Brexit has been with us for quite some time, yet challenges remain for businesses trading with the UK. Janette Maxwell outlines the practical considerations for Irish importers and exporters Recent CSO figures show imports from Britain to Ireland fell by 14 percent to €1.8 billion in August 2023 compared to August 2022, and exports from Ireland to Britain fell by 15 percent to €1.3 billion in August 2023 compared to August 2022. With imports and exports in decline, it’s hard not to look to Brexit and the challenges it has brought as the culprit. Here are some practicalities to consider when trading with Britain. Irish-based businesses unwilling to act as importers of record Where an Irish-based business sources goods from outside the EU, it may not be willing to take on the responsibilities associated with the importation. To secure these sales, the foreign supplier seeks an Irish VAT registration and an EU Economic Operators Registration and Identification (EORI) number to act as the importer of record on the basis the sales are subject to the incoterm, delivered duty paid. The foreign supplier is then responsible for the importation of the goods into Ireland and pays the import VAT and any customs duty arising from the importation. The subsequent sale of the goods by the foreign supplier is subject to Irish VAT, which is returned on the foreign supplier’s Irish VAT return, with the import VAT being claimed as input VAT. Subject to authorisation from the Irish Revenue, it may be possible for the foreign supplier to use postponed VAT accounting for the imports. Postponed VAT accounting for imports An Irish VAT-registered business may apply to the Irish Revenue for authorisation to use postponed accounting for imports. Where this is granted, an importer does not pay import VAT on the clearing of the goods through customs. Instead, the import VAT is included as output VAT in the Irish VAT return, with the importer claiming input VAT in the same return subject to the deductibility provisions. There is a requirement to include the customs value of the goods in the PA1 field of the VAT return and in the appropriate fields of the annual return of trading details, i.e. PA2 and PA3 or PA4. EORI numbers A business acting as the declarant when importing or exporting goods from the EU must have an  EORI number, enabling the EU Customs administrations to deal with customs-related procedures. An Irish-established business can obtain its EORI by applying to the Irish Revenue. However, a non-EU established business should request its EORI from the EU member state in which it first lodges a customs declaration or applies for a customs decision. Contracts that would result in a UK VAT registration obligation Should the Irish business sell goods on delivered duty paid (DDP) terms to a customer in Britain, the Irish business would have to deal with the importation of goods into Britain. Where DDP terms apply, the Irish business must appoint a UK-established agent and obtain a British EORI number. The Irish company would also have to register for UK VAT to pay over the UK import VAT arising and to charge UK VAT on the domestic supply of the goods to the customers in Britain. Postponing the UK import VAT Import VAT is typically payable at the point of importation into Britain. UK import VAT is liable on goods at the same rate which would apply to the goods had the supply occurred in the UK – i.e. 20 percent.   Like Ireland, the UK government introduced a measure allowing importers to operate a postponed method of accounting for the UK VAT. This means that the payment of import VAT can be delayed until the next VAT return following the date of importation. The Irish business would self-account for import UK VAT and – subject to the standard VAT recovery rules in the UK and its VAT recovery entitlement – would be entitled to claim a corresponding VAT deduction, potentially providing a cash-neutral position for the Irish business. It is important to remember that customs duty may also arise, which is non-recoverable and represents an absolute cost for the business. What’s ahead At the contract negotiation stage, it is vital that the Irish business understands the impact of the commercial terms to which they are agreeing and, if possible, negotiates more favourable terms which may avoid a UK VAT registration and the associated registration and compliance responsibilities. It is also essential to keep up to date with VAT legislative developments in the UK and seek UK VAT advice as required, in addition to Irish VAT advice. Janette Maxwell is a Director of Tax with Grant Thornton Ireland

District Societies arrange lunch or evening events for members to celebrate the season. Here is a roundup of the events for Christmas 2023, including how to book. London Society dinner University Women's Club, Mayfair Took place on Thursday 30 November 2023 Charity supported: The Irish Elderly Advice Network Thank you to all who attended Western Society lunch – bookings now closed The Dean, Galway Friday 1 December 2023 Charity supported: Hope Space Sponsor: Money Butler Ulster Society lunch – bookings now closed Europa Hotel Friday 8 December 2023 12:00pm Entertainment: Andrew Ryan Charities supported: Salvation Army; St Vincent de Paul; NOW Group Sponsor: Ulster Bank Sold out. Waiting list  Mid West Society dinner Savoy Hotel, Limerick Took place on Thursday 30 November 2023 Thank you to all who attended Cork Society Christmas lunch Maryborough Hotel Friday 8 December 2023 12:15pm Guest speaker: Jacqui Hurley Supporting Edel House Individual | Table of 10 North West Society Christmas lunch Glasshouse Hotel, Sligo Friday 8 December 2023 12:30pm Speaker: Deirdre McGettrick  Individual | Table of 10 Leinster Society Wexford Christmas dinner Kelly's Hotel, Rosslare Took place on Thursday 23 November 2023 Thank you to all who attended Kilkenny Christmas dinner Zuni Restaurant Took place on Thursday 30 November 2023 Thank you to all who attended Dublin Christmas lunch Clayton Hotel, Burlington Road Friday 8 December 2023 12:00pm Guest: Mario Rosenstock Supporting: Jack and Jill's Children's Foundation Sponsor: CPL Email to book  

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

It is with great sadness that Chartered Accountants Ireland notes the death of Gerry Nicholas. Gerry was admitted to membership in 1979. He served on Council from 2010 until 2017 and was Chair of the London Society from its inception in 1999 until 2019.  During those 20 years, he put in enormous effort into developing the London District Society into the thriving group it is today. He was keenly involved in many of the London-based Irish charities and other Irish professional bodies, forging strong links.  As a result, he was widely known, liked and admired for his clear business mind, enthusiasm and friendship.  Gerry had a strong financial career in the banking industry spending more than 15 years with Bank of Ireland and later through his own companies in asset management, mergers and acquisitions, corporate governance and corporate finance.  Gerry will be remembered as a true collaborator, connector, and communicator, with a huge personality.  He will be sorely missed. We extend our deepest sympathies to Gerry's family and many friends and colleagues throughout London, Ireland and worldwide.

