between 2022–23 and 2072–73 of 8.6 percent of UK GDP. That’s equivalent to roughly £2.2 trillion in terms of today’s GDP, or around £6,000 annually per person working. Faced with inexorable spending pressures on one hand and political resistance to tax rises on the other, there is a structural risk that our political leaders will opt for greater borrowing as the way out.  The USA may be the forerunner in this regard.  It began running enormous budget deficits under President Trump even though the US economy was operating at near full capacity. It has continued this practice under President Biden. There has been no discernible political cost to be paid by either administration. And, as the issuer of the world’s largest reserve currency, it has seen precious little economic cost so far.  Fiscal dominance is shorthand for the fiscal needs of the central government dominating monetary policy set by central banks and occurs when central banks create fresh money (via quantitative easing) to prop up the prices of government debt securities and , thereby, contain the consequent interest rates.  Between 2009–2021, the share of their government’s issued debt held by central banks grew by about 15 percent in the USA and around 30 percent in the UK and the Eurozone. In essence, central banks were able to do something inflationary (create a lot of fresh money) because external circumstances were already very deflationary.  A justification can always be found: economies must be sustained through the financial crisis; we must not let a pandemic morph into a depression. The political cost was negligible. We can, therefore, expect more of the same in the future when fiscal push comes to monetary shove.  The constraint on fiscal dominance will not be rules or laws governing what is right or wrong but expedience: what can policymakers get away with?  The practical constraints will be financial market reactions and any inflationary effects of monetary loosening. But there may not be any noticeable market reaction: the Bank of Japan owns an estimated 45 percent of all Japanese government debt without any allergic market reaction.  The key question is whether inflationary pressures are stoked by aggressive fiscal dominance. The return of inflation explains why monetary restriction has replaced monetary exuberance.  But once inflation is out of the way, expect fiscal dominance (and more money-printing) to resume. That would be bullish for real assets (such as property and commodities) and bearish for paper assets.   Cormac Lucey is an economic commentator and lecturer at Chartered Accountants Ireland

Accountancy Ireland sits down with Carol Phelan, CFO of Dalata Hotel Group. From her journey at one of the Big Four to private equity, Phelan shares her insights into the business side of the hospitality industry and Dalata’s people-centric approach to success A lifelong interest in business took Carol Phelan on a career path that has seen her work in a Big Four firm, an Irish private equity house and, ultimately, become CFO of Dalata Hotel Group – Ireland’s largest hotel operator. Speaking to Accountancy Ireland  in Dalata’s new state-of-the-art headquarters in Sandyford in south Dublin, Phelan explains how she grew up on a farm in County Laois and was always interested in business.   “At school, I gravitated towards business success stories, particularly Irish ones. I was always strong with numbers – they made sense to me, but it wasn’t just about balancing the books. It’s what people are doing with the business. I did a broad Business degree at the University of Limerick. I specialised in accounting and finance and did a Master’s in Accounting. I knew it was a qualification that would stand to me whatever I did.” Her undergraduate degree included an internship component, and in a forerunner of her future career, it took her to work in a hotel in France for nine months. “I got to work with numbers in a real business and found I could bring some skill to that.” After college, she joined KPMG and qualified as a Chartered Accountant.  “I wanted to develop my skills and build my professional and business network,” she says. “I worked in the financial services and transaction services divisions. That allowed me to work with companies doing deals and making strategic acquisitions. I was able to go into businesses of different sizes in various sectors and work with leading advisors. I enjoyed my time with KPMG.” She also learned something about herself. “I realised I didn’t want to be an advisor. I wanted to be the one making the decisions and living with them.” Moving on from the Big Four Phelan joined private equity house Ion Equity in 2007, just before the global financial crash hit. It could hardly have been a more challenging time for that sector.  “It took me out of my comfort zone,” she says with no little understatement. “It was about going in, putting deals together, and putting money behind them. It was also about helping finance teams in investee companies deal with the challenges presented by the crash.” Given her qualifications and experience, she was often asked why she didn’t go to one of the major international private equity firms. “I wanted to be where the leadership was,” she explains. “I wanted to be close to the decisions. No matter how small a role I had, I wanted to be part of the decision making.” Her next move saw her join Dalata in 2014.  “I wanted to get into the finance function of a large Irish company,” Phelan explains. “The Dalata opportunity came up, and it ticked all the boxes. The people leading the company shared my values – ambition, a desire to grow and challenge oneself, and always wanting to do better. Dalata has that in spades.  “The company has always been led by people very concerned about building a business that works for everyone and not just about generating higher numbers and profits. They want a business that creates opportunities for everybody. I knew the people in Dalata before I joined, so I knew it was all true.” The company was on the cusp of significant change when she joined. “It was just after the IPO. All the structures had to be built to accommodate it. I was able to use my skills for that. It was great to have that challenge.” A people-centric business The culture of the business is very important to Phelan.  “Hospitality is a very people-centric business. It’s about more than numbers and the bottom line. That sits well with me and my background. Dalata has always said it wants people with ambition: ambition to grow and develop themselves but to bring others with them, as well.” Dalata places great store by training and development, with over 113,00 training courses completed by its staff in 2022.  “The company is growing and ambitious. I can’t tell you the opportunities that will exist in three years, but we will put everything behind people who want to grow and develop.  “People who joined the company in 2015 are now working in roles that didn’t exist back then. We give people support to get the experience and skills and take on those roles. We opened seven hotels in 2022, and the majority of the leadership teams in them is made up of people developed in Dalata. That creates opportunities for those following behind them.”  Career mobility is also important. “You can join the finance team here, but who knows where you will end up. We have operations people who ended up in finance and operations people who started in finance. You can’t pigeonhole people. As a major plc, we also have all the finance strands here so someone can build a full suite of experience.” There is a need to look beyond functional skills, she adds. “You can develop skills for a role in finance, but it has never been just about the numbers. I can tell by sitting across the table from someone if targets will be met without looking at numbers on a page. We all have that ability if we work on it.” The people-centric approach delivers real business benefits. “We see ourselves as an employer of choice. That’s very important in the hospitality industry. We are not as challenged as others in the industry regarding recruitment. We are now back at 2019 job vacancy rates. We will always have several vacancies. That’s the nature of the business.” “The only way was up” She was appointed Group CFO on 1 July 2021. “The only way was up, having been shut down for most of the previous two years [during the pandemic],” she says with a smile. “It was easy coming in after that. Anyone can look like a hero in those circumstances.” Looking back on COVID-19, she believes it showed Dalata at its best.  “We never panicked. We stood back and said it would resolve itself. That was based on a genuine belief that science would get there. That was our underlying expectation, and we had to be ready when we came out the other side. We looked at it through a longer lens. Everyone stepped in to do whatever needed to be done. Our bottom line was to protect our people. They represent our biggest asset. The accounting standards haven’t figured out a way to measure the strategic value of people yet, but we know what it is.” The aim was to keep people employed during COVID-19.  “Our focus was on everyone doing the right things in the right ways to keep people on. That’s the Dalata way of doing things. We ensured all our people had full access to the Dalata Online Academy. Even at home, they could continue to grow and develop.” The operations software platform also proved its worth. “We use it in the hotels for people management, rostering, onboarding, as a communications tool, and for pushing out video updates,” Phelan explains. “We have a lot of young people in the industry, and the ability to access information over the phone is so important to them, particularly when they can’t get together physically. We ensured people remained connected to the business even when apart.” That approach was extended to customers, landlords, suppliers, bankers and other stakeholders.  “We gave refunds to customers when they asked for them. We never even considered not paying rent. All our decisions were taken with a view to the long term. That will stand to us in the future.” Growth Having delivered record profits in 2022, there will be no let-up in the growth and development of Dalata Hotel Group, Phelan says.  “We now have 52 hotels in Ireland, the UK and continental Europe, and another five in the pipeline in London, Brighton, Manchester and Dublin. Forty percent of our rooms are in Dublin, 40 percent in the UK, and the balance is in regional Ireland and continental Europe.  “We have great ambitions for continental Europe, but our priority growth focus is the UK. There is a gap in the four-star hotel market, and we are in a great position to fill it. Dalata is a very ambitious company. The focus is always on what’s next. I love that attitude. But there is strong discipline. There will never be trophy assets in Dalata. Everything must make sense for the broader business and deliver a return for our shareholders.”  She concludes by pointing out that her own role reflects the core values of Dalata.  “I am an executive director and sit on the board as well as leading the finance team. I must be able to contribute to Dalata strategically, not just in my own expert area. Board members need to be able to challenge each other. We may approach it from slightly different angles, but it’s important to hear everyone’s views. That’s the Dalata culture overall. People are encouraged to bring their individuality to work. Everyone is encouraged to have a voice and to speak up. Who we are and where we’ve come from shapes that. We all bring different perspectives to the debate.”

