Ethics

The Institute’s Code of Ethics for members has been revised and restructured and this revised Code will take effect from 1 March 2020 replacing the current Code of Ethics (effective September 2016). The revised Code of Ethics is available to read here. The Institute’s Code of Ethics has been closely aligned for many years to the Code of Ethics issued by the International Ethics Standards Board for Accountants (‘IESBA’).  In 2018 IESBA finalised a significant project to clarify and restructure its Code of Ethics.  IESBA’s primary intention behind this restructuring of the Code was not to fundamentally change the substance of the Code, but to improve clarity and navigation.  Some key features of the restructuring include: a more consistent approach to each section, including separating out material into requirement paragraphs and related application material; reordering material, dividing larger sections and including more sub headings; simplifying the more complex sentences; changing numbering to clarify the intent of each paragraph, and to allow for further changes without having to renumber existing material; and Introducing a “Guide to the Code” to explain how it works. The Institute’s Code of Ethics has now been revised to align with the restructured IESBA Code and so the format and layout of the revised Institute Code of Ethics will look completely different to members.  To help members become familiar with the revised Code of Ethics we have made available a table of destinations which shows where each paragraph in the 2016 Code appears in the revised 2020 Code.  This table of destinations can be accessed here. The new structure, compared to the old structure, is as follows: Revised Code of Ethics for members of Chartered Accountants Ireland (effective 1 January 2020) Extant (‘old’) Code of Ethics for members of Chartered Accountants Ireland (effective 30 September 2016) Guide to the Code This is a new section in the revised Code of Ethics Part 1 – Complying with the Code, Fundamental Principles and Conceptual Framework Sections 100–120 Part A – General application of the Code Sections 100-150 Part 2 –Professional Accountants in Business Sections 200-299 Part C – Professional Accountants in Business Sections 300-350 Part 3 –Professional Accountants in Public Practice Sections 300-399 Part B– Professional Accountants in Public Practice Sections 200-280 Part 4A – Independence for Audit and Review Engagements* Sections 400-800 Part B – Professional Accountants in Public Practice Sections 290 Part 4B – Independence for Assurance Engagements other than Audit and Review Engagements Sections 900-990 Part B – Professional Accountants in Public Practice Sections 291 Part 5** - Applicable to Insolvency Practitioners Part D – The Practice of Insolvency Section 400  *        The Institutes’ Code of Ethics does not apply to the performance of statutory audit work.  Independence and other ethical requirements for auditors are contained in the Ethical Standard for Auditors issued by the FRC and IAASA in the UK and Ireland respectively. **     The revision of the part of the Code of Ethics applicable to the practice of insolvency is still ongoing and is expected to be published in the first half of 2020.  Non- IESBA content – ‘add-on’ material The Institute’s Code of Ethics has historically contained ‘add-on’ material (shown in italics in the Institute’s Code) over and above the provisions of the IESBA Code of Ethics.  Where the revised IESBA Code of Ethics now addresses the matters included in Institute ‘add-on’ material or where the add-on material has been assessed to be descriptive in nature rather than core to the Code of Ethics,  such ‘add-on’ material has been removed as part of the revision project.  The revised Institute Code of Ethics is now closer than ever to the IESBA Code of Ethics.   Removed ‘add-on’ material which is considered useful but not core to the Code has been made available for members in a series of Ethics Releases on the following topics: Code of Ethics and changes in professional appointments; Code of Ethics and confidentiality; Code of Ethics and corporate finance advice; Code of Ethics and marketing.  These Ethics Releases are available in the Institute’s online Ethics Resource Centre. Key developments in the revised Code As well as the significant restructure there have been some enhancements of the content in the revised Code of Ethics although there is no fundamental change to ethical requirements.  These include the following: “Guide to the Code” This new introductory section does not form part of the Code but provides some useful information on the purpose of the Code, it’s structure and how it is to be used. Enhanced and overarching conceptual framework There is a clear emphasis on the fundamental ethical principles and the use of the conceptual framework for applying those principles underlying every section of the Code.  In this context there is also new guidance to emphasize the importance of understanding facts and circumstances when exercising professional judgment and new guidance to explain how compliance with the fundamental principles supports the exercise of professional skepticism in an audit or other assurance engagements. Safeguards Revised ‘safeguards’ provisions better align to threats to compliance with the fundamental principles.  A new definition of ‘safeguards’ clarifies that ‘safeguards’ are specific actions (no longer ‘actions or measures’) to be taken to reduce threats.  Additional guidance is provided in the revised Code of Ethics in relation to example ‘safeguards’. Application of relevant Code provisions to all professional accountants Clear guidance that relevant provisions for professional accountants in business are also applicable to professional accountants in practice, in the context of their role other than when providing professional services to clients.  The converse also applies where appropriate.  This is not a change to requirements of the Institute’s 2016 Code of Ethics but rather provides clarification as to how the provisions of the Code apply. Professional accountants in business (‘PAIBs’) New and revised sections dedicated to PAIBs relating to: preparing and presenting information (extended new section 220); and dealing with pressure to breach the fundamental principles (new section 270) These changes add additional explanation to existing requirements in the Institute’s 2016 Code of Ethics and have, for the most part, been regarded as implicit in the 2016 Code.   Non-compliance with laws and regulations (‘NOCLAR’) Dedicated sections on non-compliance with laws and regulations (‘NOCLAR’) (new sections 260 and 360).  The 2016 Code of Ethics includes specific permission to breach confidentiality in the public interest and so the NOCLAR provisions can be seen as a change of detail, rather than of substance.  The new sections provide additional guidance in this area. Inducements Additional guidance is provided in relation to the threats posed by gifts and hospitality and more broadly now referred to as inducements.  The revised Code of Ethics introduces an ‘intent’ test.   The acceptance of any inducement which is offered with an intent to influence inappropriately is prohibited whereas there may be possible safeguarding actions to take in relation to inducements where there is no intent to influence inappropriately.

