Sustainability

It is clear why sustainability matters. Added to its obvious importance are the climate action plans rolled out by governments, the global sustainability initiatives lead by agencies such as the UN and NGOs like the World Economic Forum. There is also the increased emphasis on sustainability among deciders of capital allocation, including investors, financiers, grant providers and donors, and the rising environmental awareness in society, which expects higher standards of ethics and governance from institutions. If, as a director, you occasionally feel overwhelmed by the volume of information regarding sustainability, then you are not alone. If you wonder how sustainability is relevant to your role and what difference you can make, take assurance from Socrates that “wonder is the beginning of wisdom”. How Sustainability is Relevant to Your Organisation Whatever an organisation does, regardless of its size, sustainability will impact: its legal and regulatory requirements, how it provides a service or produces a product, whether it retains or attracts talent, whether it is attractive to customers, or whether it is perceived as a viable prospect for banks or investors. The fiduciary duties of directors require them to act in the best interests of the organisation and have regard to other stakeholders. Addressing sustainability issues and looking after the organisation’s business are clearly relevant to these duties. Sustainability may be the ultimate disrupter for businesses. Even if an organisation does nothing to address sustainability issues it will still be impacted by them. For example; What is the risk of a change in regulations challenging current business models? What is the risk of more sustainable technological advancements displacing current products, service offerings or production processes? To what extent can carbon tax increases be passed on to the consumer? What impact will phasing out of oil and gas have on residual values of assets or cost of replacement in the future? Standing still is not an option if an organisation wants to manage the impact of sustainability. Directors, acting as the mind and will of an organisation, have a key role to ensure it is appropriately identifying and responding to relevant sustainability risks. How You Can Make a Difference If you are a director or a member of a board sub-committee wanting to raise the issue of sustainability (even if this is not currently seen as a priority), consider the following approach: Get informed: Find out more about the type of sustainability issues that impact your industry. Sustainability will affect regulatory requirements, consumer demand, availability of resources and all the necessary components of the ability to do business. You do not have to become an expert on sustainability, but a little knowledge or awareness can prompt the right questions. Find Allies: Engage with other board members. Discuss how sustainability impacts the business and how the board might address the issues. You may find that you have more support than you expect. Be Honest: It is important to be pragmatic and constructive as to the reasons why the organisation should address sustainability and how it does so. There may be some immediate measures the organisation can take (‘quick wins’), but more substantive measures may be required to be taken to achieve lasting long-term benefits. Collaborate: Lasting change cannot be achieved alone. If your organisation is not clear on what to do or what direction to take in relation to sustainability, consider collaborating with other organisations on similar journeys. Be curious: Ask questions about sustainability, explore alternatives and respectfully challenge traditional assumptions. Invite others to discuss the issues and embed sustainability objectives in the organisation’s strategy. Questions beginning with ‘What if?’, ‘How?’ or ‘Could we?’ will spark curiosity and give rise to more possibilities and sustainable solutions. Sustainability cannot be achieved alone.  Strategy and know-how shared among organisations and individuals will inform, create awareness and provide confidence for the journey ahead. Directors must be confident to ask advice and seek help from others. If we agree that we all have a stake in sustainability, then we all have a stake in finding solutions to the key risks of our time.   Chartered Accountants Ireland’s Governance Conference 2021 focuses on how boards can embed sustainability in organisations and takes place online on 22 April 2021 from 9:30am. Niall Fitzgerald Head of Corporate Governance & Ethics at Chartered Accountants Ireland 

