Western Society News

Data has always been an integral part of any organisation, but the pandemic highlighted its importance. Now, companies must invest in the correct infrastructure to reap the benefits of data. Eoin O’Reilly explains. Data and technology had an interesting and important role to play in the battle against COVID-19. We all grew accustomed to seeing medical experts and scientists produce statistical models and projections to help guide policy decisions. People became familiar with epidemiological terms such as R-numbers and gained new knowledge of statistical models. When governments spoke about following the science, they actually meant following the data. This was particularly interesting for companies that had been hit with a severe shock. They had to move quickly to understand the impact of the pandemic on their business and plan a way forward. Many companies saw data as key to that. They had to use data to gain a new understanding of their customers, get products to those customers, reshape their supply chains, and create new ways of doing business. That also brought about a recognition that their data infrastructure may not have been ready for the challenge. Many organisations thought they were well set up but found difficulties with data quality issues (with systems not talking to each other) and low quality reports. The new understanding of the importance of data has also brought about a willingness to invest in addressing infrastructural deficits. Organisations appreciate the need to invest in the foundations if they are to reap the benefits of data. According to the EY Ireland CEO Imperative study, 84% of Irish CEOs anticipate significant investment in data and technology in the next 12 months. This is positive news and indicates that executives now see the value of data and know that it will impact their business. Before, they had to be convinced that data was worth investing in; now, they say it will help them connect with customers. In addition, they say that data will be at the front end of the business, where it will help serve the customer better and achieve competitive differentiation. Utilising the data However, just 63% of Irish CEOs said their organisations can deliver timely data-driven insights, enabling better internal and customer outcomes. So while many organisations have made considerable progress, a significant minority do not yet have that level of capability. In most cases, the systems and level of analytics in use are pretty basic and do not offer the capability required to enable better customer outcomes. This somewhat inflated view of their organisations’ capabilities may be due to a misunderstanding of data analytics’ true nature and power. That said, all the indications point to an appreciation of the need to invest more in data. But it cannot just be an add-on for the organisation. If companies are to compete against the new breed of digital-first firms, they will need to become data-first enterprises. Traditional vs digital-first companies The acceleration in value of global technology giants over the last six to nine months has been off the scale. The critical difference between those companies and their more traditional counterparts is that they have data and digital technology at their core. When considering a digital and data strategy for any organisation, everyone should ask: what approach would a digital-first organisation take? Even companies in regulated sectors are looking over their shoulders at potential born-digital competitors. Banks are already seeing parts of their business being cherrypicked by new data-led fintechs. The open banking directive gives these new competitors access to customer data, which they can use in new and imaginative ways. Traditional banks will have to step up lest they end up on the losing side of this data struggle. Overall, the results of the EY Ireland CEO Imperative Survey are very encouraging. They indicate that data is valued for its ability to help an organisation differentiate itself and its offerings and win in the market. That will drive further investment in the coming years. Eoin O’Reilly is Assurance Partner and Head of Data Analytics at EY.

Professional learning and development is key to career progression, but asking for financial support from your company can be difficult. Dearbhla Gallagher outlines how best to approach your employer when it comes to requesting support. Learning and development are critical in the workplace. As dramatic changes in technology have changed the way we work, employees can’t afford to rest on their laurels and ignore their professional development. Ongoing training is key to everyone’s professional progress. However, professional training can be expensive and not always within our budgets. It makes good sense to request financial support from your employer: many firms and companies generously support professional development if they can see the value of upskilling their workforce. Requesting training support demonstrates to your employer that you are committed to developing and growing in your role. But simply asking for financial support is not enough; your employer needs to see the potential for a clear return on investment. So, let’s take a look at a good approach to identifying and requesting support for your learning and development from your organisation. Do your research Start by doing your research. Do a self-assessment. Consider your skills deficiency in relation to not just your current role but the skills you need for the next promotion. Get feedback, ask your colleagues what training they undertook to progress in their own careers. Ask a mentor if they can help identify potential skills gaps that could prevent you from progressing. Be prepared to listen and take on board what your mentor is saying. Research training options and the costs. Can you commit? Do you have the time and energy for 3,000-word assignments after work and after the kids have gone to bed? Demonstrate the benefits The next step is to be able to demonstrate the benefits to your employer. They will want to see a strong case for increased productivity and performance. They will want to know if the training will improve the quality of your performance and output. Link your request for education funding to specific performance objectives. Think about the bigger picture – how will the investment in your training benefit the broader organisation? Is it possible, for example, that you can share what you have learned afterwards with a wider group of your colleagues by way of a presentation, thus avoiding the cost of sending multiple employees on the same course? Make a commitment Finally, investing in employee training is generally seen to increase employee loyalty and commitment to the organisation in the future. By and large, employers are very generous with training budgets, but they will want some level of comfort that you are not going to jump ship at the first offer with your newly acquired knowledge. You are more likely to get a positive response if there is a strong sense that you are committed to a future in the organisation. Dearbhla Gallagher is the HR & Learning and Development Manager at Baker Tilly.

