Articles

Ethics and Governance

While artificial intelligence will certainly play a part, the fundamentals of board management will be familiar.   It is a brisk October morning in 2025 as Julianna, board chair of Oaktree Limited, calls the board meeting to order. Julianna reminds everyone that at 11am precisely, the meeting will commence and Theodore, the artificial intelligence-powered corporate governance assistant, will begin recording the board meeting. The board members are still getting used to the new corporate governance requirement for a virtual assistant to not only record the board meeting, but to analyse the conversation and pick out key debates, challenges and decisions before producing a draft of the meeting for formal signoff at the end of the board meeting. As Julianna looks around the board team, which consists of five women and four men with an average age of 46, she feels very happy about how quickly the two new independent non-executive directors have settled in. It was a pity to lose Padraig and Lucy, but with a new directive stating that all non-executive directors must step down after two three-year terms, she welcomes the new blood coming into the board team. Julianna reminds everyone about the quarterly board evaluation that is due to happen this week and the importance of delivering on the commitment to shareholders of improving the board’s effectiveness and performance score to 90%. Just after 11am, two of the company’s largest shareholders join the live stream of the board meeting and the meeting begins… The board’s responsibility What will the boardroom of the future look like? And what will fundamentally change from today? There is an unprecedented focus globally on boards and how they can evolve to deliver outstanding performance for shareholders and stakeholders. This is to be achieved by embracing the highest levels of ethics and transparency while balancing exceptional levels of challenge, debate and oversight with the board’s capacity to add significant strategic value. From public limited companies to small- and medium-sized enterprises, boards increasingly recognise their responsibility to guide organisations through turbulent waters. Current challenges include significant market disruption stemming from technological and business model change and increasingly unpredictable macroeconomic and geopolitical risks. Progressive board teams are now positioning themselves to thrive in the years ahead with a particular focus on diversity, independence and culture. True diversity in the board team It has been a long and frustrating journey, but we are edging closer to genuine diversity in board teams in terms of gender, age, ethnic background, professional background and thinking styles. The day will come when board chairs will only think of getting the very best talented and diverse board members with a vibrant mix of skillsets, experience and thinking styles. The days of a traditional male-dominated board, selected because of their association to the CEO or board chair, will seem a distant memory. Boards will, as a rule, look for the very best talent to strengthen the team – irrespective of gender, age and professional background. Genuinely independent non-executive directors Shareholders and institutional investors globally are placing a growing emphasis on the number of diverse and highly skilled independent non-executive directors on board teams. Such members bring a mix of deep sector expertise and overall business experience and judgement. Up to now, many boards paid lip service to the critical value that high-calibre independent non-executive directors bring to the table. This has had a negative impact on boards’ performance. Performance culture of board teams Progressive high-performing board teams focus intently on the board’s effectiveness and performance. Utilising the simple principle that if you can’t measure it, you can’t improve it, the best board teams conduct meaningful annual evaluations to ensure that the board – both individually and collectively – is bringing its A-game with every single board member making a valuable contribution. In the UK, large private companies are being encouraged to adopt the public limited company requirement to conduct external board evaluations every three years followed by two internal board evaluations. This trend will likely extend to all serious boards in the years ahead as a means of ensuring that a genuine performance culture is embedded in board teams – irrespective of scale or sector. Shareholders and stakeholders deserve this level of commitment from their board team. Conclusion Shareholders and stakeholders are entrusting their boards with a fundamental responsibility to oversee, protect and enable their organisation to prosper while embracing the highest levels of accountability, ethics and corporate governance. Excellence is not the default position of a board of directors, irrespective of the stature and CVs of board members around the table. Outstanding boards are forged from a high-calibre chair setting the bar very high for board effectiveness and performance; superb and diverse independent non-executive directors bringing outstanding work ethic, challenge, oversight and strategic thinking to the board; a CEO and executive team engaging in an open and accountable manner; and all integrated into a genuine board team with a passionate commitment to excel on behalf of shareholders and stakeholders. The board teams of the future will focus on ensuring that board teams are enabled to excel on behalf of shareholders by delivering outstanding strategic value, embracing best-in-class risk management and adhering to the highest levels of ethical stewardship. Kieran Moynihan is Managing Partner at Board Excellence, which supports boards in Ireland, the UK and mainland Europe.

Dec 03, 2018
Management

Performance reviews are often thought of as an ordeal rather than opportunity. Dr Gerard McMahon outlines the actions to take before, during and after the review to ensure its success. For many people, the performance review process is a pain in the posterior. It is up there with a visit to the dentist in the popularity stakes. However, the wide-scale application of formal performance management or appraisal systems serves to underline an employee’s central role in the pursuit of a wide range of organisational objectives. Though performance management is ultimately an ongoing, every-day process, it normally comes to a head at the periodic review meeting. If approached with due consideration, it can prove to be an uplifting and invaluable experience for all.  Before the meeting Before you step into the meeting, reflect on its purpose. Most want to increase the employee’s motivation levels, to any extent, in the desired direction. Make sure that’s clear for yourself and your employee. It’s worth considering planning a provisional interview structure and strategy to ensure all relevant matters will be dealt with in an appropriate manner.  Set a mutually convenient time – a lot of it – and encourage the employee to prepare for the meeting. It is now common for employees to submit a self-assessment form to their manager prior to the meeting. This practice has considerable merit, as it encourages the employee to reflect on all of the important aspects of their performance and development.  The decision as to what venue to use for such a sensitive meeting is also worth considering. Though the norm is to convene it in the manager’s office, it may be preferable to locate in the employee’s office (if they have one) or to avail of a neutral venue. It helps to ensure that there will be no interruptions, wherever you go. Having agreed the time and venue, the room’s setting or layout should also be prepared. The manner in which a room is laid out conveys certain messages. For example, the manager can choose to avoid placing themselves behind a desk due to its (physical and psychological) ‘barrier’ connotations. You should also avoid sitting at a confrontational angle.  Next, it is important to review the employee’s job description and consider what their job entails in practice. You should also be familiar with the review forms from previous meetings, including the objectives agreed. It will be useful to have concrete examples to support the feedback that you intend to give. When forming an assessment of the employee’s performance, other views may be relevant.  It can also help to check what training/development has or can be provided to the employee.  Finally, the manager should be aware of the objectives of the organisation, department or division objectives for the next period and the potential role of the job-holder. During the meeting Once the meeting commences, it’s important to establish rapport. This entails nothing more complex than breaking the ice with simple questions and quips. After the initial niceties, the review’s objective and proposed agenda can be outlined. The practice of inviting an agenda input gives the employee joint ownership of the process. Of course, the better prepared the manager is, the less likely it is that issues that had not been anticipated will be introduced.  It is advisable to clear the (discreet) note-taking with the employee and to invite them to take notes if they wish.  Start the review by giving appropriate, positive feedback. This is the most important part of the review meeting, so don’t rush it. It is also good to encourage the employee to talk about what positives they think they bring to the role. It is a good idea to get the employee to self-review as much as possible. A good manager should spend up to 85% of the review meeting actively listening, so take your time and don’t be afraid to use silence if and when appropriate. Clarifying and reflecting are also useful techniques for getting the employee to open up and elaborate. It is advisable to avoid arguments and judgement before you’ve heard all of the evidence.  In a similar vein, an effective manager will focus on facts relating to job performance, not personality. This entails reviewing past performance and SMART (i.e. specific, measurable, agreed, realistic and time-bound) objectives, before setting new ones for the coming period.  As with any important meeting, summarise the key points at the end. However, it may prove enlightening to ask the interviewee to summarise first and then to focus on any important omissions. If it hasn’t been done during the meeting, complete the self-assessment form – or make appropriate arrangements with the interviewee for form completion Before closing, the manager should look for feedback on him or herself. Performance management reviews should be a two-way street, and if one is big enough to give feedback, one should be big enough to take it. Conclude the meeting on a positive note. After the meeting The manager and employee should be satisfied that the completed self-assessment review form is a fair and accurate reflection of the meeting. The draft form should be forwarded to the employee for approval, signature or comment on any appropriate revisions. Afterwards, both parties should endeavour to do what they agreed in the meeting and on the form, and make sure to schedule follow-up reviews or agreed actions. Finally, ensure that the employee and other authorised parties secure copies of the signed form or that the designated online computerised facility is appropriately utilised. Dr Gerard McMahon is the Managing Director at Productive Personnel Ltd. Performance review checklist Before Reflect on the meeting’s purpose: to motivate. Agree a mutually convenient time and place. Ask the interviewee to submit the self-assessment form in advance.  Plan a provisional interview structure and strategy.  Check the meeting venue to ensure an appropriate setting and layout.  Ensure that there will be no interruptions. Review the job holder’s job description and consider what the job entails in practice.  Study forms from previous meetings, including the objectives agreed, and look for concrete examples to support your feedback. Others’ views may be relevant.  Check what training or development has and can be provided.  Revisit the department’s objectives and the potential role of the job-holder. During Establish rapport. Confirm the interview’s objective and agree the agenda. Enable note-taking.  Give appropriate, positive feedback and encourage the reviewee to talk about their strengths. Actively listen as you allow the interviewee to self-review and self-prescribe. Take your time and don’t be afraid to use silence when appropriate.  Clarify and reflect to explore key issues. Don’t engage in arguments. Focus on facts relating to job performance, review past performance and SMART (i.e. specific, measurable, agreed, realistic and time-bound) objectives. Set SMART objectives for the coming period.  Ask the interviewee to summarise the meeting and then focus on any important omissions.  Look for feedback on yourself.  After Forward the draft form to the employee for approval and signature. Follow through on what was agreed in the meeting and on the self-assessment review form.  Fill in the diary in regard to follow-up reviews and agreed actions.  Ensure that the interviewee and other authorised parties get copies of the form. 

Dec 03, 2018
Personal Impact

Burnout is a very real problem, but organisations can ease the burden with some simple adjustments.   Stress, pressure and deadlines are part of the everyday workload of managers. But when the common feeling of stress tips over into burnout it can be a serious problem, affecting not just your own health and performance but that of your team and organisation. Some researchers say that as many as 50% of medical professionals and 85% of financial professionals have been affected by burnout. Others say that as few as 7% professionals have been seriously impacted. While researchers may disagree on the numbers, they do agree that burnout is associated with many negative physical and psychological health outcomes such as depression, sleep disturbances, anxiety, and increased alcohol and drug use. Burnout is a psychological syndrome that is characterised by a negative emotional reaction to one’s job as a consequence of extended exposure to a stressful work environment. It produces feelings of inadequacy and alienation, which affects personal and professional relationships. Stressed people think they will feel better if they can get on top of the situation, whereas burnout is associated with the belief that one’s situation will never be rectified. How to spot the signs of burnout Burnt-out colleagues are not difficult to see. Once productive and engaged, the quality of their work will decrease; they will come in late to work; interactions with colleagues will become curt; and they will become prone to illness, thus absenting themselves from the office more frequently.  How to address burnout If companies look at their role in creating workplace stress, which inevitably leads to burnout, there is every chance they can eliminate the factors that lead to burnout. Recent research suggests that there are three steps leaders can take to address burnout in organisations: Reduce excessive collaboration The endless rounds of meetings and conference calls, which aim to include every stakeholder in every decision. Very often, this type of collaboration is required by corporate cultures, yet is far beyond what is required to get the job done. Burnout is also driven by the always-on digital workplace. Switching off a personal device lays the emotional impact at the individual executive’s door rather than with the company’s policy. Call off unnecessary meetings There is huge demand for collaboration in contemporary organisations with little in the way of technology and norms to manage it. Left to their own devices, most employees will manage their time in ways that reduce stress and burnout. Companies could also challenge the assumption that collaboration (two heads are better than one) and meetings are the best way to get things done. Recent research on introverts subverts this assumption and provides alternative methods (such as breaking work tasks into individual, pair and small group tasks) to capture the creativity and talent of all organisational members. Stop overloading the most capable employees The best people in organisations, at every level, are overwhelmed by meetings, emails and interruptions. They then cannot do the job for which they have been hired because they are busy collaborating with other people. Giving people the space and time to do their job may be the most important intervention companies make to address burnout and drive success. It is a win-win for everybody. Dr Annette Clancy is an organisational consultant and also researches organisational behaviour, in particular emotion in organisations.