How do employers attract and retain Gen Z? Full-blown member David Boyd explains The oldest members of Gen Z are now 26, only a few years out of university, an experience shaped by an abrupt shift to online learning, disrupted exams and prohibited socialising. Then the introduction of remote work put individuals’ priorities into perspective. So what does this mean for Gen Z in the workforce? Great Place to Work identified that Gen Z are the largest generation, 32 percent of the global population. By the year 2030, the number of Gen Z employees is anticipated to triple. While they are educated, skilled, socially conscious and resilient, their full potential is as yet unknown. Having grown up with evolving technology, they are more adaptable to change and accepting of efficiencies at work. Additionally, Gen Z want to work for an organisation that sees them as an individual, not a number. As this generation loves learning and puts diversity and inclusion first, a company’s culture can be their first non-negotiable factor in applying for a job. Forget the generalisation that all of Gen Z are “quiet quitters” because what they really want is transparency, action on diversity, and social and environmental responsibility from an organisation that will support their career development. Generation X and Millennial employers should be mindful of Gen Z’s use of anonymous review websites and social media platforms to assess organisational culture. Therefore, organisations should consider if their digital platforms feature people from diverse backgrounds and show support for LGBTQ+ communities, and their online presence is authentic, showcasing their values. Gen Z are said to be the most selective generation, who will change jobs and employers for better opportunities and value alignment. They pay close attention to the types of interview questions asked, particularly if the interviewer is empathetic towards their happiness in the role and good cultural fit. Some people hold the misconception that what Gen Z want at work is a Google-style lounge area and activities but what they really want is holistic benefits, particularly flexibility. Gen Z have experienced working remotely and so are keen to optimise their time outside work to meet their commitments and achieve ambitions. They are unwilling to compromise their vision to fit into a culture that does not fulfil their expectation to live outside working hours. Of course, flexibility includes more than just flexible working hours; it means internal mobility through acquiring a new skill or role. It is unlikely that Gen Z will settle in one role for the duration of their career without the opportunity for growth and development. A study by LinkedIn found that 40 percent of Gen Z are willing to accept a pay cut for a role that offers better career development. A further 70 percent had experienced a career awakening, initiated by the pandemic. Symptoms included boredom, a craving for more work-life-balance and the desire for a job aligned with their passions. Organisations that strive to attract and retain Gen Z should commit to making a strong initial connection with employees, utilise technology for efficiencies, take action on social and environmental global issues, and provide support for employees’ personal and career development. David Boyd is a Graduate Consultant at Grant Thornton in Northern Ireland

Jeff Landers recently relocated to Dubai, with a career journey that has used his qualification in ways he didn't consider. 1. Where did you grow up and where do you live now? I was born in Dublin, and lived in Leopardstown on the south side of the city for my whole life. I did a brief spell in Vancouver, Canada, then went back to Dublin before making the decision to move to Dubai in January 2023 with my partner. 2. What made you choose to become a Chartered Accountant? To be honest, I fell into it based on college and my friend group. I was always good with numbers and business in school, so I ended up doing a degree in Mathematics and Economics in UCD.  After that, I felt the natural next step was to get a professional qualification. Most of my college and school friends went into accounting or law, so at that stage I felt accounting would be a good career where I could put my numeric skills to use.  Chartered Accountants Ireland has always been considered the strongest accounting qualification globally, so when I was offered the chance to join a training firm, (EisnerAmper Ireland), and complete the exams, there was no doubt in my mind that it was the right decision. The chance to get straight into work and start earning instead of pursuing a Masters degree really appealed to me, so when I got offered a firm close to home I jumped at the opportunity. 3. Can you tell us a little about how you got to where you are today – both the geographical location and your career path? At the outset, I wasn't totally sure of the area I wanted to be in. Once I finished my training contract, I realised that working in audit wasn’t for me. I moved on to a great company called JW Accountants to try a different branch. Over the following two years, I got experience specialising in corporate finance, examinership and insolvency. I loved the company and the people but still wasn't sure if I was on the right road. After lots of thinking, I made the decision to move on again. It had been a great few years all round, but it felt right. Dubai had always appealed to me and I was fairly certain I'd like to try it, but Covid forced me to postpone. Not wanting to be idle and just wait, and wanting to keep an income, I decided to start my own business selling cookies online...the natural step for a qualified Chartered Accountant! In ways, Covid steered the direction of the business. I went from selling directly to customers to scaling up to sell to coffee shops around Dublin. The end of the pandemic meant I was back at a crossroads though; I realised that I could scale up to yet another level, investing in a more formal premises and staff, or go back to my previous plan to go to Dubai. It was an incredibly hard decision, but six months in and I can say I don't regret it one bit (and I have stopped eating cookies everyday!) I feel that my Chartered Accountant qualification and training helped with my business skills and decision making so it did enhance that part of my career. On arrival in Dubai, I was still not convinced that straight-up accountancy was the right role for me. I got the opportunity to work in Alchemy Search as a finance recruiter and couldn't say "no". Like running the cookies business, it allowed me to continue to use my accounting experience in a different field. My experience working in various accounting roles and specialisms helps me understand the needs of the candidate as well as the client. It was a huge step for me, and it was a challenging transition, but having settled in and had excellent support from everyone in the team I know I’ve made the right decision. In summary, I took the classic route – audit, insolvency, self-employed baker, recruiter!  4. What do you value most about your membership of the profession and how do you think those benefits can be used to support the economy and society? The profession has given me such a great basis for everything I have done in my career. It gave me the skills and confidence to start my own business – knowing how to register the business with the CRO, file tax returns, maintain my accounts. It helped me get a job in finance recruiting when I relocated to Dubai. What you learn while completing the qualification is transferrable to many parts of life, not just your career. In terms of the economy and society, accountants have a responsibility to support businesses to make better decisions and ultimately help them succeed. It is a privilege to be part of the membership and we need to respect that and give back to society whenever we can. 5. As a member living overseas, can you talk to us about how your membership has been of value to you globally, and what do you value about it now that you're living overseas? I have met some incredible people in Dubai who are also members, and it has a real sense of community, especially abroad. Everyone I have met goes out of their way to make a connection, something I am actively trying to do when I hear of new members moving to Dubai. Whether you stay working directly as an accountant or branch off into a new career like me, the community of Chartered Accountants at home and abroad are always there to help when needed. I have already attended a member event in Dubai, something I recommend for all members living here as it is a great way to network with similar people. I originally came out here with the view of staying for two years (like most…) but having settled now and experienced life out here I think it will be very hard to leave anytime soon. 6. And finally, if you weren't an accountant, what do you think you would be/would have been? I have always loved all types of sport. The dream was always to be a professional in some capacity, however my football skills never matched my desire! I would say now if I had to take a different route, I would have enjoyed sports journalism or media. Considering I have left practicing accounting directly, I think I have definitely ended up in the right profession after taking the scenic route! Jeff Landers is a Consultant with Alchemy Search. Alchemy Search is a dedicated, regional specialist in financial recruitment, focused on accounting, tax, corporate finance and treasury appointments.  