To be prepared for this new legislation, eligible employers need to start analysing their data and planning accordingly. Aoife Newton tells us what needs to be done before 2022. Gender pay gap reporting legislation was recently signed into law in the Gender Pay Gap Information Act 2021 (the Act). However, when and how the information will need to be reported is as yet unknown. In this regard, the regulations to give effect to the Act are eagerly awaited. The Act amends the Employment Equality Act 1998 by requiring regulations to be made by the Minister for Children, Equality, Disability, Integration and Youth as soon as reasonably practicable after the commencement of the legislation. The regulations will place reporting and publication obligations on private and public sector employers regarding their gender pay gap. They will contain much of the detail on the practicalities of the legislation. Which employers are affected? The legislation will not apply to all employers. Only employers that satisfy certain employee thresholds will be in the scope of the legislation. Where an applicable employer reports that a gender pay gap exists, the employer will be required to explain why the gender pay gap exists and detail the measures being implemented by the employer to reduce or eliminate the gap. Both private and public employers will be affected by the mandatory reporting obligations, but they will initially only apply to employers with 250 or more employees for up to two years after the commencement of the regulations. The scope of the mandatory reporting obligations will widen further to include employers with 150 or more employees on or after the second anniversary of the regulations and those with 50 or more employees on or after the third anniversary. Employers with less than 50 employees will not be required to report on their gender pay gap. What is required? Applicable employers will be required to report on the difference in remuneration between male and female employees, as set out below: the difference between both the mean and median hourly pay of male and female employees; the difference between both the mean and median bonus pay of male and female employees; the difference between both the mean and median hourly pay of part-time male and female employees; and the percentage of male and female employees who received bonuses and benefits-in-kind. Employers will also be required to simultaneously publish the reasons for differences in pay in the context of the above and the measures being taken or proposed to eliminate or reduce such disparities. In addition to the mandatory reporting requirements, other requirements may be contained in the regulations once published, including: the class of employer, employee and pay to which the regulations apply; how the number of employees and remuneration is to be calculated; and the form, manner and frequency with which information is to be published. The information will not be required to be published more than once per year. Enforcement An aggrieved employee can make a complaint to the Workplace Relations Commission (WRC) if an employer is not reporting on its gender pay gap. On receipt of a complaint, the WRC will investigate the complaint’s merits and may order the employer to take a specified course of action to ensure compliance with its reporting obligations. However, the WRC does not have the jurisdiction to order the employer to pay compensation to an employee or impose a fine on an employer. The Act provides for the Irish Human Rights and Equality Commission (IHREC) to apply to the Circuit Court or High Court seeking an order forcing an employer to comply with its reporting obligations. Employers that do not comply with such a court order may be held in contempt of court. The Act also provides that the IHREC, on receipt of a request from the Minister, can carry out (or invite a particular undertaking, group of undertakings, or the undertakings making up a particular industry or sector to carry out) an equality review or create and action an equality action plan. What to do now Minister Roderic O’Gorman has confirmed his intention to have the regulations in force by the end of 2021. He has also indicated that employers may be required to submit their information through a central website. Given that the regulations will likely be in force by the end of 2021, the legislation will probably apply to applicable employers from some date in 2022. Employers can prepare by collating and analysing their remuneration data to assess the extent to which gender pay gaps exist. This will help plan how to remove or reduce any such gaps before they are publicly obliged to report, the reasons for them, and what they are going to do about them. Aoife Newton is the Head of the Corporate Immigration and Employment Law team at KPMG.