Apr 09, 2021
Governance, Risk and Legal

The fifth annual Good Governance Awards concluded on 19 November 2020 with the announcement of the winners of the annual report awards across six categories. These categories are based on turnover including a new category this year for very small non-profits with an annual turnover of less than €50,000. One of the main aims of the Governance Awards is to improve the overall standard of annual reporting in the charity and non-profit sector and to provide specific feedback to all entrants alongside guidance on how to improve their annual reports, including their financial statements and disclosures.   Each of the annual reports goes through a very rigorous assessment but underpinning the many assessments and checklists there are some key elements or features which are essential in the eyes of the assessors and judges. In the spirit of improving standards, we have compiled a summary of the top ten judges’ recommendations arising from their assessment of this year’s shortlisted annual reports. We have also included the top ten comments from our assessors in relation to annual reports that were not shortlisted. Top ten judges’ recommendations Ensure the annual report tells a story, in a way which is easy to follow and easy to navigate. Make the link between the charity’s purpose, objectives, and expenditure apparent throughout the report. Focus on clarity and conciseness. The length of some annual reports raised questions concerning the additional value being added with very detailed accounts of activity. Use metrics and key performance indicators (KPIs) to describe achievements. Provide context by disclosing the targets against which KPIs are measured and, where applicable, disclose the prior year’s KPIs. Including a trend analysis of KPI performance over, say, a three-to-five-year period, was highlighted by the judges as good practice. Report on the organisation’s governance structures and processes and describe how adherence to good governance is embedded throughout the board and the organisation. This should include disclosing board members tenure and the approach to board succession planning. Avoid generic risk reporting and emphasise the key and specific risks the organisation faces, how these are being managed and expand into detail on what the board consider to be the current fundamental areas of risk. Include a clear explanation of what reserves are held by the organisation, including an indication of whether these are high, low or within expectations of the board. Material movements between reserves should be explained. Provide clear explanation for a deficit, if it arises, including whether this position is likely to persist and what actions or measures are being taken to address the underlying cause(s). For charities and other non-profits organisations that work with vulnerable adults and children, ensure that safeguarding (measures to protect the health, well-being and human rights of individuals, which allow people to live free from abuse, harm and neglect) is addressed in the annual report.There were some excellent disclosures on safeguarding included in some of the shortlisted organisations this year. Disclose how the charity or non-profit organisation is addressing matters relating to sustainability, cyber security, data protection, diversity and inclusion. These matters are of increasing interest to the readers of these reports. Top ten assessor comments on annual reports that were not shortlisted Ensure that there is a link between the non-financial narrative and the financial statements in the annual report. They should not read as two standalone documents. Review the report for consistency. There were notable instances where the financial statements reported a deficit but there is either no mention of this in the narrative of the annual report or a deficit of a different magnitude is referred to in the narrative. Some reports included a very upbeat and positive narrative describing the organisation’s many achievements, with little or no mention of the challenges, but the financial statements presented a different story. Ensure basic governance disclosures are included, such as providing an explanation of the operation of committees and the recruitment, induction and qualifications of board members and their tenure on the board. In addition to describing the organisation’s activities, describe the key risks and challenges faced by the organisation during the financial period. Disclose the organisation’s mission, vision and values and link these with disclosure of the organisations objectives for the financial period, key performance indicators, etc. Ensure the annual report includes transparency in relation to the various sources of funding accessed by the organisation during the financial period. Ensure the income and expenditure account, or statement of financial activities (for those apply the Charities SORP (FRS 102)) is presented showing restricted and unrestricted funds separately. Review, before submission, the financial statement disclosures to ensure they are complete (required disclosures are included), consistent with the information presented in the financial statements and elsewhere in the annual report and provide any additional information necessary to assist the readers understanding of the organisations successes and challenges faced during the financial period. Prepare an annual report that includes both the non-financial narrative and the financial statements to facilitate readers getting a better understanding of the financial position and key drivers for financial performance. Opt-out of the right to prepare financial statements in accordance with Section 1A of FRS 102 or to file abridged or abbreviated financial statements. This is sub-standard to good governance practice for charities and non-profit organisations reliant on government grants, fundraising from the public or other sources of charitable or voluntary donations (e.g. philanthropy or people volunteering their time to help others). We hope that the above observations and feedback comments will help in improving the standard of annual reports, including financial statements next year. Diarmaid Ó Corrbuí, CEO Carmichael. Email diarmaid@carmichaelireland.ie    

Dec 08, 2020
Governance, Risk and Legal

This week was Charity Trustees’ Week and every year it is a very timely opportunity to acknowledge the valuable contribution of volunteer trustees and celebrate the excellent work they do on charity boards and subcommittees. Giving is part of the Irish psyche, with Ireland ranked 5th in the most charitable countries in the world. This level of generosity is a testament to the commitment of trustees to build public trust in the charities sector through good governance and oversight of strategy to achieve charitable purpose, as well as working with stakeholders to deliver value for money and make a positive impact for all beneficiaries.  This week also saw the Good Governance Awards take place yesterday and this year they attracted the largest number of entrants to date, highlighting the commitment of charities to setting and maintaining high standards of governance.  As a body founded to act for the public benefit, Chartered Accountants Ireland is pleased to add our voice to others in commending trustees for their invaluable contribution to the charity sector and our society. The Institute celebrates the commitment of many of our 28,500 members to the charity sector as managers, employees, trustees, professional advisors, volunteers, regulators and, of course, as donors. We also acknowledge the role of beneficiaries (the raison d’être of charities) and members of the public for their important role in holding charities accountable and providing feedback on how charities can improve services and delivery. 2020 has been a very challenging year for charities due to the Covid-19 pandemic and many have had to radically adapt how they provide services and achieve their charitable purposes.  Many trustees have had to be more generous in their commitment, perhaps at a time when there were other increased demands from their businesses, employers or at home.  This year trustees have overseen the crisis management of some profound challenges for the charities sector, for example: Pressure on Fundraising - According to recent analysis by Benefacts in the first quarter of 2020, at least €0.9 billion was raised by charities in Ireland through fundraising and donations. This highlights the significance of fundraising to charities. Although fundraising on social media has been successful in some cases, it has not been possible for many charities to replace their large traditional fundraising drives involving face-to-face interaction. Christmas 2020 will be a critical time for charitable donations. Maintaining Existing Services - Additional costs of maintaining existing services with Covid-19 precautions are a burden, for example the cost of PPE. For those charities that rely on government funding and that are subject to an annual funding commitment from Government, rather than a multi-annual funding model, planning is restricted by the increased levels of uncertainty the Covid-19 crisis has entailed. Trustees have also to be commended, along with charity management, employees and volunteers, for stepping up and fulfilling a need in society for key services during this pandemic. We have seen many positives for the charity sector during 2020, including: A greater appreciation of the work of charities, for example, meals on wheels, supports to vulnerable groups and the broader healthcare and education systems delivered by and supported by many charities and volunteers. This should lead to more government support and greater empathy and understanding from the public. An increased ability of charities to progress the agenda of the sector on a number of policy fronts to government, for example highlighting deficiencies in services for some sectors of society, making recommendations for improving philanthropy and providing greater incentives for giving through tax reform on relief for donations. Members of the accounting profession are held in high regard by charity and not-for-profit boards and there is strong demand in the sector for trustees with accounting, finance and governance expertise.  We encourage members of Chartered Accountants Ireland with an interest in the sector to get involved and make a difference. Members of our profession have always been accountable and are held to a high standard in the application of their professional knowledge.  We would like to remind members that Chartered Accountants Ireland is here to support you in your role with various expert publications including guides and toolkits as well as courses and member support services. The voice of the sector is represented by charity and not-for profit groups in both the Republic of Ireland and Northern Ireland in addition to advocacy work undertaken on behalf of members engaging with regulators and standard setters. Finally, on behalf of the Council of Chartered Accountants Ireland, its Chief Executive and staff, we congratulate all involved in Charity Trustees’ Week 2020 and acknowledge the important work of this vital sector all year round.  Paul Henry President, Chartered Accountants Ireland  