Feb 13, 2020
Tax

Business Post 9 February 2020 Now that the scramble for votes is over, the scramble for the big jobs in government begins.  The job descriptions of the 15 ministers allowed under the constitution has changed many times, as successive Taoisigh sought to emphasise or reallocate political priorities.  New portfolios get created, and then can be re-amalgamated as happened with Finance and Public Expenditure and Reform in 2011.  Also as part of the deck shuffling by Enda Kenny in 2011, responsibility for trade was moved to the Department of Foreign Affairs.  The move was broadly welcomed at the time, notably by the Fianna Fáil leader Micheal Martin. Trade is where the diplomatic rubber hits the road for open economies.  When outlining Britain’s trade negotiation strategy on Monday last in Greenwich, Boris Johnson quoted the 19th century Liberal politician Richard Cobden.  Cobden once described free trade as “God’s diplomacy”, the best way of keeping the peace. More pragmatically, Ireland’s tiny pool of natural resources along with a small indigenous market means that we simply cannot go it alone and ignore international trade.  It makes perfect sense to have the trade function directly linked to the Department of Foreign Affairs and, in parallel, for Ireland to increase the number of diplomatic missions abroad in recent years as it has done.  Quite literally, if you're not in, you cannot win. If ever there was a need for Ireland's trade concerns to be in step with our diplomatic efforts, it is now.  There will be no immediate land border issue on the island of Ireland as a consequence of Brexit.  Having this problem resolved diminishes any special negotiation status we may have within the European system, though there is optimism in official circles that the other EU countries won’t throw Ireland to the Brexit wolf as the future relationship with Britain unfolds.  As Finance Minister Paschal Donohoe was quoted as saying last week, “we will be seeking at all times to put both the European interests and the Irish interest first and I believe they are going to be fully aligned”. This is the kind of diplomatic circumlocution that will be required in the coming months from our next Minister for Foreign Affairs and Trade.  Brexit makes little commercial sense for most Irish and British people in industry.  It will make even less commercial sense for the British if Britain becomes obliged to stick to EU norms and standards to secure a comprehensive free-trade agreement with the EU.  This was the underlying message of Boris Johnson’s Brexit policy speech in Greenwich on Monday last. On the other hand, the EU cannot grant Britain free access to its market unless Britain continues to accept EU standards.  To do otherwise would dilute the necessity for any country to be a fully paid-up member of the EU to gain access to EU markets.  Compounding this problem for Brussels is that several other EU member countries aren’t entirely clear themselves on what constitutes adherence to standards and quite often don’t bother themselves unduly when going about implementing EU legislation.  Nor is Ireland the only EU member country fighting State Aid tax cases against the Commission. The new Minister responsible for Foreign Affairs and Trade will also be embroiled in two further scenarios.  He or she will need to continually reassure investors from outside the EU that Ireland is still the place to be when doing business with Europe, and that because of Brexit we can offer even more opportunities than before, while at the same time dealing with a growing contradiction in the all island economic approach.  Successive governments on both sides of the border have long extolled the virtues of an all-island economy but the Northern Ireland economy is imbalanced.  It is overly reliant on the public sector.  The Brexit withdrawal agreement has created a hybrid form of trading existence (part UK, part EU) for Northern Ireland.  Northern Ireland will have, in effect, dual membership of both the EU Customs Union and the UK Customs territory, and a similar dispensation for VAT.  This makes Northern Ireland an ideal place to consider establishing a business if looking to trade with Britain in high tariff or highly regulated goods.  It follows that the worse the future trade deal is between the EU and Britain, the greater the potential advantage to Northern Ireland of having this dual-regime arrangement.  A thriving Northern Ireland economy should reduce Stormont’s dependency on public sector funding from Westminster which involves a subvention in excess of £1billion sterling a month.  So now, in the course of the negotiations on the future trading relationship between Britain and the EU, the economic interests of the North and South will be directly at odds.  It will take a particular brand of diplomatic skill to square this particular circle. In his Greenwich speech, Johnson without any sense of irony quoted Cobden’s “God’s diplomacy” idea as the best way of keeping the peace. Cobden could not have envisaged, and perhaps Johnson does not care, about the trouble the next Irish Minister for Foreign Affairs and Trade will have in ensuring that free trade does indeed keep the peace.  Any takers for the job?   Dr Brian Keegan is Director of Public Policy at Chartered Accountants Ireland    