Due to industrial action between 10 May and 2 June, callers to the Employer Helpline and the Construction Industry Scheme Helpline, which will be open from 9am to 5pm, may experience longer wait times than usual. Readers are reminded that until 2 June, calls to the Agent Dedicated Line are restricted to queries on self-assessment penalties and PAYE coding notices.

Chartered Accountants Ireland and several members from a range of practice sizes met recently with HMRC as part of HMRC’s Making Tax Digital (“MTD”) small business review. In December when HMRC announced the most recent delay to MTD, the Government also announced an informal review into the needs of smaller businesses, and particularly those under the £30,000 income threshold. That review is considering if/how MTD for income tax can be shaped to meet the needs of these smaller businesses and the best way for them to fulfil their income tax obligations. It will also inform the approach for any further roll out of MTD for ITSA after 6 April 2027 when businesses with turnover between £30,000 and £50,000 will be mandated to join. Once that review is complete, the Government will lay out the plans for any further mandation of MTD for income tax. During the meeting we stressed that the MTD for income tax exemption threshold needs to be more realistic and should be set at the VAT registration threshold. We also expressed concern that agents will not be able to bulk sign up clients, that the trial will only be public from April 2025 which will not allow one full cycle to be completed before mandation from April 2026 for the turnover > £50,000 population, and that there is a need for free bridging software to be available. The income tax system is also in dire need of simplification. On the issue of MTD, forum meetings are held every quarter and we will continue to represent your views at these. We will update you on developments in Chartered Accountants Tax News.

In today’s unpredictable business environment, organisations must invest in resilience to ensure they can withstand any disruption and quickly recover, writes Andy Banks  As Irish businesses grapple with a rapidly changing world, the challenges of geopolitical upheaval, soaring inflation and economic uncertainties have become ever more prevalent.   Added to this, businesses are facing the rising threat of cybercrime, supply chain challenges and the climate crisis.  To survive and thrive in this upheaval, Irish business leaders must be able to proactively anticipate and respond to disruption.  The key to success is resilience: the ability to navigate crises and the capacity to adapt and succeed in the face of disruption.   PwC’s Crisis and Resilience Survey 2023 delves into how organisations are directing their resources, efforts and investments toward building resilience to thrive in a state of permacrisis.  There are three ways organisations can embrace and invest in resilience to transform their operations in an era of constant disruption.  1. Integration: An integrated resilience programme is essential  It is no longer sufficient for organisations to operate in silos as they address today’s complex and interconnected risks. Both locally and globally, enterprises are moving towards an integrated approach to resilience.   They are centrally governing and aligning multiple resilience capabilities around what matters most to the business and embedding this programme into their operations and corporate culture.  2. Leadership: Thriving in a permacrisis means upskilling leaders and teams  Consistent with global trends, 33 percent of Irish respondents in the PwC survey said building a team with the right skills is a significant challenge in establishing a resilience programme. Fifty-seven percent of Irish organisations cite upskilling future leaders as one of the three most important elements of future-proofing resilience.  A successful resilience strategy and programme needs:  Executive sponsorship from the C-suite;  A senior leader with clear responsibility for the programme; and  A skilled team to drive the programme across the organisation.  3. Programme approach: Build operational resilience around what matters most  Organisations must build operational resilience and ensure that enterprise planning and preparation are part of a broader continuous cycle.   Irish organisations invest in teams to deliver on the resilience agenda, with 77 percent of respondents confirming at least one dedicated resource.   As more organisations integrate their resilience programmes, many firms worldwide are adopting the core principles of an operational resilience (OpRes) approach, focusing on protecting what matters most and prioritising investment based on what’s critical to their organisation and stakeholders.   This allows organisations to manage risks with high reliability and drive efficiency.  Those who have moved to an integrated resilience programme are significantly ahead in many of the core elements of OpRes: building a robust corporate immune system where an organisation can adapt, flex and grow stronger.  Technology-powered resilience   Distributed data, systems, processes and operational silos mean organisations struggle to obtain a complete view of their resilience, only identifying gaps when disruption hits.   The traditional approach to managing resilience is no longer working – simply checking off compliance with regulations does not deliver resilience.   Too many organisations miss opportunities to identify and rectify vulnerabilities before an incident occurs. What are the vulnerabilities you can and can’t live with? It’s time for a new approach.  Business leaders understand the need to underpin resilience strategies with technology that can intelligently aggregate data from across a business to provide an integrated, insight-driven single source of truth and greater agility in times of crisis.   Business leaders also want to use technology to create a living resilience programme they can continually test and evolve.  Andy Banks is Risk Assurance Solutions Partner at PwC 