Start-ups looking to grow have a range of options but carefully considering accounting standards is one way to reduce complexity, write Wuraola Raheem and Paddy McGhee For many Irish high-growth start-ups, the early years are consumed by the cash burn of developing a new product, followed by the cost of growing the market. The nuances of accounting standards are often a secondary consideration.  However, not being aware of some of the accounting standards considerations can have a negative impact on investor confidence and regulatory compliance. Here are nine areas of complexity that often arise for high-growth companies at the start of their journey. IFRS or FRS 102? If an organisation has an international shareholder base and international customers and suppliers, should it use IFRS?  While IFRS is a complete standard recognised globally, its measurement and valuation criteria, together with its disclosure requirements, are burdensome for a small company.  FRS 102 was written with small companies in mind, and in most cases, for a growing company, it will work as well as IFRS.  The decision to move to IFRS will be better taken when the company matures. For example, if a firm acquires other businesses along the way, the requirements for assessing the purchase price allocation are more onerous under IFRS than FRS 102.  Similarly, disclosure requirements are more onerous under IFRS. Revenue recognition There are very few modern businesses for which revenue recognition arises when the invoice is issued. Many companies provide multiple services and warranties, give a right of return or provide a service over a period of time or – increasingly in the tech sector – based on consumption.  This will give rise to the possibility of accrued revenue in which the service is provided in advance of billing or deferred revenue if billing has occurred, but the service or good has not been fully delivered. IFRS, US GAAP and FRS 102 are mainly consistent in their treatment of when revenue is recognised. Many growing companies enter into tailored contracts in order to make those first few sales often giving rise to additional free services or warranties that may lead to revenue deferrals.  Many other firms enter into agreements with large platform companies to sell their products or services, and the lines between marketing and delivery costs and net revenue can become blurred. Accounting for venture capital As companies begin to raise equity, the type of financing used is often not ordinary shares. Common forms of investing include: convertible loan notes; preferential loan notes; preference shares; and shares with a liquidation preference. Today, few investments are in the form of a loan or equity as investors look to protect their investment by having some form of preference. There is often a level of negotiation in these, so funding instruments will almost always have some individual nuances. The impact is that some convertible instruments include a hybrid instrument that needs to be assessed or, in other instances, while something may be called a ‘share’, if it has a fixed return, it may be accounted for as debt. Many companies also overlook the fact that the direct costs of raising equity are recognised in equity, or direct costs relating to debt are capitalised and amortised using an effective interest rate method. It’s not to say that many costs leading up to a finance raise are expensed, such as due diligence fees. Share-based payments There has been much valid criticism in Ireland that share-based remuneration has not received more tax concessions. For a young company, a popular route to attract staff is to offer share options, reducing the cash outlay.  In theory, share options are provided in lieu of a cash salary. Because of this, accounting standards require the intrinsic value of share options at the date they are issued to be recognised as an expense over the service period. Depending on the perceived volatility of the shares and the rights attached to them, this can result in a sizeable non-cash charge to the income statement and one that often does not appear in management accounts. Investing in cloud infrastructure The treatment of expenditure linking a business to cloud-based software has recently been a hot topic for large companies.  The reason for this is that IFRS accounting standard setters recently reminded companies that where they invest in linkages to a cloud-based infrastructure, the related costs should be expensed rather than capitalised on the basis that the firms do not own or control the cloud-based software. This meant that several multi-million Euro enterprise resource planning (ERP) implementation projects were expensed rather than capitalised.  It is easy to see the frustration that some reporters faced as they will receive the benefit of those costs over several years. With many companies reliant on cloud-based infrastructure, it can be a shock to learn that not all the related costs meet the criteria for capitalisation. Capitalised development expenditure “Our enterprise value is €XX million so how come we cannot recognise that value on our balance sheet?” is a common question, followed by: “Given we have spent €XX million on product development, can we capitalise that?” Accounting standards are very detailed on what can be capitalised and what is expensed. Generally, costs relating to internally generated brands, start-up costs, training activities, research, advertising and internally generated goodwill are expensed. The one area in which companies may capitalise costs is where such costs relate to the development of a product or process that can be shown to bring future economic benefit.  There are, however, concise rules on what may be capitalised. While costs can be, it does not mean such costs meet the criteria for claiming research and development (R&D) tax credits.  While the costs can be closely aligned, they are not mutually inclusive. International expansion Given the size of Ireland’s indigenous market, most companies look to international expansion early on. Initially, companies need to assess how they will expand: Do they use foreign subsidiaries to make sales? Is a foreign subsidiary used for providing services to the parent company in sales and marketing, local maintenance or R&D? Regardless of the role played by the foreign subsidiary, from a tax perspective, the share of the taxable profit each country will get will need to be determined. This is where the concept of transfer pricing comes in, and companies need to determine where the profit would reside if the various companies were unrelated. Increasingly with foreign expansion, companies have to deal with employee taxes for foreign employees or employees who move to a new market to help set up a presence. Consolidation requirement As companies grow, they reach a stage where there is a requirement to prepare consolidated statutory financial statements. At a basic level, if a company is defined as a small company under Irish law, it is not required to prepare consolidated accounts. The requirement for consolidated accounts kicks in when a company exceeds two of the following criteria two years in a row: Third-party turnover of €20 million; Gross assets of €10 million; and/or 250 employees. Given the relatively high-level criteria for employee numbers, companies generally meet the requirement when they reach the turnover limit. Other regulatory requirements Irish company law and accounting requirements are generally well legislated for, ensuring that small companies are not overly regulated.  Having reached the consolidation requirement at €20 million turnover, a private company’s next legislative bar is the requirement to have a directors’ compliance statement if it reaches €25 million turnover. Having reached a consolidated turnover of €50 million, a company is required to put an audit committee in place or explain why one is not required. Wuraola Raheem is Audit Manager in Consumer Technology Business at Deloitte Paddy McGhee is Audit Manager in Consumer Technology Business at Deloitte

Chartered Accountant David Malone, Chief Executive of the Irish League of Credit Unions, believes that credit unions are uniquely positioned to fill the gaps left by the departure of major banks and cater to the needs of small businesses and individuals, offering a personalised and community-focused approach Having recently achieved the top ranking in the Ireland RepTrak 2023 study of corporate reputation, credit unions are now poised to provide a real alternative to traditional retail banks for the full range of financial services products.  The credit union sector’s strong local presence with over 500 locations across the island of Ireland demonstrates a clear community focus now combined with soon-to-be-enacted new legislation, which will see credit unions unlock their full potential to become the country’s primary financial services institution of choice. David Malone, Chief Executive of the Irish League of Credit Unions (ILCU), an advocacy body for credit unions in Ireland, believes the unique ethos and DNA of credit unions place them in a strong position to fill the void left by the departure of KBC and Ulster Bank, as well as other service gaps. “There have been significant changes in the financial services sector since the global financial crisis,” he says. “Twelve retail banks were operating in Ireland back then. It’s down to three now. That has led to a lack of customer choice, particularly in the mortgage and SME lending markets, where competition is highly concentrated between the three pillar banks.  “Along with that, we have seen bank branch closures, decimating Irish towns and even where branches remain, decision-making has migrated from the local branch to the centre.” That centralisation has created problems for customers, says Malone.  “For example, small businesses have a real challenge trying to get loans from banks,” he notes. “There is limited interaction with local bank branch managers. Many such loans are turned down. A small business owner can visit their local credit union and sit with staff to explain their business and its needs. Our staff have that vital local knowledge and will understand the specific needs of the business that, in many cases, can help in providing the appropriate loan finance.”  Building relationships Malone joined the ILCU as Head of Finance and Deputy CEO seven years ago, after spending over ten years in audit and assurance with PwC.  “I trained as a Chartered Accountant with PwC after doing my degree in Accounting and Finance and Masters in Accounting at DCU,” he says. “I am now a Fellow of the Institute. It’s a great qualification, providing a real platform for your career. “At PwC, I worked with a wide range of clients, from large Irish plcs to SMEs to Irish subsidiaries of multinationals. Going into different businesses and seeing how they are run was fascinating.” Auditing is much more than a numbers game, he explains. “You have to build relationships with audit clients. You are there to add value and recommend improvements to the client’s financial processes.” He was drawn to the business world as a student during his summer job. “I worked for five summers in my aunt’s business, which was a busy tour operator during the 90s. I learned all about customer service and how the true value of timely and reliable financial information is key to decision-making and strategic direction.” Malone was appointed ILCU CEO in July 2022.  “In conjunction with our board, I had been leading the transformation programme for the organisation prior to that,” he says. “The programme aims to deliver on our new purpose to lead, support and sustain the development of credit unions on the island of Ireland. “Our areas of focus include facilitating collaboration of credit unions, repositioning the credit union brand, and effective advocacy to government and regulators. We also provide a significant suite of professional services to member credit unions in areas such as risk and compliance, legal, human resources and training.” The evolution of credit unions “Our transformation has brought significant additional expertise into the organisation with a number of new skill sets adding huge value as we deliver our purpose,” Malone notes. Malone is excited by the evolution of credit unions. “Credit unions have a 42 percent share of the personal lending market. They have issued close to half a million loans in the last year. In addition, credit unions in over 200 locations across the country are now providing current accounts that are potentially accessible by over two million credit union members. These can be accessed through an app and support Apple Pay and Google Pay. Credit unions now account for over 10 percent of new current accounts opened.” The new legislation, the Credit Union Amendment Bill, is a game changer, Malone says. It allows for the establishment of Credit Union Service Organisations (CUSOs) by groups of credit unions. These CUSOs enable credit unions to pool resources to invest in back-office infrastructure that will enable more credit unions to provide a wider range of financial services, particularly SME lending and mortgages. The new legislation also allow credit unions to provide services to members of other credit unions where the credit unions agree and allows credit unions to pool loans and risk between each other. “Credit unions have significant funds to lend,” says Malone. “They are not relying on the wholesale money markets for their funding. Instead, members continue showing confidence and trust in credit unions by depositing their savings.  “A number of credit unions now offer some of the lowest interest rates in the mortgage market. Credit union mortgage lending has increased by 25 percent in the last year. There is circa €11 billion of funds in credit unions that is available to be lent and can be used to fund small businesses, help people buy their homes, and support community organisations. The new legislation will help credit unions significantly increase their footprint in these areas. “Digitalisation presents great opportunities,” he explains. “Credit unions embrace technology by providing online payments, digital membership and loan applications. However, there is an important difference: credit unions are not digital only; they are digital with the essential human touch. Credit unions are omnichannel, so you can go into a branch or call on the phone and get an answer in real-time.” There is also the issue of financial exclusion. “People still need access to cash, and with banks closing branches and removing ATMs around the country, credit unions have an important role to play in providing that access.” Trusted organisations Malone believes that personal service is the chief reason for credit unions’ top ranking in the Ireland RepTrak 2023 study of corporate reputation.  “We got under the bonnet of that ranking, and we found the key contributors are our human, friendly and authentic service. The study emphasises attributes such as trust and respect, which are core to the ethos of credit unions which are locally owned and managed. We are proud to be at the heart of communities nationwide working towards a more inclusive society, where no one is left behind.” That contrasts sharply with some of the other lenders in the market. Malone is concerned about the impact of ‘buy now pay later’ (BNPL) and personal contract purchase (PCP) products on borrowers. “People don’t realise they are accumulating significant amounts of small debts with these products,” he says. “When people get a loan from the credit union, it’s very transparent and open. We want a lifetime relationship with members. It’s not short-term. Credit unions have helped members consolidate debts to deal with issues created by those products.” He explains that credit union loans are very different to other loans.  “For example, credit union loans provide flexibility, including no early repayment penalties. There is also loan protection insurance that effectively repays the loan in the event of a member’s death. This is a unique credit union benefit that you won’t get with the bank.  “I recently learned about a young person in their twenties whose parents had died. The parents had bank and credit union loans. The credit union loans were paid off automatically as they were covered by the insurance. The bank offered a repayment plan. Our approach is so different to other credit providers. We genuinely care about our members.” That membership is ultimately the critical point of difference, he believes.  “Our members are much more than customers; they are part owners of their credit union. They have a say in how it’s run. Members can volunteer to be on the board and committees. The boards are made up of community volunteers who have the locality’s best interests at heart. They selflessly give their time to credit unions. I would encourage any Chartered Accountant to consider becoming a credit union director, as it is enormously rewarding. “We see credit unions becoming primary financial institutions of choice migrating from the periphery to the front and centre of the financial services landscape,” he continues. “We are building on over sixty years of service to communities around Ireland. We are here to stay, not retrenching or closing – quite the opposite. We are growing and moving forward. We are building on a great reputation and great customer experience. We are offering a much wider range of products and services across the country, and that’s great news for members and the people of Ireland.”

