One-on-one discussions with key business leaders can provide a better understanding of the company, its culture, strategy, risks and opportunities.
For any new director—particularly when joining the audit committee (AC)—a learning curve comes with the territory. Just how steep that learning curve is, however, and how quickly a new director is able to contribute meaningfully to the work of the board and its committees, can hinge directly on the quality of the onboarding process.
Understanding the business—its operations, strategies, risks, and management team—as well as the responsibilities and culture of the board and its committees takes time. But a structured onboarding process—including essential information and briefing materials, quality discussions with key people, and a “road map” for getting up to speed—can greatly accelerate a new director’s integration and contribution to the board’s work.
For new AC members, onboarding presents an added layer of complexity, given the intricacy and scope of the financial reporting/accounting and legal/regulatory compliance issues on the AC’s plate.
We offer the following framework for new AC members—and the management and audit professionals supporting them—to consider as they develop an onboarding process, including:
Formal orientation programs for new directors are fairly common, but these programs—without more—may be inadequate to get the new director up to speed and in a position to contribute to the work of the board early on. A good onboarding process is not a “one size fits all” process, and may vary considerably depending on the background, experience, and role the director is expected to play. While management plays a key role in shaping the onboarding program, new AC members should be prepared to take responsibility for their onboarding plans to help ensure that it is properly tailored and focused to build a strong foundation for informed oversight.
No “one size fits all”
A good onboarding process—which is key to getting a new AC member up to speed and in a position to contribute to the work of the committee—is not a “one size fits all” process, and may vary considerably, depending on the background, experience, and areas of interest of a new director. While management obviously plays a key role in shaping the onboarding program, every new AC member needs to take charge of his or her own onboarding in order to make sure that it is properly tailored and focused.
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