Audit Committee Chair: Tips for Effective Audit Committees

Episode Summary

Following the 2008 adoption of Sarbanes-Oxley, the audit committee found itself under a bright spotlight. Whether focused on overseeing Section 404(b) or recruiting financial experts, all discussions of corporate governance seemed to lead back to audit committee effectiveness.

While other committees have been “stealing the spotlight” these days, the audit committee arguably remains at the core of all board operations, overseeing everything from compliance and financial reporting to cyber risk. In this episode, Paula Loop, Leader of PwC’s Governance Insights Center, returns to Inside America’s Boardrooms to share tips on how today’s audit committees can improve their effectiveness–starting with a focus on committee leadership.

The most important thing about your audit committee chair is they [must] have a really good risk radar. There are a lot of things that come through [the audit] committee that can have a significant impact on how investors/shareholders view the company. Think about a financial reporting issue or a internal control issue… You’ve got to have somebody in the seat that can really do a good ‘risk balance’ about what’s important and what’s not.
— Paula Loop, Leader of PwC’s Governance Insights Center

Throughout the episode, Loop offers suggestions for how today’s audit committee chairs can assess their effectiveness–from succession planning and executive sessions to agendas and proxy disclosures. Don’t miss additional insights in PwC’s resource, Audit Committee Chairs: Practical Tips for Effectiveness.

PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

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Diligent and New York Stock Exchange Research

In this joint research project, the New York Stock Exchange and Diligent surveyed nearly 400 directors to understand how they communicate with other members of the board. Which practices are the most common? Which ones pose the greatest risk?

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