Dec 03, 2018
Personal Impact

Emotional intelligence and a high trust quotient are important attributes that result in more effective leadership and career success. How can you use your EQ and TQ to further your career in the New Year? A recent Harvard Business Review article, ‘What To Do If Your Career Is Stalled And You Don’t Know Why’, described how many talented executives careers stall or derail because of what they call ‘pandas’ – issues that may be perceived as innocent, but with powerful jaws that deliver a bite. The top three ‘pandas’ are executive presence, communication and peer-level relationships. Often, individuals are blissfully unaware of the existence of an issue that is blocking their progression.  As we consider our career trajectories going into 2019, it is essential that we familiarise ourselves with the story others tell about us. Having a career goal with insufficient self-awareness is like having a destination without a map of the terrain. Key areas to consider in this respect are emotional intelligence (EQ), our trust quotient (TQ) as well as our capacity to lead with agility. These concepts tie in with the most common pandas. EQ, TQ and agility Emotional intelligence relates to a set of competencies which impact how we engage with others (Table 1). There is a clear connection between these competencies and our levels of executive presence, communication skills and ability to build peer relationships.  TQ is a less commonly known dimension. It is a measure of an individual’s personal trustworthiness; a key to building good relationships. Being trustworthy and ethical may be considered a given in a profession such as accounting, however TQ is slightly different. TQ refers to how trustworthy your team, your peers or your clients find you.  Do they find you credible and reliable? Can they feel safe in trusting you with personal, confidential information and how much do we have their interest at heart versus our own interests? The higher our self-orientation, the lower our TQ.  The third element worth considering is leadership agility®. Leadership agility® is our ability to take wise and effective action amid complex, rapidly changing conditions. Many of us are trained to diagnose a situation and come up with the correct answer – that’s what experts are paid for! However, while expertise is highly valuable, sometimes we can rely on it too heavily and end up narrowing our field of vision and misdiagnosing an issue at hand. A black and white approach can lead to rigid thinking and peers, clients or team members may feel that their perspective is not considered or understood. 360 feedback If EQ, TQ and leadership agility® are areas to be navigated before creating a plan to progress your career in 2019, how can you find out what others say about you in relation to these dimensions? The most traditional way of getting such feedback is through a 360-feedback process. There are many 360 tools available in the market and all of them provide different information depending on the angle they take.  Another option worth considering is to identify some trusted individuals who have your best interests at heart and ask them a few questions: What do you consider to be my key strengths that I can use to build my career?  What could hold me back? If I were to pick one or two areas to develop, what should they be? What role/project would be an interesting next move for me, considering my strengths and areas of development? Career criteria Once you have opened up the conversation about your development, discussions about the next steps in your career will inevitably result. It’s a good time to explore what is important to you right now and in the year to come. Such considerations often include financial reward, career progression, flexibility/balance, learning experiences or meaningful work. Whether we prefer clearly defined career goals or to be opportunistic, having clarity regarding the important criteria for our careers is helpful when going into a new year.  In order for us to maximise our effectiveness and continued career success, it is important for us to understand the story others tell about us (including ‘pandas’) and reflect on the important criteria in our career. Once we have built this picture through conversations with others, we can establish the work we need to do to achieve our career aspirations through 2019 and beyond.Leadership Agility® is a registered trademark of ChangeWise. Eadine Hickey is Founder and Director at Resonate Leadership. QUESTIONS TO CONSIDER WHEN PLANNING YOUR CAREER MOVE IN 2019 As you consider your level of EQ and TQ, what do you believe are your strengths and what areas may require development? Is there a risk that you over-use your ‘expert mindset’ in certain situations and would benefit from taking a broader perspective on issues? Who could provide you with very constructive feedback on your strengths and development areas to support you in your career progression? What criteria and values are important to you as you consider your career for 2019 and beyond? Who could be of support to you in achieving your career goals (mentors, coaches, colleagues, friends)?

Dec 03, 2018
Feature Interview

Lucinda Woods ACA, the 2018 winner of the Early Career Accountant of the Year Award, shares her success story. Describe your current role at The Restaurant Group plc. The Restaurant Group plc operates over 500 casual dining restaurants, pubs and concessions across the UK. It employs roughly 15,000 people and is listed on the FTSE with a market capitalisation of around £500 million. I’m lucky to have a very diverse role within the group. I work for the CEO, managing a team that spans group strategy, commercial decision support, customer and market insight, and M&A. The breadth of my role has enabled me to support many strands of the turnaround of our casual dining division, as well as run deals such as the £15 million acquisition of the 11-pub company, Food & Fuel Ltd., and work on business development opportunities in our concessions division, which manages foodservice operations at airports. I also served as Interim Chief Marketing Officer last year, which was a great development opportunity for me, landing outputs on digital, brand strategy and retail marketing operations. Describe your average working week. I get up at 4.30am on Monday to commute to London and I fly back to Dublin on Thursday evening in time to put my son to bed. Fridays are spent catching up on things at home, and the occasional visit to the gym! How did you feel when you were announced as the Early Career Accountant of the Year? Humbled. There was a strong bench of talent nominated for the award so to be called out amongst that was an honour.  What in your view gave you the advantage over your peers? A combination of factors have enabled me to pursue my career ambitions and constantly challenge the boundaries of my comfort zone. From an early age, my parents inspired me to seek out opportunities and my husband has always been very supportive of my career choices and travel commitments. I’ve been very fortunate in terms of the organisations I worked with earlier in my career – KPMG, Investec Corporate Finance and Paddy Power Betfair – as management across all three provided me with tremendous encouragement and support. In addition, I’ve been supported by superb peers and mentors including my boss, who has been generous with his time, always encouraged me to focus on the customer and areas where I can have the most impact, and shown faith in me to do that. I’ve also been lucky to have many talented people work for me, and from whom I have also learned an enormous amount. You have also studied at Harvard. What was that experience like? I was fortunate to do the MBA programme at Harvard Business School. The experience of being surrounded by so many diverse and interesting perspectives was invaluable. I was also taught by many outstanding professors, including Michael Porter and Clay Christensen. What’s next for you? Nappies and sleepless nights! Our family headcount is about to increase with a new baby due in early 2019. Lucinda Woods is Strategy & Business Development Director at The Restaurant Group plc.

Dec 03, 2018
Spotlight

As the ‘future of work’ debate continues, leaders can take three practical steps to future-proof their business.   Every week brings new stories about how the world of work is changing. Driven by forces such as advances in technology, global inter-connectedness and growing consumer expectations, new disruptions and innovations are appearing across virtually every business sector at a faster pace than ever before. But surely the world of work has always undergone constant change? Indeed, authors such as Charles Handy have been writing about this ‘new’ world for many years. Haven’t we, as humans, always adapted and continued on our way? The general consensus seems to be that the digitally empowered period we are now moving into, labelled loosely as ‘the future of work’, will undergo as fundamental a transformation as was experienced after the first Industrial Revolution. While robots, automation and millennials continue to grab the headlines, there is a fundamental shift in the very nature and structure of the world of work – a shift that business leaders and policy makers need to address before they get left behind. So what does the ‘future of work’ really mean for those leading organisations today? Making sense of ‘the future of work’ Early adopters point to the need for organisations to be more strategically responsive and adaptable, more organisationally agile and also more comfortable in dealing with constant change. Organisations need to be responsive to fundamental changes in how work can now be delivered and organised, and to the emergence of a new employee and a multi-generational workforce with different (and sometimes not-so-different) expectations regarding work and the workplace. The ability to sense and respond to these challenges will be essential for long-term success. Commonly quoted essentials such as embracing new technology, dealing with continuous change and managing diversity are now accepted as ‘business as usual’ realities rather than anything new. But what should leaders do in the short-term to prepare for this new environment? 1. Set the right strategy Given the wide range of topics, from artificial intelligence and digital technology to gig working and the changing workforce, it can be hard to make sense of the challenges and opportunities at an organisational level. Filtering all the hype from the real and material issues for your own situation is an important first step. To assist in that process, we use a scenario planning tool called SCOPE (Figure 1), which guides leaders through the main considerations specific to them and their business. Different organisational scenarios are tested for the future, from incremental change to major disruption. Standing back to consider key themes – from strategic flexibility to how the organisation’s culture, structure and processes are aligned and the type of workforce it needs for the future – this quick diagnostic helps executives explore the key questions and likely scenarios to help them get a handle on how their business is strategically placed for the future of work. Organisational agility, for example, is a common theme that emerges from any review of strategy in the context of the future of work. Agility is well-established as a critical organisational competency that has helped organisations adapt to complex and rapidly changing business environments. For high-profile cases, just look at what Netflix and Amazon have done with their business models over the last 10 years. The compelling argument is that if business leaders can improve an organisation’s agility and build it into the organisational culture, structure and processes, they will have gone a long way in preparing their organisation for future challenges and opportunities. 2. Evolve your leadership style It may sound obvious, but reflecting on the role and appropriate approach of leaders is also critical in helping the wider organisation thrive in the future of work. Writers such as Lurie and Fisk suggest that the digital economy requires a new kind of leader from before – one who can lead people in a direction that involves an increasingly diverse set of customers, employees and stakeholders. The outlook of digital leaders must also reflect the characteristics of their business environment (i.e. open, fast-paced, connected, non-linear, virtual and technology enabled). These writers and others contend, for example, that organisational leaders must develop agility as a core leadership capability so that they can respond effectively and calmly to the uncertainty and ambiguity of the modern marketplace. As Martin Goldsmith, author of What Got You Here Won’t Get You There, puts it: “Leadership agility is probably the most important competency for leaders to have in today’s rapidly changing world”. But what is an agile leader? Most models of leadership and leadership development today point to a shift in emphasis from traditional ‘command-and-control’ leadership styles to more transformational, ‘servant-based’ and agile leadership approaches.  In their book, Leadership Agility, William Joiner and Stephen Josephs define the natural and progressive development stages of the ‘agile leader’. From the traditional, tactical and problem-solving orientation of the “expert leader” to the more strategic and outcome-oriented “achiever leader” and then the more visionary and facilitative/empowering “catalyst leader”, Joiner and Josephs describe the practical skills of progressively leading in a more agile way. This helps to call out typical leadership development stages through the lens and language of modern agile principles and practices. Self-awareness and clarity of language and behaviour is helpful for any organisation seeking to be more deliberate and mindful in developing such skills and the working culture associated with organisational agility.   These future of work nuances required for leadership today, combined with what we already know about the more age-old and enduring qualities of simply being a good leader of people, will help leaders thrive in the new landscape and will also allow others in their care to do the same. 3. Build your best team  Armed with a sense of the strategic direction required to face the future of work and being aware of the leadership approach required, leaders should also look at who they hire, promote and keep within their future organisation. No leader can succeed alone, so having the right talent at all levels is a critical theme for leaders as their organisations evolve and grow. New business and organisation models challenge many of our assumptions regarding traditional talent strategy and HR management. Many aspects of talent management will themselves require disruption and new thinking. For example, if an organisation is to be re-configured to take advantage of the business and cost benefits of a ‘blended’ mix of suppliers, outsourcing partners, free agents, automation and a core, full-time workforce, it follows that a new work design and workforce planning strategy will be needed to map out the organisation’s short-term and long-term talent needs. Indeed, the management of the non-core workforce will become a highly strategic function and consideration must be given to how the different parts of the organisation will work together to deliver optimum service to the customer. Once the work design and workforce planning aspects are worked through, the rest of the talent life-cycle processes need to kick in and align. For example, recruiting for the right skills also needs to account for likely and possible changes in skills requirements further down the line. Therefore, attracting people with the right attitude and a learning mindset could arguably be as important as their immediate skills. Training and development will need to be continuous and provided through a mix of mobile, online, on-the-job and formal methods that align with changing business needs as well as the different learning styles of a modern workforce on the move. Rewards will be more flexed and individual, with a “consumer standard” employment experience demanded by different generations of employees. Even how we exit employees is changing, with employers seeing their alumni network as a talent pool for the future as well as important social advocates for their organisation when they leave. Meanwhile, the physical (and virtual) workplace is changing to accommodate new ways of engaging staff working and collaboration. Central to this new talent management story is a clear picture of what the organisation’s desired culture must be. There is a risk that some employers will promise the earth to attract sought-after employees only to find that they cannot deliver on their promises as new work models and skill requirements change the employment prospects of employees and their jobs over time. These new talent management realities will present both challenges and opportunities. We therefore need to re-think what we demand from our leaders and front-line managers, and what qualities they need to succeed. These qualities are possibly quite different to what organisations have hired and trained for in the past. Where do we go from here? We may not have all the details about what our organisations will look like tomorrow, but the one thing we can do today is basic scenario planning that considers different prospects for our own organisations ranging from incremental change to radical disruption. We can then set about designing a talent management strategy that puts the right leaders and people in place to deal with the inevitable changes as they continue to emerge and develop. Kevin Empey is Founder of WorkMatters, a consulting firm that helps business leaders prepare for the future of work.