Nov 20, 2020
Governance, Risk and Legal

Chartered Accountants Ireland congratulate the winners of 2020 Good Governance Awards, which took place last night, 19th November 2020, with over 220 online attendees. Chartered Accountants Ireland were delighted to partner with The Carmichael Centre and support this annual highlight for the Charity and non-profit sector in Ireland. 2020 winners are: Category 1 (volunteer only organisations with an annual turnover <€50k): Serve the City Category 2 (volunteer only organisations with an annual turnover between €50k and €250k): Sharing Point Category 3 (organisations with an annual turnover between €250k and €1m): Children’s Rights Alliance Category 4 (organisations with an annual turnover between €1m and €5m): BeLonG to Youth Services Category 5(organisations with an annual turnover between €5m and €15m): LauraLynn Ireland’s Children’s Hospice Category 6 (organisations with an annual turnover >€15m): Concern Worldwide Governance Improvement Initiative Award: NiteLine Dublin, Proudly Made in Africa, Canoeing Ireland, The Jack and Jill Childrens’ Foundation, and Royal College of Physicians of Ireland. Congratulations to all organisations that were shortlisted. As part of the mission to encourage and promote good practice in the area of annual reports and others areas of governance feedback is provided to all entrants. In addition, overall observations of what organisations did very well and areas for improvement is shared.

