Thought Leadership Series
Audit Committee Institute
Partners, senior advisors and professionals, KPMG LLP
Board Leadership Center
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.
Tips for preparing the agenda and making the most of committee meetings.
The AC chair plays an important role in ensuring that the risk oversight activities of the board and all committees are properly coordinated with the AC.
One of the AC chair's key roles is to help ensure that committee members understand the top critical risks to the business.
As the job of the CFO has become more demanding, the audit committee chair's support of the CFO has become more critical.
AC oversight of auditors, while viewed by most ACs as effective, continues to pose challenges for ACs in a number of areas.
The AC chair should providing leadership & assessing the tone at the top and throughout the organization.
The AC chair should help ensure that the committee is "moving the ball forward" through education and self-assessment.
Considering the committee's interactions with the board, management, and auditors as well as its composition.
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