Dec 03, 2018
Spotlight

Why should you care about the future of work? In short, your employability depends on it. There are huge similarities in the approaches being taken to both the future of work and climate change. It’s out there, we know it’s happening; but we are too busy in our daily work to give it sufficient time and thought, thereby limiting our capacity to adapt before it’s too late. Most readers will be familiar with Stephen Covey’s time management quadrant. The future of work is in quadrant two: not urgent, but important. We tend to focus on the urgent to-do list and the reality of meeting deadlines. In this article, I will outline the importance of investing time in your future employability and explain why everyone should care about the future of work. Why should you care? The average life expectancy of a Fortune 500 organisation is just 15 years, so individuals can no longer assume that employment is for life. Business competitors no longer come from within your industry sector; they mostly sprout up and scale at speed to grab huge market share. Airbnb was not started by hoteliers, Uber was not founded within the taxi industry, Netflix was not started within the media industry. This speed of change will catch you unaware if you are busy with your head down. Accountancy firms compete fiercely to hire entry level graduates. However, they will need fewer graduates in the future as an increasing variety of manual tasks become automated. As accountants, you learned your trade as juniors by conducting audits in industry. You got to see and understand how businesses operate in real life. How will graduates get this experience if and when the work is automated? Change is required in the education and integration of accounting graduates into the future world of work. While Ireland is in the midst of an employment boom, we are witnessing the rise of corporate outplacement programmes as finance and accounting roles become automated. These roles, along with administration and middle management, featured consistently in the Harmonics Global Future of Work Study as the top three roles in decline. The work you did in the past is changing rapidly. Almost every organisation is undertaking a lean transformation or robotic process automation project of routine manual-entry tasks to achieve greater scale, speed and cost efficiency. As an example, Revenue’s move to real-time data as part of its PAYE Modernisation programme eliminates the need for the P30, P45 and P60 forms, along with end-of-year returns. Digits on a spreadsheet are easily mapped into software applications, which takes the pain away and simplifies work. PwC recently launched a digital fitness app for employees worldwide to accelerate and upskill the digital knowledge of its people across a range of domains. Digital acumen is now a lifelong endeavour, which needs to be embraced to stay employable. Big data is valuable and business intelligence dashboards offer real-time data on key business metrics. Artificially intelligent machines will provide answers, but our potential in the future of work is in the questions we ask. Think about a calculator – we’ve all used one to do a quick calculation. The next stage was Googling a simple question to get an instant answer. Now, imagine inputting a complex accounting scenario into a computer programme, and back come your options. In this scenario, massive computational power has replaced manual effort. Indeed, computing is increasing in power and reducing in price – in 2023, it is expected that €1,000 will buy you computational power equivalent to that of the human brain. A recent World Economic Forum report estimated that total work tasks in 2018 were 70/30 in favour of humans over machines. This will evolve speedily to 60/40 by 2022. We are not far off equilibrium in terms of the ratio between human and machine tasks in the workplace, and this demands change on our part. Like our organisations, we too have new competitors for our work – smart machines – and we need to learn how to work with them, rather than compete with them, into the future. The smart machines I speak of are software bots that are learning 24/7 and replicating the work we currently do on our computers. The organisational impact The hierarchical organisation chart that once created vertical career ladders in a functional silo no longer makes sense. This is a major challenge for future organisation design. The organisation chart of the future is organic and constantly evolving. Work architecture needs to be broken up like Lego and reconfigured into human and machine pieces. Organisations are neither resourced nor ready for such an eventuality. Like Lego, the work pieces will need be broken down and reconfigured for every new business challenge. This will lead to the demise of rigid functional silos and will require agile and cross-functional networked systems that evolve to meet specific customer needs. What can you do now? You can prepare by letting go of the past – something we, as humans, find very hard to do. We like routine, certainty and security. Accounting roles are transitioning away from day-to-day number crunching to focus more on interpreting data, building financial models aligned to company strategies/initiatives and project-based work with key stakeholders and other departments. I speak about the nine critical human skills needed in my new book, Future Proof Your Career, which will be available soon on Amazon. The future of work will demand lifelong devotion to the development of critical human skills including critical thinking, communication, creativity, consulting, commercial acumen, collaboration and embracing new cultures – all of which will need to be complemented by ever-changing digital skills. It is not only a skillset shift that is required, but a mindset one. If you have a fixed mindset, resist change and are unwilling to upskill, then your job and your future employability is in jeopardy – but this is within your control.  Finally, I invite you to take part in our global future career readiness research project. It is aimed at working professionals to honestly evaluate how future-ready you are. The Future Career Readiness Index is a powerful instrument that allows you to quickly test your future career readiness in five key areas. It takes less than 10 minutes to benchmark yourself against others in your sector and profession. On completion, you will receive a free downloadable Future Career Readiness report to accelerate your future career. You can access the report at www.futurecareerreadiness.com. My parting career advice is this: disrupt yourself before you are disrupted. John Fitzgerald is Managing Director at Harmonics Group and serves on the Board of OI Global Partners.

Dec 03, 2018
Spotlight

Valarie Daunt discusses how the preferences of millennial workers are driving changes in the workplace. When it comes to the attractiveness of a potential employer, the 2018 Deloitte Millennial Survey found that while financial rewards and benefits are the top priority for millennials in Ireland, this is followed by flexibility, a positive organisational structure, opportunities for continuous learning, and well-being programmes and incentives. The changing expectations of our workforces is one of the major forces re-shaping the future nature of work. By 2030, millennials will make up 75% of the workforce. It is therefore time to sit up and take note. So, what trends will we see as a result of these millennial preferences?  From careers to experiences With technological and demographic trends disrupting traditional career paths, organisations need to reconstruct job profiles and career models, and rethink the coaching and development of employees from entry-level staff through to executives. 21st century careers can be viewed as a series of developmental experiences, each offering the opportunity to acquire new skills, perspectives and judgement. In this environment, organisations need to look at alternative ways of upskilling employees to achieve an agile and responsive workforce. Companies leading in this space are finding ways for employees to learn from others as well as providing learning programmes and on-the-job training. Today’s employee seeks responsibility and leadership roles earlier than heretofore, yet many organisations are unprepared for this change. More than one third of Irish respondents to Deloitte’s 2018 Human Capital Trends Survey stated that, in their organisation, career paths generally progress up a traditional hierarchy, with little flexibility to accommodate individual worker interests or desired career paths. More than half (57%) stated that they only occasionally get the opportunity to work on assignments outside their assigned business line or manager and one third stated that their organisations are only somewhat effective at empowering employees to manage their own careers. Given that the wants and needs of today’s workforce are evolving quickly, talent practices need to support employees in developing a suite of adaptable and agile skills that can be deployed across many areas of the organisation. Only 35% of Irish respondents rate their organisations as being ready to build the 21st century career model, despite the fact that 82% rank this as important. Well-being as a strategic priority As the line between work and life blurs, organisations are investing in well-being programmes to drive employee productivity, engagement and retention. However, there is often a significant gap between what companies offer and what employees value and expect. It is no longer enough for organisations to offer traditional benefits and remuneration such as medical assistance programmes and once-a-year reviews. Today, the focus is on providing programmes that not only protect employee health, but actively boost social and emotional well-being. This includes innovative programmes and tools for financial wellness, mental health, healthy diet and exercise, mindfulness, sleep and stress management, as well as changes to culture and leadership behaviours that support these efforts. Expanding well-being programmes to encompass what employees want and value is now essential for organisations to treat their people responsibly – as well as to boost their social capital and project an attractive employer brand. The Human Capital Trends Survey shows that 50% of Irish organisations rate themselves as “ready” or “very ready” to offer holistic well-being programmes while 37% of Irish respondents state that their organisation offers well-being programmes beyond the traditional offerings. From front-line staff right up to executive leadership, there is a consensus that these programmes promote employee productivity and support employee retention. If an organisation wants to keep its most promising talent, it needs to give employees a reason to stay. The hyper-connected workplace Millennials’ preference for a positive organisational structure is interesting, and is no doubt connected to the fact that there are massive changes underway in how we connect. Social media and collaborative communications tools are transforming the world of work. Today, instant messaging tools such as Slack and Trello, which can be tailored for a project team’s use, have introduced new ways of working. They allow ideas to be bounced off colleagues on a regular basis, without having to wait for scheduled team meetings. They can also provide exposure to leaders and experts, which we know appeals to the millennial cohort. In Ireland, as elsewhere, these new technologies and tools are changing how we communicate at work. 68% of Irish respondents to the Human Capital Trends Survey said this is having a positive impact on productivity and 75% envisage increased use of online platforms as a communication channel in the next three to five years. While a majority of respondents rank this trend as “very important”, Irish organisations have displayed a somewhat conservative approach to adopting emerging communication channels and tools, with more than four in 10 either only permitting the use of well-established tools or requiring tools to be carefully reviewed and approved by their IT departments. Only 6% identify emerging tools and promote their use among employees. Organisations will need to adopt a holistic approach, taking into account different working styles and introducing rewards to promote take-up while also ensuring that the workforce is prepared and willing to use these tools. An important aspect of this strategy is to audit the tools in the marketplace and ensure that they are satisfactory from a risk and IT perspective before introducing them into the workplace. Once approved, collaboration tools should be embedded in day-to-day processes where possible, so as to actively promote adoption among the workforce. As social media and collaborative communication tools migrate from personal lives to the workplace, organisations must apply their expertise in team management, goal-setting and employee development to improve performance and promote collaboration. For the hyper-connected workplace to improve productivity, procedures, workspaces and leadership styles will need to be capable of capitalising on the power of these tools while at the same time managing any potential negative impacts. Conclusion There are many drivers of change impacting on the future of work, and the preferences of millennials is just one of these drivers. However, the impact will be great and there are some gaps to be bridged. Irish businesses now need to begin taking stock of the implications of these drivers of change. Valarie Duant is Partner and Head of Human Capital Management at Deloitte.