Nov 19, 2020
Governance, Risk and Legal

Boards and Corporate Governance – Covid-19 Implications Last updated: 12 November 2020 Boards and their advisors continue to seek up to date information and insights on how the Covid-19 pandemic crisis continues to affect the governance and operations of their business including risk, internal controls, financial reporting, audit and assurance and other regulatory and corporate reporting requirements. The Covid-19 pandemic crisis continues to affect different businesses in different ways. The extent of the risk arising and the impact it may have will vary depending on the company’s specific circumstances and exposure. Since March 2020, much has been issued in terms of advice from regulators, and commentary, regarding various corporate governance considerations related to the spread of coronavirus. The challenge is to stay ahead of what is an evolving situation. We are regularly producing webinars and articles bringing relevant updates and expert insights to our members. We have assembled below some information, for UK and Republic of Ireland, that we have come across that may be of assistance to members. Commentary should not be taken as advice or as a comprehensive analysis of all aspects. When reading information at the links below, due care should be taken of the date of issue and any developments in the interim that may not be reflected in the material published, such as updated statements from regulators etc. Our members’ expertise, judgement and experience are now invaluable to guide each organisation on their unique journey through and beyond this crisis. We encourage all our members to remember that your first responsibilities are to yourself and ensure that you stay well. Take some time to review the member resources offered by Chartered Accountants Ireland in relation to wellbeing and building personal resilience at CA Support. In the meantime, remember that your Institute is here to help you. If there are specific issues where you need help, or if you want to share ideas or insights, please contact us at either ethicsgov@charteredaccountants.ie or +353 1 637 7382.   From the regulators: Link Ireland and UK – All entities applying accounting standards UK Financial Reporting Council (FRC), publish (July 2020) a report summarising the key findings of a thematic review of the financial reporting effects of Covid-19 for a sample of interim and annual reports and accounts with a March period end. The report can be particularly useful to Boards, Audit Committees, and executive directors as guidance for preparing their accounts. It identifies areas where disclosures affected by Covid-19 can be improved, as well as providing examples demonstrating the level of detail provided by better disclosures. FRC Covid-19 Thematic Review: Review of financial reporting effects of Covid-19. Ireland and UK – All entities FRC publish (May 2020) guidance for companies on Corporate Governance and Reporting. FRC - Guidance for companies on Corporate Governance and Reporting Ireland and UK – All entities FRC’s Financial Reporting Lab publish (March 2020) a summary of the five key questions investors want to know the answer to. FRC 5 current questions investors seek information on.. Ireland and UK – All entities applying accounting standards UK Financial Reporting Council (FRC) issue (14 April 2020) update and clarity on accounting and auditing standards requirements in relation to going concern and alerts for investors. This is important matter for boards to consider and further information is contained Chartered Accountants Ireland information hubs on financial reporting and statutory audit referred to further down in this table. FRC Covid-19 update regarding going concern UK – Listed and Regulated Institutions FRC, Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) announced a series of actions (26 March 2020) to ensure that information continues to flow to investors and to support the continued functioning of the UK’s capital markets. Includes forbearance measures for UK listed companies on publishing annual reports and preliminary results and guidance for UK banks on capital requirements and building uncertainty into expected credit loss calculations. Joint Statement UK and Ireland Listed entities UK FRC Guidance for companies on Corporate Governance and Reporting (Company Guidance Update March 2020 (COVID-19)) – contains guidance on corporate governance matters such as risk management an internal controls, management information, estimates and forecasts, dividends and capital maintenance, Directors/strategic report, viability statement and going concern and some key financial reporting considerations. Corporate governance and reporting guidance UK and Ireland Listed entities UK FRC publish Guidance for companies on Corporate Governance and Reporting. They highlight some key areas of focus for boards in maintaining strong corporate governance and provide high-level guidance on some of the most pervasive issues when preparing their annual report and other corporate reporting. Guidance for companies on Corporate Governance and Reporting UK and Ireland companies UK FRC publish (June 2020) Lab report providing examples for companies to follow when making going concern assessments, risk reporting, and producing viability statements.   Note: Podcast interview with Phil Fitz-Gerald, Director of the FRC Lab, discusses two new reports on investor disclosures during the Covid-19 crisis. Report on Covid-19 related going concern, risk and viability UK and Ireland companies UK FRC publish (June 2020) Lab report providing practical guidance and examples to companies to help meet the challenge of reporting to investors in times of uncertainty. The report focuses on company reporting in respect of their resources, action they are currently taking in response to issues and future objectives they expect to achieve.   