Accountants call for national entrepreneurship strategy
Canadians are pretty good at creating businesses that last, according to a new study by the Chartered General Accountants' Association of Canada (CGA-Canada). Laying the Foundation for a National Entrepreneurship Strategy finds that around 85 percent of new Canadian businesses survive for a year, 62 percent make it at least three years and 51 percent are still going after five years. The Business Development Bank of Canada puts this last number above 66 percent.
Overall, "Canada is well positioned to capitalize on its strengths and increase the amount of entrepreneurial activity in this country." Nonetheless, "Key challenges for Canadian entrepreneurs include access to skilled labour, education and training, lack of innovation, access to financing and the complexity of tax and regulatory compliance."
Among the barriers to success for small and medium enterprises (SMEs) are the oft-cited low productivity and limited innovation. CGA-Canada chalks these problems up to limited access to financing, plus bureaucracy and taxes.
Industry Canada supports this view. A recent report on the 2008 Survey of Regulatory Compliance Costs found that the hours SMEs spend on regulatory paperwork had decreased from 2005, but continued to be a burden. On average, small and medium businesses spent 18 hours per establishment over the study period. And the smaller the business, the greater the cost of compliance per employee.
While CGA-Canada's recommendations focus on government initiatives to aid and promote entrepreneurship (e.g., lowering business taxes, reducing red tape, opening borders), the study itself contains much valuable insight into the state of independent business in Canada today and the economy in general.
The government does try to help though. It offers the Canada Business website, a portal for government services directed at entrepreneurs. The site greets visitors with an offer to help find grants, loans and financing, and permits and licences. One of those financing options is the Canada Small Business Financing Program, which provides loans to purchase or improve property and equipment.
Read Laying the Foundation for a National Entrepreneurship Strategy here (PDF).
See the Business Development Bank of Canada's Canadian Entrepreneurship Status 2010 report here (PDF).
Other government resources for small and medium businesses include the Small Business Quarterly newsletter and a website devoted to the government's ongoing efforts to reduce bureaucracy for SMEs, www.reducingpaperburden.gc.ca.
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Volunteering: a pleasure or a burden?
After I joined the board of directors at the Toronto Outdoor Art Exhibition (TOAE), it didn't take long for me to wonder how I'd balance my new obligations with the rest of my day-to-day life. I'd volunteered before, but only informally. Now I have regular responsibilities, mainly meetings and fundraising. I'll probably invest 70 to 80 hours volunteering with the organization this year. It's a worthy cause, but it's also worthwhile to question the time commitment.
Thomas E. Ullyett, lawyer and vice-chair of the Legal Profession Assistance Conference (LPAC), points out that:
There are perils to too much volunteering. The volunteer work you have to do today, this week, this weekend or this month is just another drain on your energy and time and can be a significant stressor. Volunteer work is work—though often very enjoyable—and it has to be factored into the overall work-life balance equation that many lawyers struggle with. And it's not just lawyers with young children that may find themselves stressed by the pressures of work, family commitments and volunteer activities. Even lawyers who don't have children or whose children have grown up and left home may find the combination of work, family and volunteering too much at times.
Obviously, this extends beyond lawyers to all workers: if you've already got too much on your plate between work and home, you should probably think twice before adding a serving of volunteering.
I certainly don't want to quash the desire to help. In fact, I imagine that for some people who lack balance, fulfilling volunteer activities might be just the thing to set the scales aright. (I think spending a day or two every month walking around Toronto's High Park with the Volunteer Stewardship Program pulling up invasive species would be a refreshing experience, for example.) If a volunteer position offers some fulfillment that's missing from a worker's daily job, it might be just the right counterbalance to workplace stresses. However, as Ullyett says, even fulfilling volunteer work is still work, and it can add up if not managed properly.