Dec 03, 2018
Spotlight

Employers face a host of challenges as they seek to future-proof both their people and their businesses. The future of work can be both exciting and worrying depending on your perspective. Will robots, machines and artificial intelligence take all the jobs? Or will they support workers and produce many new jobs while improving working conditions for all workers? The future rarely turns out the way we imagine. In 1899, the head of the US patent office was quoted as saying: “Everything that can be invented has been invented”, so predictions may make us look foolish. However, that should not stop us considering the opportunities and threats for business and how we can future-proof our organisations. Here are three issues businesses should consider as they prepare for the future of work. Workplaces Technology allows us to work from pretty much anywhere in the 24/7 global workplace. Companies are rapidly moving to agile workplaces and hot-desk environments with more flexible working arrangements. The challenge for organisations has little to do with technology capability; the willingness – or lack thereof – of executive and management teams to support employees who work remotely is arguably a more pressing issue. This is a particular challenge for managers who prefer to see their team in person but, more worryingly, reward those in close proximity and ignore those who work remotely. There is also a reluctance to use the gig economy – a market of independent workers available for short-term engagements – within more traditional organisations. Innovation Hyper-growth companies have one thing in common: an innovative culture. Innovation is something organisations can cultivate, but most companies are risk-averse. Innovative employees take risks and break the rules, and they need to be supported while doing so. Without making mistakes, trying out new ideas and working on new disruptions within their own sector, companies will not be able to build new, innovative products and services. To achieve this, you must have the right people in the organisation and provide continuous learning for staff. Many jobs will go and it is critical that employers encourage their staff to be more flexible and self-directed in their learning so that they can contribute to the company’s ongoing success – even if it means moving regularly within the organisation. Such internal moves can be an excellent way for organisations to share information and work in a less siloed manner. Technology overload The final point relates to the dangers technology can pose for employees. The proliferation of smartphones and screens has led to dysfunctional behaviours. Email, a tool that purports to make us more productive has become a huge burden in organisations. Screen and smartphone notifications interrupt staff on a constant basis, giving them very little time to perform deep and meaningful work. We are busier than ever, but probably much less productive. Even the bedroom is now overrun by smartphone technology, which is spawning a multitude of over-tired and under-productive employees. One insurance company is actually paying a bonus to staff who have 30 good nights’ sleep in a row, as it recognises how critical sleep is to performance. Summary Governments will have to tackle work displacement for older generations as automation, digital platforms and other innovations change the world of work. On the plus side, careers we couldn’t even envisage today will soon become reality and this will provide myriad opportunities for those armed with the right skillsets. Our key job is to support the next generation coming into the workplace – those who were born into the internet and smartphone generation. We need to build on their human skills as these will be critical to their future success. Peter Cosgrove is an expert on the future of work and author of Fun Unplugged, a book to engage children without the use of screens.

Dec 03, 2018
Management

When monitoring third-party risks, it is important that entities focus on value creation as well as value protection. Outsourcing is an increasingly a key strategic decision for many businesses, allowing them to focus on core corporate activities. However, when things go wrong in third-party relationships, companies may be exposed to significant reputational, regulatory, strategic and financial risks. There are two notable recent examples of high-profile third-party failures in Ireland: The Central Bank of Ireland imposed fines on financial institutions in relation to the governance and control of outsourced services delivered by third parties; and In 2018, a restaurant chain in the UK was forced to close more than 560 of its 900 outlets as “operational issues” at a new distribution partner left deliveries “incomplete or delayed”. This is estimated to have cost the restaurant chain in question £1 million per day in lost sales. In 2016, the Central Bank of Ireland warned that poor management of third-party relationships is putting banks at risk, citing “very serious failings” in relation to the governance of these arrangements and brandishing some cases as “astonishing”. Specific criticism related to poor management of outsourced arrangements, lack of oversight and a lack of engagement and challenge from boards. Extended enterprises The operational environment of many companies has expanded to include third-party service providers. Taken together, these third parties constitute what we term “the extended enterprise.” We continue to see companies struggle to identify, measure, report and monitor third-party risks within their extended enterprise. This has led to companies being exposed to a variety of risks and failing to maximise the upside of third-party relationships. The challenge for businesses is to formulate an extended enterprise risk management strategy that proactively manages the risks associated with the extended enterprise while also driving performance. In our experience, the answers to this challenge lie in expanding one’s view of third-party risk management to incorporate value creation as well as value protection. For companies to leverage their risk management processes to improve performance, it is critical that they develop an end-to-end approach for sensing risks systematically throughout the extended enterprise so that vulnerabilities can be addressed proactively. We term this approach ‘extended enterprise risk management’ (EERM). Extended enterprise risk management EERM is the practice of anticipating and managing exposures associated with third parties across the full range of operations, as well as optimising the value delivered by third-party relationships. The risk management landscape is often fragmented and decentralised. Many companies have not agreed and documented their risk appetite. They may approach third-party risk management on an ad hoc basis, addressing prominent areas such as cyber risk and regulatory compliance as they arise. Crucially, many companies do not have a broad pan-company view of all current third-party engagements and the associated risks. A common theme that emerges here is a lack of ownership of risks across the company. For example, despite the increasing focus on risk management, some companies still do not have a dedicated risk officer. Additionally, many companies are not appropriately utilising the three lines of defence to manage risk and drive performance across the extended enterprise. The first line of defence is the business unit, which owns the third-party relationship and is accountable for managing associated risks in alignment with policies and procedures. The second line of defence is a centralised governance programme for extended enterprise risk management, which is responsible for establishing and enforcing policies/processes to ensure that third parties are managed consistently by the business. The third line of defence is internal audit, which is charged with administering a robust audit programme aligned to the most critical extended enterprise risks and controls as well as performing independent assessments. In addition to underinvesting in the three lines of defence, many companies focus excessively on quantitative metrics – contract income and expenditure, for example – when engaging a third-party. When assessing third parties, companies should always include appropriate qualitative metrics – vendor quality, technical capabilities, vendor risk profile, control environment, and ability to drive performance, for example. By not having a defined EERM framework in place, many companies are concentrating on firefighting rather than maximising the benefits that can arise from well-managed third-party relationships. Driving value  Companies increasingly need to move toward a holistic approach to EERM that emphasises value creation as well as value protection. This typically involves establishing a systematic and proactive approach to managing risks across the third-party lifecycle and, in so doing, unlocking value and improving business performance. An operating model for implementing and integrating the various components of risk management across the third-party relationship lifecycle forms the foundation of this approach. To be fully effective, such models must be aligned to the company’s overarching risk appetite and risk management framework. The model should link the individual components of risk management to agreed and documented business objectives and the company’s risk registers. Four cornerstone capabilities  Many companies believe they cannot take an end-to-end approach to managing the extended enterprise because securing executive sponsorship and getting people to take ownership can be an uphill battle. Additionally, many businesses think that the task is too vast and they do not have the expertise and resources to build, execute and sustain a comprehensive third-party oversight programme. In our experience, these barriers are more perception than reality. It is neither necessary nor possible to do everything at once. Companies should consider some practical steps to take toward establishing an EERM programme or evolving an existing one. Many companies can get a sense of what those steps might be by considering the extent to which they have developed the following cornerstone capabilities. Strategy and governance This involves the creation of an agile and flexible governance model: Is there a defined and documented strategy and governance model for managing third-party risk? Is there a defined policy to assess third-party requirements prior to entering into relationships? Are third-party risk management activities linked to value drivers agreed and documented? Have you identified, agreed and documented critical key performance indicators (KPIs) for all third-party relationships? Have you agreed and documented how third-party KPIs will be reported and monitored? Are there defined processes in place to identify new and emerging third-party risks?  People This involves managing relationships, compliance and regulations: Is senior management sufficiently invested in EERM? Are the employees charged with responsibility for third-party risk management receiving sufficient and appropriate training? Is there sufficient investment in the three lines of defence to deliver effective monitoring of third-party risks? Are there defined and documented roles for managing third-party risk across the extended enterprise? Process This involves navigating events that shape the extended enterprise: Are there appropriate contracts in place with all third parties? Do monitoring processes allow for the reliable assessment of third-party performance? Does the company react to third-party events or actively seek to prevent them? Are risk management processes standardised across the company and integrated with tools and data? Is sufficient consideration given to how evolving technologies, market trends and disruptive forces present opportunities and challenges to third-party relationships? Technology This involves using data and analytics to make informed decisions: What tools and technologies are employed to make informed decisions about third-party performance? What transactional data are you entitled to access? Does the company’s IT and systems support KPI monitoring, reporting and performance assessment? Factors to consider in assessing your third-party risks   The complexity of the extended enterprise and resource constraints are no longer sufficient reasons to avoid taking an integrated approach to third-party risk management. Wherever your company stands at present in relation to EERM, some practical steps can be taken now to establish an EERM programme or to move your existing risk management model to the next level. The following factors should be considered. Strategy and programme This involves the development of EERM solutions to assess, design and implement a strategically aligned extended enterprise programme. These may include: Conducting an enterprise-wide strategic third-party risk assessment; and Developing the governance and operating model for EERM including KPIs, reporting and monitoring mechanisms. Evaluation and continuous monitoring This involves the selection and application of a suite of solutions to measure third parties and proactively sense and respond to extended enterprise risks and opportunities. These may include: The selection of quantitative and qualitative metrics/KPIs; Third-party risk assessment processes; and Contract compliance mechanisms. Technology enablement This involves the selection and application of technology solutions to transform and continuously enhance EERM. These may include: Systems design and deployment; Data analytics; and Reporting protocols. Conclusion Effective EERM programmes allow companies to align third-party risk management to strategic objectives and deliver enhanced returns on investment by emphasising value creation as well as value protection.  Crucially, there is no ‘one size fits all’ EERM model or programme. Each company faces unique challenges and therefore, EERM programmes tend to be bespoke by nature. Time spent on EERM programme design is rewarded in the longer term. Finally, successful EERM programmes are continuously re-assessed to ensure that the model being applied remains appropriate at all times. Jimmy Crowley is a Senior Manager in Risk Advisory in Deloitte Ireland.