Report on Covid-19 – reporting in relation to resources, action, the future. UK Financial Services UK FCA published a letter addressed to CEOs of firms providing services to retail investors (31 March 2020). The letter outlines some rule clarifications, temporary flexibility in the FCA’s supervisory function and guidance in relation to ensuring resilience during the Covid-19 crisis. FCA Letter to retail investor service providers EU Financial Services European Securities and Market Authority (ESMA), the EU securities markets regulator, issued (March 2020) a public statement Actions to mitigate the impact of COVID-19 on the EU financial markets regarding publication deadlines under the Transparency Directive. ESMA Public Statement EU Financial Services ESMA issued a public statement (9 April 2020) calling on National Competent Authorities to take into account the Covid-19 outbreak in respect of upcoming reporting deadlines for fund managers to publish yearly and half-yearly reports. ESMA Public Statement re Investment Funds EU Financial Services and other companies ESMA publish (November 2020) its second risk dashboard for 2020 which sees a continued risk of decoupling between asset valuations and economic fundamentals. This report is also useful for non-financial services companies looking for a reliable source of risk forecasting on factors such as macroeconomic environment, interest rate environment, political and event risks, etc. ESMA November 2020 risk assessment EU Financial Services European Banking Authority (EBA) have issued a statement (12 March 2020) on actions to mitigate the impact of COVID-19 on the EU banking sector. EBA statement of actions   Further possible actions announced (31 March 2020) EBA statement of actions 2 EU Financial Services EBA issue a statement (25 March 2020) calling on certain forbearance measures on consumer and payment issues to be granted by financial institutions. Statement on consumer and payment issues EU Financial Services EBA issued a statement (31 March 2020) urging banks to follow prudent dividend distribution, share buyback and variable remuneration policies, emphasising that any capital reliefs permitted by central banks are to be used to finance the corporate and household sectors only. Statement on prudent distribution and remuneration policies EU Financial Services EBA publish guidelines on treatment of loan repayment moratoria considering Covid-19 measures, clarifying circumstances in which a moratorium of this nature would not be classified as part of a forbearance or distressed restructuring by the bank. September 2020 update: As these guidelines are being phased out the treatment they set out will continue to apply to all payment holidays granted under eligible payment moratoria prior to 30 September 2020. Banks can continue supporting their customers with extended payment moratoria also after 30 September 2020, such loans should be classified on a case-by-case basis according to the usual prudential framework. Guidelines on treatment of loan moratorium in financial and credit institutions EU Financial Services EBA publish (May 2020) a report addressing the EU banking sector and insights into the Covid-19 impacts. EBA preliminary analysis of impact of COVID-19 on EU banks. Ireland Financial Services Central Bank of Ireland has issued a statement (19 March 2020) on several matters including reducing the counter cyclical buffer requirements for banks to 0% and expectations on payment breaks for businesses and consumers. Central Bank Statement 19 March 2020 Ireland Financial Services Central Bank of Ireland has issued a statement (27 March 2020) on its expectations of insurance firms to ensure customer-focused decision making throughout the crisis. Central Bank Statement 27 March 2020 Ireland Financial Services Central Bank of Ireland has issued a statement (31 March 2020) on its view as to what constitutes essential banking and financial services in context of the Irish governments public health measures to prevent further spread of Covid-19. Central Bank Press Release 31 March 2020 Ireland Financial Services Central Bank of Ireland launches an online Covid-19 information hub for consumers, SMEs and regulated firms CBI Covid-19 Information Hub Ireland Financial Services Central Bank of Ireland issue (August 2020) statement on the use of electronic signatures in regulatory documents and forms CBI - Statement on the use of electronic signatures in regulatory documents and forms Ireland Charities Charities Regulator (Republic of Ireland) have published answers to several frequently asked questions around regulatory reporting and governance matters affecting Charities during the Covid-19 crisis including forbearance in relation to annual reports due between 12 March 2020 and 15 December 2020, keeping records of meetings, considering charitable purpose in any pandemic relief activities and ensuring funds are not misspent, etc. Charities Regulator Frequently Asked Questions Northern Ireland Charities The Charity Commission for Northern Ireland have published updates on regulatory reporting, advice regarding charity meetings, serious incidents reports and accounting matters The Charity Commission for Northern Ireland update Ireland and Northern Ireland – Tax and general business Chartered Accountants Ireland are engaging with government agencies, regulators and the Revenue authorities, North and South, around the impact of the COVID-19 outbreak, and potential issues with filing deadlines, payments etc. Their responses and links to information are regularly updated on our technical and business updates section. Technical and business updates UK – All Companies UK Companies House published, and regularly updates, coronavirus guidance for companies in relation to several company secretarial requirements, e.g. filing documents, share buy backs, etc., and other information relating to their services, employees and suppliers. Guidance for Companies House customers UK – All companies UK Companies House publishes (July 2020) guidance on temporary changes to Companies House filing requirements arising from (Filing Requirements) (Temporary Modifications) Regulations 2020 that were signed into law following enactment of the Corporate Insolvency and Governance Act 2020. Guidance on temporary changes to Companies House filing requirements Ireland – All Companies Ireland’s Companies Registration Office (CRO) regularly provide updates on services and various company secretarial requirements, e.g. official document submissions, electronic filing, etc., and where to direct any queries. CRO–Update on Services Available Ireland – All Companies The Office of the Director of Corporate Enforcement (ODCE) published a series of FAQ’s in relation to general meetings. ODCE – GAQ re General Meetings Ireland – All organisations The Department of Business, Enterprise and Innovation issued protocols designed to support employers and workers to put measures in place that will prevent the spread of COVID-19 in the workplace when the economy begins to slowly open up. Return to work safely protocol UK – Public Sector UK National Audit Office publish a guide for Audit and Risk Committees on Financial Reporting and Management during COVID-19. Guide for Audit and Risk Committees on Financial Reporting and Management during COVID-19 Ireland and UK – All organisations Organisation for Economic Co-operation and Development (OECD) publishes policy measures to consider in order to avoid corruption and bribery in the COVID-19 response and recovery. Policy measures to avoid corruption and bribery in the