Conal Kennedy writes: Sustainability is probably the most important issue of our times. However, when it comes to sustainability reporting, your first questions may well be how and when does this affect you, your firm and your clients? The short answer is that sustainability reporting will directly affect a large proportion of members in practice, and sooner than they may think. The Corporate Sustainability Reporting Directive (CSRD) has been passed by the European Union and it is in the process of being transposed into Irish legislation. It applies to a number of categories of entities, but of most immediate interest to readers of Practice Matters may be its application to large private Republic of Ireland registered companies, as defined by the Companies Act. Amongst a number of requirements, these must provide detailed information in electronic format in their annual management reports under CSRD for years commencing 1 January 2025 and thereafter. Furthermore, these companies will need to obtain independent assurance that the information is presented in compliance with the Directive. This assurance, which initially will be at the level of limited assurance, will be given and reported on only by properly authorised individuals and firms. A very large proportion of practices have at least one large company client. The impact of inflation in recent years has brought many more companies into the large category, and the future impacts on balance sheets of the proposed changes to lease accounting under FRS 102 will bring in some more marginal cases. These clients may well engage your firm for assistance with reporting under CSRD or the provision of assurance. This will mean applying the European Sustainability Reporting Standards (ESRS), and reporting on their application. These standards are currently published in draft, and are available at this link. As can be seen, the standards are substantial and detailed, and obtaining a working knowledge of them will require a large commitment of time and resources. Assurance standards will also be published in due course. Even if a firm has no large Republic of Ireland company clients, the firms may need to assist clients with the provision of “upstream and downstream” reporting of sustainability information to customer or supplier entities with broader reporting obligations under CSRD. You should determine what level of knowledge you need to obtain regarding sustainability reporting and assurance. I would suggest the following broad categorisation for the purposes of this article: Level 1 – This applies to firms who have no large Republic of Ireland company clients. Knowledge of upstream and downstream reporting requirements sufficient to assist clients to provide this information. Level 2 – Firms with large company clients. A general understanding of the reporting and assurance requirements, reporting dates, size limits as applicable to these clients. Level 3 – A level of knowledge sufficient to assist a large company to report correctly under CSRD. This will mean obtaining a detailed knowledge of the CSRD, the transposing legislation, and the final versions of the ESRSs. Level 4 – The knowledge set out at level 3 above, together with the knowledge, training and authorisation to provide assurance on sustainability reporting. Individuals who are statutory auditors (responsible individuals) on 1 January 2024 or are undergoing the approval process at that time and are approved before 1 January 2026 will be eligible to be grandfathered as assurance providers. Grandfathered sustainability assurance providers will be required to undertake sufficient and appropriate CPD to demonstrate competence. Once the grandfathering window has closed, subsequent applicants will need to follow a set procedure, which will include obtaining sufficient relevant training and practical experience and passing an examination. If your firm has one or more clients who are large companies likely to be affected by CSRD, some of the courses of action open to firms could be set out as follows: Key partners and staff within the firm will obtain the knowledge to provide assistance to relevant clients. One or more partners within the firm may obtain authorisation to provide independent assurance to relevant clients. The firm may recruit staff or partners who have a knowledge of sustainability reporting and assurance in order to provide these services. The firm may decide that it will not provide services related to sustainability reporting, and engages with its large company clients to determine how their needs will be met. The firm may decide that the needs of its large company clients are best served by others who are in a position to provide a full range of financial and sustainability reporting services, and engages with the clients to ensure a smooth transition to new service providers. All of the above courses of action require informed decisions, planning and implementation. A key consideration is the future availability of trained and suitably qualified people to provide sustainability related services. Many firms will see the potential to provide these services to their clients and will make their plans accordingly. Other firms are currently having difficulty in resourcing their current range of services, and this will influence their current and future courses of action. Firms in Northern Ireland, many of whom are registered as Republic of Ireland auditors, may be interested in providing sustainability reporting assistance services and assurance to Republic of Ireland companies. The acquisition of knowledge and training is essential to all firms to enable them to make effective decisions and to provide services to their clients as needed. The Institute is committed to supporting its members though its Technical, CPD and Specialist Qualification offerings. We have had a strong uptake of the Certificate in Sustainability Strategy, Risk and Reporting which first ran in 2022 and is continuing. We expect to launch a Sustainability Reporting Qualification with an assurance aspect in due course. Have a look also at our Sustainability Centre and look out also for our upcoming Sustainability Reporting Hub, which will be supplemented by a selection of Q&As to answer your key concerns. In Practice Consulting, we will ensure that you obtain the supports and toolkits that you need as practitioners. I have concentrated in this article on large private companies. Other entities affected include entities already subject to the Non-Financial Reporting Directive, Public Interest Entity SMEs, and ultimately small and medium sized companies which have a further three years to comply. These have different requirements and timelines, with which you should familiarise yourself if relevant. The important point is that this is an issue that cannot be ignored. If you have already put plans in place, I hope that this article was helpful to you. If your firm is affected by the issues dealt with in this article, and you have not started the planning process, then the message I have is that the Sustainability Reporting train has already left the station. Don’t underestimate the scale of this project and the benefits to be obtained from timely actions.

The European Union’s recently implemented Pay Transparency Directive is set to transform the way companies across the EU approach pay equity and transparency. Doone O’Doherty explores steps organisations should take to implement the Directive. At the end of March 2023, the European Parliament adopted the EU Pay Transparency Directive. This will go through the final formalisation steps, including Council adoption, and enter into force 20 days after publication in the EU Official Journal.  EU Member States will be required to transpose the Directive into national legislation within three years – very likely in 2026.  Given the proposed legislation’s complexity and implications, organisations should start preparing now to ensure a smooth transition from a legal, operational and strategic perspective. Under the Directive, greater transparency will be required in four critical areas.  Gender pay gap reporting and equal pay Organisations above a certain employee threshold will be required to publish gender pay gap figures externally.  Where a pay gap of five percent or more is found in any category of worker and other criteria are not met, a joint pay assessment must also be completed. Recruitment   Organisations will be required to provide information on pay (e.g. pay bandings) as part of the recruitment process, such as adding pay ranges to job adverts or sharing this information with applicants. They will no longer be able to ask candidates about current pay to determine offers.  Pay approach and philosophy  Employers with more than 50 workers must provide workers with information on the criteria used to determine pay and pay progression. Average pay levels Workers will have the right to request information on the average pay level of workers doing similar work to them, broken down by sex. This must be provided within two months of the request.   To whom does this apply? While local implementation may vary, the Directive suggests that the requirements listed above may apply not only to employees but also apply to other worker types (e.g. contractors and gig economy workers).  Key steps to take Given the significance of the measures to be introduced, organisations must identify their biggest risks and opportunities and prioritise activities. This will allow for developing an effective change plan to ensure readiness for the upcoming legislation and wider transparency requirements.  For some organisations, the impact of the EU Pay Transparency Directive will be significant, potentially leading to the widespread transformation of critical people policies and activities. Successful change (including impacted systems and processes) is a multi-year programme.   It will be critical for companies to: Understand the impact: Identify key stakeholders and gain a high-level understanding of key risks and opportunities for your organisation. Provide an initial briefing to identified stakeholders on the Directive and its implications for your organisation.  Assess organisational readiness: Deep dive into the key risks and opportunities identified through interviews and document reviews. Complete a readiness assessment to prioritise activities with stakeholders. Develop an implementation plan: Develop a high-level implementation plan to embed change based on agreed priorities, risks and opportunities.  Doone O’Doherty is Partner of People & Organisation at PwC 