The Pre-Budget Submission 2024 tackles challenges in Ireland, from the ‘green’ transition to inflation and housing supply, offering recommendations to benefit businesses, says Gearóid O’Sullivan Each year, Pre-Budget Submission is prepared under the auspices of the Consultative Committee of Accountancy Bodies – Ireland (CCAB-I).  It is a particularly influential document as it represents not only the views of Chartered Accountants but also our peers in other professional accountancy organisations. The Pre-Budget Submission is overseen by the CCAB-I’s Tax Committee South, of which the membership is predominantly Chartered Accountants. Pre-Budget Submission 2024 This year’s Pre-Budget Submission addresses several key issues impacting business in Ireland, from the so-called ‘green’ transition to the impact of inflationary pressures and, of course, ongoing supply issues on all sides of the residential property market.  The aim of any tax measure is ultimately to support the economy and wider society. Therefore, to the extent a measure represents an initial cost to the Exchequer, the hope and intention is that there is a corresponding benefit that exceeds the cost.  In some instances, the benefit is purely financial, e.g. our recommendation to permanently legislate for the Special Assignee Relief Program (SARP) and, in others, the benefit is a desired change in behaviour, e.g. our recommendation to introduce a ‘Help-to-Insulate’ scheme. Measures to alleviate capacity issues in the residential property market The residential property market faces issues on both the rental and retail sides.  On the rental side, we continue to advocate for measures to make renting more attractive, particularly for small-scale and accidental landlords.  Despite tax legislation recognising taxable profits in many cases, often small-scale and accidental landlords find themselves in a cash-flow negative position when the tax bill and any loans on the property are taken into account.  While it is reasonable to mention the economic benefit achieved through property ownership over the longer term, the cash-flow impact is often driving these small-scale and accidental landlords out of the rental market.  If this cohort of landlords were, in turn, selling their investment properties, there could be a sound basis from a policy perspective in maintaining the rules in their current iteration.  However, landlords will often have to first seek to evict and then sell. As such, vacancy represents a key policy issue for government when designing appropriate taxation rules for landlords. With the above in mind, CCAB-I has made several recommendations that we suggest will make letting sufficiently attractive for smaller-scale and accidental landlords: Local property tax should be available as a deduction against rental income. Expenses deductible under section 97 TCA 1997 should be aligned with Case I/II principles. Expenses that are revenue in nature and incurred wholly and exclusively for the purpose of the rental business should be deductible, and rental losses should be available for offset against other income. Capital allowance rates for fixtures and fittings should be increased from 12.5 percent to 25 percent per annum to facilitate landlords investing in the maintenance of properties, providing the works do not result in the termination of an existing tenancy. Landlords who retrofit a property to enhance the property’s energy rating should be able to claim a 100 percent capital allowance where the renovations do not result in the termination of an existing tenancy. The Government should introduce measures to bring parity to the taxation of corporate and individual professional landlords by introducing a flat rate of 25 percent on Case V income for small landlords who opted to become ‘professional landlords’ by waiving their rights under Section 34 of the Residential Tenancy Act (2014), giving additional security to their tenants. We have also suggested a reasonable capital gains tax (CGT) relief to incentivise property sales with tenants in-situ: Professional landlords should be given access to succession reliefs (e.g. CGT retirement relief) to improve the long-term investment proposition of the residential rental business. To encourage landlords to remain in the private rental market, CGT relief of four percent per annum should accrue for the length of time the asset remains a rental property. (This was specifically examined in a 2017 Report of the Working Group on the Tax and Fiscal Treatment of Rental Accommodation Providers.) In addition to the above, we are also recommending that Government increases ‘Rent-a-Room’ relief to match standardised average rents and to remove the ‘cliff-edge’ over which relief is completely removed. Measures to combat inflationary pressures The level of inflation in the Irish economy is putting significant pressure on households.  The European Central Bank began increasing interest rates in a bid to dampen inflation. There is a balance to be struck between tax measures to combat inflation and the policy aim of reducing spending capacity. With that said, there is scope for a reasonable change in the personal tax regime, which should not be incongruent with the policy objectives of the European Central Bank.  Earlier this year, CCAB-I responded to the Department of Finance’s consultation on Ireland’s personal tax system. The Pre-Budget Submission includes many of the points raised in that earlier submission, including a recommendation to move to indexation of the income tax bands and credits.  In Ireland, a taxpayer begins to pay tax at the higher rate from €40,000, although the average industrial wage is €46,800. Therefore, the application of an indexed approach to increasing bands and credits should ensure that tax bands and credits remain valuable year to year. Otherwise, while the Government may not raise bands and credits in a particular year, the real value of after-tax wage is likely to have decreased due to the impact of inflation. We also recommend changes to other areas of the personal tax system, including several changes to the CGT and capital acquisition tax (CAT) regimes. These include: The CGT annual exempt amount available under section 601 TCA 1997 should be increased to €5,000.  The CGT indexation tables in section 556 TCA 1997 should be extended beyond 2003 to the present day. The rates of CGT and CAT should be reduced to 20 percent. The lifetime limit for claiming revised entrepreneur relief under section 597AA TCA 1997 should be increased to €5 million. The category A threshold for CAT should be increased to €350,000 in line with a rate reduction. The CAT small gift exemption should be increased to €5,000. Employers’ PRSI should not be increased at this time. As in 2022, we are also recommending that further consideration is given to an intermediate rate of income tax. This is a longer-term ambition.  However, the current system is complicated by the fact that we have three separate taxes on personal income (income tax, USC and PRSI). As such, all these taxes could be redesigned into a single tax, and in this scenario, an intermediate rate of tax becomes a key tool. Further recommendations Pre-Budget Submission includes further recommendations on measures to assist climate change, support foreign direct investment, SMEs and entrepreneurs, and enhance the tax system generally.  The document is a key feature of the tax department’s annual output. It reflects the views of professional accountants across the country and is presented directly to the Department of Finance each year.  While the Government faces several challenges in this year’s Budget as it balances a substantial surplus with increasing societal needs, it is hoped that our recommendations will be considered in terms of the benefit we believe they will bring to businesses in Ireland. Gearóid O’Sullivan is a Tax Manager at Chartered Accountants Ireland 

Imelda Hurley, CEO at Coillte, the semi-state forestry company, talks about her passion for sustainability and the importance of Ireland’s climate action and biodiversity agenda for the Irish economy and society  Imelda Hurley knew from an early age that she was destined for a career in business. Hurley tells Accountancy Ireland about her career path and how Coillte’s strategic vision will further support its contribution to Ireland’s climate targets, optimising the multiple benefits from forestry.  Tell us about yourself and the start of your career. I grew up on a family dairy farm just outside Clonakilty in West Cork. My first job was with Clonakilty Black Pudding, a little-known brand back then, but now a very successful and entrepreneurial operation. I completed a Business Studies degree at the University of Limerick. Following that I joined Arthur Andersen and became a Chartered Accountant. During that time, I had the opportunity to engage with multinationals and indigenous companies. That gave me a great lens into how organisations successfully operate, develop and implement strategy. How has your career evolved since you qualified as a Chartered Accountant? A: I always had an ambition to become a CFO and eventually a CEO. My career experience has been from farm to fork to forestry, working in the food, agribusiness and agriservices businesses across a variety of ownership structures.  During my role as CFO and Head of Corporate Sustainability at PCH International in China, I had the opportunity to learn more about sustainable product development and supply chain management.  That was over 10 years ago, when few organisations were talking about sustainability. I’m left reflecting on how times have changed over those 10 years and how there is an increased focus on sustainability today.  You were appointed as CEO of Coillte in November 2019. Tell us about your role and what attracted you to the position. I really enjoy the outdoors and nature. Coillte gave me a great opportunity to work in a business with a commercial focus, but also a business delivering social good. I joined Coillte in November 2019 and I spent much of the first two years navigating the pandemic. I wanted to ensure that Coillte emerged from the pandemic as a sustainable, viable and vibrant organisation. I am pleased to say that when we reported our 2021 results, we delivered record revenues, record profitability and a record dividend to the State.  Coillte manages 440,000 hectares of primarily forested land, circa seven percent of Ireland’s land, with about 6,000 individual properties. We have just over 800 employees and 1,200 contractors working across three divisions: Coillte Forest, Land Solutions and Medite Smartply.  Coillte is the nation’s largest forester and producer of certified wood, a natural, renewable and sustainable resource and the largest provider of outdoor recreation space in Ireland. It enables wind-energy on the estate, processes forestry by-products and undertakes nature rehabilitation projects of scale. When you were presented with your Businessperson of the Year Award in December, you were described as an “advocate for sustainable business practices and a leader in sustainability discussions”. Why is sustainability important to you? We are on a journey that requires us to leave the planet in a better place than we found it. There is a financial balance sheet but also an environmental and social balance sheet. Good business brings these together. From my perspective, I accepted the award on behalf of Team Coillte, all of whom work every day to balance and deliver the multiple benefits of forestry.  Tell us about the strategic vision you launched last year and Coillte’s plans for the next 12 months and beyond. In April 2022, we launched a new forest strategic vision focusing on four pillars – Forests for Climate, Wood, Nature and People. This vision sees us, as an example, enabling the creation of 100,000 hectares of new forests by 2050. Those forests will sink approximately 18 million tonnes of CO2.  We are also working on how we manage our existing forests to capture an additional 10 million tonnes of CO2 by 2050.  We have an ambition to redesign approximately 30,000 hectares of peatland forests through a programme of rewetting or rewilding for climate and ecological benefits and also aiming to enable the generation of one gigawatt of renewable wind energy by 2030.  From a people and recreational perspective, we are targeting to enable €100 million of investment to create world-class visitor destinations by 2030.  In July 2022, we launched Beyond The Trees, Avondale at Avondale Forest Park in County Wicklow and in June of this year, we opened the newly refurbished Avondale House, further adding to Avondale Forest Park experience, which has had over 300,000 visitors since June 2022. Our ongoing focus is to continue to ensure a strong, viable, vibrant Coillte that focuses on optimising our contribution to Ireland’s Climate Action plan, while continuing to deliver sustainably certified timber to support the decarbonisation of the built environment.  Our strategic vision also involves increasing from 20 percent of the estate being primarily managed for nature and biodiversity to 30 percent by 2025 and to 50 percent in the long-term. Another major focus for us is workforce capacity, planning for our organisation and the industry more broadly. We have 440,000 hectares under management and between now and 2050 the State has an ambition to increase forest cover from 11.6 percent to 18 percent. As such there will be a requirement to attract more people into our sector going forward. Are you glad you made the decision to qualify as a Chartered Accountant and what career advice would you offer your younger self? A: In the early years of my career, I looked up to others. Ultimately, I realised what was much more important was to follow my own path and enjoy the journey. You have to do what makes you happy and if you work hard and are determined, good things will come.  

 Employee well-being is vital for business success. Moira Grassick explores the biggest people risks, from stress to diversity, and outlines how you can strengthen your organisation’s resilience A business is only as successful as its employees. People are both the most important asset a business has and, on the other hand, a source of risk if they’re not properly managed. After a stressful number of years in which health and well-being were primary concerns for everyone, the workplace has changed irreversibly, and it’s up to business owners to adapt to ensure their people stay happy and, in turn, deliver business growth. Some business risks are outside the control of Irish employers. Global geopolitical tensions and interest rates continue to impact the cost of doing business, but it’s different when it comes to your people. Employee risks are within your control. Here are some risks your organisation can minimise, ensuring happier and more productive employees. Stress and burnout After a challenging number of years, your employees may be suffering from anxiety, stress or burnout symptoms. These psychosocial issues can have a direct impact on productivity and potentially on the reputation of your business. Employees are more focused than ever on work-life balance and well-being. Taking steps to help employees achieve their goals in these areas helps reduce errors, minimise staff turnover and avoid dips in productivity. Remote Health & Safety  A remote worker’s home workstation is an extension of the workplace, and employers need to consider their Health & Safety obligations in this regard. The main responsibility for Health & Safety at work rests with the employer regardless of whether an employee works remotely or onsite. A risk assessment of the employee’s home workspace should be carried out. Work-related injuries (both physical and psychosocial), whether they happen onsite or in a remote location, could lead to penalties, brand damage and a deterioration in employee relations. Recruitment and retention Although the labour market shows signs of turning back in favour of employers, it’s crucial for business owners to figure out what will help staff build long-term careers with them. High staff turnover is bad for business, so engaging with employees and responding to their feedback on what could help them build a long-term future with you will pay dividends. Workplace culture Serious misconduct like bullying and harassment or theft and fraud can derail a business. It’s vital to manage these risks through the effective operation of appropriate policies and procedures. Staff should be aware of the values they are expected to uphold. Likewise, if employers don’t deal with grievances in the correct manner, they risk demoralising staff who won’t want to work within an uncaring culture. Preventing grievances in the first place should be the aim, but failing to manage employee grievances properly will distract your management team from their main tasks, demotivate staff who think colleagues have not received fair treatment and ultimately hurt your business. Diversity, equity and inclusion As the Irish population continues to diversify, it’s important to develop an inclusive and diverse working environment. Failing to address this area will limit your access to the broadest possible talent pool and potentially have reputational consequences that hurt relationships with employees, customers and other stakeholders. Legal and compliance As well as the challenge of managing the transition away from pandemic-related work practices, employers also have a wide range of new employment laws to consider. The statutory sick pay scheme came into force in January and affects all employers. The transparent and predictable working conditions regulations impact probation periods, employment contracts and documentation. Most recently, employers will need to act upon various new work-life balance rights, including the right to request remote work. It’s a major challenge for employers and employment law practitioners to keep pace with the volume of recent employment regulations. The cost of ineffective management The costs associated with these risks are multiple. Management spends too much time firefighting, employees take their talents elsewhere, and the bottom line suffers. With the right approach, however, business owners can turn all these risks into strengths that will make their business more resilient to setbacks and more productive when trade is brisk. Moira Grassick is Chief Operating Officer at Peninsula Ireland

