The chair’s leadership—in setting the committee’s tone, work style, and agenda—is vital to the audit committee’s effectiveness and accountability.
The importance of the audit committee (AC) chair’s leadership—in setting the committee’s tone, work style, and agenda—is vital to the committee’s effectiveness and accountability, and cannot be over-emphasized. In our experience, the most effective AC chairs are fully engaged—recognizing that the position may require their attention at any time, and often beyond regularly scheduled meetings; they understand the culture of the organization; they set clear expectations for committee members, management, and auditors; and they ensure that the right resources are being employed to support quality financial reporting.
To provide effective leadership, the AC chair must have a clear understanding of the committee’s duties and responsibilities; be able to commit the necessary time (which will vary, depending on the size and complexity of the business); be readily available on urgent matters and in times of crisis; and have the requisite business, financial, communication, and leadership skills.
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