Myles Thompson has spent 35 years working in audit for KPMG and over ten years supporting the work of Accountancy Europe, culminating in his recent election as President. In this article, he shares his thoughts on operating in an environment of uncertainty, the challenges facing the profession, and the potential for accountants to make a big impact on the most pressing issues of our time. Today, the accountancy profession faces many competing demands. In that context, how do you prioritise particular issues for Accountancy Europe to pursue? Accountancy Europe has always had a clear strategy in terms of what it’s working on. That’s developed continuously and every two years, with a new president, it’s looked at again. About a year ago, when I knew I would be the president from 1 January, I worked with the Accountancy Europe team and the CEO to consider how we wanted to develop the strategy. We came up with six key strategic areas to work on: corporate reporting, audit and assurance, corporate governance, sustainability, COVID-19 recovery, and – linked across all these areas – the impact on SMEs. Even though they are very broad strategic areas, we then had to identify what’s important for our members and where we can make a difference. That informed our focus, taking into account the resources available at Accountancy Europe. In some instances, we agreed to work on a particular project because it’s vital for the profession, while in other cases, we would have liked to work on a project but, for various reasons, we couldn’t. So it is a prioritisation game. We also work through this process with Accountancy Europe’s board, which has representatives from ten countries, including Ireland. We discuss the strategic objectives and consider what we should be working on with the Accountancy Europe team, which frames how we work. But we’ve got to be agile. The European Commission has said that it will look at audit reform, for example, and we will have to adapt to that because it will be significant for the profession. Sustainability reporting and assurance is an emerging area of discussion and debate. What role do you see the profession playing in this space? Sustainability reporting is very high on the European Commission’s agenda. It has established a process to develop corporate sustainability reporting standards for Europe, and the IFRS Foundation is also looking at this. There are several roles in that sphere for the profession. First, we must work with the European Commission to help them develop appropriate corporate reporting standards. But we also have a role to play, especially as Accountancy Europe, in ensuring that the European Commission and the IFRS Foundation work together towards a global solution – because most of the companies this will impact are global. Regarding comparability, the problem is that various bodies developed standards, but they’re all slightly different. So, this is an opportunity for the European Commission and the IFRS Foundation to bring it all together in one global set of standards that the Commission is happy with and can use – and can build on. These standards will represent the baseline, but certain countries or regions will always want additional reporting on top of that. And I think that’s fine, as long as you have an agreed starting point. Investor groups are increasingly seeking environmental reporting, which provides significant momentum for companies – and then we move into the area of assurance. To get consistent, high-quality reporting by entities, you need assurance. The Commission has already announced that the reporting it will put in place will be subject to assurance. The profession, therefore, has a significant role to play in ensuring that this is not overly burdensome and that it’s proportionate to what we’re trying to achieve. Linked to that, we must recognise that many companies will not have the systems and processes necessary to develop the reporting required. It’s going to take time for companies to get the right processes and systems in place. From that perspective, the profession must work with these entities to get them ready for assurance. The time needed to get companies to report will be short in terms of the potential transition period. Indeed, the Commission has put forward a very ambitious timetable whereby companies will be reporting in two years based on revised standards. But we’ve got to recognise that when companies start to report in that initial period, there will be bumps in the road and they will need time to get that reporting process right. Assurance needs to follow after this, and perhaps companies will need a couple of years to work with their auditors before public assurance can be given. We don’t want assurance that simply keeps telling people that the reporting is wrong; that won’t help anyone, and companies will need time to get it right. The audit profession is facing reform in the UK, driven by the Department of Business, Energy & Industrial Strategy (BEIS) consultation process. Do you expect similar reforms at the EU level, particularly in light of the recent Wirecard scandal? Audit quality has improved enormously over the past 20 years, and we need to recognise that. There has been more regulation and scrutiny, and even the regulator admits that audit quality has improved. But of course, it needs to continue to improve.   It is easy to blame the auditors for a company failure, but the auditors aren’t the cause. The whole ecosystem needs to be looked at, from the entity’s corporate governance to the directors, the regulators, and the audit. So, it’s good that the UK’s BEIS consultation looks at that whole ecosystem and recognises that everybody in that process needs to improve. The UK consultation is important because the European Commission recently announced that it would look at the outcomes of the 2014 audit reform. They will consider whether it has made a difference in audit quality, concentration, and independence, but they will also look at the whole ecosystem. They recognise that this is not just about the audit. That is coming in the autumn, and it needs to involve all stakeholders – business, regulators and auditors – to thoroughly debate all views and perspectives, not least those of the accountancy profession. Commissioner Mairead McGuinness is saying the right words at the moment, that this must be done collaboratively. I’m sure they’ll look at the outcome of what is happening in the UK and the Netherlands. When it comes to the UK and Europe, I think some of the issues are very similar. For example, when you look at the audit firms, they will consider governance processes, independence and non-audit services, concentration, and improving regulation. However, some of the solutions may be different. Many possible solutions that have been discussed in the UK are very UK-specific, mainly because the regulator is the regulator of both companies and auditors. It handles both sides, and that’s unusual. In the US, for example, the SEC (Securities & Exchange Commission) oversees the companies while the PCAOB (Public Company Accounting Oversight Board) oversees the audit. Emerging from COVID-19, economies will have higher debt burdens. How will economies stabilise, and what role will the profession play in this regard? The first thing to say is that nobody knows what will happen. This is new territory for everybody, so we have to be flexible and learn as we go. But for me, the critical area where the profession can help is in working with the SME sector. So much regulation concentrates on listed public interest entities, but the SME sector constitutes 80% of the European economy. The accountancy profession is a key advisor to SMEs, and we