Geopolitical uncertainty is reshaping boardroom priorities and acquiring the right expertise is crucial for strategic resilience, writes Dan Byrne Geopolitical risk: Is your board talking about it? If so, do they know how to handle it? The harsh reality is that many companies can’t do so properly. However, stakeholders are rarely patient when it comes to geopolitics. When something happens, they want a response from your corporate leadership.  The last thing your board needs to be is unaware of how to handle a situation, what to say, and how to adapt your strategy to changing global events. The challenge is processing that it’s all happening at once.  The news cycle is now dominated by the Israel-Hamas war. Before this started, the spotlight was on the Russian invasion of Ukraine and, before that, the chaotic US withdrawal from Afghanistan.  Meanwhile, we’ve got tensions between the West and China, the right-wing backlash against Brazilian and US elections, and unresolved Brexit issues – not to mention the protracted conflicts that are now so ingrained in the fabric of modern geopolitics. Every geopolitical crisis begins a new chapter of geopolitical pressure in corporate playbooks. The importance of geopolitical risk Assessing geopolitical risk is essential. It’s not going away and, depending on your company, it could be crucial to your strategy.  This doesn’t have to be direct – your company’s stance on a particular issue, for example. It can also be indirect – such as the businesses you work with within your supply chain. Many American companies have been shifting their manufacturing from China to other locations, such as Vietnam, out of fear that Chinese authorities could disrupt their business at the drop of a hat. Corporate leaders will be prodded by investors wanting to know if their company can survive through sanctions or consumers wanting to see their response to escalating conflict. The storm of questions will come; the challenge is how best to weather it. Expertise needed Experts in geopolitical risk will have the following skills: A deep understanding of corporate strategy and risk; Knowledge of global affairs, new or potential conflicts with global impacts, the intricacies of trade sanctions and the knock-on effects of government changes on international relations; and The ability to navigate through substantial geopolitical fallouts. The hard part is finding this expertise. Finding the right candidate to fill a board seat depends on multiple factors, like the availability of talent, training, networks, and an alignment of values. In some situations, this is a heavy ask.  It’s also worth noting that the market for geopolitical expertise is highly active right now as companies realise that they need to be prepared. Playing the long game Organisations should realise that the quest for geopolitical experience for your board may be a long game.  It can take time to find the talent that works well for your business – and it’s time that stakeholders may not always give you, pushing you for an answer and refusing to accept that you might need more time. That’s why it is essential to start now on geopolitical expertise if you haven’t already. If it feels like you’re playing catch-up, bear in mind that this won’t always be the case. Eventually, you will have the solid knowledge you need on your board to help you develop thorough answers to complex questions.  In reality, the world always moves faster than corporate governance is comfortable with, so it’s better to get ahead. Dan Byrne is a content writer at The Corporate Governance Institute

Successful digital transformation requires strong leadership. Dave Vincent outlines his tips for successfully embedding innovation in business Growing up in Belfast in the seventies and eighties, I was convinced that by 2020, we’d all be travelling around on flying cars or hoverboards and have a host of robot servants looking after us. Fast forward to the nineties, and I can vividly remember sitting in my university computer lab wrestling with the logic and code required to help teach a hungry virtual monkey how to get their hands on a hidden bunch of bananas. In 2023, while software applications and systems are significantly more developed than in the nineties, the reality doesn’t quite match the vision of the eighties (the hoverboard being the biggest disappointment). I couldn’t have dreamed of many of the developments that have instead taken place, however. Since the term ‘artificial intelligence’ (AI) was first coined almost 70 years ago, we’ve seen wave after wave of technology-enabled innovation, from the rise of personal computing to the internet, mobile devices, augmented and virtual reality, the cloud, the metaverse, self-driving vehicles and now, generative AI. Each shift has captured the imagination, created new opportunities and raised further questions and challenges for business leaders. We are surrounded by technology, and every day, we can see that technology evolves and changes as it impacts how we live and do business. How can technology help? Some of the most frequent questions I hear from clients considering digital transformation are: “Where do I start?” “How do I create the most impact?” “What does success look like?” Rather than starting by asking or thinking about what a particular tool or technology can do, I prefer to reverse engineer the questions and ask: “What are you trying to do in your business or what problem would you like to solve, and how can a digital mindset or technology help?” As these new technologies continue to influence all areas of our business operations, customers and employees, companies need a new type of (digital) leader who can understand, interpret and navigate this digital transformation era. The digital leader Implementing new technology is challenging. The organisation seeking to embed the latest technology — and its staff — must unlearn old concepts and embrace the new systems. For digital leaders, this means adopting alternative leadership styles. In the past, leadership was about giving orders and making decisions. Digital leaders know that successful digital transformation is not just about adopting technology; it’s about transforming business and operating models, driving growth, enhancing competitive advantage and increasing business agility. Today’s leaders must be able to evaluate progress, priorities and