A recent survey suggests that Irish CFOs are placing less importance on ESG considerations than they did a year ago, despite growing stakeholder interest, explains Derarca Dennis Ireland’s financial leaders are optimistic about the future despite current challenges, identifying investment in talent as one of their top priorities, the EY Ireland CFO Survey 2023 has found. Interest in environmental, social and governance (ESG) issues has, however, faded over the past year and this is a cause for concern. Just six percent of the 151 finance leaders surveyed by EY Ireland cited increasing the sophistication of non-financial reporting as one of their top strategic priorities for the five years ahead, down from 15 percent in the 2022 survey. Only 10 percent saw opportunities in sustainability and decarbonisation as a priority for driving growth in the year ahead. It is essential to view these findings in the context of the timing of both surveys, however. The 2022 survey took place before the Russian invasion of Ukraine at a time when the world was emerging from COVID-19. There was a decidedly optimistic view of economic prospects and a growing focus on the need to tackle the climate emergency. Conditions in early 2023 could hardly be more different. Spiralling energy costs, inflation at levels not seen for decades, rising interest rates and continuing geopolitical volatility have combined to focus business minds on more immediate survival and growth concerns. ESG viewed as compliance The overall results of this year's EY Ireland CFO Survey suggests that ESG is still regarded as a compliance and regulatory issue rather than as a source of commercial opportunity. Forty-three percent of our respondents pointed to sustainability regulatory compliance as a key focus for the next two years, while just two percent identified non-financial and ESG reporting as a priority for the same period. What is concerning is that organisations not covered by regulations (current or imminent) could face difficulties winning new business or maintaining relationships with existing customers. Organisations that are covered by the regulations, and that have set decarbonisation targets, increasingly require their supply chains to meet the same standards, with potentially severe consequences for failing to prepare adequately, so collaboration across the supply chain is essential. Financial and training implications Organisations raising finance already have to answer questions about sustainability performance and social impact from banks, private equity houses and other potential investors. It is, therefore, imperative to make ESG/non-financial reporting an integral part of their core strategy. There was also a degree of discordance in the findings. When talking about the evolving role of the CFO, 54 percent of respondents claimed their role now includes a greater focus on ESG and non-financial reporting, and 60 percent described their non-financial/ESG performance monitoring and reporting capability as basic or not mature. Despite this, attaining non-financial/ESG reporting skills was identified as a priority for the next five years by just 15 percent of the financial leaders surveyed. Lack of leadership buy-in A lack of endorsement from senior leadership and a paucity of expertise and experience within the finance team were cited as key barriers to more effective ESG reporting at an organisational level. Some 30 percent of the finance leaders surveyed said it was not considered a priority among leadership, which may lead to unaddressed ESG risks in the future. While the current macroeconomic environment and business climate can justify some diversion of attention away from the ESG agenda, the fact remains that it cannot be divorced from the broader needs of the business. Indeed, ignoring ESG will present significant risks in an environment where a business’s ESG credentials and sustainability performance will increasingly become key competitive differentiators. Future-focused CFOs need to be aware of the importance of the ESG ecosystem and mindful of the environment in which they operate, which not only includes Ireland but also the European Union. They must ramp up resource allocation to enable their finance teams to meet rapidly growing ESG and non-financial reporting requirements. Failure to take these steps could see businesses falling behind those competitors that are addressing the ESG agenda today. You can read the full report at EY.ie. Derarca Dennis is Assurance Partner at EY Ireland

OECD countries will not close the gender pay gap for at least 50 years if we continue at the current pace of progress, despite the potential economic gains, writes Ger McDonough To mark International Women’s Day, PwC released the results of our Women in Work Index, assessing women’s employment outcomes across 33 Organisation for Economic Cooperation and Development (OECD) countries. The Women in Work (WIW) Index shows that female workforce participation across the 33 OECD countries increased slightly in 2021. Progress towards gender equality remains too slow, however.  In fact, based on OECD countries’ gender pay gap of 14 percent in 2021 and historical rates of progress towards gender pay equality, our findings show that it will take more than 50 years to close the gender pay gap. This means that a 20-year old woman entering the workforce today will not see pay equality in her working lifetime. At the same time, our analysis also shows that, by closing the gender pay gap, OECD countries could make trillion-dollar gains. By increasing women’s average wages to match those of their male counterparts across the OECD, female earnings would rise by more than US$2 trillion per annum, our research has found.  In Ireland, closing the gender pay gap could boost women’s earnings by US$4.32 billion per annum (8%) and increasing women’s employment could boost Irish GDP by US$50 billion per annum or nine percent. Ireland ranks in 12th place overall out of the 33 OECD countries in our latest WIW Index, up from 15th place in the year prior. This improvement was in large part due to a rise in the female labour participation rate from 65.6 percent to 69.6 percent. Our research also reveals that just 25 percent of women in Ireland have an established plan to advance their career with their current employer, however, compared to 35 percent of women globally.  If the rebound from the COVID-19 pandemic has taught us anything, it is that we can’t rely on economic growth alone to produce gender equality—unless we want to wait another 50 years or more. Employers can make a material improvement to women's empowerment in the workplace now by focusing on fair reward, autonomy, inclusive leadership and instituting a data-driven diversity strategy. Women working full-time in person have the lowest empowerment score in our WIW Index. This trend follows suit for men—suggesting that autonomy over how, where and when people work fuels feelings of empowerment across the workforce. According to our WIW Index, the women who are most empowered also have greater opportunity to work remotely (74%). However, close to half (48%) of women can’t do their job remotely.  Of the 11,285 women who can, 29 percent are working remotely full-time, and 56 percent had some level of hybrid work pattern. Autonomy fuels empowerment for both women and men, but women currently have less autonomy over how, when and where they work.  Demand for flexibility is a talent-wide proposition, and one that cannot be ignored by employers as they seek to enhance diversity, fuel engagement and innovation, and position themselves as an employer of choice. Ger McDonough is Partner and Leader of the People and Organisation Consulting Practice at PwC Ireland 