Feb 10, 2020
Ethics and Governance

Barry Robinson explains the obligations placed on private companies arising from the new EU Whistleblower Directive. On 7 October 2019, the EU approved a new Directive on the protection of persons reporting on breaches of European Union Law, also referred to as the Whistleblower Directive. In Ireland, public bodies have had regard to the Protected Disclosures Act 2014, which was amended in June 2018 to incorporate provisions of the EU Protection of Trade Secrets Directive. The current legislation entitles a worker (as defined in the 2014 Act) to report wrongdoing in a public body if there is a reasonable belief of such wrongdoing, and have their identity protected. However, the Whistleblower Directive, which must be adopted into Irish law within two years, will mean that the obligations under the 2014 Act will extend to the private sector as well. The Association of Certified Fraud Examiners’ (ACFE) 2018 Report to the Nations, a global analysis of the costs and effects of occupational fraud, shows that tip-offs or whistleblowing is still the most effective method of detecting occupational fraud, which highlights the importance of this legislation. What will the EU Whistleblower Directive mean for private companies in Ireland? The Directive will make it mandatory for companies with over 50 employees to establish internal reporting channels, both for reporting and follow-up. The Directive allows for companies with between 50 and 249 employees to share resources as regards the receipt of reports and any investigation to be carried out. Who will “reporting persons” be? The 2014 Act currently defines a “worker” who can make a protected disclosure as an employee or a contractor. In the future, under Article 4(1) and 4(2), the Directive will extend the scope of the definition of “reporting persons” to include shareholders, who are not currently included within the 2014 Act. It will also include volunteers and unpaid trainees, and individuals who report on breaches within their knowledge acquired through a work-based relationship, which has since ended. What are the required timeframes for following-up on a disclosure? The Directive will impose timeframes on companies that receive a protected disclosure by creating an obligation to respond to, and follow-up on, the whistleblowers’ reports within three months (with the option to extend this to six months for external channels in duly justified cases). The receipt of a disclosure must be acknowledged within seven days. Will the reporting channels be internal or external? The Directive seeks to encourage disclosures internally in the first instance. The Directive states: “as a principle, therefore, reporting persons should be encouraged to first use internal reporting channels and report to their employer, if such channels are available to them and can reasonably be expected to work”. However, the Directive also allows for external reporting channels. Third parties could be authorised to receive reports of breaches on behalf of legal entities in the private and public sector, provided they offer appropriate guarantees of respect for independence, confidentiality, data protection and secrecy. Such third parties could be external reporting platform providers, external counsel, auditors, trade union representatives or employees’ representatives. Protections against any form of retaliation from employers will be given to persons who report wrongdoing internally and externally. The protections under the Directive will also extend to persons “who make such information available in the public domain, for instance, directly to the public through online platforms or social media, or to the media, elected officials, civil society organisations, trade unions, or professional and business organisations.” Who are “prescribed persons”? The Directive includes provisions in respect of “competent authorities” to whom a disclosure can be made. The Directive states: “in the case of legal entities in the private sector that do not provide for internal reporting channels, reporting persons should be able to report externally to the competent authorities”. Are there any new requirements? The Directive introduces a wide range of new requirements for companies who receive disclosures, which are summarised below: Secure channels for internal reporting. The Directive states that internal reporting shall require “channels for receiving the reports which are designed, established and operated in a secure manner that ensures that the confidentiality of the identity of the reporting person and any third party mentioned in the report is protected, and prevents access thereto