For the most part, employers have no obligation to worry about their employees' work-life balance, but they'll almost certainly be better off if they do. Lack of balance leads to stress and reduced morale, which lead to weakened health and low productivity. For lawyers, the LPAC offers a 24-hour help centre accessible by phone. For other workers, the employer might offer an employee assistance program (EAP) or some other type of counselling. Employees can benefit from any opportunity to let their bosses know, without fear of judgment, how they feel about their work—their stresses and work-life conflicts.
For myself, I'm managing so far, and enjoying working with TOAE, although I do feel like my weekends are never quite long enough. (If you find someone who doesn't feel that way, let me know.) I want to offer my best to my employer and TOAE, and I've got plenty to do besides. But I know I can talk to my boss when things get out of hand.
See Not-for-Profit PolicyPro and Human Resources PolicyPro — Ontario Edition for advice and sample policies on volunteering and employee assistance programs. We'll be sure to let you know when EAP policies come to the rest of the HRPP series.
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Corporate social responsibility is dead!
Some organizations might be happy to hear that, but it's not what you think. According to Kelly Hawke Baxter, executive director of The Natural Step Canada, a non-profit organization dedicated to improving sustainability in business, corporate social responsibility (CSR) was never that big a deal to begin with. It was a stopgap measure that allowed unsustainable companies to clothe themselves in robes of virtue.
Companies that are leading the sustainability revolution are those that see sustainability as a key business strategy and driver of innovation. Those companies are not asking, "Based on our business plan, what should our CSR strategy be?" but rather, "In light of sustainability, what should our business plan be?" … It's about inventing a completely different kind of future.
Long live CSR?
So CSR might be nearing the end of its life as we know it, or maybe it was never really more than a masquerade of marketing and public relations in the first place.
But what about all those reports that find organizations that commit to CSR enjoy all kinds of benefits? These effects appear to manifest mainly within organizations, but have limited effect on the underlying problems that CSR aims to address:
- Respect for human rights
- Protection of the local and global environment
- The impact of business operations on communities (e.g., through displacement) and particular groups such as indigenous peoples
- Avoiding bribery and corruption
- Consumer protection
In other words, "It's not enough to be adding environmental and social priorities to a business-as-usual agenda. It's not enough to be doing less bad by being more eco-efficient, but still headed in an unsustainable direction."
So what does a post-CSR sustainable business look like? Sustainability advocate Bob Willard says:
A sustainable company is one that cleans up its act, neutralizes its environmental and social impacts, and leaves the world the way it found it, or better. It achieves net zero energy, net zero waste, net zero water, net zero pollution, net zero materials—net zero everything. At least. And it steps up to the gnarly issue of economic and social justice to ensure more equitable attainment of a high quality of life for its stakeholders.
The government, for its part, has shown no sign of legislating social responsibility for business, aside from basic environmental and employment standards. (Although, one might argue that Ontario's Accessibility for Ontarians with Disabilities Act is the type of broad social engineering that CSR advocates call for.) The Department of Foreign Affairs and International Trade refers to CSR as "non-binding approaches to promote responsible business conduct".
What do you think? The descriptions above sure sound like the type of behaviour that would lead to positive social outcomes. But is it possible or realistic for business to undergo this shift? Is it the job of business to promote social or environmental goals? Will the government ever impose overarching CSR regulations?
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Modern quality management, part two
by Ron Richard, quality, information technology and proactive risk management specialist with the College of the North Atlantic.
Continuing with our series on modern quality management, here are a few more how-to suggestions on implementing and maintaining quality management in your organization.
Ensure information technology staff understand a common definition of quality assurance
The Continual Service Improvement manual of the Information Technology Infrastructure Library defines quality assurance (QA) as, "The process responsible for ensuring that the quality of a product, service or process will provide its intended value."
Ensure all understand the QA scope and objectivity requirement
Process and Product Quality Assurance supports the delivery of high quality products and services by providing the project staff and all levels of managers with appropriate visibility into, and feedback on, the processes and associated work products throughout the life of projects.
Practices to objectively evaluate processes and products are invaluable, but only work as well as staff understand them.