COVID-19 response and recovery From professional bodies/organisations   Ireland and UK – Financial Reporting Chartered Accountants Ireland have assembled some information relating to the financial reporting implications of Covid-19. This may be of assistance to board members, audit committees, finance committees and advisors. Financial reporting implications of Covid-19 Ireland and UK – Statutory Audit Chartered Accountants Ireland have assembled some information relating to the audit implications of Covid-19. This may be of assistance to board members, audit committees, finance committees and advisors. Audit implications of Covid-19 UK – All organisations Chartered Institute of Personnel and Development (CIPD) collated guidance and protocols issued from the UK Government on returning safely to the workplace. Covid-19: Returning to the workplace Ireland and UK – All companies ICAS and ICAEW publish SME guidance on going concern. Directors are required to assess whether the business is a going concern when drawing up their annual accounts, and this should cover a period of at least 12 months from the date of approval of the accounts. Coronavirus has had a dramatic change on the performance and prospects of many businesses, leaving some under threat, and accounts will have to reflect its impact. This guidance is designed for owners and directors of SMEs to assess the prospects of their business in the wake of COVID-19. Covid-19 and Going Concern Guidance for Directors of SMEs Ireland and UK – All organisations ICAEW have published a short article titled “Assets and values – the fall-out from COVID-19”. It offers a viewpoint on valuing assets in the COVID and post-COVID environments and how it will engender more questions than answers, especially given the impact of various government interventions on returns. It is a useful thought-provoking article for Boards and Directors that may be assessing the value of assets in their organisations. Assets and values – the fall-out from COVID-19 Ireland and UK – Audit Committees International Federation of Accountants (IFAC) and Institute of Internal Auditors (IIA) produced an insightful article on Implications for Audit Committees Arising from COVID-19. Implications for Audit Committees Arising from COVID-19 UK – AGM’s Annual General Meetings (AGMs) UK: Guidance issued on guidance on Annual General Meetings (AGMs) in the UK and impact of Covid-19 The guidance was produced by law firm Slaughter and May and The Chartered Governance Institute, with the support of the Financial Reporting Council, GC100, the Investment Association and the Quoted Companies Alliance. Covid-19 AGM Guidance UK Note update re Corporate Insolvency and Governance Act 2020: FRC AGM guidance Ireland – AGMs and other company secretarial matters Annual General Meetings (AGMs) Republic of Ireland: Specific requirements under Companies Act 2014 and the organisations own constitution need to be considered in respect of holding AGMs (virtually or physically, in or outside the state, etc.), notifications to members, resolutions required, etc. The Chartered Governance Institute have collated several sources of guidance on AGMs in Republic of Ireland. Covid-19 AGM Guidance ROI Ireland and UK – all organisations Articles and other resources to assist boards and their advisors are available on Chartered Accountants Ireland’s Governance Resource Centre and Webinars microsite Governance Resource Centre   Webinars Ireland and UK – all organisations Webinar: Responding to COVID-19: Advice to Boards and Organisations (Thriving in Uncertainty). Advice to boards and organisations Ireland and UK – all organisations Webinar: How Boards Operate in Times of Uncertainty (including useful company secretarial insights and advice). How boards operate in uncertainty Ireland and UK – all organisations Governance Webcast Series: Ten-minute interviews with CEOs, executives, non-executives and key business advisors on experience to date and advice on dealing with Covid-19 crisis. Governance webcast series UK – all organisations Article summarising key corporate governance aspects of Corporate Insolvency and Governance Act 2020. New Act updates Corporate Governance in Great Britain and Northern Ireland Ireland and UK – all organisations Accountancy Europe published (20 March 2020) Coronavirus crisis: implications on reporting and auditing, exploring going concern, post balance sheet events reporting, impact on estimates and judgements and implications for the audit report. Coronavirus crisis: implications on reporting and auditing Ireland and UK – all organisations Accountancy Europe published (27 March 2020) five key steps for accountants to guide Small to Medium Sized Enterprises (SMEs) through the crisis. This is a useful read in context of SME governance. Accountancy Europe 5 key steps for SMEs Ireland and UK – all organisations Accountancy Europe published (10 April 2020) an overview of EU country responses to the implications of the coronavirus on reporting including going concern, key accounting standard considerations, filing deadlines and more. Note: article also references Chartered Accountants Ireland’s Covid-19 guidance for boards and corporate governance. Coronavirus crisis: country responses to the implications on reporting Ireland – Funds Industry The Irish Funds Association (Irish Funds) have published an online repository of announcements, updates and guidance on Covid-19 implications for the funds industry. Irish Funds Covid-19 online resources Ireland and UK – all organisations The Institute of Risk Management (IRM) published an online support page outlining some risk considerations for business and risk managers during the Covid-19 crisis. In addition to some UK specific references the risk considerations for organisations outlined and additional resources provided are relevant to organisations in Ireland and UK. Risk considerations for business during the Covid-19 crisis Other related information   Ireland - Charities Ireland’s national association of community and voluntary organisations, charities and social enterprises, The Wheel, have compiled details of several fundraising resources for Irish non-profits and community groups. Fundraising information and resources for non-profits during Covid-19 Northern Ireland - Charities Northern Ireland Council for Voluntary Action (NICVA) have published an online Covid-19 information hub providing supports and advice to the voluntary and community sector on coping with the crisis. NICVA Covid-19 Information Hub Ireland and UK – All organisations Financial Executives International (FEI) publish insights to how ESG issues are being discussed in the boardroom amid the COVID-19 pandemic ESG in the boardroom amid COVID-19 Crisis.  

