On the 7th of March 2024, we had the pleasure of gathering four seasoned Audit Committee Chairs to discuss advice on how become effective Chair leaders alongside their learnings from years of navigating permacrisis and transformations in a variety of sectors.
Moderated by: Carolyn Clarke, ex-FTSE100 Head of internal audit, risk and control, and Founding Partner of Brave Consultancy.
This summary is a collection of insights from our esteemed panel about what needs to be considered when engaging with an audit committee or becoming one;
Our panel:
Stephen Bolton, Jock Lennox, and Sangita Shah.
Understanding Business and Influence:
To be an effective Audit Committee Chair, it’s crucial to deeply understand the business, including how it generates profit. This foundation allows for influencing executives and gaining their respect, which is essential for making meaningful contributions and driving change.
Trust and Value Addition:
Evaluating trust in and the potential to add value to the executive team is vital when considering opportunities. The willingness to commit to a company’s direction depends significantly on these factors.
Insight and Oversight:
A comprehensive view of the business is necessary, including the insight into its operations, culture, and systems. It’s about identifying what works, what doesn’t, and being prepared to advocate for necessary changes to enhance internal controls and reporting efficiency.
Looking Forward and Diversity:
Adopting a forward-looking perspective and valuing cognitive and experiential diversity within the audit committee enhances the committee’s ability to address current and future challenges. Involving people with varied backgrounds, such as CEOs, enriches discussions and outcomes.
Engagement and Passion:
Remaining mentally stimulated and engaged in businesses that align with personal passions ensures a fulfilling role as an Audit Committee Chair. Trust and due diligence in understanding the culture and operational environment of the business are crucial.
Board Membership First:
Recognising that the primary identity is that of a Board member rather than exclusively an Audit Committee Chair emphasises the collective responsibility for the company’s direction and success.
Integration of Risks and Controls:
The conversation around risk, particularly with the evolving landscape of ESG reporting, cybersecurity, and data privacy, requires an integrated approach to ensure resilience and adaptability.
ESG and Sustainability:
The integration of ESG considerations into Board discussions and the establishment of specialised committees reflect the growing importance of sustainability in corporate governance.
Materiality and Control Statements:
Understanding and defining material risks and controls are becoming increasingly critical, with a need for simplification and focus on key areas to avoid over-complication.
Reflecting on our enlightening event from March, the importance of engagement, passion, and a comprehensive approach to risk and controls was illuminated, particularly concerning the evolving role of ESG in corporate governance. These discussions, enriched by our panel of experts, highlight the path forward for effective audit committee leadership.
In partnership with Diligent, we look forward to hosting many more such events, offering insights into the dynamic landscape of corporate governance. If you’re driven to influence the future of audit practices and governance, we warmly invite you to join our next event. Your experiences and insights are invaluable to our community’s growth. Get a taste of the day from our round up video here.
Additionally, for those interested in advancing their careers to the next level, reach out to julia.white@iac-recruit.com to explore development opportunities that can elevate your journey in committee leadership.