Drawing upon the Capability Maturity Model Integration (CMMI), produced by the Software Engineering Institute, the Process and Product Quality Assurance process area supports all process areas by providing specific practices for evaluating performed processes, work products and services against the applicable process descriptions, standards and procedures, and ensuring that any issues arising from these reviews are addressed.
Ensure employees understand how quality management processes are measured
The Control Objectives for Information and related Technology (CobiT) state that quality management is essential to ensure that IT is delivering continuous improvement and transparency for stakeholders. Control over the IT process of managing quality is measured by the percent of:
- Stakeholders satisfied with IT quality
- IT processes that are formally reviewed by QA on a periodic basis and that meet target quality goals
- Processes receiving QA review
CobiT is produced by ISACA (the Information Systems Audit and Control Association) and the Information Technology Governance Institute.
Ensure everyone involved with projects participates at minimum in an overview of chapter 8 of the Project Management Body of Knowledge—Project Quality Management
To help get the overview started here are a few key points from the chapter.
Quality is the degree to which a set of inherent characteristics fulfils requirements.
Project QM includes the processes and activities that determine quality policies, objectives, and responsibilities so the project will satisfy the needs for which it was undertaken. It implements the quality management system through policy and procedures with continuous process improvement activities conducted throughout as appropriate.
Project quality management contains three main processes:
- Process of identifying quality requirements or standards for the project and product, and documenting how the project will demonstrate compliance
- Process of auditing the quality requirements and the results from quality control measurements to ensure appropriate quality standards and operational definitions are used
- Inputs include project management plan (with integrated quality management and process improvement plans), quality metrics, work performance information, and quality control measurements
- Tools and techniques include quality audits and process analysis as well as those used for plan quality and perform quality control
- Output recommendations can include organizational process assets updates, change requests, and updates to project management plan and project documents
- QA support may be provided to the project team, the management of the performing organization, the customer or sponsor, as well as other stakeholders not actively involved in the work of the project
- QA also provides an umbrella for continuous process improvement
- Process of monitoring and recording results of executing the quality activities to assess performance and recommend necessary changes
In the next issue of Inside Internal Control, I'll share more details on planning quality and performing quality control, alongside some key principles from Information Technology PolicyPro.
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So approximately 6.1 out of every 10 Canadians went to the polls or mailed in a ballot to vote in the 41st general election, and the Conservative Party won its long-coveted majority, despite the charges of contempt that felled the previous Parliament. Will we have a nice and stable four years to build on our economic recovery, as the Conservatives campaigned? Or will we find the country irrevocably transformed in the Conservative image, as the Liberals, NDP and Elizabeth May have charged?
One thing I can say with qualified confidence is that the government will present a budget that looks more or less the same as the one introduced before the election. So if you didn't look at it then, it might be worth looking at now; although you can also be sure to see extensive budget coverage in the media when it does finally drop sometime in June.
In March, Deloitte & Touche offered a thorough look at the consequences for businesses and individuals.
Canadian Business magazine and the Montreal Gazette offered briefer analyses.
Before the election, Adam Aptowitzer of Charity law firm Drache Aptowitzer outlined how the budget would affect charities, pointing out numerous areas of concern. See the firm's budgets page for a number of commentaries on the topic.
As usual, I'd love to hear your thoughts on the topic: what do the next four years hold for the Canadian economy and businesses?
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What's that you say? Bar association releases plain language guide
When a guide to using legal jargon in everyday life offers as its first tip, "Familiarize yourself with Latin", I'm pretty sure there's a problem.
How often do you find yourself looking at some sort of legal work, financial report or other important document, but unable to understand what's on the page? Or maybe you can understand the words and how they combine to form sentences, but still have to read the same phrase over and over again in order to get it. Or maybe you find excessive use of jargon or buzzwords infuriating.
The use of legalese and jargon seems to be well entrenched in the business world, despite the latter changing constantly with the times. How many of these have you heard (or used) recently: game-changer, actionable, outside the box, blue-sky thinking, web 2.0, leveraging, disambiguate, HiPo, moving the goal posts?