Nov 12, 2020
Governance, Risk and Legal

The Corporate Insolvency and Governance Act 2020 (the ‘Act’) received Royal Assent on 25 June 2020. It makes some significant changes to UK insolvency legislation and provides for new measures for companies in financial difficulty due to the economic impact of COVID-19. The Act also makes temporary changes to law relating to the governance and regulation of companies and other entities. This article highlights some of the key changes affecting corporate governance of an entity.  A summary of the key corporate governance aspects of the Act is also available here. The measures introduced in the Act were welcomed by Chartered Accountants Ireland who believe they will provide some confidence to struggling, but viable, businesses as they cope with the array of challenges presented by the Covid-19 pandemic crisis. Speed and impact were of the essence and the UK House of Commons, Department for Business, Energy and Industrial Strategy (BEIS) and the Insolvency Service must be commended on giving this emergency legislation priority. Some of the key changes affecting corporate governance are highlighted as follows: 1. Filing deadlines Missing a deadline for filing prescribed documents with Companies House automatically results in financial penalties and, in some cases, can result in criminal sanctions for the directors or the company being struck off the register of companies. However, the Act officially legislates for temporary extensions of these deadlines and enables the Secretary of State to make further extensions if necessary. The extended period for filing prescribed documents, including updates to the People with Significant Control (PSC) register in relation to beneficial ownership, must not exceed: 42* days, in a case where the existing period is 21 days or fewer, and 12* months, in a case where the existing period is 3, 6 or 9 months. Companies House website states that eligible companies do not need to apply for an extension and that they will update their filing deadline automatically. 2. Annual General Meetings (AGMs): Where companies are required to hold general meetings between 26 March 2020 and 30 September 2020*, they will have greater flexibility in how they hold such meetings, irrespective of the provisions of their company’s constitution and the Companies Act 2006. Companies that were due to hold their AGM within this period can delay it until 30 September 2020, without being in breach of Companies Act 2006 or the company’s constitution. To afford companies greater flexibility in how they hold their AGMs, while also conscious of the varying information and communication technology (ICT) capabilities, the Act includes temporary measures that: Removes obligation for meeting to be held at any particular place. Removes obligation for a quorum of those participating in the meeting to be together at the same place. Removes the right of a member/shareholder to attend in person, participate other than by voting, or to vote by particular means. Enables the meeting to be held, and any votes to be cast, by electronic means or any other means. 3. Wrongful trading: The Act temporarily suspend parts of insolvency law to support directors to continue trading through to 30 September 2020* without the threat of personal liability for wrongful trading and to protect companies from creditor action. It requires the High Court to assume that a director, in making any contribution that it is proper for a person to make, is not responsible for any worsening of the financial position of the company, or its creditors, that occurs during the period from 1 March 2020 to 30 September 2020*. It should be noted that this measure does not in any way excuse a Director from the offence of fraudulent trading (S993, Companies Act 2006) nor any other wrongdoing. Directors, whether organisation is in distress or not, are expected to exercise appropriate risk management and required to make decisions that promote the success of the company. In doing so, S172, Companies Act 2006 requires Directors to have regard to a wide range of factors including: the long-term consequence of decisions as well as the interests of the employees; the relationships with suppliers and customers; the impact of the decision on community and environment; the desirability of maintaining a reputation for high standards of business conduct; the need to act fairly as between members of the company, as well as introducing wider corporate social responsibility into a director’s decision-making process. Chartered Accountants Ireland jointly hosted a webinar on 30 June 2020 where we heard from key speakers Nick Bates (Head of corporate transparency, BEIS), Peter Swabey (Policy and Research Director, Chartered Governance Institute) and Mike Metcalf (Chair of ICAEW Company Law Panel and Partner, KPMG). The event can be viewed here. Níall Fitzgerald FCA Head of Ethics and Governance, Chartered Accountants Ireland * The Corporate Insolvency and Governance Act 2020 enables further changes to duration of certain temporary provisions to be made either by regulation or the Secretary of State.

Jul 03, 2020
Governance, Risk and Legal

Entries open until 11 September 2020 The Good Governance Awards recognises and encourages adherence to good governance by charities and other non-profit organisations in Ireland. The 2020 Awards are now open for entries for both the Annual Report Award and the Governance Initiative Award on www.goodgovernanceawards.ie Institute involvement The Institute are proudly supporting the awards for the third year. It is important to recognise good governance and more importantly to recognise the people that are responsible for putting it into practice. Members of our profession are held in high regard by charity and non-profit organisations and many are involved in the sector by direct employment, volunteering, accepting trustee appointments, acting as advisors, accountants, or auditors. Two Award Types Annual Reports: This award recognises annual reports that effectively tell the story of the non-profits its activities, impact, finances and demonstrates adherence to good governance practice.   Governance Improvement Initiative: This award recognises initiatives that have been taken in the last 12 months to improve the quality of the non-profit’s governance. Four great reasons to enter Open for non-profits of all sizes: There are six entry categories ranging from small (annual turnover of less than €50,000) to the very large (turnover of over €15 million).The push this year is for getting smaller non-profits involved Entries reviewed by a first class assessment and judging panel: There is a panel of over 60 assessors and judges and seven accountancy firms who bring great expertise and experience who will review each entry and provide valuable feedback and insight to assist in enhancing each submitting organisation’s governance Organisation reputation is enhanced with stakeholders: Entering the Good Governance Awards demonstrates commitment to adhering to good governance practice and transparency. It also shows willingness to be assessed and receive feedback on how governance can be enhanced Boost team morale and gain valuable PR opportunities: Being shortlisted for a Good Governance Award recognises hard work to adhere to good governance practice. Winning an award boosts credibility and increases awareness of the organisation which can help convince even more people that it is a cause worth supporting. New award category for 2020: very small non profits In this year's Good Governance Awards, there is a new entry category for very small non-profits (annual turnover less than €50,000). As an added incentive to encourage smaller non-profits to enter for the Annual Report award, thanks to the Community Foundation of Ireland, those shortlisted in this category will receive €1,000 with the overall winner receiving an additional €1,000. For more details, see www.goodgovernance.ie Institute supports and services for those involved in the Charity/Non-profit sector (‘the Sector’) The following are examples of key supports and services the Institute have in place for members: Dedicated Charities and Non-profit members group (ROI), co-chaired by Paula Nyland FCA and Tony Ward FCA – See page 50 of 2019 Annual Report) Dedicated Charities and Non-profit members group (NI), chaired by Dr Rosemary Peters Gallagher OBE – See page 23 of 2019 Ulster Society Annual Report) Concise Guide of Ethics and Governance for the charity and not-for-profit sector Northern Ireland: Notification facility for Charities/Non-profit boards seeking expressions of interest from Chartered Accountants to join their board. Click for list of contacts Procedures for Quality Audit for Charities – ROI Procedures for Quality Audit for Charities – NI Online courses relevant to Charity and non-profit sector (click and search) e.g. Auditing and Accounting for Charities – ROI Also, events run by District Societies (Western, Cork, Ulster, Mid West, North West, Leinster, London, Australia, United States) Northern Ireland:  Organise webinars on relevant topics for sector (click and search) Technical representations to standard setters, government and regulators on matters also affecting the Sector, based on inhouse technical research and expert input from members technical committees Technical Releases and Technical Alerts providing additional information on technical matters also affecting the Sector Dedicated Governance Resource Centre an Ethics Resource Centre containing updates and other resources on matters also relevant to the Sector Níall Fitzgerald - Head of Ethics and Governance      