Dec 03, 2018
Regulation

IAASA’s Observations document highlights key topics management, directors and audit committees should consider when preparing and approving 2018 financial statements.   IAASA published its 2018 Observations document, the eleventh such document, last September. The document aims to assist in the production of high-quality financial reports by emphasising some key financial reporting topics to be considered by management, directors and audit committees when preparing, approving and auditing financial statements. IAASA’s Financial Reporting Quality function examines the annual and half-yearly financial statements of equity issuers, debt issuers and closed-end fund issuers to ensure that they are compliant with the relevant financial reporting framework. IAASA’s financial reporting supervision remit is limited to Irish companies trading on the regulated markets of European stock exchanges (issuers). However, the Observations document may be relevant to a broader range of companies when preparing year-end financial statements. The matters included in IAASA’s Observations document derive from a variety of sources including, but not limited to: The risk rating assessment for individual issuers from IAASA’s risk matrix, which is used to select specific reports for examination; The outcome of overviews performed on preliminary announcements and annual/half-yearly financial reports; Topical issues such as supplier funding arrangements, new IFRS guidance and media commentary; Issues identified at the European Enforcers Co-ordination Sessions (EECS), which is organised by the European Securities and Markets Authority (ESMA). EECS is a forum for European accounting enforcers; Peer issues – matters identified in an entity’s periodic financial report that may be relevant to a wider group of issuers; and Financial reporting issues identified by IAASA’s audit inspection teams. The primary audience for IAASA’s Observations document is the preparers of financial statements. However, it should also help users of those financial statements to understand the significant judgements and estimates made by management in their preparation. Financial reporting environment Entities face unknown economic, political and social threats and uncertainties because of Brexit and heightened protectionist policies, particularly in the USA. The UK is leaving the European Union on 29 March 2019. The details of any Brexit agreement may be clearer by the time entities are finalising their 2018 annual financial reports during the first quarter of 2019. Brexit will affect different entities in different ways and to different extents. Depending on the terms of any Brexit agreement, entities’ ability to conduct business on existing terms may be disrupted (e.g. supply chain, access to the single market, access to the Customs Union, the impact of cross-border and cross-channel trade, and the impact of euro-Sterling exchange rate volatility). Against this ongoing uncertainty, impacted issuers should monitor the likely impact Brexit will have and consider disclosing the financial reporting implications. Some comments on the key topics covered in the Observations document are set out below. Impact of recently issued standards  The quality of disclosures of the impact of new accounting standards effective for the first time in 2018 (IFRS 9 and IFRS 15) in issuers’ 2018 half-yearly reports has been variable. Similarly, the quality of disclosures regarding IFRS 16 (effective 2019) has been mixed. IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors sets out the required disclosures for the initial application of an IFRS [IAS 8.28] and for a new IFRS that is not yet effective [IAS 8.30-31]. The Observations document highlights the requirement to disclose the impact of the initial application of IFRS 9 Financial Instruments. These include the requirements to disclose re-classifications of financial assets and financial liabilities upon initial application of IFRS 9 and a reconciliation of the impairment allowances under IAS 39 Financial Instruments: Recognition and Measurement and under IFRS 9 disaggregated by measurement category [IFRS 7.42I-42S]. IFRS 15 Revenue from Contracts with Customers is effective for accounting periods beginning on or after 1 January 2018. IFRS 15 requires entities to disclose more information about contracts with customers and to disclose disaggregated information about revenue. IAASA indicates that, as the application date of IFRS 16 Leases and IFRS 17 Insurance Contracts nears, entities are required to provide more qualitative and quantitative information about their impact. Significant judgements and sources of estimation uncertainty  IAS 1 Presentation of Financial Statements requires disclosure of significant judgements [IAS 1.122] and sources of estimation uncertainty [IAS 1.125]. IAASA expects entities to: Clearly distinguish these two separate requirements; and Avoid the temptation to provide an extensive list of such items that do not meet the IAS 1 criteria. Complex customer and supplier arrangements and factoring These arrangements can vary greatly from entity to entity, both in terms of their nature and impact. IAASA encourages disclosure of such arrangements and, in particular, the cash flow treatments thereof. Identifiable intangible assets In applying IFRS 3, issuers should consider whether intangible assets should be separately recognised and disclosed on the basis of the separability criterion of IFRS 3 [IFRS 3.B33]. Alternative performance measures Entities’ compliance with ESMA’s Alternative Performance Measures Guidelines has been varied. IAASA reminds entities to endeavour to fully comply with the guidelines and, in particular, to provide explanations where an alternative performance measure is changed or is no longer presented. Consistency of key assumptions IAASA calls on entities to “‘sense check” the consistency between the key assumptions used for the fair value measurement of intangible assets acquired in a business combination with the subsequent intangible asset assumptions used elsewhere in the financial statements. Individual intangible assets Entities with material individual intangible assets should ensure that the disclosure requirements of IAS 38 Intangible Assets, dealing with the disclosure of information about material individual intangible assets, are provided in full [IAS 38.122(b)]. The Observations report can be downloaded at www.iaasa.ie. Maurice Barrett is Senior Financial Reporting Manager in IAASA’s Statutory Reporting Quality Unit.

Dec 03, 2018
Feature Interview

Ian Mathews, outgoing CFO at Trinity College Dublin, reflects on his career as he prepares for a new challenge in Abu Dhabi.   As curtain calls go, Ian Mathews couldn’t have scripted it better. The Chartered Accountant and outgoing Chief Financial Officer at Trinity College Dublin will leave the university this month having won three major accolades in recent weeks – Finance Team of the Year at the Irish Accountancy Awards; Finance Team of the Year at the British Accountancy Awards; and Best Diversified Asset Investment Fund: Trinity Endowment Fund at the Wealth & Finance Investment Fund Awards. In January, he will take up his new post as Vice-Chancellor of Administrative and Financial Affairs at Abu Dhabi University. Ian describes it as “purely fortuitous” that the university won three accolades as he prepares to leave the stage, but it is an arguably just reward for a man who led Trinity’s Financial Services Division out of 3 College Green and integrated 60 finance professionals into the day-to-day operation of the university. “It all started in 2007 when my predecessor and I proactively commissioned an external review,” he said. “The findings were clear, but tough to swallow. We had a great team but we weren’t great on customer service, we didn’t focus on our stakeholders and we said ‘no’ a lot.” Reaching out With the financial crisis just around the corner, the team would be forced to say ‘no’ even more in the years that followed but Ian was determined to bring the finance function closer to the action and make the team more accessible to the university’s 1,800 full-time and 4,000 part-time staff.  “We knew we were good accountants, but we needed to translate that into something of value for our non-finance colleagues. So we recruited a Services Liaison Officer to help us reach out to the different areas of the university,” he said. “We introduced an outreach programme within the Financial Services Team to help the different departments get to know each other and we brought them in groups to the main campus to attend lectures. The whole idea was to build empathy with our colleagues and help us understand where they might be coming from when they have a finance-related issue.” Systems development Today, the Financial Services Division is recognised as an integral part of the university’s operational structure and this is due in large part to Ian’s vision for a more open, approachable and understanding finance function. Such organisational development initiatives were followed some years later by the introduction of a new real-time procurement and reporting system. According to Ian, the university “had no visibility on what it owed or purchased. While we were able to pull accounts together, we had no real strategic data.” In one instance, it took the university three weeks to respond to a relatively straightforward parliamentary question about the university’s taxi expenditure. The university is now on the front foot when it comes to data-led intelligence. Its real-time accounting system allows staff to access the university’s procurement system on their smartphones and make orders around the clock. “We secured €13 million in savings over five years by streamlining our procurement and focusing on value. Where we once had 60 travel agents serving the university, we now have one. Where 10 years ago one department was buying a ream of paper for €8 and another was making the same purchase for €2, everything is now aggregated and we know that we’re getting the best value possible.” Setting these processes and systems up is one thing. It’s another thing entirely to shift the culture of an organisation as large as Trinity College Dublin. Luckily for Ian, he has always been blessed with the power of persuasion. “I have a capacity to listen and build relationships, and this has certainly been an advantage. I also try to lead by example because if you can do that, you will inspire people and create the basis for a workplace that is built on loyalty, integrity, commitment and hard work.” His accessible style was also an asset in his negotiations with the university’s Students Union. Over the years, Ian made a point of meeting the incoming officer group to establish a clear line of communication. “I’m quite people-oriented and I like to keep lines of communication open,” he said. “I fully respect the mandate of the Students Union to fight for more resources and fee certainty. I only ask that if they want to raise a question at a meeting, that they speak to me first. That way, they still have their say at the meeting but they will have the added benefit of a considered, informed response. We won’t always agree, but I’ve heard past presidents of the Union saying that the first thing you do when taking office is talk to Finance. We’re now part of the solution, not the problem, and that’s a great credit to the team.” Strategic investment In the midst of rebuilding his division’s culture and reputation within the wider university, Ian also led Trinity College into uncharted territories. “When I took over as CFO, Trinity College had never borrowed in its 400-year history,” he said. “Our first loan was drawn down in 2010, a second in 2015 and the university has just secured a further 30-year €100 million loan from the European Investment Bank to fund the soon-to-be built E3 Institute (Engineering, Environment and Emerging Technologies), which will develop the knowledge, technologies and aptitudes needed to design and shape the planet’s natural capital. The loan will also fund a refurbishment of the arts block, an expansion of the law school, and new student accommodation at Trinity Hall in Dartry.” The next act Over the past 24 years, Ian has played a central role in the rejuvenation of Trinity College Dublin. Now the university has its sights firmly set on the future, the time has come for a new challenge – one that came in the form of an unsolicited email. “I was asked to put myself forward by an agency in Dubai and it was an operations role as opposed to pure finance. If I waited another five years, my options would be restricted and the time was right from a family perspective,” he said. “Trinity has been great but now, the future excites me in a new way. If you don’t take these opportunities when they arise, you might live to regret it.” So with three awards in the bag and a string of investments at work, which will no doubt benefit the university for generations to come, the curtain comes down on a sterling career in Trinity College Dublin. But the university hasn’t heard the last of him. “I recently facilitated a visit by Abu Dhabi University to Trinity to talk about the potential for collaboration in the area of health sciences,” he said. “I’ll maintain my links with the university because that’s just me, it’s who I am. Two decades of corporate knowledge isn’t going to disappear overnight and if anyone needs to talk, they’ll only have to pick up the phone. I’ll be happy to help.” He might be leaving Trinity’s stage, but don’t bet against an encore.