In the modern business landscape, fostering a culture of accountability is paramount for organisational success and ethical behaviour. Yvonne Kelleher and Conor McCarthy discuss the crucial connection between culture and accountability Culture and accountability are not new concepts. However, for many organisations, driving a culture of accountability seems like an intangible feat, with many organisations leaping to enhance the operating model without recognising the need to manage the human factors. This can be a costly oversight, and without considering a unified approach and mindset to drive accountability, the desired benefit and return will not be realised. Executives must set a leading example in this time of increased public and regulatory scrutiny and change in Ireland and globally. They need to exhibit accountability and maintain trust with both stakeholders and employees. Culture and accountability are not static ideas, nor do they impact one industry. In fact, in Ireland, we have seen over the last 12 months a lack of accountability underpinned by poor behavioural drivers across a range of industries such as financial services, public bodies and broadcasting has resulted in computational damage and a loss of stakeholder and employee trust. Time is of the essence for organisations to conduct a stocktake, reassess their culture journey and address any gaps to promote and embed an effective and resilient culture to drive and enforce accountability. Organisations should look at this as not only a necessity but also an opportunity that will support their success in the long run.  Organisational accountability – what is it? Organisational accountability occurs when all employees behave in a way that promotes the successful and timely completion of their responsibilities. It involves the organisation being answerable for its actions, decisions and impact on stakeholders, including employees, customers, shareholders, communities and, of course, the environment. A poor culture of accountability can present itself in several ways. Lack of transparency There is often a lack of transparency in decision-making processes, communication and reporting. Information may also be withheld, buried, distorted or not shared openly with stakeholders.  Lack of clarity in roles and responsibilities When there is a lack of clarity regarding roles, responsibilities and expectations, it becomes challenging to establish accountability. Unclear lines of authority, ambiguous decision-making processes, and overlapping responsibilities can contribute to a culture where no one feels truly responsible or accountable for outcomes. Lack of leadership Leadership plays a crucial role in shaping the culture of an organisation. In a poor culture of accountability, leaders may fail to model and uphold the principles of accountability. Leaders evading responsibility or engaging in unethical behaviour without facing the consequences sets a negative example for others.  Lack of trust There may be an environment of distrust and scepticism. This can lead to a lack of collaboration, communication and willingness to report issues and mistakes.  Low consequences for misconduct In organisations with a poor culture of accountability, there may be a lack of appropriate consequences for unethical behaviour or poor performance. This can lead individuals to believe they can engage in misconduct without facing significant repercussions.  Fear of retaliation Conversely, a poor culture of accountability may foster an environment where individuals fear retaliation for speaking up, reporting wrongdoing or challenging the status quo. This fear can deter individuals from holding themselves or others accountable, leading to a lack of transparency and the perpetuation of negative behaviours. It is crucial, therefore, to get a balance between consequences and a fear of retaliation.  Low morale A lack of organisational accountability can diminish an employee’s sense of purpose. This results in a lack of motivation to do your job and impacts the quality of employees’ work.  The link between culture and accountability Today, an organisation’s success is no longer just about the bottom line; qualitative inputs like transparency, trust and employee performance, productivity, collaboration and engagement also determine success. Therefore, an organisation’s cultural norms, values and practices can significantly influence the expected, accepted and enforced accountability level to ensure sustainable change. 1. Trust and transparency   Culture affects the level of trust and transparency within an organisation. In cultures where trust is high, and transparency is valued, accountability tends to be emphasised more. Employees tend to hold themselves accountable for their actions as they believe in the importance of integrity and honesty.  2. Consequences and enforcement Cultural attitudes towards consequences and enforcement also play a role in accountability. In some cultures, the fear of reputation, trial by the media or social stigma may serve as a powerful deterrent leading individuals to be more accountable for their actions. In other cultures, legal frameworks and regulatory systems play a key role in enforcing accountability (like the new individual accountability regime currently being implemented by the Central Bank in regulated institutions within Ireland).  Cultural influences Cultural influences on accountability can vary significantly across different societies and organisations, particularly as the operating and workforce landscape evolves. While some cultures may prioritise individual accountability, others may emphasise collective responsibility more. Understanding and addressing these cultural dynamics, including behavioural drivers, are essential for promoting a sustainable culture of accountability and ethical behaviour. Yvonne Kelleher is Managing Director in Risk Consulting at KPMG Conor McCarthy is Partner, Head of People and Change at KPMG

Derarca Dennis explains how CFOs and finance functions are evolving and how organisations need to concentrate on talent management and diverse skillsets for sustained growth The EY Ireland CFO Survey 2023 has found that CFOs are playing an increasingly strategic role in their organisations. The role of the CFO has expanded, as has that of the finance function. It has evolved to become much more engaged with other areas of the business. This has brought with it a requirement for new skills as well as an increased focus on talent management. That need is reflected in the survey results, with developing future leaders, people management and talent retention continuing to be key areas of focus for the next two years for 60 percent of respondents. Reducing costs and compliance with sustainability regulations are also high on the agenda for most CFOs. While technology in the form of automation and advanced data analytics capabilities will undoubtedly be critically important in supporting the evolving role of the finance function, talent must remain a key area of focus if it is to fulfil its potential. Forty percent of the respondents said their priority for driving growth in the coming year is investing in upskilling existing talent in their organisations, while a further 34 percent said investing in new talent would be a priority. CFOs are focused on optimising the skillsets and talent they already have. This is particularly important in a very tight talent market where organisations of all sizes are experiencing significant levels of talent churn. That, in turn, leads to a loss of knowledge and skills, which are not easily replaced. A continuous learning curve A culture of continuous learning that empowers employees to work at their best and realise their potential is a proven talent retention strategy. Not only does it deliver increased job satisfaction, but it also opens new career opportunities within the organisation. However, organisations must also seek to automate the dull, repetitive tasks that have traditionally been undertaken by the finance function. Some of those tasks can also be shared with other areas of the organisation, such as treasury. Closer interaction between the treasury and finance functions can allow certain tasks to be shared, allowing finance professionals to focus on more value-added work. That work includes preparation for upcoming regulations and reporting requirements in areas such as sustainability. Finance leaders may also need to look at hybrid models to access the capability required to meet the finance function’s expanded role. One option is to fill capability gaps by co-sourcing the required skillsets through professional services partners. These organisations can offer a range of services from basic accounting activities, record-to-report activities, control monitoring and testing, through to day-to-day treasury operations, typically on a managed service basis. Need to invest in diverse talent At a higher level, the changing nature of finance reporting requires CFOs to master a diversity of skills, especially a deep understanding of non-financial factors. It is also leading to profound changes in the composition of finance teams. Future finance teams will be very different from those of today. Finance professionals will, of course, be at their core, but  finance teams will also draw upon a diverse talent pool to enable the function to play its full role as a strategic partner in the overall business and to embrace the potential of technology and data. Future finance teams will augment the traditional skills of finance professions with those of environmental, social and governance (ESG), and have data analysts, supply chain experts and process engineers. Having that wider expertise within the team will make it much more effective when it comes to creating greater efficiencies across the business and delivering long-term value to the organisation. Continued investment in diverse talent will, therefore, be imperative given the evolving and increasingly business-critical role of the finance function. Future-fit CFOs need to focus on: rethinking current operating models and mapping future touch points with other parts of the business, such as the treasury and ESG teams; talent management strategies aimed at upskilling existing employees and attracting and retaining new recruits; acquiring the diverse skills that will make the finance function fit for its increasingly strategic role in the organisation; leveraging existing capability within other departments to support the finance function; outsourcing or co-sourcing elements of the finance function to external partners on a managed service basis; and stemming employee turnover by ensuring that processes are future-ready and efficient enough to retain talent interest and engagement. The evolving role of CFOs and finance leaders in Ireland and of the teams they lead makes it imperative to focus on people management and the acquisition and retention of diverse skillsets. To ensure success, acquiring and retaining talent from both internal and external sources is crucial. Finance functions of the future will encompass a wide array of professionals whose skillsets will contribute to the organisation’s strategic growth. Ultimately, driving greater value for the organisation hinges upon empowering talented individuals with efficient, automated and data-driven processes across both financial and non-financial domains. Derarca Dennis is Assurance Partner at EY Ireland

Ireland’s urban growth demands sustainable development. As we transition to a green future, our focus must be on modernising regulations, energy resilience, R&D and public-private partnerships, says Robert Costello Ireland’s urbanisation has been rapid: in 1969, half of the population lived in rural areas, and urbanisation is expected to reach 75 percent by 2050. In recent decades, urbanisation combined with general population growth and an economic boom has dramatically increased the footprint of Ireland’s cities. Much of this growth occurred without due regard for sustainable development. As Ireland sets out on a green transition, we must focus on making our cities sustainable. Like the broader economy, Ireland’s cities run largely on fossil fuels. According to the United Nations, cities consume about 78 percent of the world’s energy, accounting for more than 60 percent of greenhouse gas emissions. Transport accounts for almost 18 percent of total emissions in Ireland, and nearly all (94 percent) of these emissions come from road transport. Ireland has among the longest commute times in Europe, with many commuting into and around cities. Ireland’s buildings are among the hardest to heat in Europe, with heat loss rates (U-values) three times those of Sweden. With poor heat retention and a relatively high reliance on solid fuels and oil, Irish buildings have the highest emissions in Europe. Net zero emissions commitments of Ireland and the EU The European Union is committed to achieving a 55 percent reduction in greenhouse gas emissions by 2030 and net zero emissions by 2050. Ireland has committed to reducing emissions by 50 percent by 2030 and achieving net zero emissions by 2050. Considering Ireland’s starting point relative to many of our European counterparts, significant action is required across the economy and society. By implementing initiatives across the following four pathways, Ireland’s urban areas can become more sustainable and resilient to climate change. 1. Modernise regulations Having the funding and finance to complete the green transition is necessary, but it is not sufficient: the regulatory environment must enable the required investment. Ireland’s regulatory regime has been slow to respond to the needs of those working towards Ireland’s net zero ambition. Green hydrogen (hydrogen produced from renewable energy) will have a key role to play in decarbonising the country’s hard-to-electrify sectors. This must be underpinned by a national hydrogen strategy that reviews existing regulations, considers where changes are required, and signals to the market the direction of travel in terms of the development of this vital sector. While the Government has consulted on a hydrogen strategy, the consultation report has yet to be published. An ambitious hydrogen strategy will go hand in hand with plans to develop offshore wind farms on Ireland’s west coast, allowing the country to become an energy exporter. 2. Plan for energy resilience and sustainability According to Engineers Ireland, Ireland faces an energy trilemma in which we must meet our energy needs while ensuring that we (i) increase sustainable energy production, (ii) keep our energy supply secure, and (iii) maintain affordability. Diversity of supply and investment in infrastructure, such as interconnectors and energy storage, are essential in overcoming this trilemma. 3. Invest in research and development We cannot build the world of tomorrow without research and development (R&D) today. We must therefore recognise the role of R&D within Ireland in making our green transition possible. As an international hub for technology firms, Ireland has the potential to make digitalisation a core part of how we decarbonise our economy, building smart cities and communities. Combined public and private investment in digitalisation R&D will transform our economy. 4. Rethink public-private partnerships Public-private partnerships (PPPs) are a very useful method of contracting to deliver infrastructure. In Ireland, they have been successfully deployed to develop our motorway network, build schools and now deliver much-needed social housing. They involve a lot of upfront work, de-risking projects and ensuring that the assets built are robust and well-maintained into the future. They also encourage more private sector involvement in infrastructure, bringing new technology and innovation into projects. In addition, PPPs allow governments and public bodies to retain ownership of the infrastructure assets, an essential feature for long-term public ownership. Rethinking PPPs involves broadening the areas in which this model can be deployed to help realise our net zero ambition. Areas where the model (or a variation of the model) can be deployed include district heating, battery storage, offshore grid infrastructure, bus and train fleets, electric vehicle (EV) charging, sustainable buildings and port infrastructure. On the (path)way to a better future Cities, big and small, can set out on clean-energy pathways. Each pathway requires working with various stakeholders, including some with competing needs. These stakeholders include regulators, power generators, power transmission and distribution companies, industry and consumers. Only by laying the proper groundwork can people be brought on board and positive outcomes maximised. Stakeholder engagement is all the more essential in the case of Ireland’s cities, which have less administrative and financial autonomy than cities such as Paris or Berlin – Ireland has the lowest level of local autonomy in the European Union. With a population that continues to grow rapidly and become more urban, Ireland must seize the opportunity to build more sustainable cities. A successful and sustainable green transition requires bringing people on board and embracing the technology that will enable shorter, cleaner commutes, warmer homes and a cleaner environment. Outlining and committing to clean energy pathways enables the public and private sectors to put the resources in place and build the necessary capacity to deliver the required investment in our cities and towns. Robert Costello is Leader in Capital Projects & Infrastructure Practice at PwC