Jul 01, 2020
Governance, Risk and Legal

In his latest short interview for the Governance Webcast Series, Níall Fitzgerald talks to CEO of Irish Residential Properties REIT Plc, Margaret Sweeney FCA, and discusses: The future of the Irish residential property market The impact of the Covid-19 crisis on how we work and board decision-making Perspectives on sustainability and the socially responsible measures organisations are taking.    

Jun 26, 2020
Governance, Risk and Legal

In his latest interview for the Governance Webcast Series, Níall Fitzgerald talks to recently appointed Chair of Irish Funds Association, Lisa Kealy FCA, to discuss:  •             The impact of the Covid-19 Crisis on the Irish funds industry •             Insights about fund manager and investor activity in recent weeks •             The expected role the Irish funds industry will play in Ireland’s recovery As investors continue to search for yields, in some cases willing to trade liquidity for above average returns, there is evidence the pandemic is driving more interest in Environmental, Social and Corporate Governance (ESG) investing. Ireland may well be on its way to becoming a green hub of investment management with sustainability at the heart of its industry and culture. We also hear of expected growth in the Irish funds industry as many multi nationals are looking to relocate high value roles such as product investment management and risk management to hubs like Ireland. In addition, the industry is continuing to offer many roles for graduates and experienced professionals returning to Ireland. To hear more from Lisa please watch her seven minute interview included in our Governance Webcast Series.

May 29, 2020
Audit

ICAS and ICAEW have today jointly published free-to-access guidance for owners and directors of SMEs to assess the prospects of their business in the wake of COVID-19. The guidance has been written by experts at ICAS and ICAEW to aid the many small and medium-sized businesses that have been affected by the coronavirus crisis as they prepare their accounts. Company directors are required each year to assess whether the business is a going concern when drawing up their annual accounts, and this should cover at least the 12 months from the date the accounts are to be approved by the directors. But coronavirus has had a dramatic change on the performance and prospects of many businesses, leaving some under threat, and accounts will have to reflect its impact. The publication explains to business owners and directors the importance of forecasting cash flow and how to reflect the impact of COVID-19. Additionally, it provides suggestions on how to work with auditors and accountants during the pandemic, including the need to provide evidence which shows that conclusions reached regarding going concern are reasonable. The guide is available here.

May 19, 2020
Governance, Risk and Legal

Bob Semple FCA writes about the secret sauce of electronic collaboration and the opportunities technology presents to apply a cost effective new approach to virtual meetings. He highlights technology features that, when used, can make a positive difference to the meeting experience. Whether you are organising your next virtual team, management or board meeting, Bob shares his top tips on how to reinvent the meeting in order to get better participation and outputs. Read virtual meetings gone wrong – a guide for the bewildered.

May 14, 2020
Governance, Risk and Legal

Many companies are facing unprecedented uncertainty about their immediate prospects in an environment which may challenge or disrupt their usual management and governance processes. The FRC have issued guidance highlighting some key areas of focus for boards in maintaining strong corporate governance and provide high-level guidance on some of the most pervasive issues when preparing annual report and other corporate reporting including Interim Reports. Interim reports Directors will need to exercise judgment about the nature and extent of the procedures that they apply to assess the going concern assumption at the half‐yearly date.  This might include disclosures of: any material uncertainties to going concern; assumptions made about the future path of COVID-19 and the public health responses; the projected impact on business activities; use of government support measures; and access to bank and other financing.  It is a matter for a company to decide whether to engage their auditors to perform an interim review engagement– it is not a legal or regulatory requirement.  However, feedback the FRC has received from investors indicates that such a review provides valuable assurance, and this may be particularly so in the current environment.   Read the full guidance here.    

May 14, 2020