The Windsor Framework provides for the smoother flow of goods between Britain and Northern Ireland, but is it enough? asks Eoin O’Shea It's been just over ten years since David Cameron, the UK's then Prime Minister, unveiled the idea of holding a referendum on EU membership. On that fateful day, 23 January 2013, Cameron made the rather prophetic statement: "If we leave the EU, we cannot, of course, leave Europe. It will remain for many years our biggest market, and forever our geographical neighbourhood. We are tied by a complex web of legal commitments." The latest addition to the post-Brexit tsunami of legal commitments entered into by the UK and the EU, including a 177-page Withdrawal Agreement and a 2,530-page Trade and Co-Operation agreement, is the Windsor Framework. The Windsor Agreement aims to update the 63-page Northern Ireland Protocol agreed by the UK and EU as part of the Withdrawal Agreement.  The Windsor Framework – in reality, several legal and political documents – was launched last week by the president of the EU's executive branch, Ursula Von Der Leyen, and UK Prime Minister Rishi Sunak at Windsor Guildhall.    The Windsor Framework came about because the Northern Ireland Protocol to the Withdrawal Agreement operated, in parts, like a manual for a United Ireland. Back when former UK Prime Minister Boris Johnson was 'getting Brexit done', there was a fear that Ireland, north and south, might have different laws concerning trade, the movement of goods, customs, taxes and the like, leading to a hard border on the island of Ireland. To counter such a border, it was decided by the UK and the EU that Britain would have its own British laws on those border/market/trade issues, and the Island of Ireland (north and south) would follow EU rules. Leaving Northern Ireland subject to EU laws, the oversight of the EU court of justice in Luxembourg, and the full panoply of EU officialdom. One view of the Northern Ireland protocol was that it permitted goods to flow between Northern Ireland and Ireland/EU without customs checks, duties, or paperwork. It also allowed for the free movement of goods between Northern Ireland and the rest of the UK.   Economist John Fitzgerald dubbed the situation as providing "unique dual access to both the British and the EU markets". Similarly, Michael Gove, then a member of the UK cabinet, stated: "That means that businesses in Northern Ireland have the opportunity to enjoy the best of both worlds; access to the European single market, because there's no infrastructure on the Island of Ireland, and at the same time unfettered access to the rest of the UK market." Unfortunately, the Northern Ireland protocol didn't work. Neither politically nor economically.  Excessive paperwork and administrative uncertainty made it difficult, expensive, and slow for goods to move to and from Northern Ireland and Britain. Imports and exports between Ireland and Northern Ireland skyrocketed as businesses in Northern Ireland found buying goods from Ireland/EU easier than from the neighbouring island. In the first five months of 2022, for example, exports from Ireland to Northern Ireland increased by 42 percent compared to the previous year. Politically, the original Northern Ireland protocol caused significant problems, including a boycott of the Stormont Assembly by the DUP and a threat by the UK to unilaterally override, with domestic legislation, the Protocol's operation.  All sides were fearful for the continued operation of the Good Friday Agreement and the possibility that relationships between communities within Northern Ireland and north/south and east/west ties could be negatively affected, perhaps for a generation. In short, all roads have been leading to last week's Windsor Framework for some time.  The highlights of the Framework include the following: The introduction of a trusted trader system in Britain to facilitate smoother transport of goods to Northern Ireland; Identity and physical checks on goods are to be drastically reduced; The same food will be available on supermarket shelves in Northern Ireland as in the rest of the UK; Goods moving from Britain to Northern Ireland that are destined for the EU or at risk of entering the EU will be subject to full customs checks and controls; People in Northern Ireland will be able to get medicines, including new medicines, at the same time and under the same conditions as people in the rest of the UK; Certain goods travelling from Britain to Northern Ireland may carry labelling "not for EU", ensuring that products remain in Northern Ireland; Consumer-to-consumer parcels will be entirely exempt from the main customs requirements; Travel to and from Britain with pets will be easier and require reduced documentation; Garden centres in Northern Ireland will have an easier time stocking plants, shrubs, trees and seeds from Britain; The UK has agreed to share live data with the EU on movements of goods from Britain to Northern Ireland to give additional comfort to the EU that goods transfer rules are being adhered to and that the single market is not at risk; and The number of proposed changes to the application of EU VAT and excise duty requirements to Northern Ireland.  It has been agreed that members of the Northern Ireland Assembly might, by way of a 'Stormont Brake', to stop new EU law from applying in Northern Ireland (as a last resort). It is also proposed by the parties that there be enhanced involvement of Northern Ireland interests in the operation of the joint committees set up between the UK and the EU on the management of relationships. As can be seen, the arrangements under the Windsor Framework provide for a much smoother flow of goods between Britain and Northern Ireland than was the case under the Northern Ireland protocol. But, as also can be seen, the arrangements are not as smooth as before Brexit. Eoin O'Shea is a Barrister at Law and Chartered Accountant