by non-authorised staff members”. Dedicated, impartial staff to handle reports. The Directive requires the designation of a neutral person or department competent for following-up on the reports, which may be the same person or department as the one that receives the reports. These dedicated staff members will maintain communication with the reporting person and, where necessary, ask for further information from – and provide feedback to – that reporting person. Diligent follow-up. The Directive requires thorough follow-up and the provision of feedback within three months (which may be extended to six months in duly justified cases). Transfer to another competent authority. The Directive allows for the transfer of a disclosure to another competent authority where the receiving body does not have the competence to deal with the matter. The Directive states that this must happen “within a reasonable time, in a secure manner, and that the reporting person is informed, without delay, of such a transmission”. Reporting the outcome per national law. The Directive states that the receiving body must communicate to the reporting person the result of investigations triggered by the report, in accordance with procedures provided for under national law. Procedures for making a disclosure Article 13 of the Directive sets out the information a competent authority must publish concerning receipts of disclosures. The following information must be published on the competent authority’s website, which must be reviewed and updated every three years: The conditions under which reporting persons qualify for protection; Contact details for the external reporting channels – in particular, the electronic and postal addresses, and the phone numbers for such channels, indicating whether the phone conversations are recorded; Details of how the disclosure will be processed; Details of the timeframes and format for feedback; Details of the confidentiality regime and how personal data will be processed; Details of whether or not a discloser will be held liable for a breach of confidentiality; Remedies and procedures available against retaliation; and Contact details for any other relevant body or information body providing advice to the discloser. Protections against penalisation The 2014 Act makes clear the rights of an individual if an employee is penalised for making a Protected Disclosure. The Directive states: “it should not be possible for employers to rely on individuals’ legal or contractual obligations, such as loyalty clauses in contracts or confidentiality or non-disclosure agreements, so as to preclude reporting, to deny protection or to penalise reporting persons for having reported information on breaches or made a public disclosure providing the information falling within the scope of such clauses and agreements is necessary for revealing the breach. Where those conditions are met, reporting persons should not incur any kind of liability, be it civil, criminal, administrative or employment-related”. Article 20 of the Directive states that reporting persons shall not incur liability of any kind in respect of such a report or public disclosure, provided they had reasonable grounds to believe that the reporting or public disclosure of such information was necessary to reveal a breach under this Directive. What about trade secrets? The 2014 Act was amended in 2018 to incorporate provisions of the EU Provision of Trade Secrets Directive. This required whistleblowers to demonstrate that they acted in “the general public interest” when disclosing commercially sensitive information. The Directive, however, states that where a reporting person can show “reasonable grounds”, they will incur no liability in respect of disclosures including for defamation, breach of copyright, breach of secrecy, breach of data protection rules, disclosure of trade secrets, or for compensation claims based on private, public, or collective labour law. This appears to narrow the burden of proof for reporting persons from acting in the public interest to acting on reasonable grounds. What should companies do? All companies in Ireland should review their obligations under the Whistleblowing Directive and assess their ability to implement internal reporting channels and assign dedicated staff to handle such reports. Companies should undertake planning to identify how reports will be investigated independently, and within the required timeframes of the Directive. While many companies may adopt a “wait and see” approach, companies must act to implement systems and reporting channels per the Directive. Barry Robinson FCA is a Director, Forensic Services, at BDO Ireland.

