Spencer Stuart has recently completed a study of 50 Audit Committee Chairs to get their perspectives.
The product of in depth conversations with a select group of highly respected audit committee chairs in Europe and North America, Global Fifty: Perspectives of Leading Audit Committee Chairs reveals how changing regulatory requirements have affected the functioning and composition of the audit committee, its interaction with corporate management and advisers, and audit committee recruitment. Specifically, the study examines:
* The audit committee's heightened role in assessing business risks
* The compliance demands of Section 404 and the business impact of the regulatory requirements
* The challenges to recruiting qualified audit committee members, including a discussion about the real and perceived increase in director liability
* Recommended practices for running an efficient and effective audit committee
* The elevated role of the internal auditor
* The potential long-term consequences of regulatory changes on the accounting profession
Having a diverse Audit Committee is a key component in having an effective team working on behalf of management and the shareholders. Beyond someone with a CPA or Finance background, you need someone with Operations and Technology experience. They should not have an adverse relationship with the C-level management. If they do, then this could be a sign that current management is under a higher level of scrutiny than they would like. It could be a signal that the Audit Chair is not getting the answers they need or are being blocked from getting the facts. Audit committee's always need the ability to get the answers to their questions quickly and without major hassles. Maybe even more importantly, they need allies to assist them in getting those facts and answers as efficiently and effectively as possible.
A new breed of Audit Committee ally is emerging to take on those tasks that they are not equipped to perfom themselves. These firms who are allies with Audit Committees can bring substantial talent and resources to the table on a tactical basis. These boutique consulting, audit and research firms are typically comprised of former executives from large corporations, systems integrators or the big four accounting firms. They work in tandem with the Audit Committee Chair to assist them in getting answers, background and profiles that provide them the bigger picture. And sometimes, it's that bigger picture that provides them with the insight and information to they require to do their job. To protect and preserve corporate assets.
For a look at one trusted firm, see Caveat Research.