are uniquely placed to help them deal with this crisis while working with governments and banks in various countries. There is a considerable concern that banks in most countries are being encouraged by their respective governments to give companies time, but it will be fascinating to see how banks react. As things start moving, will they suddenly decide against servicing a particular company or area? The number of UK companies that have gone insolvent in the past year has reduced dramatically because furlough schemes and banks have shored them up. However, those supports will eventually diminish, and there will be an increase in insolvencies down the line. The profession will be vital in helping companies through that chasm. In terms of advocacy for this important sector, Accountancy Europe has worked with the European Commission to push it on policies for SMEs. But this type of advocacy needs to happen on a country-by-country basis because it’s very difficult to have Europe-wide laws. The profession can act as the voice for many of these SMEs at a local level and work with SME groups. For example, Accountancy Europe works with SME United, a Brussels-based group representing SMEs in Europe. We need this kind of collaboration to get the best for companies. You have worked through many economic shocks during your more than 35 years at KPMG. What did these experiences teach you about leadership? I remember the 2008 banking crisis distinctly because I was trying to help audit clients through that process. It is similar to the current crisis in the sense that you have to be practical and transparent to identify the issues and solutions. In some instances, people assume that companies have suffered badly in a crisis. But many have reinvented themselves, they’ve emerged much stronger. They achieve that by being clear on their position and debt burden, for example. Of course, some companies will fail, but the profession must help these companies be transparent on issues like resilience and going concern. That’s why I’m a big supporter of companies talking about resilience in the context of what could happen in three to five years. I’m also a big advocate of detailed audit reports and robust audit reporting. We’ve driven that enormously over the last six years in the UK – talking about the risks and highlighting concerns. We must underline to investors what the issues are in a company, but it is also imperative to ensure that the board and directors are fair and balanced in what they say about a company’s performance and prospects. We can do a lot of work in that area in the future. If I was to share one piece of advice, it’s to cultivate your role as a professional advisor – whether you work in practice or industry – so that we can help companies develop and grow. We must see that as different from the auditor; the auditor must be independent and not part of the business. But when you’re not the auditor – and many SMEs don’t require an audit – the profession needs to be there as an advisor. We must help SMEs get through whatever crisis they’re in, help them with their supply chain, help them with their processes, help them deal with their debt burden, and make them as efficient as they can be. In short, we must strive to be trusted advisors to business. How has the work of Accountancy Europe changed over the term of your involvement? I’ve been involved with Accountancy Europe for over a decade. Accountancy Europe was historically very technically focused. It mainly responded to technical consultations, whether from the international standard-setters globally or the European Commission. But over the last five years, it has become much more strategic and much more involved in helping the Commission develop its agenda early in the process. One example is sustainability reporting. Accountancy Europe has been involved from the beginning in helping EFRAG, the group dealing with this issue. So while the technical activity remains, Accountancy Europe has become much more strategic in its focus, and that’s important. What other issues do you expect to come into focus for you and the accountancy profession in the years ahead? The profession has a lot on its plate with sustainability reporting and audit reform, to give two examples. But for me, the profession needs to keep improving and ensure that it deals with public and regulatory expectations, especially on the audit side. The profession could do more to explain its role in that respect. Whenever a company collapses, the focus often falls on the auditor, and the question is always: ‘why didn’t the auditor see it coming?’ If the profession continues to explain the role of audit and how it works, that would be helpful. But as I mentioned earlier, auditors don’t bring down companies. So, the profession needs to keep explaining its role and what it does, and that will be important as we work through the fallout from this crisis and in the years ahead. Myles Thompson is President of Accountancy Europe. Myles Thompson on… the expectation gap There should be an expectation that auditors are doing the job to the highest quality that they can. And I think that is a very important expectation that we should have. But I think it is also relevant to recognise that other stakeholders may well have a greater expectation of the profession than is currently required by the regulators and by standards. The expectation gap exists; it’s been there for many years. I don’t think the profession helped itself by not dealing with it or explaining the process. But we shouldn’t hide things and say: ‘well, that’s not our responsibility’. We need to explain what we do and what we can do. And if, in the end, society decides that we need to do more, that can be done. Audit is a risk-based process, and of course you can do more – you can lower the risks and test more, and we are doing more of that through technology. Technology may be crucial because when it’s used appropriately, it can be a really powerful tool in identifying unusual transactions. A large company may transact thousands of times a day, but we have artificial intelligence tools now that can analyse every transaction in every day of the year to see if something stands out. But we still need to understand the expectations of us as auditors and deal with that. Myles Thompson on… Brexit There are two areas to consider. First, we need to recognise that London is a significant capital centre, and many European companies are listed in London. So, we need to make sure that such companies can transact appropriately and work in that capital environment in the UK. Before, everything was equivalent, so we need to make sure that it works. And from a profession point of view, we need to ensure that we continue to have proper recognition of the profession across Europe. Because again, before Brexit, the qualifications in one country were recognised in others. Work is needed on this because there are many UK qualifications used by member bodies in other countries. If a qualification is not going to be recognised, then that could have a significant impact.  Thankfully, the biggest area of cooperation is between the UK and Ireland, which is being dealt with in an appropriate way. I see the relationship between the UK and Ireland as separate from that between the UK and mainland Europe because the UK and Ireland have always worked together very strongly. For example, Chartered Accountants Ireland is a member body for north and south, and many firms operate on that basis also. The profession works across borders, and it must continue to do so in that respect. So, I’m less worried about the UK and Ireland and more concerned about how the UK and continental Europe will work.