And does this sound familiar?
If you fail to comply with your duty of disclosure and we would not have entered into the contract on any terms if the failure had not occurred, we may void the contract within three years of entering into it. If your non-disclosure is fraudulent, we may void the contract at any time. Where we are entitled to void a contract of life insurance we may, within three years of entering into it, elect not to void it but to reduce the sum that you have been insured for in accordance with a formula that takes into account the premium that would have been payable if you had disclosed all relevant matters to us.
It's okay: you can scream. (Look here for a translation. It's half as long—and intelligible!)
And rejoice! A growing group of advocates (I call them freedom fighters) is pushing for plain language in legal and other technical documents. First among them is probably the Plain Language Association International (PLAIN), whose mission statement is rather long-winded for an org devoted to concise communication.
Not too surprisingly, lawyers have resisted, commonly arguing that the complex ideas that the law expresses require complex language to describe. But some important players are onside: the Canadian Bar Association has expressed its support for plain language, and offers an informal guide on the topic, Plain Language Legal Writing. And Quebec's Bar Association recently released its own plain language guide, Le langage clair: Un outil indispensable à l'avocat (Plain Language: an indispensible tool for lawyers). Unfortunately it's available in French only.
For fun, or maybe to fill in the blanks in your next presentation, try this buzzword and jargon filled nonsense generator, which creates such gems as, "We need a more blue-sky approach to three-dimensional management processing."
All of First Reference's publications—Finance & Accounting PolicyPro, Information Technology PolicyPro, Not-for-Profit PolicyPro, Human Resources PolicyPro and the Human Resources Advisor—offer clear explanations of complicated topics for all readers.
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BC HST referendum
British Columbians against (or at least concerned about) the harmonized sales tax protested loudly, and the government heard their voices. The province will hold a referendum on whether to keep the HST or revert to the previous regime of a provincial sales tax plus the federal goods and services tax.
British Columbians will receive their ballots by mail in mid-June, and must return them by July 22.
In an attempt to sweeten the HST pot, BC's Legislature has passed a binding resolution to reduce the provincial HST to 10 percent if, and only if, the province votes to keep the HST. The deal would also provide one-time transition payments to families with children under 18 and low-income seniors.
For more information on the referendum, visit www.hstinbc.ca.
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A new PolicyPro for Manitoba and Saskatchewan!
Dear readers in Manitoba and Saskatchewan: the wait is over! You may now leverage First Reference's sample HR policies and procedures—specific to your jurisdictions.
Behold the value of Human Resources PolicyPro — Manitoba and Saskatchewan Edition:
- It provides over 70 samples of policies and procedures for each of the provinces
- It offers an easy way to write a policy and procedure manual based on sample policies reflecting the minimum legislative standards for the provinces
- It allows you to customize the sample policies using Microsoft Word® from within PolicyPro; there's nothing new to learn!
- It explains why a policy is required and what you need to be aware of when developing and implementing a policy
And, you lucky folk, you can receive a FREE 30-day trial of Human Resources PolicyPro — Manitoba and Saskatchewan Edition!
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In the previous issue of Inside Internal Control, I wrote that the previous government's budget led to the dissolution of Canada's 40th Parliament. What I meant was that the budget had caused a big stir, but didn't even make it to debate before Parliament fell on a vote of non-confidence. I regret the error and have since corrected it.
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The recent release of Finance & Accounting PolicyPro (2011-02) replaces all of Chapter 6 — Fixed Assets and policy FN 7.07 – Income Taxes. The material has been updated and two checklists have been added to cover tax documentation and compliance. Completing these checklists will help ensure that your tax administration process is complete.
The upcoming update to Information Technology PolicyPro (2011-02) consists of a replacement for half of Chapter 10 — Network Security. The material has been refreshed and cross-references and links have been replaced and updated.
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About Inside Internal Control
Editor: Adam Gorley
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