Feb 10, 2020
Tax

Last Tuesday’s publication of the Sinn Fein election manifesto was met with the usual howls of derision from their political opponents.  You’d be disappointed if it were otherwise. The Sinn Fein manifesto is provoking extreme responses which was possibly its intention.  Its ideology is firmly rooted in socialist ideas which haven’t the same electoral support here as Labour has in the UK.  Their manifesto out-Corbyns Corbyn.  When he was running for election in the UK last year, Jeremy Corbyn only wanted a 50% percent income tax on the wealthy.  The authors of the Sinn Fein manifesto would probably see that as a half-hearted aspiration.  They want earnings over €140,000 to be taxed at a combined rate of 57%.  That’s 4% PRSI, 8% USC, 40% Income Tax and a 5% high income levy. Just because a particular ideology might not sit well with a majority of the electorate does not mean that it is wrong.  Any form of taxation is essentially about redistribution.  It's about moving income from one cohort of society to another, or towards investing in and sustaining services which are available to all cohorts of society.  Devising tax policy is tricky not because of having to set rates nor indeed because of having to decide which and whose money should be taxed.  What makes it tricky is the need to ensure that the policy can be sustained.  When the financial collapse a decade ago led to a collapse in property valuations, property transactions, and hence the tax yield from the construction and banking sectors, we learnt to our cost what happens when tax policy isn’t sustainable. Politicians can set up the tax system in almost any way they want and be reasonably assured that it will work in year one.  It is not a secret how such tinkering can be achieved.  Each year the Revenue Commissioners publish a “ready reckoner”, explaining the impact to Exchequer receipts from increases and decreases to the various bands and rates of tax.  It would for example be possible for a new Finance Minister to double the rate of Capital Gains Tax this year to 66%.  The ready reckoner says that every percentage point change affects the yield by €33m, so that in theory should generate an additional €1billion or so.  This could be used to eliminate local property tax and still have plenty of spare change to reduce the pensions age, so the minister can claim that the figures add up.  He or she might be right in 2020 but would certainly be wrong in 2021 or 2022.  People would look for ways around such a confiscatory tax, or simply defer sales of capital assets in the hope of better days.  The biggest ticket tax item in the Sinn Fein manifesto, restricting retrospectively the tax allowances available to companies for intellectual property, is at best a cash flow advantage.  It is not a new or additional tax.  Their proposal for a high income levy will create what is known in the UK as the cruise ship point – when it’s no longer worth your while after tax to earn more and you may as well go on holiday.  A vacant site levy of 15% may well bring in an additional €100 million or so in the first year, but what happens when the levy starts to work and the number of vacant sites drops off? For businesses, the mooted 15.75% rate of employer PRSI on incomes over €100,000 will create a pay ceiling beyond which few employers will venture.  And will companies be reassured of the commitment to the 12.5% rate in the Sinn Féin manifesto?  Their own Stormont Finance Minister Conor Murphy announced ten days ago that he is not actively pursuing a 12.5% rate for Northern Ireland, although he has the devolved power to do so. Let’s set aside any objections on ideological grounds.  The problem with the tax proposals in the Sinn Fein manifesto is that they are not sustainable.  They would bring in additional money in year one, but not in years two three or four.  All this is a pity because there is much in the Sinn Fein manifesto to like.  They have got the right idea for instance about carbon tax and the futility of increasing it without providing credible fuel usage alternatives.  The current Sinn Fein election manifesto harks back to their manifesto in the run-up to the 2011 General election.  Ireland was a different place back then.  Unemployment was soaring, the national debt was mounting, tax receipts had fallen off a cliff and international creditors were calling many of the shots.  However the core ideas in the Sinn Fein manifesto are the same now as they were a decade ago – higher taxation on a small proportion of individuals, extensive tax reliefs for cohorts of workers on the lower income brackets, and a significant increase in public sector day-to-day spending.  Ireland has moved on. The Sinn Fein manifesto needs to as well.    Dr Brian Keegan is Director of Public Policy at Chartered Accountants Ireland