Dec 02, 2018
Personal Development

Thinking is the top-rated next generation skill, but the ability to think critically is rare. Follow these tips to stand out from your peers in the soft skills stakes. WORDS BY STEPHEN TORMEY I was browsing LinkedIn recently when a headline caught my eye. It read: “The top skills companies need – and how to help your employees develop them”. I’m a sucker for a list, so I clicked in and scrolled down for the answer, whizzing past the verbiage in the process. To my surprise (and that of the article’s author, as I found out when I eventually read the intro), the leading ‘next generation skill’ is... thinking. We do it all the time but according to research from the Harvard Graduate School of Education, it’s the most important skill of the future followed by self-understanding, empathy, ethics and communication. Develop your critical thinking According to Georgetown professor, William T. Gormley, critical thinking consists of three elements: a capacity to spot weakness in other arguments, a passion for good evidence, and a capacity to reflect on your own views and values with an eye to possibly changing them. He elaborated on these points in a recent Harvard EdCast, which you can listen to here. But how can you develop these three elements and learn to think critically? According to an article published by NUI Galway, there are a number of ways to do this. You will likely know some of the points mentioned (join a debating society, get involved in class discussions etc.), but there some very noteworthy suggestions also. They include: Swap coursework with a classmate and critically evaluate each other’s arguments, use of evidence and conclusions; Accept that criticism and disagreement aren’t the same as conflict. It’s okay to hold different views to a classmate, friend or lecturer; Engage critically with course content, particularly with your assigned reading; and Remember that critical thinking is hard. As a set of ‘higher order’ skills, it isn’t something you can learn overnight. Keep trying. Ask for feedback – and learn from it. There’s some great material there, but the university’s Christopher Dwyer also suggested a very useful – and fun – means of honing this skill in his book entitled Critical Thinking: Conceptual Perspectives and Practical Guidelines: play devil’s advocate. In the era of groupthink and news bubbles, it’s easy to be convinced that there’s a right way and a wrong way. Seeking out alternatives, even seemingly irrational ones, could help you see things in a new light and this is what your future employers will be looking for - someone who is technically competent but can approach things with fresh perspectives. Let the debate begin!

Nov 01, 2018
Personal Development

Empathy isn’t only helping us connect with the feelings of others, it also hones our own self-awareness, aiding us in building and nurturing healthy relationships. WORDS BY PAUL PRICE When asked about artificial intelligence (AI), Amos Tversky, psychologist and long-time collaborator of Nobel Prize in Economics winner Daniel Kahnerman, replied, “We study natural stupidity.” Tversky wasn’t saying that humans are stupid, only that we have a propensity for emotional reasoning. Indeed, it is this ‘emotional stupidity’ and emotional intelligence (EI) that sets us apart from machines.  Despite rapid advances in emotional recognition algorithms, it is unlikely that machines will manage to simulate the most human of EI skills – empathy – any time soon. Why? Because empathy requires both feeling and imagination. It is the ability not only to understand others’ perspectives but to attune emotionally to them so that we ‘feel’ what they are feeling. Like a social radar we use to read the mood of a room, or the political currents of an organisation we enter, empathy is a uniquely human skill. And while at times it seems akin to a sixth sense, empathy, through focused effort and regular practice, can be learned.  To ‘feel’ the feelings of others, we must first channel our own. This begins by learning to recognise visceral signals inside our own body and what they are telling us. What feelings do the physiological signs preempt? What triggers them? By honing our self-awareness in this way and learning to quieten our inner chatter during interactions with others, we can gradually form a base for empathetic social-awareness. For those who find this a challenge, here are a few suggestions to help with one-to-one collegial interactions. Take an active interest in the experiences and the concerns of colleagues and be ready to reciprocate.  If a colleague seems emotionally burdened, show a healthy concern for their wellbeing. Be ready to listen if they care to share. Do so with compassion and without judgement and without trying to ‘fix’ them. If you feel that an experience from your past might help, offer to share it, but curtail talk about yourself. Remember this is about their circumstances, not yours. If values differ widely, to attune, you might try some method acting. For example, if a colleague is distraught at the loss of their cat but you are not a pet lover, you might revisit how you felt at the loss of a loved-one of your own. But maintain a healthy objectively so as not to exacerbate the situation. If you simply cannot attune to what the person is feeling, rather than avoid reflecting altogether, consider saying something like, ‘I can’t imagine how you are feeling.’ Empathy requires practice. Observe people interacting in different social settings whenever possible. Pay attention to how their moods change and learn to identify related emotional cues. Avail of every opportunity to practice your listening and emotional response skills, particularly with friends and family.   Here are some tips for developing empathy in work-groups: At meetings, avoid excessive note-taking. Instead, focus on the speakers and what is going on around you. Make occasional eye contact. Observe how others respond to their facial expressions, body language, verbal cues and tone of their voices. Notice how these signals relate to the thrust of the meeting and the mood in the room.  Pay attention to timing, particularly when you are contributing. Observe others that you consider naturally possess empathy. If you continue to have difficulty, consider engaging the help of a trusted mentor. Through developing empathy, we learn to appreciate difference, embrace diversity and nurture healthy relationships with those around us. Any time invested in developing this competence is time spent future-proofing our careers, not only towards AI but against potential relationship blunders.

Nov 01, 2018
Spotlight

Auto-enrolment makes sense, but there are critical issues beyond pension coverage that need to be considered. BY GILLIAN RYAN I went to visit my daughter in the Gaeltacht on Sunday so we had a five-hour round trip, much of which was spent reading articles in the Sunday papers and on LinkedIn about pensions – much to my husband’s delight. Genuinely. I know that’s probably most people’s idea of hell but given the fact that I have worked in the pensions industry for longer than I care to remember, I find such articles really interesting and, if I’m honest, a little frightening. My job and career to date is based on people’s need to invest in pensions. I work with advisers to support them so they can help their clients build better financial futures. On that basis, you might say I have a vested interest but as well as working in the business, I’m a wife, a mum and a friend, so my vested interest is less about my job and more about the futures of the people I care about. That said, my professional experience gives me greater insight than most on this topic. The road trip involved me reading articles about the potential reduction of tax relief on pensions contributions, the ability to bring pension funds back to Ireland from different jurisdictions, the alleged complexity of different pension structures, the fact that public sector workers don’t really need to worry too much about their pensions, and that the private sector does not appear to worry enough. I shared some insights with my husband as we drove down the dreary M6. I don’t imagine my comments and observations made the trip any more exciting for him. It did, however, open up a discussion about our future though and the potential cost of financing it. Damian is a golf club member and I’m a gym member. We both like driving nice cars. We’re not big travellers but like to have a sun holiday once a year and enjoy socialising. I could go on, but the point I’m making is we like to enjoy life and this costs money. We both work hard and believe that life is for living, but we have two children and we know it’s important to provide for them as we want them to have everything they need. What struck me as really scary was that, although I have worked in financial services for over half of my life, this was probably the first time we had a forensically in-depth discussion about such things. Maybe it is a sign that we need to get out more, but it is more likely because we have reached the stage in life where we know we are half-way there and we want to live in the comfort that we have grown accustomed to in retirement – but we don’t want to work forever. We are both members of occupational pension schemes, to which we and our respective employers contribute. As we near retirement, the need for – and the benefit of – being a member of these arrangements is becoming ever more relevant. There is a push to increase pension coverage in the private sector in Ireland and I agree that this is something that should be done. I have some concerns about the direction of change, however. Coverage If I think back to when I was 20 and retirement was two more lifetimes away, pension funding was the furthest thing from my mind. Had I not worked in a company with a pension scheme, I am quite confident that I would have elected to spend my money elsewhere. On that basis, I genuinely believe that 20-something year olds need a push to make provision and to that end, the introduction of an auto-enrolment (AE) system that would automatically include this cohort of private sector employees makes a lot of sense. They will be grateful someday that this was “forced” upon them. Adequacy I believe an AE scheme is appropriate for those who don’t make the decision to fund but at a certain stage in life, one needs to start taking responsibility for one’s own financial future. The issue of having set levels of pension contributions in place is that members of such schemes believe that just ticking the box is enough. They believe they have a pension, which they do, but that brings me to my next concern: is the pension that you contribute to adequate to support your needs and desires in retirement? This is where the requirement for financial advice kicks in. Individuals need to be asked the following: Are you maximising the tax reliefs available to you at this stage in your life? Are you taking enough risk to generate the returns you need on your investment? How does your pension fund fit in with the other assets you own? When you retire, what should you do with your pension to provide for the future you want? We are all living longer, so how do you save enough to ensure that you can afford to retire comfortably? There is a cost for getting this advice, and rightly so. But in the world we live in, surely we understand that you get what you pay for – particularly if you are savvy enough to plan ahead. Tax relief I mentioned tax relief in the last section and in the weekend papers, there was much discussion about tax relief and the possibility that the Government may seek to reduce the tax relief available to higher rate tax payers. The papers referred to the “standardisation of tax relief on pensions” and I struggle with this one for many reasons. Higher rate taxpayers earn more and therefore pay more tax on their income. To that end, they should be entitled to tax relief at the same rate as they pay on income earned. If it was about creating a more simple structure and encouraging more private sector workers to fund pensions, then why not standardise at the higher rate? If our Government wants to increase coverage, they should surely aim to make pensions more attractive to the lower earners rather than penalise the higher earners. Reducing higher rate tax relief will not encourage those subject to tax at the lower rate to fund pensions. It will make no difference to them and will more than likely reduce the amount of pension contributions made by the higher rate cohort, so this contradicts the Government’s stated ambition to increase private sector coverage. Tax standardisation only relates to reliefs, which is one part of the equation. There has been no reference to standardising the tax paid on the income from retirement benefits. As a higher rate taxpayer, why would I make contributions to my pension and get relief at the lower level when at retirement, the same Government that reduced the relief available to me in the accumulation stage (pension funding) want to tax the income paid to me in the decumulation stage (retirement) at the higher level? That isn’t a balanced approach. The cost to fund auto-enrolment Private sector versus public sector pensions – this is the most emotive debate of them all and, as you can imagine, the public sector don’t want their pension benefits to be touched. To be fair, I completely understand that. While it is a significant cost to the economy, there are a huge number of men and women who work hard to earn this benefit and I am sure that if I was eligible, I’d be fighting to retain it too. Many academics and industry representatives have tried to come up with solutions that would create a level pensions playing field between the private and public sector. To date, no-one has been successful. My main concern, and the one that the Government tends to brush over, is that the majority of pension costs incurred by the State relate to public sector pensions – not private sector pensions. Conclusion AE in some form makes sense and addresses the coverage issue. It doesn’t address the adequacy issue, however, and there should therefore be a middle ground where individuals can seek advice and fund private contracts where necessary. The means by which the State funds the introduction of AE, which is a system to maximise coverage in the private sector, should not be funded by a reduction in tax relief. This move would be totally counter-productive in a world where private sector pension funding needs to be increased. Anyway, if you have made it to the end of this story, you will be glad to hear that my daughter is having a great time at the Gaeltacht and my husband is delighted that she will be home next week, so there’s no need for anymore (pension) road trips. Gillian Ryan is Strategic Business Manager at Standard Life.