Paul A. Slattery outlines the keys to successful impromptu public speaking. Ad hoc speaking situations are a common occurrence in professional settings, and the mere prospect of delivering a speech at short notice can be nerve-racking for many of us. However, there is no need to dread this. By employing specific techniques, you can deliver a successful presentation at any time. Be prepared to sound spontaneous Your goal is to sound spontaneous while articulating your ideas in an organised manner, making an impact on your audience. Although being fresh and spontaneous is desirable, simply ‘winging it’ should never be your approach. Achieving a balance of ‘organised improvisation’ and appearing natural without following a script requires preparation. The rule of three The ‘Rule of Three’ is an excellent starting point. It can be adapted to suit any topic and is based on the concept that we are more likely to remember a list of three items or ideas. You can use the Rule of Three to structure your presentation and deliver a solid argument, even with barely any time to prepare. Select the three most important aspects to concentrate on, such as “Three necessary measures to undertake….” The Rule of Three is exemplified in another recommended communication model: ‘Be Brief. Be Bright. Be Gone.’ This philosophy was introduced by Jay Frost and David Currier in their book of the same name. The idea was originally intended for aspiring pharmaceutical sales representatives, but it can be universally applied. To succeed in sales, it is essential to comprehend and implement these three principles: Be brief — Keep your sales pitches short and to the point. Be bright — Understand your product and its context. Be gone — Respect your customer’s time. Be brief Keep in mind that simplicity is key to effective communication. Start by defining the reason for the presentation and providing the relevant facts. Tell your audience only what they need to know – not everything you know. Be ready to answer their questions and maintain a positive attitude in your communication. Consider using the BLUF methodology. BLUF stands for Bottom Line Up Front and is a concise communication practice in which critical information is presented first. It is commonly used in the US military to ensure precision and impact. Think of BLUF as an inverted pyramid providing a simplified version of the message. It is applicable not only in military writing and journalism but also in business presentations. Be bright As a starting point, understand your situation and its context. You should also aim to create a bright impression by engaging in eye contact and, when feasible, firmly shake hands. Try maintaining a confident posture by standing tall. Make sure to convey openness and receptiveness by uncrossing your arms and legs. A sincere smile can go a long way in creating a connection. When speaking, project your voice into the room to ensure everyone can hear you clearly. Speak with confidence to convey your expertise and captivate your listeners. In other words, project your executive presence. Be gone Once you have conveyed your message, it is important to conclude promptly, respecting people’s time and avoiding unnecessary follow-up. Showing consideration for others’ schedules and minimising complexity are vital in any professional communication. There is no need to dread presenting at short notice. Being ready will assist you in delivering concise and compelling presentations. By practising the approaches mentioned here, you can deliver successful impromptu speeches, sound spontaneous and leave a lasting impression on your audience. Paul A. Slattery is the founder and Managing Director of NxtGEN Executive Presence

Tim Bicknell explores how to unlock the potential of innovation as a positive force for business growth Innovation, that elusive force propelling organisations forward, has become the ultimate strategic imperative in our fast-moving and sometimes chaotic business landscape. But what does it take to forge a culture of innovation? The answer lies, not just in visionary leadership and cutting-edge technology, but also in the delicate and skilled work of transforming teams and businesses into hotbeds of creative brilliance. 1. Leadership as catalyst Leadership commitment is the bedrock upon which a culture of innovation is built. Those at the top of the organisation must prioritise and actively support innovation initiatives, signalling to all the value placed on creativity and smart risk-taking. They must build an environment in which experimentation is encouraged, providing resources and dedicated time for visionary pursuits. Through personal example and unwavering support, leaders can pave the way for a culture that embraces, nourishes and rewards innovative thinking. 2. Rewarding the brave: A culture of risk-taking At the heart of innovation lies the spirit of audacious risk-taking. Organisations must, not only encourage, but also reward those who dare to dream big and venture into uncharted territory. Empowering employees to propose daring ideas, while embracing failure as a stepping-stone to success, creates an environment in which considered risk-taking can thrive. By recognising and incentivising risk-takers, regardless of the outcome, organisations send a clear message that innovative thinking is both cherished and actively encouraged. 3. Fostering cross-functional collaboration Innovation flourishes where cross-functional collaboration is supported. Organisations must shatter the silos that breed stagnation and nurture an environment in which diverse perspectives converge, birthing a breeding ground for creativity and ground-breaking solutions. By creating platforms that encourage individuals from various backgrounds to collaborate, exchange ideas and harness collective expertise, organisations can tap into a wellspring of knowledge and insight, fuelling the innovation process. 4. A learning mindset for continuous growth A culture of innovation thrives on the relentless pursuit of knowledge and growth. Organisations must provide pathways for employees to enhance skills, acquire new knowledge and stay attuned to emerging trends and technologies. Through immersive training programmes, workshops and mentorship, organisations not only arm individuals with the tools for innovation, but also showcase their commitment to personal and professional development. By nurturing a culture of lifelong learning, organisations unleash the creative spirit of their teams, enabling them to adapt and thrive in the face of an ever-changing market landscape. 5. Nurturing a culture of open communication Effective communication and a continuing, open exchange of ideas can support a culture of innovation. Organisations need to construct channels and platforms that foster a seamless flow of ideas across all levels. Regular brainstorming sessions, idea-sharing platforms and innovation forums become the lifeblood of a culture that thrives on open dialogue. Leaders must be seen to be receptive – actively listening to employee suggestions and providing constructive feedback. It is through this culture of open communication and inclusivity that organisations can unlock the creative potential within their teams. 6. Unleashing the power of diversity and inclusion Diversity and inclusion form the bedrock upon which innovation stands tall. Teams comprised of individuals with different skill sets and expertise challenge conventional thinking, leading to fresh ideas and ground-breaking solutions. Organisations must actively seek diversity and foster an inclusive environment in which all voices can be heard and valued. By embracing diverse perspectives, experiences and backgrounds, organisations can effectively foster a culture of innovative brilliance. Cultivating a culture of innovation within a team and business requires a multifaceted approach. Organisations unlock the potential for creative breakthroughs by: prioritising visionary leadership; embracing risk-taking; fostering collaboration and open communication; promoting continuous learning; and nurturing diversity. When these critical success factors are woven into the DNA of an organisation, innovation becomes a driving force, propelling their teams and business towards sustainable growth and success. Tim Bicknell is Managing Director of Deep Cove

Our Chartered Star 2023 winner Peter Gillen tells us about his work helping companies to reach their sustainability goals and gives us his take on sustainable finance  Peter Gillen, a sustainability manager in Grant Thornton’s Financial Services Advisory Department, was recently named Chartered Star 2023, 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.  A graduate of Trinity College Dublin, Gillen grew up in Dundrum and began his career training with PwC before his passion for sustainability led him to join the Sustainability Team at Grant Thornton in 2021. As Chartered Star 2023, Gillen will attend One Young World Summit, representing Chartered Accountants Ireland and Chartered Accountants Worldwide, in Belfast in October. Here, he tells Accountancy Ireland about his interest in sustainability and gives us his take on ongoing developments in sustainable finance globally. Tell us about your decision to become a Chartered Accountant? What attracted you to the profession? When I was younger, particularly in the lead-up to the CAO application process in sixth year, family and friends told me accountancy was one of those qualifications that would allow me to work in any sector anywhere in the world. This has come to pass in my career so far as I’ve had the opportunity to work in Europe and the US as well as here in Ireland. Travel, in general, is one of the best ways I have found in my own life to learn from others. That’s why attending One Young World Summit later this year is so exciting to me. There will be so many people from many different countries, and we will have the opportunity to learn from both our shared experiences and different perspectives. What is it that initially sparked your interest in sustainability? I’ve always had an interest in sustainability and was frustrated by the slow pace of progress in the last decade or so. During the pandemic, when everyone had more time to reflect, I reconsidered the direction of my career and decided I would try to merge my training in financial services with my passion for sustainability. It was really about finding ways to use my knowledge to bring about real change and help companies on their sustainability journey. Chartered Accountants in general are uniquely placed to be right at the heart of sustainability discussions, and to deliver concrete plans to transition to a greener economy. There isn’t a medium- to large-sized organisation in the world that doesn’t employ a Chartered Accountant and we are uniquely placed to support ESG efforts, because of our problem-solving and analytical skill sets, our ability to take a step back and see the bigger picture, and lastly being able to apply our learnings from financial reporting to the impending sustainability reporting requirements, which will be applicable to companies over the next few years. What do you see as the greatest sustainability-related threats and challenges of our time? In terms of threats, it’s the classic, “the wants of the few outweigh the needs of the many”. Those in power – the few – often have self-interest in mind and their actions can have a disproportionate impact on others – the many. Those who have the power to influence real change are sometimes reluctant to do so. A classic example here is the large oil companies, or sometimes political leaders. Chartered Accountants working in leadership positions in large corporations really do have an important role to play in leading the way and convincing their stakeholders to tackle the climate crisis, not just for the planet but also for their companies’ long-term viability. For me, it comes down to collaboration, both nationally and internationally. Humankind is the single greatest determinant of the fate of our planet. We have the power to save our planet from becoming an uninhabitable place.  The challenge is trying to unite a large group to focus on one shared goal. History has shown us how difficult this can be, but also that it is possible and that it is often at times of catastrophic crisis that we unite. One example is the European Union, which was born in the aftermath of World War II. I’m confident that this time we can unite before it’s too late and introduce sufficient measures to address the issue. What is your take on current progress on Ireland’s Climate Action Plan? I think we have made a lot of progress, but we still have a long, long way to go. There are challenges but there is also immense opportunity for a country like Ireland. In particular, we have a unique opportunity to harness our coastline for the purposes of renewable energy – wind and wave, for example – and become a net exporter of energy instead of relying on imported fossil fuel-based energy sources. Reaching Ireland’s climate targets isn’t just about government action, though. Every single person has a role to play. For example, we have all become too reliant on convenience and this mindset needs to change. We need to learn to repair the goods we have where we can, instead of automatically replacing them – thinking differently about the lifespan of the items we own and the waste we generate. Tell us about Grant Thornton’s sustainability team and your role in it. I am a sustainability manager within our Financial Services Advisory Department. Our team helps our clients navigate all of the new environmental, social and governance (ESG) rules and regulations the EU and other regulatory bodies are bringing out. The world has really woken up to the climate crisis, so our work is evolving on a daily basis as legislators and regulators work to promote the transition to a greener economy. We help our clients to understand these requirements and the roadmap they need to put in place to meet them. My biggest career goal is to continue to help companies to support the UN SDGs, primarily by supporting SDG 13 Climate Action, because, for me, climate change is, without a doubt, the biggest challenge of our time. What do you think of the progress made by the European Commission thus far in progressing the Corporate Sustainability Reporting Directive? I’m optimistic about the progress they have made so far. The European Financial Reporting Advisory Group (EFRAG), the European body drafting these standards, delivered their first set of draft standards to the European Commission last November. In order to ensure companies can implement these new standards, Mairead McGuinness, European Commissioner for Financial Stability, Financial Services and the Capital Markets Union, has asked EFRAG to prioritise efforts on capacity-building, basically providing the relevant companies with a support function to help them implement the standards. As a result, EFRAG is pausing the roll-out of sector-specific standards for now, which I can understand given the circumstances. It’s important that companies are given sufficient support so that they may implement the sector-agnostic standards appropriately before moving forward with the sector-specific standards. What does it mean to you to be named Chartered Star 2023? It was an honour to win it and something I wouldn’t have thought possible all those years ago when I started my career in accountancy. The list of past winners is so impressive. To be chosen this year is a privilege and I have a responsibility as Chartered Star 2023 to continue the high standard in everything I do. Ultimately, I hope to continue to work towards the achievement of the UN’s SDGs for many years to come both in my personal life and through my career.