Feb 03, 2020
Business law

Shane McAleer writes: “That would be an ecumenical matter!” The Ethics Research Report, published by Chartered Accountants Ireland in January 2019, reported that “94% of respondents have ‘observed or encountered’ some level of unethical behaviour during their professional career”. Due to the nature of their business, members working in practice can be more exposed to certain ethical dilemmas. In my experience, the following are two typical dilemmas that can arise and, unless appropriately managed, may potentially lead to unethical behaviour. Business & professional client relationship vs close personal friendship Over time, practitioners can develop a good professional relationship with their client. On some occasions this can develop into a closer personal friendship which, in some circumstances, can expose the practitioner to a threat to their professional ethics. The level of threat can vary. For example: Acting for two clients, both friends of the practitioner, on opposite sides of the same transaction can present a greater threat to independence (breach of objectivity) than perhaps having two bookkeeping clients who happen to be competitors Casually discussing a client’s affairs over a drink with a mutual friend can present a breach of confidentiality. There are safeguards in the Code of Ethics, or the Ethical Standard for Auditors, to help manage these. The ultimate safeguard is resignation, but only insofar as the threat arises between the client and the practitioner. Where the misconduct arises through an action of the client, then this can lead to specific professional responsibilities, e.g. whistleblowing or reporting suspicious transactions under Anti-Money Laundering legislation. Such scenarios can present an ethical dilemma where the practitioner is torn between the value of friendship and their professional obligations. For some, the dilemma can deepen where the client pleads for discretion. This segues to another typical dilemma, below. Expectations to deliver vs Undue pressure/influence from the client or management Situations can arise where practitioners are put under undue pressure/influence from the client to “turn a blind eye” on certain matters. This pressure may also come from management within the practice. In my experience as an insolvency practitioner, I have come across scenarios in companies where a potential ethical threat existed for the practitioner previously advising or auditing the company. In one scenario, a sole practitioner provided audit and tax advice to a large family company for many years. There was a good relationship with the client, given that the client had followed from a firm where the practitioner had previously worked. Over time, the owner/director amassed a significant director’s loan. The practitioner was aware of the loan but for several years it was not disclosed correctly in the accounts. The relevant taxes associated with the loan were not submitted. In another scenario, a practitioner prepared management accounts, showing a solvent position, for the purposes of providing these accounts to a secured lender. The practitioner was aware that the accounts were materially different from the actual position, i.e. an insolvent one. The client was insistent that failure to present a solvent position would result in financial support being withdrawn, with the potential loss of the business and jobs. The facts of the cases in scenario one and scenario two suggested that the practitioner had, perhaps inappropriately, succumbed to pressure from the client to agree with the client’s rationalisation that it was in the best interests of the company to account for matters in this way, and even that the company’s survival may depend upon it. Perhaps, the decision to accommodate the client was influenced out of a sense of loyalty. Perhaps it was out of fear of losing a client. Or, perhaps it was out of a lack of awareness of the relevant requirements! In addition to the safeguards outlined in the ‘Code of Ethics’, there are a number of supports available to all Members and their staff from the Institute, including the Ethics Resource Centre which contains a number of articles and publications to assist members to reach a decision. The Practice Consulting team will always be willing to advise members in practice in dealing with ethical issues and, in addition, CA Support is open to all members to assist them in times of difficulty. Shane McAleer is a director in Somers Murphy & Earl Corporate Services Limited. He is a member of Council, the Institute’s Ethics and Governance Committee, and the Members in Practice Committee. He is also a member of the CCAB-I Insolvency Committee.

Feb 01, 2020
Ethics and Governance

It can take several years and a lot of hard work to build an effective board. David W. Duffy outlines key measures that can be taken to improve its effectiveness. It can take several years to build a fit-for-purpose board that has the leadership and dynamism to support the executive team. The most important element in any governance structure is the Nominations or Talent Acquisition Committee. The purpose of this committee is to help the board make sound business decisions by appointing the right board members. If this committee does not do its job, then the board and the organisation risk stagnating through the lack of new ideas or no challenges to the status quo. New appointments should be strategic and not tactical; they must bring unique skills and experience to the company that will have a real and tangible impact at board level.  This could include the world of digital, geopolitical insight, capital raising, or knowledge of a particular sector, such as offshore life assurance. Board appointments that are rushed are not a good sign of good corporate governance; each appointment should be considered carefully before being made. So, assuming the board is populated with the right talent, here are a few examples of other measures that can be taken to improve its effectiveness: Conduct regular external board evaluations to get an external perspective on the effectiveness of the board. Conduct 360 reviews of the board directors. Make sure that the information provided by the executives is assessed annually to ensure the board can do its job efficiently. Have an annual work plan for the board and for all its committees. This will help set the agenda for the year, and will also ensure the board spends enough time on the future by delegating as much as possible to its committees. Hold an away day at least once a year to reflect on the board’s strategy in some depth and to focus on specific issues, such as looming regulation or competition issues. This also provides an opportunity for the directors to get to know one another other better. Invest in the capability of the board through a professional development programme. The board evaluation may well indicate what the directors might like in terms of development, but it is helpful to also ask them. Topics will depend on the company, but the programme could focus on new regulation and compliance requirements, sustainability, diversity and inclusion, etc. David W Duffy FCA is the Founder and CEO of The Governance Company and the author of A Practical Guide to Corporate Governance, published by Chartered Accountants Ireland.

Jan 31, 2020

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