business models continually and be prepared to change direction quickly. Digital leaders need to understand not only how systems and technology work but also how that technology will be received and used by staff, as well as how it will impact how employees work and the type of work they do. Digital leaders need to be able to effectively manage employees through shifts and changes to ensure that digital technology is used to deliver the best business outcomes. To make informed and pragmatic decisions about technology, digital leaders must be able to evaluate the impact technology can deliver for their organisations, use data to inform policy and decision-making, and proactively assess and manage risks related to data security. To drive digital innovation, leaders must be agile and flexible, creating a culture where innovation, collaboration and continuous learning can flourish and empower their teams to make data-driven decisions. To ensure focus and alignment, leaders must share a well-defined and compelling strategic vision, calling out what success looks like and showing the roadmap that will get there. It is also important to remember that leadership in the digital age is not just the responsibility of the nominated digital leaders and senior leadership teams, however. Every employee can be a digital leader. The future is digitally enabled Organisations can drive digital innovation and growth from the ground up by empowering staff at all levels to take ownership of, and show leadership in, their work.  The future of work is undoubtedly digitally enabled, and business leaders who are prepared to embrace this change and lead their teams effectively will be the ones to succeed. The digital age allows leaders to create more meaningful and purpose-driven work for their employees and promote innovation and growth for their organisations. Organisations can position themselves for continued success by investing in digital leadership development.  And maybe somebody will finally work out how to create the hoverboard of my dreams. Dave Vincent is a Director of Digital Transformation at Grant Thornton Northern Ireland

Accountants will be the profession best placed to bring the necessary rigour to the analysis and governance of critical data in the age of AI, writes Sharon Cotter Canadian philosopher Marshall McLuhan has suggested: “We become what we behold. We shape our tools, and thereafter our tools shape us”. This is important to remember today, when the spotlight is on the potential consequences, intended and unintended, of the artificial intelligence (AI) tools being shaped by humans. The rise of AI AI encompasses a vast range of computer science research. Since the 1950s, scientists have pursued the goal of building machines capable of completing tasks that normally require intelligent human behaviour.  Machine learning (ML), a subset of AI, enables machines to extract knowledge from data and to learn from it autonomously.  In the past decade, the exponential increase in the volume of data generated, captured, stored and available for analysis, coupled with advances in computing power, have created the impetus and means to rapidly advance ML, which in turn has facilitated the development of narrow AI applications.  In essence, narrow AI applications are computer programs, or algorithms, specifically trained, using very large datasets, to carry out one task, or a limited number of tasks. Best suited to tasks that do not require complex thought, narrow AI algorithms can often accomplish such tasks better and more swiftly than humans.  Most of the AI capability we use today is narrow AI – from Alexa and Siri, which carry out human voice commands, to ChatGPT and Bard, which generate output based on conversational text prompts, and Dall-E2, which generates visual images based on text prompts, to name but a few.  In the field of accounting, we can utilise coding languages and software tools such as Python, ‘R’ and Alteryx to generate predictive forecasts and models.  We often use these tools without realising that we are using elements of narrow AI. For example, these programming languages and software tools embed many of the statistical algorithms that allow us to easily carry out linear regression analysis, a common method of predicting future outcomes based on past data. Adapting to broaden our role The word ‘computer’ was first coined by the English poet Richard Brathwaite in 1613 to describe a person who carried out calculations or computations. For the next 350 years or so, most humans who needed to perform calculations used mental arithmetic, an abacus or slide rules until the widespread availability of electronic handheld calculators in the 1970s. As accountants, we have seamlessly adapted to the tools available to us – whether these are an abacus, double-analysis paper, a totting machine, or computer software tools like Excel and Alteryx.   The use of these tools, and the time saved by their use, have allowed us to broaden our role from recording, summarising and presenting the underlying economic transactions to providing a much wider range of useful information to decision-makers both within, and outside, organisations.  This is reflected in commentary from the professional accountancy bodies emphasising the importance of good organisational decision-making and suggesting that the core purpose of our profession should be to facilitate better decisions and identify the business problems that better decisions will resolve. Asking the right questions In 1968, Pablo Picasso is reputed to have said: “Computers are useless. They can only give you answers”. While the remark may have been dismissive of the then cumbersome mainframe computer, it does encapsulate the notion that the real skill lies in figuring out the right question to ask, as this requires both judgement and creativity.  Useful, timely and relevant information for decision-making can only be produced if the right question is asked of the right data at the right time. On the face of it, this seems simple and straightforward, but in practice it is often much more difficult to achieve.  