Sustainability is often seen as the domain of large corporates but SMEs have the collective potential to be more powerful players. Sheila Killian explains why Social and environmental sustainability is often seen as more relevant to big multinational companies (MNCs) than to SMEs, small-to medium enterprises employing no more than 250 people. MNCs are more likely to have a sustainability strategy, and resources for its implementation, monitoring, reporting and communication.  They are more likely to report externally, integrating their reporting across sustainability and financial activities, and to be scored by ESG rating agencies.  This does not mean that MNCs carry all the responsibility or should reap all the benefits, however.  SMEs are enormously impactful in aggregate and have a huge amount to gain by getting involved. So, why and how should they engage? The potential impact of SMEs on sustainability SMEs have a massive collective impact. In Ireland, they account for seven jobs in 10. While large companies are commonly exporters, SMEs tend to serve their local region.  In terms of where people live, work, shop and spend their leisure time, smaller enterprises dominate. This amplifies both their responsibility, and the opportunities open to them. Because SMEs are embedded in their communities, they often make a huge contribution socially without realising it. This may lie less in strategy than in values.  David O’Mahony of O’Mahony’s Booksellers Ltd, a long-established independent bookshop in the south-west, sums up the position: “It’s only when you really think about it and put all the things together that you realise that there’s a lot more going on … [in corporate responsibility and sustainability] … than we would have probably realised ourselves.”  O’Mahony’s enjoys high social capital locally, gained through understated good work for the community and environment, derived from values and a sense of neighbourliness rather than from formal reporting.  Why SMEs do not report Despite this implicit moral accountability, many SME owners do not think about reporting externally on their sustainability. This is often because they don’t see the value to be gained. Compared with MNCs, there is much less separation between ownership and management/control in SMEs.  Therefore, the need for both internal and external reporting is reduced because the main shareholders are already intimate with what is going on in the business, and employees are closer to the leadership.  Unless the business is considering raising external finance, there is little need to consider how potential investors might perceive it, and if there is a perception that customers are not interested in sustainability activities, these will not be reported.  It seems to come naturally to SMEs to be community-oriented, however, often because they are family-owned, and such behaviour reflects the origins and values of the family.  Such firms tend not to have formal, written codes of conduct, but instead propagate the personal values of their owners, who do not consider that a separate, published set of values and reporting on their social and environmental activities is necessary for business. Why SMEs should report One reason for SMEs to begin some form of sustainability reporting is so that they can compete with MNCs locally to attract and retain talented employees.  The labour market is tight, remote working has shifted the power balance, and younger generations are more focused on sustainability.  Increasingly, SMEs are framing their sustainability credentials more clearly, and connecting them with their employer brand so that they can attract the talent they need.  There is also a consumer angle. The challenge posed by behemoth online retailers to small, local bricks-and-mortar businesses is now well-rehearsed.  A small, independent business, like a bookshop, needs to clarify and articulate its values and personal touch as a competitive advantage.  This ‘personality’ needs to be communicated externally if it is to reach the right customers effectively. Sustainability reporting can convey a sense of what the company is all about, its values and purpose – its ‘soul’. A third reason, particularly applicable to SMEs operating in the business-to-business sphere, is that reporting on strong sustainability metrics confers an advantage in entering the supply chains of larger firms.  If, for instance, an MNC is moving towards zero-carbon, it is likely to require smaller companies in its supply chain to be also on that journey.  A fourth reason to report is the internal value to be gained from paying attention to sustainability. Measuring, reporting and constructing a narrative around social and environmental values will improve the culture of the business, and pave the way to greater innovation.  Hotel Doolin in County Clare is an example of a small business that tells its sustainability story effectively. It has shortened its supply chain by buying local produce.  The hotel harvests rainwater, it has eliminated single-use plastics, and uses environmentally low-impact energy and heating. It became Ireland’s first carbon-neutral hotel in 2019, under the Green Hospitality Programme, ahead of many larger competitors.  The business also promotes social sustainability, employing refugees, supporting local community groups and actively seeks to be a good employer. This has enhanced its reputation not only locally but nationwide.  Partnering with not-for-profits Smaller companies that are ambitious in terms of sustainability targets will inevitably want to achieve things that are beyond their capacity.  If, for example, a business decides to work on the water quality in the area in which it operates, it may lack in-house expertise, jeopardising its credibility with the local community. One solution may be a partnership with a not-for-profit organisation (NFP). NFPs often have the expertise to tackle social and environmental issues but lack the resources, whereas companies may have resources (money) but lack the knowledge. A partnership can achieve sustainability goals if the match is right.  The NFP needs to be operating in the area in which the company wants to make progress, and the company needs to align with the NFP’s approach to society and the environment.  Mutual respect and consultation are key. At worst, a partnership can be seen as a ‘fig leaf’ for the SME and can undermine the legitimacy of the NFP. At best, it can be truly impactful for all involved. SMEs’ supply chain responsibilities  MNCs are famously held responsible for the working conditions in which their goods are produced by companies in their supply chains. Scandals, including the sweatshop labour exposed in the 1990s to the Rana Plaza garment factory collapse in Bangladesh in 2013, have forced companies such as Nike, Gap and Nestlé to change their practices.  Bad practices persist today, however, even where goods are produced close to home. In 2020, for example, it was revealed that online vendor BooHoo was selling clothes made in extremely poor working conditions in Leicester in the UK.  For a small, independent retailer, this means that, unless it takes steps to assure itself of the origin of the goods it sells, the risk remains that all or some element/s of those goods may have been produced in sweatshop conditions.  Smaller firms may lack resources to monitor conditions in their suppliers’ factories. Nor are they likely to have the requisite buying power to impose a code of conduct on their suppliers. So, what can they do about the conditions under which the goods they sell are produced? The International Labour Organization has clarified that a firm has responsibility as far up the supply chain as it has ‘reasonable influence’.  Large firms can leverage direct buying power to positively impact supplier. Starbucks works with its coffee producers to bring them up to higher social and environmental sustainability standards, for example.  A small trader is, however, limited to choosing suppliers wisely, and using their influence when feasible, perhaps working with other firms in the sector. The key differences between the supply chain responsibility of MNCs and SMEs, then, relate to power and influence. This principle also applies to other areas of sustainability. More power means more responsibility and the potential to make a positive impact.  SMEs need to address all the key issues of fair pricing, employee welfare, human rights and environmental impact within their own operations and – as far as possible – outside of them, bearing in mind their levels of resources and power.  The key questions here are: “Are we doing all we reasonably can to achieve sustainable practice?” and “Are we seeking to improve?”  Sometimes, acting in concert with other SMEs, can achieve more. The outcome may not be perfection, but honest efforts in the right direction will carry collective weight.  Sustainability and the SME advantage While corporate sustainability is often seen as the domain of MNCs, SMEs – because of their numbers and connection with, and impact on, society – are potentially more important players.  Many SMEs do not report their sustainability policies for several reasons, including informality, time and resource pressures, unfamiliarity with reporting standards and frameworks, or because a strong internal locus of value and ethical behaviour is already vested in their owners and leaders.  However, SMEs generally have high levels of engagement with their local communities and implement sustainability on an intuitive basis, drawing on leaders’ personal values. Reporting these efforts can bring significant advantages externally and internally.  Despite a lack of resources relative to larger companies, the key to building sustainable value for SMEs lies in making the best choices that are within their power at a given time. Sheila Killian is Associate Professor at Kemmy Business School, University of Limerick, and author of Doing Good Business: How to Build Sustainable Value