Oct 01, 2018
Spotlight

It seems likely that Ireland will soon adopt the Auto Enrolment Retirement Savings System, so here’s some practical advice to help your clients prepare for the road ahead. BY GARY BRIGGS Back in 2012, when the UK Government introduced automatic enrolment (AE), only 50% of private sector employees in the UK were enrolled in any sort of pension scheme. Today, that figure is very close to 100% and the few employers that have failed to comply with the legislation face heavy fines. Whether they wanted to or not, the vast majority of UK employees are now saving money for retirement and although their futures are not guaranteed to be rosy, they are certainly more financially secure. Both employers and employees make contributions, resulting in an additional £2.5 billion saved into workplace pensions each year. In Ireland, which will introduce AE by 2022, there is a mountain to climb. According to research carried out by Standard Life in early 2017, only one-third of all private sector workers in Ireland have any sort of pension scheme while the topic of retirement planning never even occurs to three-quarters of all employees. This presents a massive challenge for employers, and their accountants, who will very shortly need to start preparing their workforce for across-the-board pension contributions. AE, which is currently subject to a public consultation process, is likely to apply to those between 23-60 years of age and earning over €20,000 per annum. Contributions will begin at 1% for employees, increasing to 6% in year six. Contributions will also be matched by employers up to a maximum of €75,000 and the proposed State contribution is €1 for every €3. Just to be clear: AE is probably going to apply to ALL employers. So a household employing one nanny will need to be just as diligent as a multinational corporation with 500 employees. The only differences will be in the scale of the operation and the timing. If Ireland follows the UK’s example, large corporations will be first in line. This will give SMEs, who are less likely to have pension arrangements in place, time to get their houses in order – but nobody will be exempt. Your role Let’s also be honest: not everyone is going to like this. Many employers, especially smaller ones, will regard it as an additional administrative and financial burden. Some employees may resent additional monies being automatically deducted from their payslips. Sadly, some will see it as a necessary evil akin to tax, rather than as a welcome gift for the future. In contrast to the UK, it is proposed that employees in Ireland – not their employers – will choose their pension provider on an individual basis. This could lead to confusion for employers. This is where you, the accountant, come in. Your existing relationship with your client puts you in the perfect position to prepare them for this sea change. By pointing clients in the right direction and helping them organise their payroll data, you can smooth what can otherwise be a painful process and add significant value to your client/accountant relationship. It will also make your clients less likely to fall prey to other payroll administrators that might claim to offer a one-stop solution for AE. Key factors I was fortunate enough to be involved in the UK’s AE project from the beginning when one of my clients, a restaurant chain with over 40 sites, asked me to embark on a pension planning and budgeting exercise. This was followed by an investigation into the optimum software and payroll services to make the proposed process work efficiently. I soon realised that significant adaptation to their existing systems would be required and that financial advice was only a tiny part of the overall process. There were also 14 volumes of guidance notes to digest. Since then, I have helped hundreds of employers – large and small – to introduce workplace pensions. While every business is different, there are three common factors when it comes to the effective roll-out of pension schemes. The first is data. Put simply, if you put bad data in, you get a bad solution out. So before any employer can even start to implement a pension scheme, they must get their employee and payroll data into impeccable order. More often than not, this requires an element of cleansing and re-formatting the data to make sure it’s compliant with whatever pension software they are going to use. Payroll operators may also need some degree of training to become familiar with the new process. The second factor is communication. Assuming the Irish Government goes ahead with AE, we can expect the relevant government department to immediately start a nationwide campaign to promote the initiative. Many clients will nevertheless remain perplexed about their obligations. The average employee will be even less aware, and this ignorance will be far from bliss. Much of the language associated with pensions and AE is highly technical and the process, with its staggered enrolment dates and incremental increases, has the potential to be confusing. Effective communication will be required at every stage of the process to make employers and employees accept, and eventually embrace, this initiative. At Vintage Corporate, we developed a comprehensive communications toolkit to help our clients keep staff informed and engaged. Aside from the statutory letters, we supported the enrolment process with staff notices, workshops and one-to-one meetings. This gave us the opportunity to introduce the wider topic of general financial planning, which can ultimately improve employees’ financial well-being and enhance their employer’s status as a great company to work for. The third key factor that facilitates adoption of workplace pensions is project management. These pension reforms will be Ireland’s biggest for many years and will necessitate a complex, highly regulated process. Each employer will have to complete numerous steps, often placing great pressure on support staff. Your clients can of course manage the entire exercise themselves, but it is likely to consume many hours that could be better spent. In the long run, it may be more cost-effective for them to call on the services of a professional adviser who has already managed the process several times and knows the ropes. A long road If you are speaking to your clients about AE, you should also help them realise that their obligations will be ongoing. Most employers naturally focus on the initial launch and implementation, giving less thought to the longer term. The UK experience has shown that this was simply the beginning. Like us, you could introduce a comprehensive ongoing service whereby a member of your support team maintains regular contact with enrolled companies and visits them at least once a year to ensure compliance. You could also present clients with an annual report and a certificate of good pension governance. Gary Briggs is Managing Director at Vintage Corporate and a leading authority on workplace pensions and group insurance.

Oct 01, 2018
Spotlight

The consultation on the automatic enrolment retirement savings system has begun, but what does the Government’s strawman proposal recommend? BY JOE CREEGAN The long-awaited strawman on automatic enrolment (AE) to retirement savings has been launched, two decades after it was first mooted. The background to its introduction is stark; recent statistics issued by the Central Statistics Office suggest that as little as one-third of employees outside the public sector have no pension coverage. This statistic ignores the potentially bigger issue around the adequacy of contributions being made, something I will come back to later. Worryingly, this statistic has worsened since 2008 when 54% of all employees were contributing to a personal pension or a pension plan sponsored by the employer. This figure includes public servants and the most recent corresponding figure is down to 47%. Ironically, AE in not new to Ireland as, in the past, it was not unusual for employers to make it compulsory for new employees to join the company’s pension scheme. This was more typical in the world of defined benefit schemes, where benefits are calculated with reference to final salary. However, the public sector aside, defined benefit schemes have mostly been replaced by defined contribution schemes. In such schemes, the benefits are determined by the contributions made and the investment return achieved. With the move to defined contribution schemes, the joining of the pension scheme has also become voluntary. During the recession, many employees faced with pay cuts and increased income tax chose – unsurprisingly – to sacrifice future income needs to protect current income. As a result, we now have a cohort of workers that have lost a decade during which they should have being saving for retirement. When you examine the detail in the proposed strawman, this cohort will unfortunately have to wait another decade before it gets close to making adequate contributions towards retirement. The detail Looking more closely at the detail of the consultation document issued on 22 August 2018, the proposal is to commence contributions in 2022 with an initial contribution of 1% from the employer and 1% from the employee and a contribution from the government of 0.33% in lieu of tax relief. This would be payable on gross annual earnings to a maximum of €75,000, which gives an effective tax break of 25% to all taxpayers. It remains to be seen how contributions in excess of €4,500 (6% of €75,000) will be treated for tax purposes and, indeed, how existing pension arrangements will operate going forward – many of which currently attract income tax relief at the marginal rate. Over time, contributions will be required to increase to 6% from the employer, 6% from the employee and 2% from the government in 2027. This would be close to an appropriate contribution level for an adequate income in retirement. The concept of increasing the contribution over five years is a sensible one and is similar to the ‘Save More Tomorrow’ concept in the US where employees divert salary increases each year towards pension funding. Over the last 10 years, this concept would not have worked in Ireland. Indeed, any attempt over the last 10 years to introduce AE might have been interpreted by hard-pressed taxpayers as just another tax, not unlike USC. On that note, the messaging around AE will be crucial. The public will need to understand that the appropriate level of contribution is the 14% arising in 2027 and that the initial contribution is simply a mechanism to phase in a more appropriate level of contribution. The fact that the Government proposes to appoint up to four external providers will counter any suggestion that this is “just another tax”. Another point of debate will be the capping of charges at 0.5% of assets under management on the assumption that the automatic enrolling of employees will reduce distribution costs. While the proposed ‘central processing authority’ will introduce cost efficiencies, it is important to ensure that employees have access to appropriate advice on their investment decisions and the adequacy of contributions being made. In relation to investment returns, this will continue to be the most important decision for employees – especially in light of the fact that these returns will continue to grow tax-free. In fact, over time and with the right investment strategy, this tax break will provide a greater benefit from the Exchequer than the 0.33% (increasing to 2%) of salary. As Figure 1 demonstrates, the investment returns far outweigh the cumulative contributions made over time. Communication and engagement It is important to recognise that AE is not the same as compulsion and many employees may opt out at every opportunity. Engagement with the pension scheme therefore becomes even more important if scheme members are to truly appreciate the benefits of long-term savings. Specifically, we need: To ensure that members are contributing at the right level as early as possible in order to maximise the contributions made and, more importantly, the investment return on these contributions. There is nothing to stop people starting contributions now, and indeed at a higher rate than proposed under AE; To ensure that members make the right investment decisions. For example, a low-risk approach might not be appropriate for someone with a long time horizon to retirement; and To help members understand the conversion from savings to retirement. This is particularly important where, after retirement, members retain responsibility for investment decision-making under approved retirement funds rather than purchasing an annuity with the retirement fund. It is therefore important that communication and engagement with scheme members, at the very least, addresses these three elements sufficiently. Furthermore, the introduction of AE will bring a younger cohort into retirement funding and we will need to reconsider how we communicate with this group, perhaps with better use of technology, to build trust and highlight the importance of long-term thinking. The AE consultation process will run until 4 November 2018 and while the initiative is positive, there will be many issues to be resolved before the system can be rolled out in 2022. In the meantime, and before AE becomes mandatory, we all need to do more to encourage our employees to join the company pension scheme and get the immediate benefit of the employer contribution and tax relief. For those employers without a sponsored pension scheme, why wait to be forced to introduce a scheme in 2022? Joe Creegan is Head of Corporate Life and Pensions at Zurich Life.