According to new analysis from EY, GDP is not necessarily a good measure of how well a society is doing – and specifically, how well a country fares after the pandemic. Yannick Cabrol and Simon MacAllister suggest other considerations. Economists and public decision-makers have been relying too long on GDP to measure the health of our society. GDP assesses the overall size of the cake and excludes social indicators, which can lead to mistaken conclusions. After all, if a doctor checks someone’s temperature with the wrong tool, they may not make the proper diagnosis or propose the right treatment. Below are areas that must be considered when thinking about the impact of the pandemic on Ireland. The vulnerable At the onset of the pandemic, particularly during the initial lockdown, there was a great emphasis on the sentiment that “we are all in this together”. However, over the last 12 months, this has ceased to be the case. Instead, the pandemic had a greater impact on those already vulnerable, while others benefitted. Social inequalities The impact of the pandemic is very different to that of the financial crisis of a decade ago. But one area of similarity is that the burden of impact has fallen more acutely on the most economically disadvantaged in society. The health outcomes mimic the economic ones, with people in disadvantaged areas more likely to contract COVID-19 or suffer job loss or severe disruption. The disease itself has disproportionally affected the poorest people in our societies. In Ireland, those considered very disadvantaged are almost 50% more likely than the average citizen to contract the virus, while the most affluent are 30% less likely to contract the virus. Geographical inequalities Residents of Irish cities are 32% more likely to contract COVID-19. This can be explained by higher population densities, increased levels of social interaction, and the prevalence of younger, more mobile communities. This presents significant difficulties for decision-makers. Public health regulations need to be clear and simple to follow, but a centralised approach can sometimes be perceived as unfair and excessive for areas with lower incidence rates. The future will be shaped by diversity – of working patterns, of place, and of individuals. Technology will open new possibilities for towns and rural economies, and cities will become more time fluid with a greater emphasis on entertainment and socialising and less on routine and homogeneity. Sectoral inequalities Economic commentary and policy formation tends to focus on the exporting industries that are key to driving growth. But the pandemic has shone a light on the industries that form the backbone of the labour market: our public services and retail, leisure and entertainment industries. While public services have been among the least disrupted sectors, the accommodation, retail and entertainment sectors have endured a very difficult year. Lower paid jobs have been the most disrupted by COVID-19. The pandemic impacted nearly 90% of jobs in the hospitality sector at some point in 2020. Workers in that sector already had the lowest weekly earnings pre-COVID, at around €376 per week. Financial inequalities Unlike during the last major global recession, the main drivers of wealth – namely, stock prices and housing – have held up very well. The stock market performance reflects the acceleration of digital business models and the success of businesses in sectors such as information and communications technology and healthcare. As a result, COVID-19 has exacerbated the mismatch between the labour market and the stock market. In 2020, stocks increased by 15%, while the number of people employed decreased by 18% (excluding those temporarily supported by the Government). The result is increased financial inequalities. The pandemic is benefitting the few who have financial assets while disadvantaging the many who are struggling to keep or find a job. Those who have been able to work from home also managed to save more money than ever in 2020. The Central Bank of Ireland reports that Irish households saved over €14 billion in the year to December 2020, with total Irish household deposits reaching a record €124.5 billion at the end of the year. This contrast in wealth and labour market outcomes is just another example of disruption causing division and creating a disconnect between winners and losers. International inequalities Interestingly, more equal societies appear to be doing better in their fight against COVID-19. This may be linked to a greater willingness to invest in public health infrastructure as well as a commitment to delivering better living conditions for disadvantaged people. A fairer society is a goal sought by almost every economy in the world. However, the rewards for achieving such a goal have often been the subject of heated debate. Does a greater redistribution of wealth curtail an economy’s ability to grow or enhance it? Perhaps the impact of the pandemic will provide another reason, if one was needed, to strive for a fairer society. Yannick Cabrol is EY-DKM Economic Advisory Services Assistant Director in EY. Simon MacAllister is Strategy and Transactions Partner and Head of Valuation, Modelling and Economics in EY.