In the face of rising business costs, practitioners must ensure that more SMEs avail of the Small Company Administrative Rescue Process in the months ahead, writes Graham Kenny In 1990, the Iraqi dictator Saddam Hussein led a ground force invasion into Kuwait. This war was to serve as an unlikely catalyst for a radical overhaul of corporate restructuring in Ireland. It set in train a clear evolutionary lineage to the Small Company Administrative Rescue Process (SCARP) recently enacted under the Companies (Rescue Process for Small and Micro Companies) Act 2021. To understand this evolution, it is important to consider what actually happened in 1990. The economic effects of the invasion of Kuwait had immediate and dire consequences for Ireland.  Up to 70 percent of Larry Goodman’s Anglo Irish Beef Group exports were sent to Iraq and its customers went into immediate default.   Faced with the collapse of one of the largest employers in the State, the then Taoiseach Charles J. Haughey hastily recalled the Dáil from its summer recess and passed the Companies (Amendment) Act in August 1990.  This piece of legislation introduced examinership into the Irish statute books and, for the first time, permitted protection from creditors and the subsequent write-off of company debts.  Over the past two decades, I have been involved in many of the seminal cases of examinership across a range of sectors, including the first Supreme Court hearing of an examinership (In Re Gallium Limited [2009] IESC 2009). My experience is that examinership has served as an essential corporate restructuring tool, saving thousands of jobs through schemes of arrangement. Often, however, the costs associated with such restructuring have been cited as a disincentive for smaller companies to use the process. As a result, examinership has notionally remained the preserve of larger companies. The genesis of SCARP In February 2020, COVID-19 reached Ireland and had a devastating effect on many small businesses. In response to the threat of another financial crisis, SCARP came into force in December 2021.  This new Act is based largely on the examinership model, but notably does not require an application to court for its commencement.  Like examinership, the idea behind SCARP was to give companies breathing space from their creditors in order to implement a restructuring plan, which ordinarily included the write-off of a portion of creditors’ debts.  Before discussing the necessary role SCARP will have to play in the coming months, it is important to first undertake a brief overview of the salient features of this new corporate restructuring tool.  Who can apply? The Companies (Rescue Process for Small and Micro Companies) Act 2021 is aimed at protecting ‘small’ and ‘micro’ companies.  Small companies are defined as having an annual turnover of up to €12 million, a balance sheet of up to €6 million and up to 50 employees.  Micro companies are defined as having a turnover of up to €700,000, a balance sheet not exceeding €350,000 and up to 10 employees.  How does a company prepare for SCARP? The first step a company should take in considering the SCARP process is that the directors should prepare a statement of affairs in accordance with section 558B(4) of the Act.  The statement of affairs is accompanied by a statutory declaration that is then given to a Process Advisor. What is a Process Advisor? The Process Advisor is ordinarily an experienced insolvency practitioner who will attempt to restructure the company’s debts. It may be noted that the company’s auditor or accountant cannot act as its Process Advisor.  The Process Advisor will review the company’s statement of affairs and other financial information (as set out in Section 558C(4)) and then outline their determination as to whether the company has a “reasonable prospect of survival”.  It is important to note that a Process Advisor does not take executive powers and that the board of the company maintains full control. The Process Advisor’s fees are subject to super-preferential status over all other creditor claims. How does the rescue process commence? If the Process Advisor determines that the company does have a reasonable prospect of survival, then they will confirm this in writing to the directors of the company.  Section 558D(2) sets out that, within seven days of receipt of such confirmation, the directors shall convene a board meeting to consider whether the appointment of a Process Advisor is appropriate.  Section 558K compels the Process Advisor to notify employees, creditors and the Revenue Commissioners within five days of their appointment.  Section 558O states that creditors must acknowledge receipt of such notice within seven days and further information regarding their claim within 14 days. Can a creditor opt out of the rescue process? Section 558L provides a list of potential excludable debts. This list includes the Revenue Commissioners.  Notably, the holders of such excludable debts have 14 days to notify the Process Advisor of their intention to be excluded from the rescue plan. Such creditors must give reasons for their decision to opt out.  From anecdotal evidence, it appears that the Revenue Commissioners is largely supportive of the process and generally determined to opt in. What is a Rescue Plan? Section 558Q sets out the matters that must be incorporated into any Rescue Plan. These include: a statement of affairs; the likely outcome for creditors on a winding-up or receivership; the effect of the plan on each creditor; the reasons why the plan is fair and equitable; and  details of the Process Advisor’s remuneration. How is the Rescue Plan approved? Section 558T puts the onus on the Process Advisor to call a meeting of members and creditors as soon as is practicable after preparing the Rescue Plan.  Section 558T(4) requires that such meetings shall be fixed for a date no later than 49 days after the date on which the Process Advisor was appointed.  It is important to note that creditors must be give seven days’ notice of such meetings, so in reality the meetings must be convened no later than day 42. Section 558Y(4) sets out that a Rescue Plan shall be deemed to have been accepted by a meeting of members or creditors when 60 percent in number, representing a majority in value of the claims represented at that meeting, have voted in favour. Section 558Y(5) sets out that the Rescue Plan shall be binding on members and creditors where at least one class of impaired creditor accepts the plan and, furthermore, that 21 days have passed from the date of filing of the notice of approval in the relevant court office and no objection is filed in accordance with section 558ZC. Section 558Z requires that creditors are given notice of such approval within 48 hours. It is important to note that under section 558ZB, the Rescue Plan will not become binding on members and creditors until 21 days have elapsed from the filing of the notice of approval. What does it mean for a Process Advisor to “certify” certain liabilities?  Like examinership, the Process Advisor is given the power under section 558ZAA to certify company liabilities.  This certification means that such liabilities are treated as expenses of the Rescue Plan and therefore give such creditors a preferential status.  This provision is often used as an incentive to encourage creditors to continue to trade with the company while a Rescue Plan is formulated.  The future of SCARP Corporate restructuring requires a fine balance between competing corporate interests, employee rights and duties to creditors.  An unfortunate consequence of this complexity is that the rules governing such restructuring, whether under examinership or SCARP, can be convoluted and sometimes confusing.  But this fact alone should not deter practitioners from seeking appropriate advice and permitting struggling companies from reaping the benefits of this multifaceted legislation.  The low number of companies availing of SCARP thus far is bewildering. I would suggest that one of the main reasons for this sluggish start is simply the unfamiliarity of practitioners with the process.  The well-worn path of liquidation is regrettably often proffered by advisors before a full consideration of SCARP (or indeed examinership) is properly undertaken.  I think the main reason SCARP has not taken hold, however, is down to the extensive supports and debt warehousing that has been offered by the State.  In my experience, entrepreneurial directors live in the moment and dream of a brighter future. Directors can be reluctant to focus on the dark clouds on the horizon and are often instead consumed with an arguably unrealistic optimism. A report published by the Revenue Commissioners in March 2023 highlighted that 13,000 businesses have been expelled from the tax warehousing scheme for non-compliance and are now facing a 10 percent penalty charge.  Perhaps more worryingly, the same report shows that about 63,000 businesses still had a combined €2.2 billion tax debt in the warehousing scheme. This report also revealed that such debts owed by businesses in the scheme ranged from 19,000 businesses owing less than €100 to 6,400 owing more than €50,000. Jobs and livelihoods at stake Behind all of these abstract statistics, it is important to remember that these businesses employ 400,000 people who, in turn, have families to support.  In the face of both cost-of-living and housing crises, it appears inevitable that any rise in corporate insolvency rates would have a devastating impact on countless families within the next two years.  In light of these stark numbers, it is incumbent on practitioners across Ireland to seek the appropriate advice from corporate restructuring specialists when consulted by companies in this quagmire of historical debt.  The sooner this advice is sought and considered, the more realistic the company’s chances of survival will be. SCARP offers a vital lifeline to many struggling companies, and in the coming months, it needs to become a standard go-to option for practitioners and  their clients.  Graham Kenny is a Partner in the Dispute Resolution and Litigation Practice Group at Eversheds-Sutherland LLP

The roadmap for the EU Commission’s milestone Corporate Sustainability Reporting Directive is taking shape and now is the time to start preparing for a brave new era in non-financial reporting, writes Conor Holland With the Corporate Sustainability Reporting Directive (CSRD) now approved by the European Council, entities in the EU must begin to invest significant time and resources in preparing for the advent of a new era in non-financial reporting, which places the public disclosure of environmental, social affairs and governance matters (ESG) matters on a par with financial information. Under the CSRD, entities will have to disclose much more sustainability-related information about their business models, strategy and supply chains than they have to date. They will also need to report ESG information in a standardised format that can be assured by an independent third party. For those charged with governance, the CSRD will bring further augmented requirements. Audit committees will need to oversee new reporting processes and monitor the effectiveness of systems and controls setup. They will also have enhanced responsibilities. Along with monitoring an entity’s ESG reporting process, and evaluating the integrity of the sustainability information reported by that entity, audit committees will need to: Monitor the effectiveness of the entity’s internal quality control and risk management systems and internal audit functions; Monitor the assurance of annual and consolidated sustainability reporting; Inform the entity’s administrative or supervisory body of the outcome of the assurance of sustainability reporting; and Review and monitor the independence of the assurance provider. The CSRD stipulates the requirement for limited assurance over the reported information. However, it also includes the option for assurance requirements to evolve to reasonable assurance at a later stage. The EU estimates that 49,000 companies across the EU will fall under the requirements of the new CSRD Directive, compared to the 11,600 companies that currently have reporting obligations. The EU has confirmed that the implementation of the CSRD will take place in three stages: 1 January 2024 for companies already subject to the non-financial reporting directive (reporting in 2025 for the financial year 2024); 1 January 2025 for large companies that are not presently subject to the non-financial reporting directive (reporting in 2026 for the financial year 2025); 1 January 2026 for listed SMEs, small and non-complex credit institutions, and captive insurance undertakings (reporting in 2027 for the financial year 2026). A large undertaking is defined as an entity that exceeds at least two of the following criteria: A net turnover of €40 million A balance sheet total of €20 million 250 employees on average over the financial year The final text of the CSRD has also set timelines for when the Commission should adopt further delegated acts on reporting standards, with 30 June 2023 set as the date by which the Commission should adopt delegated acts specifying the information that undertakings will be required to report. European Financial Reporting Advisory Group In tandem, the European Financial Reporting Advisory Group (EFRAG) is working on a first set of draft sustainability reporting standards (ESRS). These draft standards will be ready for consideration by the Commission once the Parliament and Council have agreed a legislative text. The current draft standards provide an outline as to the depth and breadth of what entities will be required to report. Significantly, the ESRS should be considered as analogous to accountancy standards—with detailed disclosure requirements (qualitative and quantitative), a conceptual framework and associated application guidance. Readers should take note—the ESRS are much more than a handful of metrics supplementary to the financial statements. They represent a step change in what corporate reporting entails, moving non-financial information toward an equilibrium with financial information. Moreover, the reporting boundaries would be based on financial statements but expanded significantly for the upstream and downstream value chain, meaning an entity would need to capture material sustainability matters that are connected to the entity by its direct or indirect business relationships, regardless of its level of control over them. While the standards and associated requirements are now largely finalised, in early November 2022, EFRAG published a revised iteration to the draft ESRS, introducing certain changes to the original draft standards. While the broad requirements and content remain largely the same, some notable changes include: Structure of the reporting areas has been aligned with TCFD (Task Force on Climate-Related Financial Disclosures) and ISSB (International Sustainability Standards Board) standards – specifically, the ESRS will be tailored around “governance”, “strategy”, “management of impacts, risks and opportunities”, and “metrics and targets”. Definition of financial materiality is now more closely aligned to ISSB standards. Impact materiality is more commensurate with the GRI (Global Reporting Initiative) definition of impact materiality. Time horizons are now just a recommendation; entities may deviate and would disclose their entity-specific time horizons used. Incorporation of one governance standard into the cross-cutting standard requirements on the reporting area of governance. Slight reduction in the number of data points required within the disclosure requirements. ESRS and international standards By adopting double materiality principles, the proposed ESRS consider a wider range of stakeholders than IFRS® Sustainability Disclosure Standards or the US Securities and Exchange Commission (SEC) published proposal. Instead, they aim to meet public policy objectives as well as meeting the needs of capital markets. It is the ISSB’s aim to create a global baseline for sustainability reporting standards that allows local standard setters to add additional requirements (building blocks), rather than face a coexistence of multiple separate frameworks. The CSRD requires EFRAG to take account of global standard-setting initiatives to the greatest extent possible. In this regard, EFRAG has published a comparison with the ISSB’s proposals and committed to joining an ISSB working group to drive global alignment. However, in the short term, entities and investors may potentially have to deal with three sets of sustainability reporting standards in setting up their reporting processes, controls, and governance. Key differences The proposed ESRS list detailed disclosure requirements for all ESG topics. The proposed IFRS Sustainability Disclosure Standards would also require disclosure in relation to all relevant ESG topics, but the ISSB has to date only prepared a detailed exposure draft on climate, asking preparers to consider general requirements and other sources of information to report on other sustainability topics. The SEC focused on climate in its recent proposal. The proposed ESRS are more prescriptive, and the number of disclosure requirements significantly exceeds those in the proposed IFRS Sustainability Disclosure Standards. Whereas the proposed IFRS Sustainability Disclosure Standards are intended to focus on the information needs of capital markets, ESRS also aim to address the policy objectives of the EU by addressing wider stakeholder needs. Given the significance of the directive—and the remaining time to get ready for it—entities should now start preparing for its implementation. It is important that entities develop plans to understand the full extent of the CSRD requirements, and the implications for their reporting infrastructure. As such, they should take some immediate steps to prepare, and consider: Performing a gap analysis—i.e. what the entity reports today, contrasted with what will be required under the CSRD. This is a useful exercise to inform entities on where resources should be directed, including how management identify sustainability-related information, and what KPIs they will be required to report on. Undertaking a ‘double materiality’ analysis to identify what topics would be considered material from an impact and financial perspective—as required under the CSRD. Get ‘assurance ready’—entities will need to be comfortable that processes and controls exist to support ESG information, and that the information can ultimately be assured. The Corporate Sustainability Reporting Directive represents a fundamental change in the nature of corporate reporting—the time to act is now and the first deadline is closing in.