While uncertainty over energy price shocks and supply continue to dominate the national conversation, there is also an opportunity for Ireland, writes Colm O’Neill The first documented energy crisis unfolded in the late 16th century when industrialised regions in Europe literally ran out of trees to burn. This caused enormous political and social upheaval but also generated tremendous opportunities for countries with the natural resources and ingenuity to capitalise on the transition. It was the start of the Industrial Revolution. Ireland’s green energy advantage Today, Ireland has everything required to become a global green energy powerhouse. Our position on the northwest corner of Europe offers some of the best available offshore wind resources. The strength of our skill base and our strong collaborative research community mean we also have the ingenuity to capitalise on it. Ireland has a large offshore wind generation capacity, so the potential is clear. If we act quickly and with purpose, Ireland could achieve energy independence and become a hub for energy-intensive industries and a net energy exporter.   But ours is not the only country in Europe with this potential. Scotland is investing heavily in its offshore wind resource, as is Portugal, which also has the additional benefit of significant solar capacity.  Time to act Although the benefits are long-term, decisive action is required now if Ireland is to grasp the opportunity. However, change is needed in three crucial areas: planning, regulation and gas infrastructure. Planning The energy transition will require spending billions of euro on constructing energy infrastructure on a scale never before seen in this State. However, despite An Bord Pleanála having a statutory timeframe to decide on applications for wind energy projects by June, the average time for a decision is over a year, and some projects have waited for more than two. This slow pace puts Ireland on the back foot when competing for international investment. The current review of the planning system in Ireland urgently needs to address this critical area. Regulatory change required Commission for Regulation of Utilities (CRU) was established in 1999 to support the liberalisation of energy markets in Ireland as part of Europe’s first liberalisation directives. Implementing this was a challenging task: while there has been active customer participation and switching at the retail level, there has been less investment in new thermal generation capacity. The CRU’s mandate has expanded over time to include other utilities and energy safety, and the CRU now plays a central role in Ireland’s energy transition.  To reflect the scale and importance of this mandate, the CRU needs investment in resources, a review of governance structures and changes to the agency’s statutory mandate. These changes are vital if the regulator is to support Ireland’s development as a major European energy powerhouse, with this objective at the centre of their strategic agenda. Gas reliance Ironically, transitioning to a modern, low-carbon energy system requires lots of energy. And for many years, the generation of that energy will rely heavily on natural gas. Despite the undoubted potential of an array of ‘green gases’ from biomethane to hydrogen, the reality is that natural gas will need to be part of our energy system for decades to come. Energy policy must recognise this. We currently import around 75% of our natural gas demand through a pipeline from the UK. Any realistic strategy for energy independence must have a plan for reliable sourcing of natural gas while at the same time promoting investment in developing ‘green gases’. This includes building facilities to import liquified natural gas (LNG) and developing storage for natural gas locally. This can be done while also supporting exciting developments in hydrogen and biomethane that are already happening across Ireland. Gas of all types will be central to our energy system, and we need a plan and investment that delivers security in both the short and long term.  We need to be pragmatic The actions outlined above are very straightforward but far from easy. Progress is often sacrificed to idealism and dogma. We need to be pragmatic; we need to take calculated risks and accept that we may take action that may not deliver the perfect outcome immediately but will help us bridge to a greener energy future.   The benefits of acting now will be reaped in the coming decades, not the immediate months or years. This is a time for bold visionary decisions on the part of both investors and the government. These are multi-generational initiatives that need to be actioned today. The unfolding climate catastrophe won’t wait. The window of opportunity for Ireland to become a global energy transformation hub will close. To quote the Chinese proverb, “The best time to plant a tree is 20 years ago. The second best is now.” Colm O’Neill is Head of Energy, Utilities & Telecoms at KPMG

Work to achieve parity in the workplace is often assigned to women, but research shows that when men advocate for equity, everyone wins, says Andrea Dermody Gender equality issues are nothing new in the boardroom. Grant Thornton’s 2022 report Women in Business: Opening the door to diverse talent revealed that just 33 percent of senior leaders globally are female. Time and again, research shows that the more diverse a company, the better its performance. So perhaps it’s time to shift the focus and consider how men can play their part in the pursuit of parity. Men as allies Too many organisations still miss the mark on gender balance efforts by focusing gender initiatives solely on what women can do to level the playing field—or, at best, inviting men to attend diversity and inclusion events designed for women. An alternative drive towards ‘allyship’ is, however, steadily gaining pace. For men, this is about acknowledging and using their privilege to help others. When they do, they can help to share knowledge, break down barriers, and promote equal access. Why allyship matters Notably, the more women occupying a seat in a company’s C-suite and corporate board, the better its sustainability, corporate social responsibility, and business performance. With this in mind, having men as allies should be a business imperative. Empowering men is one pathway towards allyship. Male allies can help advocate for women’s voices to be heard, and that commitments to equity and inclusion are taken seriously. But believing in the cause is only part of the equation. Men must actively work to achieve it.  Grant Thornton’s 2022 research suggests male allies can support progress towards gender parity among senior leadership in several impactful ways, from exerting influence to change behaviours in their circles to facing down sexist behaviour and supporting and encouraging female colleagues. The result is reciprocal reward. The business performs better, and male allies experience personal growth, broaden their network, and, most importantly, experience the associated benefits of a unified, energised and collaborative team. Allyship is a verb, not a noun For men, the message is clear: you must take action. W. Brad Johnson and David G. Smith, authors of Good Guys: How Men Can Be Better Allies for Women in the Workplace, offer five ‘rules to live by’ for men who aspire to better ally behaviour in the service of promoting tangible gender equity in the workplace: Allyship is a journey, not a destination. Nobody ever “arrives” as an ally. Allyship is with, not for. Make your ally actions collaborative.  Allyship perpetuates autonomy, not dependence. You must hold yourself accountable for the net outcome of your ally behaviour. Allyship is about decentring, not standing in the spotlight. Speak less, hand the mic to women with key expertise, and structure projects, so women gain credit.  Allyship is critical to improving the status quo. Examine longstanding practices that perpetuate systemic inequities. Overcoming barriers  Allyship is growing trend, as is training in this area, but there is a gender gap in the perception of what success here means. Research shows that women and other underrepresented groups see less evidence of measurable workplace change than men. In short, men are essentially worse allies than they think. In this no-holds-barred report released in 2018 by the Harvard Business Review, the authors also suggest there can be a cost to men who act as allies. The authors describe the ‘wimp penalty’ of allyship, where men who advocate for female colleagues are seen as less competent by both men and women.  Finding the balance Barriers aside, it’s clear from the evidence that progress towards gender balance in senior leadership is accelerated when men act as allies. The more positive interactions men have with women in professional settings, the less prejudice and exclusion they tend to demonstrate. Here are some practical suggestions for closing the allyship gap: Make allyship an organisational value and priority: ensure senior leaders can talk clearly about the importance of allyship as it connects to core business outcomes, demonstrating how they value it personally and in their business. Listen and collaborate: demonstrate generous listening, show that you understand, and take meaningful action. Move from awareness to action: consider actions and techniques to overcome, challenge, disrupt, and prevent these behaviours and inequities. Create a community of allies who share and grow: allyship is not a ‘one-and-done’ process. Allow your communities to continue to learn and develop the skills they need to support the women in your organisation. There is a role for allyship to play in gender parity efforts. Ensuring that men are given a dignified, respectful role in becoming allies will bring wide-ranging benefits associated with a truly inclusive team. And then everyone wins. Andrea Dermody is a diversity and inclusion consultant, speaker and coach at Dermody