Aoife Lenox explains how a better understanding of temperament can help introverts acclimatise to office life. ‘We’ve been preparing for this our whole lives’ was a popular introvert working-from-home meme in March 2020. No commute and the convenience, at least in the short-term, worked for most people, but many extroverts found the disconnect from colleagues quite difficult. Introverts relished the opportunity to retreat from busy and overstimulating work environments, finding time to recharge during the day (albeit with home-schooling challenges), more emphasis on one-to-one communication, and the ability to contribute in meetings via chat functions. In this article, I will explain how your temperament influences how you work and, as an introvert, how you can successfully navigate a return to the office. Understanding temperament Psychologist Carl Jung developed the terms ‘introvert’ and ‘extrovert’ 100 years ago. He noticed that some people were more energised by an outward focus while others were more inward. Up to half of the population are introverted, but many of us use character traits to perform at work – being more vocal than we naturally are or showing more energy than we feel. This, I have found, leaves people confused about temperament. Influence on work Extroverts talk to think, and introverts think to talk. Introverts are internal processors and, as evidenced by MRIs of the introvert and extrovert brain, have increased activity in the pre-frontal cortex. This explains our inclination for deep thinking and reflection. It is why we can be slower to make decisions, need additional time to process, can be reluctant to speak up at meetings, and can get drained by excessive social interaction. Introverts’ increased sensitivity to dopamine, which can fuel and energise an extrovert, has the opposite effect on an introvert – often in the form of burnout from a full week in the office. Thrive A recent study by Aviva found that personality has such an impact on our wellbeing that it should be included in organisations’ wellbeing strategies. All change begins with awareness. To successfully navigate a return to the office, you might consider the following strategies: If you find your office environment overstimulating, speak to your others about your need to recharge. This might be a walk outside or time in a quiet room. I find closing my eyes for five minutes helpful. A hybrid or flexible working model also offers the opportunity to balance recharge time. Expressing our needs is important for mental wellbeing. If you need additional time to process information in a meeting, use questioning techniques to ensure that you can still contribute authentically. Identify and use your strengths to promote feelings of confidence and wellbeing. Unfortunately, negative stereotypes on introversion still pervade, so showcasing our strengths is very important. It is natural to feel anxious if you are returning to the office in the near future. Understanding your temperament allows you to recognise your needs and identify ways to create a work experience that works for you. If you are leading other people, have open conversations about their feelings on returning to the office. Remember: there is no ‘one size fits all’ solution. As the saying goes: we have all been through the same storm, but we have been in different boats. So let’s take it slow. Aoife Lenox, the founder of Inside Strategies, is an introvert strengths coach, trainer and people specialist. She runs webinars, workshops and offers people and culture support to SMEs.

The Northern Ireland Protocol represents a major strategic advantage for businesses which locate in Northern Ireland, Chartered Accountants Ireland has said today. The accountancy body which represents almost 25,000 members across the island of Ireland, has highlighted the significant positive feedback it has received from businesses regarding the unique market access into both Great Britain and the EU that they enjoy.   The Institute has sounded a note of caution however, highlighting the focus to date in discourse around the Protocol on the consumption economy, at the risk of missing out on the significant production opportunities that it can afford Northern Ireland’s economy.   The comments come as Chartered Accountants Ireland launches a guide “Building on Opportunity – A Guide to Foreign Direct Investment in Northern Ireland” showcasing Northern Ireland as a world-class location in which to do business.  Commenting, Cróna Clohisey, Public Policy Lead with Chartered Accountants Ireland said “While the Protocol itself remains a topic of heated debate at political level, it is clear to us from our engagement with the business community, that many businesses are already reaping the benefits that Northern Ireland’s unique position affords them.  “Post-Brexit, trade in goods has continued largely as it did before the UK’s departure from the EU with no customs duties or customs paperwork on the sale of goods to both Great Britain and the EU (including Ireland) from Northern Ireland. This unique market access, in addition to a skilled workforce and business friendly environment makes Northern Ireland an attractive base for companies, particularly in the manufacturing and distribution sectors, that want to trade in both the UK and EU markets.” Foreign direct investment has remained strong, with 6,000 more companies now operating in Northern Ireland than in 2016. Northern Ireland is now home to more than 1,100 international companies, employing 100,000 people. Clohisey continued, “The discourse has to date been overshadowed by a focus on the consumption economy, on bringing goods into the country. I think there is a real danger that this persisting, negative focus on the Protocol could lead to the greatest risk of all – missing out on the significant production opportunities that it can afford Northern Ireland.   “Those already located in Northern Ireland know its advantages as a place to do business – location; educated workforce; a stable and competitive tax system. But it is critical to highlight its ability to innovate and change with the times. Far from the ship building days of the past, the country has established itself in some of the world’s fastest growing and innovative industries including data analytics, cyber security, life and health sciences, clean energy, and aerospace.”   Over the next ten years, Northern Ireland will see over £1 billion of investment from the NI Executive and UK Government into four City & Growth Deals. This will further enhance the region as a significant destination for innovation and facilitate investment opportunities that further build upon Northern Ireland’s reputation in manufacturing, life sciences and artificial intelligence industries.   The Building on Opportunity guide can be downloaded here

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