Oct 01, 2018
Ethics and Governance

Trustees lend their experience to a new guide on ethics and governance.  BY NÍALL FITZGERALD I have always been involved in sport in some shape or form since a very young age. If I wasn’t playing or coaching, I was standing behind the goalposts playing ball boy. Now I am the club treasurer.” “I fell into it. A tragic accident resulted in serious injury to one of my children. We did everything we could to raise funds for the operation and, thanks to the kindness, empathy and generosity of people, we succeeded. After that, helping others and getting involved in worthwhile causes I believed in came naturally.” These are just two responses we received from the volunteer trustees we spoke to as part of our research for the Concise Guide of Ethics & Governance for the Charity and Not-for-Profit Sector (Concise Guide), published by Chartered Accountants Ireland in September 2018. It was both a humbling and enlightening experience to meet with so many voluntary trustees across the island of Ireland as part of the research. They generously give their time, skills and energy to be involved in the governance of a charity or not-for-profit organisation. In keeping with their passion and nature of giving for the benefit of others, the participants were very forthcoming with insights, tips and sharing what their experience has taught them about being involved on the boards of such organisations.  Opportunities and challenges We explored the views of the research participants, also consisting of valuable input from executive and senior management from the sector, on topics related to ethics and governance. Many of these are reflected in the Concise Guide but there are two open-ended questions that are worthy of further emphasis in this article: What are the greatest opportunities for the sector today? What are the greatest challenges facing the charity/not-for-profit sector today? When we collated responses from all participants, we were able to summarise them into a number of distinct opportunities. Figure 1 illustrates the results of our collation of opportunities. Figure 2 illustrates the results of our collation of challenges.  While it is unnecessary to speak about each highlighted opportunity and challenge, as many speak for themselves, there were a few observations worth noting here: There were no significant differences in the items being discussed between Northern Ireland and the Republic of Ireland, although it should be noted that there were a couple of considerations unique to the sector in Northern Ireland. For example,  funding concerns resulting from loss of access to EU structural funds after Brexit occurs. There was also a sense of greater collaboration between organisations in making joint funding applications and sharing resources to deliver a common purpose in Northern Ireland.  There were concerns about organisations of a certain size and their ability to respond in a timely manner to some regulatory changes.  For example, General Data Protection Regulation (GDPR) is expected to have an impact on the fundraising activities of some charities and not-for-profits. Most research participants agreed on the importance of the regulations but expressed that, without the right skills or the resources to employ them, or right tone on the board, some organisations may struggle to comply.  When it came to regulations and standards in relation to financial reporting, many believed once you have a handle on your requirements, it is just a matter of ensuring your accounting system is set up to capture the required data. For example, those who were transitioning to Charities SORP outlined the difficulties that can be involved in reporting on income and costs by activity and ensuring that required reserves are established, in addition to capturing and recording movements to and from these reserves. All agreed, however, that life was a lot easier once it was set up. It was interesting to observe the non-accountants wishing to be more informed about the finances and keen to have the financial reporting requirements explained to them in a non-technical manner. Interestingly, but unsurprisingly, technology and social media were seen as both an opportunity and a threat. While this is elaborated on in the Concise Guide, it is clear that, regardless of which side of the divide you are on, technology and social media cannot be ignored. The highlighted opportunity to ‘make a difference’ (see Figure 1) in society provided a lot of comfort on what these volunteer trustees were gathered here to do. It is why they are involved in the first place. When you combine this with the highlighted opportunity that involvement in the sector offers for personal development, it recognises the unique intrinsic reward that is only realisable in doing good for others. What other reason do you need to pat a trustee on the back this coming Trustee Week, 12-16 November 2018? Ask them why they do it and maybe their response will inspire you to want to do it, too!   Níall Fitzgerald FCA is Head of Ethics & Governance at Chartered Accountants Ireland.

Oct 01, 2018
Management

Overcoming imposter syndrome can be challenging, particularly when it spirals into persistent negativity. BY DR ANNETTE CLANCY Have you ever felt that you don’t belong? That you’re a fraud? That it’s just a matter of time before you’re found out? If so, you’re in very good company including Maya Angelou, Albert Einstein and Meryl Streep. Research tells us that almost 70% of people will experience imposter syndrome (a feeling of incompetence despite all evidence to the contrary) at some point in their lives. This feeling is particularly prevalent among high achievers such as CEOs, who have deep-seated fears of looking ridiculous, of being humiliated and of losing face. Imposter syndrome is also accompanied by the anxiety that others will find out that you’re not as smart, creative, clever or capable as they think you are. You will be humiliated, shamed and ultimately deemed to be incompetent, thus confirming your inner fear of being unsuitable for this challenging job into which you have been promoted and for which you have worked so hard. So many of us spend so much of our time trying to be perfect or, if not perfect, getting so close that it makes no difference. Work cultures that foster a zero-deficit mentality further exacerbate this drive for perfection. Imposter syndrome also masquerades as other personality types: Perfectionists set extremely high standards for themselves. They tend to be critical, risk-avoidant and may suffer from overwhelming anxiety as they attempt to do the impossible. It’s a self-defeating proposition. Add this to a work environment that extols the virtue of perfection and you have a heady recipe for defensive behaviour and poor decision-making; Experts need to know every detail about a problem or situation before they feel confident about giving their opinion. They suffer from ‘paralysis by analysis’ and are afraid of looking stupid. They instead strive to know all the details about a problem before committing to a solution; and Micromanagers are unable to delegate and must oversee the smallest details of every project. Even when they do delegate, they are disappointed with the results and end up re-doing the work to their own standards. Other people’s efforts are never as good as their own. Overcoming imposter syndrome can be challenging, particularly when it spirals into persistent negativity. The following techniques can help to manage it and its symptoms. Break the silence Fear of humiliation keeps many people from talking about imposter syndrome. Yet, keeping it to yourself only escalates the anxiety and increases the stress. Tell somebody (anybody) about your fear and you may find that you meet another one of the 70% with a similar story to tell. You won’t be alone and you may even give someone else permission to articulate their fear also. Is your boss an idiot? Didn’t think so… you have been appointed to this position because your boss has evaluated your credentials and qualifications and has made a judgement call that you are the best person for the job. If you don’t trust your own judgement, at least trust theirs. You deserve the position, you are the right person for the role and you deserve to be here. Talk about mistakes Companies that operate no-blame cultures where employees are encouraged to talk openly about mistakes and problems are more likely to be supportive of staff wanting to relinquish attachment to their inner imposter. Focus on the positives Finally, take comfort in the fact that imposter syndrome is a symptom of success. If you feel like a fraud, more than likely you are an over-achiever and have very high standards. You didn’t get to where you are by wishful thinking and an accident of fate. Dr Annette Clancy is an organisational consultant and also researches organisational behaviour, in particular emotion in organisations.

Oct 01, 2018
Management

The success of any change programme will depend on an organisation’s ability to get a small number of things right. BY DR GERRY McMAHON If today’s workplaces are to survive and prosper into the future, change must be accepted as a normal part of life. The drivers of organisational change are many and varied. They are also constantly increasing due to influences such as globalisation, competitive pressures, political and economic developments, and ongoing technological improvements. As a result, ‘change management’ covers a host of initiatives including mergers and acquisitions, restructuring, entering new markets, developing new products and services, introducing new technology, changing organisational processes, upskilling, upsizing, downsizing and the re-organisation of work. Employee resistance and the law Employee resistance is the most common problem faced by management when implementing change. Such resistance frequently manifests itself in an appearance at the Workplace Relations Commission (WRC) or the Labour Court, though it spans a continuum from passive withdrawal from the process to actively sabotaging the change, thus ensuring its failure. Of course, in general, changes cannot be made to employees’ terms and conditions of employment without their consent. Many employment contracts contain a ‘variation’ or ‘mobility’ clause that may allow amendments to be made to the contract without employees’ consent. However, these clauses are limited in that they will only allow the employer to make reasonable changes to non-material terms and conditions. Hence, for example, if an employer fails to engage or consult in respect of the change, an employee could resign and claim constructive dismissal. The claim would be that the organisation acted unreasonably and/or that the organisation breached its contracts of employment by amending the terms without consent. Should consent be sought but not forthcoming, an organisation would find it difficult at that stage to proceed with the changes across the board. In deciding on these claims, the WRC will usually examine the extent to which the employer acted reasonably by engaging and/or consulting with staff and whether employees’ consent was unreasonably withheld. The reasons for employee resistance to change include the following: People are satisfied with, or prefer, the status quo; The change is seen as a personal threat; The cost of the change seems to outweigh the benefit and the change isn’t going to be a success anyway; and Management is perceived to be making a mess of the change. Related thereto, organisational change is often associated with significant risks to employees’ health and is equated with high levels of stress. Hence, it should be no surprise that all of the effective ‘change models’ acknowledge that: People take time to accept change; They experience a psychological and emotional process in doing so; During this process, feelings of emotional distress, helplessness and meaninglessness are common; and Employees eventually accept the change(s) and may even find meaning in their revised role or setting. However, it is also well known that many change initiatives fail to achieve their objectives as they are undermined by employee sabotage, falling morale, lost productivity or industrial action. To enhance the prospect of successful change, the following guidelines therefore warrant consideration. 1. Specify your ‘change’ objectives At the outset of the process, list the objectives of the change programme. This list of specific, measurable, agreed, realistic and time-bound (SMART) objectives should be framed in terms of both business and employee outcomes. What are the perceived advantages of the change programme? What are the assessment criteria and targets? 2. Involve employees from the outset Research confirms that the best way to avoid negative consequences is to involve staff in the decision-making from the very outset. Related thereto, empirical research reveals that good communication increases acceptance, openness and commitment to change. It is also true that a deeper strategy of participation allows for an array of options and opinions to be elicited and considered. By being involved, employees are more likely to understand the rationale for – and to influence the nature of – the change, thus reducing their anxiety and resistance levels. A common approach is to clearly outline the business case for (and inevitability of) change and to invite the employees\union to help in the search for a solution. This has merit in helping to minimise any negative fall-out that would accompany a process which simply tells employees that their terms and conditions (and job security) are under review. By engaging the union’s support in creating both clear business and people objectives, the change path should be smoother and completed more quickly. For example, a practical output from such a process may include supporting or financing individuals facing redundancy in finding new employment or developing new skills. For those employees opting to leave, the provision of career transition support to help them identify other suitable employers and roles will ensure that they feel supported in moving on, protect the employer’s reputation and minimise the prospect of the employee becoming disengaged and\or disruptive. Of course, in these circumstances some organisations take what’s termed the ‘co-optation’ route, where they pay off the leaders of a resistance group by giving them a key role, seek their advice to enable their approval and emphasise the value placed on their opinions. This is largely a ‘needs must’ combination of manipulation and participation. In a similar vein, some organisations prefer to progress change via coercion, as they apply direct threats or force on the resisters (e.g. threats of redundancy, transfer, loss of promotion, negative performance appraisals or bad references). Dimensions of this approach were identified in an ESRI study, which found that employers who faced employee resistance were more likely to increase their use of part-time workers and job rotation techniques. However, the fall-out from such a strategy should be carefully considered (e.g. reduced trust levels, declining morale and productivity, and labour turnover). 3. Tune into the employees While engaging key staff (and, if applicable, their union representatives) is essential, the prospect of success is likely to be significantly enhanced through a good communications strategy. By extending communication across all areas and levels, misinformation and misinterpretation can be minimised. Hence, fora should be provided where employees can share their concerns and be listened to. By encouraging questions, listening to employees and reflecting appropriately thereon, staff concerns can be allayed as they gain a better understanding of the necessity and format of the change – and how their issues are being addressed in the new order. Success in implementing change is normally associated with those who must live or give effect to the change. It is therefore important to view the change process through the eyes of the most crucial participants in the process including the managers who establish the priorities, devise the strategies, control the resources and manage the performance levels. The appropriate response is to listen to their concerns and think constructively and creatively, rather than defensively, about how to respond to them. Employees need to know what is happening, why it is happening and how it will impact on them. This has major implications for communication, training and follow-up with staff. At the most fundamental level, this is about helping employees to view or redefine their value in terms of the range of skills and competencies they have to offer, and to find opportunities for deploying their abilities. 4. Select leaders and support managers Some organisations recognise that there are proactive and open-minded managers and staff who embrace change willingly and effectively. Their identification and engagement throughout the organisation can help ensure that it’s not perceived as just a ‘top down’ or executive onslaught. Dr Gerry McMahon is Managing Director at Productive Personnel Ltd., a human resources consultancy and training company.

Oct 01, 2018

Was this article helpful?