The benefits of AI extend across all business functions, but its potential for the finance function is especially striking, writes Paul Tully Organisations are investing in artificial intelligence (AI) to improve efficiency, reduce operating costs, and open up new business opportunities. From smart map apps and fuel consumption optimisation, to sophisticated financial tools for fraud detection, AI is becoming embedded in businesses in every sector. The question for those looking to harness the power of AI in the best way possible, is whether to build, buy, outsource the technology, or utilise a combination of all three. At a high level, AI is used to unlock the power of data to deliver better predictive and analytics capability. The technology can explore “what if” scenarios and offer insights into competitive threats and market opportunities that might arise in the future. The opportunities extend across all business functions, but the potential benefits for the finance function are especially striking. AI benefits for CFOs A growing number of CFOs are using AI to address changes to accounting regulations. We have seen large companies save manpower by using natural language processing (NLP) to review lease contracts, for example. Without AI, this would be a labour-intensive process. CFOs also need to balance the delivery and growth of performance targets, while ensuring compliance with legal and accounting regulations. AI offers enhanced insights that can support strategic decision-making in asset valuation, predicting future customer trends, and identifying market growth opportunities through predictive modelling. The ability to create fraud detection processes leveraging AI, can also help CFOs to create a robust control environment and manage risk more effectively. Options here include mechanisms that recognise suspicious behaviour and classify alerts as high, medium or lower risk. Finance operations and control Perhaps no part of any enterprise has as many repetitive, routine tasks as the finance department. Inputting invoices, tracking receivables, and logging payment transactions are high-cost, low-return activities, and not of high interest to employees. AI can increase efficiency by automating manual people-intensive finance processes, such as the order-to-cash cycle, helping to predict customer debts and improve working capital management. Accurate, timely and consistent data, generated automatically, can help finance teams to add value to their organisation, leveraging customer behaviour modelling to identify opportunities to grow margins, while also forecasting with speed and accuracy. Furthermore, using AI to analyse internal financial control points and improve fraud detection can create a more robust reporting environment. Banks and other financial services organisations are leaders in establishing or acquiring their own AI capability. This is unsurprising given the cost and regulatory challenges facing the sector. They are using the technology in customer support, automated loan approval processes, “self-repairing” mobile banking apps, and payment optimisation. They also use AI for automated fraud detection, anti-money laundering checks, customer portfolio management, electronic trading, and property market intelligence. Third-party solution business Professional services firms are leading the field in developing third-party AI solutions for clients. These range from bespoke solutions for individual clients to more general products in areas such as automated insurance claims processing, regulatory compliance checking, HR support, and the use of machine vision to monitor automated production lines. Third-party solutions are not confined to the professional services sector, or the broader technology and software services industry. Organisations with well-established AI capabilities are making their solutions available on the open market as an additional business line. Paul Tully is Head of Finance Analytics at EY Ireland AI Labs

With new EU cybercrime rules coming down the line, now is the time to step up your organisation’s ICT security strategy, writes Neil Redmond Increased regulatory scrutiny is among the five most important ways businesses have been impacted since 2020, according to the Irish senior executives who participated in PwC’s Global Digital Trust Insight Survey 2023. Regulators are becoming increasingly cognisant of the risk posed by cyber threats to businesses and their customers. As part of new legislation, the European Union (EU) aims to address cyber, and information and communications technology (ICT) risks. By understanding these regulations and knowing how to prepare, organisations can act now to align with the requirements of new EU legislation. Four key pieces of the new legislation are introducing additional requirements for business: the Network and Information Security Directive Revision 2 (NIS2); the Digital Operational Resilience Act (DORA); the Digital Services Act (DSA); and the Digital Markets Act (DMA). How can your business best prepare to comply with these legislative changes? By taking the following key actions, you can ensure that your organisation is ready ahead of time. 1. Assess the maturity of your organisation’s cybersecurity Reviewing your business’s systems and information security is critical to prepare for the upcoming regulations. Assessing your organisation’s cybersecurity and ICT risk management controls can provide executives with valuable information regarding the business’s cyber risk profile. By finding potential compliance gaps in their cybersecurity, firms can improve their posture before legislation comes into force, mitigating the risk of non-compliance and subsequent consequences, such as brand damage and financial penalties. 2. Test your business’s operational resilience at the enterprise level As part of a cyber maturity assessment, evaluating the organisation’s resilience to disruptive events will be key in preparing for upcoming regulations. While executives may believe that their business is robust and can continue to operate in adverse circumstances, the testing of business continuity and disaster recovery plans allows businesses to measure their resilience and continuously enhance their cybersecurity posture. The first step is to ensure that the organisation has contingency plans for different scenarios. These scenarios should be exercised and iteratively improved to ensure that they are fit for purpose. Examples include switching failing systems to backups or simulating a response to a malware attack on your network. All relevant stakeholders, including third parties, should participate in the testing of contingency plans—in today’s world of sophisticated threat actors, executives must ensure that their entire business is ready to respond. 3. Enhance your incident reporting processes A cornerstone of NIS2 and DORA is reporting ICT and cyber incidents. Businesses need to review their existing reporting channels and procedures, implementing processes to monitor, log, classify and report on incidents consistently. An effective way to ensure that reporting is standardised and complies with regulatory requirements is to centralise incident reporting across the organisation. Establishing formalised processes for managing reported incidents can support businesses in fulfilling their regulatory obligations. Furthermore, the DSA and DMA will require organisations to report to authorities regularly. National Digital Service Coordinators will be established, and they will be responsible for compliance monitoring. Reporting to new supervisory bodies will be a feature of these upcoming legislative changes—a trend likely to be seen in future regulations. 4. Analyse and understand your ICT and third-party cyber risk Today’s business world is deeply interconnected, with organisations often relying on a wide network of suppliers to conduct business. Reliance on third parties can increase the organisation’s susceptibility to cyber-attacks, increasing both the attack surface available to threat actors and the potential for attacks to affect operations significantly. Regulators have grown concerned about gaps in organisations’ third-party risk management processes in recent years as businesses become increasingly reliant on third parties. NIS2 and DORA build on existing guidance and legislation, such as NIS1 at the EU level and the Central Bank of Ireland’s Operational Resilience Guidelines and Guidance on Outsourcing at the national level. In particular, DORA will set out many provisions for businesses to report on the ICT risks stemming from their dependency on third parties, requiring them to describe this reliance in detail. Analysing your business’s exposure to cyber risk through the lens of third parties is a key means of securing your customers’ data and satisfying regulators. Neil Redmond is Director of Cybersecurity Practice at PwC Ireland