Deciding what question to ask requires knowledge of the business context, and an understanding of the issue being addressed as well as an ability to clearly articulate the issue. Critical thinking is key to identifying what answers are needed to identify the range of solutions for the issue at hand. Deciding what data is appropriate to use in the analysis requires an understanding of what data is available, where it is stored, how it is stored, what each data element selected represents, how compatible it is with other data, and how current that data is. It also requires knowledge of the limitations posed by using particular sets of data. Being able to generate the answer to the right question using the right data is only relevant if it can be produced at the point at which this information is needed. Sometimes, not all the data needed to answer the question is readily available, or available in the required format. Data from several sources may need to be combined and, where data is incomplete, judgement will be needed on the assumptions necessary to generate a relevant and timely set of data. Accountants are well-positioned The skills, experience and mindsets we develop as part of our professional training positions accountants well to provide the best possible decision-enabling information to decision-makers.  Scepticism is a key tenet of our profession. We look to spot anomalies in data and information, and to question the information by asking “does it make sense?” We are trained to be methodical, thorough and to look beyond the obvious. Training and experience enable us to develop our professional judgement, which we apply when determining what is relevant, appropriate and faithfully represents the underlying economic transactions.  We are adaptable and flexible in the tools we use, and aware of the need to stay up to date with the law and regulation applying to the storage and use of data. In short, we are valued problem-solvers and critical thinkers. Accountants’ ‘jurisdiction’ In his book The System of Professions: An Essay on the Division of Expert Labor, Andrew Abbott uses the term ‘jurisdiction’ to represent the link between a profession and its work.  Jurisdiction is an important concept, as the acknowledged owner of a task is likely to be able to shape the characteristics of that task. In the context of accountants’ work, the term ‘jurisdiction’ means the extent to which organisations, and society, accept that due to their professional expertise, only specific roles and responsibilities should be carried out by accountants.  Within organisations, accountants’ jurisdiction is not static. The roles and responsibilities that fall within their remit can, and do, change.  The jurisdiction of accountants can be encroached upon. Others within the organisation may also have expertise allowing them to claim work once exclusively identified with accountants. Challenges to jurisdiction The emergence of new roles, such as data or information specialists, who collect, clean and analyse data, has meant that complex analysis of financial information can now be done by non-accountants.  Some organisations have explored ways in which operational managers and decision-makers can be given direct access to financial systems.  Known as ‘self-service’ menus, such direct access to information allows decision-makers to drill down into the detail of transactions – for example, to identify the underlying causes of deviations from budget, all without the need to consult with their colleagues in the finance department.  If an organisation transfers responsibility for data analysis and decision support to data specialists and/or decision-makers, then the jurisdiction of the accountant may be narrowed or reduced. Opportunities for role expansion Equally, however, accountants’ roles and responsibilities can be increased, resulting in their jurisdiction being broadened or expanded.  The expansion of an accountant’s role requirements can either result from increased job tasks and responsibilities, or from changes in the tools and technologies available to carry out these tasks and responsibilities.  Recent research and professional body commentary has, for example, explored the extent to which management accountants have embraced changes in their role or taken on wider responsibilities, such as business partnering.  Multiple elements such as role identity, the ability to embrace change in a positive way and developing strong communication skills, to name but a few, all contribute to the successful adoption of additional responsibility. Futureproofing with digital fluency The rapid and on-going development, enhancement and availability of software tools that can be used to capture, store, identify, slice and dice data, and present information in visual graphics, are forcing accounting professionals to consider the level of IT competency required to operate efficiently and effectively in today’s digital world.   Professional accountancy bodies emphasise the importance of digital skills in futureproofing the accountant’s role while many of the larger multinational companies espouse the need for finance staff to have good digital fluency. Challenges and opportunities Both encroachments and expansions to the jurisdiction of accountants bring their own set of challenges and opportunities.  Maintaining, and expanding, accountants’ jurisdiction over the integrity of data, and the provision of information for decision-making, should be a key part of the profession’s strategy in the digital age.  I believe that the ‘governance’ of data, rather than the use of specific AI tools, should be the focus of the accountancy profession when formulating strategies for its future direction. In addition to enhancing our digital skills, we need to consider strategies such as adapting and changing the role of the chief financial officer to include overall direct responsibility for data analytics.  The governance, management and analysis of data should be as important as traditional responsibilities in finance.  Governance of data requires rigour and objectivity to ensure that its integrity is preserved. We should noticeably stake our claim as the profession best placed to bring that rigour and objectivity to the governance and analysis of data used for decision-making.  Failure to consider such strategies may mean we increase the risk that encroachments rather than expansions to our role – our jurisdiction – will become a reality. We should strive to ensure that our future role is shaped by us rather than by these new digital tools and techniques. Sharon Cotter, FCA, lectures in accounting and finance at the University of Galway