Brendan O’Hora reports on the findings of the 2022 All-Member Survey Research is conducted to discover new information or reach a new understanding of something, so the Institute’s biennial membership survey is crucial. These have been two years of significant change, and as a membership organisation, it has never been more important for us to act on the findings in a comprehensive, targeted way for the benefit of 31,000 members globally.  The survey was conducted in May and June with over 1,800 members by independent research agency, Coyne Research. This level of participation helps us to build a very accurate picture of the member experience and is much appreciated. It allows us to make the most of this opportunity to check in with members, and to ascertain how we will respond and act on the findings.  This year, we also conducted qualitative research via eight focus groups. This exercise gave us a deeper understanding of member sentiment and reinforced that we are operating in very unusual times.  The operating environment The pandemic may be in retreat, but its effects persist. An ongoing adjustment to hybrid working, declining levels of resilience after extended periods of pressure, and changing priorities among younger members, many of whom qualified or spent their early years in a virtual environment, have had an impact. Compounding this are growing cost-of-living pressures.  The top challenge emerging from the survey for businesses was, unsurprisingly, the competition for talent, up significantly on 2020. Following this is inflationary pressure and increased labour costs. What is resonating with members  Looking at our membership as a whole, the qualification is very highly regarded and a source of great pride. The letters mean a lot to our members, and that pride also extends to the robustness and quality of the education provided.  In reviewing the findings, Bernie Coyne at Coyne Research noted that members are broadly positive about the way the Institute has responded over the last two years to the pandemic.  She said: “As in previous years, members were invited to rate a range of services, based on their experience and degree of satisfaction, with sentiment remaining consistent. Over seven in 10 members rated the webinars and online CPD options as good, with a 20 percent increase in those who experienced them since 2020. The range of specialist qualifications was also rated highly, as was Accountancy Ireland magazine, the weekly Tax News circular, and the knowledge hubs on the Institute’s website.”  The research also pointed to an increase in the number of members who have communicated with the Institute by phone and email since 2020. Roughly seven in 10 rate their experience in communicating positively. While there was strong uptake of the virtual alternatives on offer during the pandemic, there is confidence in returning to face-to-face events. Indeed, the research points to a desire, particularly among younger members, to engage and learn about how they can make their membership work for them and derive the greatest value from it.  Consistent with many of our peers globally, we have seen drops in key member metrics, such as satisfaction and relevance as well as likelihood to recommend the qualification. While, unsurprising, given these unusual times, it is an important alert for the Institute that is already prompting action.   How we are responding to the findings In a changed external environment, and armed with considerable insights, our challenge now is to reposition how we engage with members, with a particular focus on younger members at the start of their career, to optimise their experience of the profession. We are working closely with the Chartered Accountants Student Society of Ireland (CASSI) and the Young Professionals Committee in so doing.  Our members are some of the strongest advocates for the profession, and, at a time when there is a continuing shortage of qualified accountants, it is incumbent upon us to ensure the membership experience is a positive, rewarding, and relevant one for these most important advocates.  One of the ways we will be doing this in the coming weeks and months will be through a campaign to put the tools into members’ hands to make their membership work for them. It will feature real members speaking about how they’ve made the most of their membership and will be accompanied by an updated member section on the website to help users better access and understand what is available, from membership details to Continuing Professional Development, conferences, social events, and supports. Our focus is on giving more control of their experience to our members, so that this experience can be tailored and made to work for the individual.   In closing, I want to return to a theme I touched on at the outset—resilience in the face of sustained pressure. One-in-two respondents reported that COVID had a negative impact on their mental health, compared to 2020. Younger members were less likely to be aware of the Institute’s member support service CA Support, and we will be working to increase awareness of this important resource.  Brendan O'Hora is Director, Members, at Chartered Accountants Ireland

Jennifer Nickerson left a successful career in Dublin to co-found a whiskey distillery in rural Tipperary. She tells Accountancy Ireland about her inspiration, ambitions and lessons learned along the way When Jennifer Nickerson co-founded Tipperary Boutique Distillery in 2014, the Aberdeen-born Chartered Accountant had already risen through the ranks at KPMG in Dublin to become an associate director in the tax department just seven years after joining as a trainee. Tipperary Boutique Distillery is now exporting worldwide and employs seven people in south Tipperary with further plans for expansion. Here, Nickerson tells us about what inspired her move into entrepreneurship and her experiences establishing and growing a small business with global reach. Q: Tell us about your life and career prior to co-founding Tipperary Boutique Distillery—what prompted you to become a Chartered Accountant? I grew up in Scotland and my dad, Stuart, was a master distiller. He managed and worked as a consultant for some of Scotland’s best scotch producers, such as Glenfiddich, Balvenie and William Grant & Sons. You could say I grew up in the industry. I loved it, especially the passion the people working in it had. I went to college in Edinburgh for six years, studying Veterinary Medicine initially and then switching to Accountancy. I decided I didn’t want to work outside in the cold and wet.  I wanted to work in an office and I had this perception that a job in accountancy would be “nine-to-five”.  I was wrong about that, but after meeting my husband Liam and moving to Ireland to train, I found I really enjoyed the problem-solving aspect of the work. Numbers make sense. There is a “right answer” and that can be very satisfying.  I worked in the tax department at KPMG and did a lot of advisory work. The hours were long but there was great camaraderie and that makes for a really nice working environment. Q: So you had settled into this new career in Dublin and you were enjoying it. What prompted you to up sticks and move to rural Ireland to set up a whiskey distillery? I married a farmer—but I did tell him that I wouldn’t be moving to Tipperary unless there was work there that would interest me as much as what I was doing with KPMG in Dublin. We talked it through and my dad had already mentioned during a visit to Ballindoney, Liam’s family farm near Clonmel, that it would be the ideal setting for a whiskey distillery. We could grow grain, we had the land to build a distillery on, there was good quality water in Tipperary and good conditions for maturing whiskey as it’s a little bit warmer than Scotland. He really just mentioned it in passing, but it struck a chord. I’d had lots of experience putting together business plans and I was lucky that Liam had a steady job working for the county council. It was a calculated risk and we could afford to do it, so we went for it. Q: What was your vision for Tipperary Boutique Distillery starting out in 2014? Ultimately, we wanted to produce a world-class whiskey from grain to glass here on Ballindoney Farm.  We knew we had everything we needed, but we also knew it would take time, because distilleries are expensive and there is also the cost of laying down spirit for at least three years before it can be sold as whiskey. It wasn’t until 2020 that we finally had the funding raised, the facility built and the equipment installed to open our own distillery. We had started outsourcing Irish whiskey casks from other distilleries cut to bottling strength with water from our farm and released our very first expression way back in March, 2015.  After that, we started taking our own grain from the farm, having it malted and distilled by my dad at other facilities. Now, we are able to do everything apart from malting here in our own distillery. We grow our own grain, we mill, we mash, we ferment, we distill, we mature and we bottle here on the farm.  Q: Tell us about your markets? What countries do you sell to and where do you have the healthiest trade? We sell into Belgium, France, Canada, into several states in the US, and a little in Korea and Singapore. We were selling to Russia, but obviously not any more, and we were in discussions with distributors in Ukraine and Poland, but the impact of the war has scuppered both. Germany is our biggest market, Italy is great, and Belgium is a surprisingly steady little market as well.  In Ireland, we sell online ourselves at tipperarydistillery.ie and through Irishmalts.com, James J Fox, The Celtic Whiskey Shop, and through local retailers around the country. Q: What was it like moving from a successful career as a tax advisor in a Big 4 environment into the cut and thrust of entrepreneurship? Was it a good experience? It was massively humbling to be honest, but also incredibly rewarding. At the start, I did miss having colleagues to talk to and bounce ideas off. I really felt I was on my own and it took me a while to find my feet. My background in accountancy definitely helped a lot with the ‘form filing’—understanding bills and applying for licenses, things like that. At the same time, there were lots of things I didn’t know about, like where to get a barcode or source seals for bottles. It was a massive learning curve. Q: What are the most important lessons you have learned so far running your own business? I had no idea starting out how vitally important sales are. That sounds like a ridiculous statement, but it took a long time for me to shift my mindset away from numbers and deadlines to just getting out there and going after sales.  What I know now is that you can’t give up. It’s no good just sending out an email to a potential customer and waiting for them to come back to you. You have to keep trying and telling literally everyone you can how great your product is and why. That can be really hard because it’s very different to sitting in front of a computer as an accountant and working to a deadline. You have to be willing and able to stand up on a stage and say, “this is what we’re doing, we’re amazing and our product is the best”.  There is a theory that 80 percent of all sales in any business come from 20 percent of costumers. Based on my own experience, I’d have to agree with that. There’s really no point in chasing one-off sales. It’s far more important to focus on valued relationships than driving around trying to get a bottle into every bar in the country. On the other side of the coin, you have to chase your bills just as much. If you’re not getting paid, you’re in trouble. Q: How has the COVID-19 pandemic and the more recent war in Ukraine affected your business and how have you responded? As soon as the Pandemic hit, our orders from overseas plummeted. We had two pallets due to go to a distributor in a country that was very badly impacted by the pandemic and they ended up having to wait six months to take delivery. Irish people are brilliant though. They started buying more Irish whiskey during the pandemic and that really saved our business. Russia’s invasion of Ukraine had a massive impact as well, because it caused major supply chain issues for us and other producers. We had to change our glass suppliers, and we had really big delays with cork supplies, the capsules for the top of the bottle seals, cardboard for packaging deliveries—you name it, everything was disrupted. Most of our suppliers I tried to keep, because we have good relationships with them and that’s really important in business. We were also probably lucky that we are quite a small operation, so we have been able to adapt more quickly than bigger producers. Q: The Irish whiskey industry has grown enormously in recent years—do you think there is room for further growth and what are your own plans from here? When we started back in 2014, there were something like six craft distilleries in Ireland, but by the time our own distillery was up-and-running in 2020, the number had risen to around 40.  The market grew so much in that time. There is a lot more competition now and a lot more diversity in the sector, but there are also a lot more customers buying Irish whiskey in Ireland and overseas. I think there is still scope for some growth in the market. Forty distilleries sounds like a lot, but Scotland has around 100. What we are seeing is that, as the market matures, there is less focus on cost and greater focus on quality. Each producer has to know their niche and communicate it well to the marketplace. For Tipperary Boutique Distillery, our plan now is to continue to sell in Europe, and expand our presence in America and Asia. We want to continue to grow sustainably and one day—hopefully soon—open our own visitor centre at our distillery here on Ballindoney Farm.