With international tax reform progressing at unprecedented speed, Susan Kilty explains why Irish businesses must continue to participate actively in the discussion. With all the global uncertainty that Ireland is facing due to COVID-19 and Brexit, there is a risk that the OECD global tax reforms – the other major threat to Irish business and the economy – will be pushed further down the corporate agenda. But to do so would be very risky. Ireland must engage with this process now, at both the political and corporate level. The world of international tax is in a state of extreme flux as governments grapple with changes in the way multinationals do business. It is worth reiterating that Ireland has attracted healthy levels of foreign direct investment (FDI) over the past 30 years, and the multinational community has contributed significantly to our economic success. According to the OECD, Ireland received more foreign direct investment in the first half of this year than any other country. Along with Ireland’s near-iconic 12.5% tax rate, a crucial element in our continuing ability to attract international investment is the stability and transparency of the corporate tax regime here. Investors from abroad who establish activities in Ireland tend to be quite sensitive to changes in the taxation system. They like certainty and stability in a tax code, which is why Ireland presents such an attractive proposition. Ireland cannot afford to lose FDI as a result of turbulence in the global tax landscape at this time. As corporation tax accounts for almost 18% of Ireland’s total tax take, any change to the regime threatens to seriously undermine the attractiveness of our FDI model and negatively impact our revenue-raising ability. The crux of the matter is that we, and many other countries, apply 20th century tax systems to 21st century e-commerce business models. Businesses have an increasingly digital presence, and many no longer trade out of brick and mortar locations. This is not limited to so-called technology companies, but can be seen across industries and in businesses of all sizes. Businesses sell freely across borders without ever needing to set up operations abroad. This new digital way of trading is not always captured in our analogue tax rules, and the rules must be realigned with the reality of modern e-commerce. However, to tax a multinational business, you need a multinational set of rules. This is where the OECD comes in, but the uncertain shape that the new rules might take brings more uncertainty for businesses at a time when it is least needed. Many clients cite the changing international tax environment as one of the top threats to potential revenue growth. And although countries now face enormous bills for COVID-19, one sure thing is that BEPS, OECD and tax reform will not go away. International corporate tax reform is happening, and it will impact many businesses and our economy. Companies need to stay on top of these changes and prioritise the issues that will affect them. OECD proposals The OECD proposals offer a two-pillar solution: one pillar to re-allocate taxing rights and ensure that profits are recorded where sales take place, and a second pillar to ensure that a minimum tax rate is paid. At the time of writing, a public consultation is open for stakeholders to share their views with the OECD on the proposals that were recently summarised by way of two “blueprint” documents, one for each pillar. Pillar One seeks to give market jurisdictions increased taxing rights (and, therefore, increased taxable income and revenues). It aims to attribute a portion of the profits of certain multinational groups to the jurisdictions in which their customers are based. It does this by introducing a new formulaic allocation mechanism for profits while ensuring that limited risk distributors take a fair share of profits. Several questions remain as to how the Pillar One proposals, which constitute a significant change from the current rules, will be applied. Pillar Two, on the other hand, seeks to impose a floor for minimum tax rates across the globe. This proposal is very complicated. It is much more than a case of setting a minimum rate of tax. It is made up partially of a system that requires shareholders of companies that pay low or no tax to “tax back” the profits to ensure that they are subject to a minimum rate. At the same time, rules will apply to ensure that payments made to related parties in low-tax-paying or no-tax-paying countries are subject to a withholding tax. Finally, it can alter the application of double tax treaty relief for companies in low-tax-paying or no-tax-paying countries. Agreeing on the application and implementation of this pillar will be incredibly difficult from a global consensus point of view. Several supposed “safety nets” in Pillar Two are also likely to be of limited application. For example, assuming that the minimum tax rate is set at 12.5%, this does not mean that businesses subject to tax in Ireland will escape further tax. Similarly, assuming that the US GILTI (global intangible low-taxed income) rules are grandfathered in the OECD’s proposal, this does not mean that the US GILTI tax applies as a tax-in-kind tax for Pillar Two purposes. Pillar Two poses a significant threat to Ireland, as it reduces the competitiveness of our 12.5% rate to attract FDI and, coupled with the Pillar One profit re-allocations, could reduce our corporate tax take. The OECD estimates that once one or both of the pillars are introduced, companies will pay more tax overall at a global level, but where this tax falls is up for negotiation – and this is why early engagement by all stakeholders is critical. While the new proposals will undoubtedly have an impact, it is not certain that Ireland’s corporation tax receipts will fall off a cliff. Ireland has already gained significantly in terms of investment from the first phase of OECD tax reform, and this has helped to drive a significant increase in corporate tax revenue. But the risks must nevertheless be addressed. There is, of course, the risk that the redistribution of tax under the rules directly under Pillar One and indirectly via Pillar Two will impact our corporate tax take. But even if the rules have no impact on a company’s tax bill, they could still impose a considerable burden from an administrative perspective, and the complexity of the rules cannot be overestimated. At a time when businesses are grappling with other tax changes, led by the EU and domestic policy changes, this would be a substantial additional burden on the business community. The OECD is progressing the rules at unprecedented speed in terms of international tax reform. The momentum behind the process comes from a political desire for a fair tax system that works for modern business. However, does this rapidity risk the international political process marching ahead of the technical tax work? This is where Ireland, both government and corporate, needs to play a vital role. While the consultation period on both pillars is open, the focus for stakeholders should be on consulting with the OECD on the technical elements of its plan. Considering the OECD’s stated objective to have a political consensus by mid-2021, this could be one of the last opportunities for stakeholders to have a say in writing the rules. The interplay between the OECD and the US Treasury cannot be ignored when considering the OECD’s ability to get the proposals over the line. The US Treasury decided to step away from the consultation process with the OECD for a period in mid-2020. This, of course, raised questions around whether the OECD proposals could generate a solution that countries would be willing to implement. Added to this, the OECD has always positioned Pillar One and Pillar Two as an overall package of measures and has stressed that one pillar would not be able to move forward without the other. The “nothing is decided until everything is decided” basis of moving forward is a risky move, but the OECD recently rowed back on this stance. If the OECD fails to reach a political consensus by 2021, we could very well see the EU act ‘en bloc’ to introduce a tax on companies with “digital” activities. This could result in differing rules within, and outside of, the EU. It would also increase global trade tensions, all of which would not be good for our competitiveness. As a small open economy, Ireland will always be susceptible to any barriers to global trade. A multilateral deal brokered by the OECD therefore remains the best option – the last thing we want to see is the EU accelerating its own tax reform or, worse still, countries taking unilateral action. For the Irish Government, providing certainty where possible about the future direction of tax is critical. Where we have a lead is in how we provide that stability and guidance where we can. The upcoming Corporate Tax Roadmap from the Department of Finance will be an opportunity to give assurances in these uncertain times. Next steps for business The public consultation will be critical for businesses to have their say in shaping the rules. Ireland Inc. must continue to engage constructively with the OECD to try to shape the outcome so that we maintain a corporate tax system that is fit for purpose, is at the forefront of global standards, and works for businesses located here. Doing so would ensure that we articulate the position of small open economies like our own. Each impacted business must take the opportunity to comment on the proposals, as this may be the last chance to have a say. Indeed, what comes out of the consultation period may be the architecture of the rules for the future. We know that difficult decisions must be made at home and abroad in terms of the new tax landscape, and made with additional pressures we could not have foreseen 12 months ago. Although it may seem that much is out of our control, Irish businesses must continue to participate actively in the discussions and ensure that their concerns are heard. The game may be in the final quarter, but the ball is in our hands. Susan Kilty is a Partner at PwC Ireland and leads the firm’s tax practice. Point of view: Fergal O'Brien Since the start of the BEPS process in 2013, Irish business has recognised the importance of the work to our business model and the country’s future prosperity. At its core, BEPS has seen a further alignment of business substance and tax structures at a global level. This has resulted in an often under-appreciated surge in business investment, quality job creation and, ultimately, higher tax revenue for the Irish State. With its strong history as a successful location for foreign direct investment, and substance in world-class manufacturing and international services, Ireland was well-placed to benefit from the new global order. The boom in business investment, which last year reached over €3 billion every week, and increase in the corporate tax yield from €4 billion in 2013 to €11 billion in 2019, are evidence of the further embedding of business substance in the Irish economy. The current round of BEPS negotiations will have further significant implications for the Irish economy, and particularly for the rapidly growing digital economy. Ibec is working directly with the OECD to ensure that any further changes to corporation tax recognise the central role of business substance and locations of real value creation. Fergal O’Brien is Director of Policy and Public Affairs at Ibec.  Point of view: Norah Collender The OECD’s proposals to address the challenges of the digitalised economy will have a disproportionate negative impact on small, open exporter economies like Ireland. Earlier consultation papers issued by the OECD on taxing the digitalised economy suggested that smaller economies could benefit from international tax reform emanating from the OECD. However, the OECD now openly admits that bigger countries stand to benefit from its proposals more than smaller countries, and the carrot has turned into the stick in terms of what will happen if smaller countries do not support the OECD. Ireland is acutely aware of the dangers ahead if countries take unilateral action to achieve their vision of international tax reform. But that does not mean that countries like Ireland should be rushed into accepting international tax rules that fundamentally hamstring Irish taxing rights. Genuine consensus must be reached to ensure that international tax reform is sustainable in the long-term. Likewise, the new tax rules must be manageable from the multinational’s perspective and from the perspective of the tax authority tasked with administrating the rules. A rushed outcome to the important work of the OECD will make for tax laws that participating countries, tax authorities, and the all-important taxpayer may not be able to withstand in the long-term. Norah Collender is Professional Tax Leader at Chartered Accountants Ireland. Point of view: Seamus Coffey How Pillar One and Pillar Two of the OECD BEPS Project will ultimately impact Ireland is uncertain. One sure thing, however, is that there will be changes to tax payments. This will be a combination of a change in the location of where taxes are paid and perhaps also an increase in tax payments in some instances. But there will likely be both winners and losers. From an Irish perspective, there might have been some comfort in that the loser could have been the residual claimant – the country at the end of the chain that gets to claim taxing rights on the profits left after other countries have made their claim. As US companies are the largest source of Irish corporation tax revenue, it might have been felt that most of the losses would fall on the US. However, significant amounts of intellectual property have been on-shored here. Ireland, therefore, has become a residual claimant for the taxing rights to some of the profits of these companies. At present, Ireland is not collecting significant taxes from these profits as capital allowances are claimed. If BEPS results in a significant reallocation of these profits, we might never collect much tax on them. Seamus Coffey is a lecturer in the Department of Economics in University College Cork and former Chair of the Irish Fiscal Advisory Council.