How to get first-time audit committee members up to speed
Apr 16, 2019
On April 16, 2019, the National Association of Corporate Directors (NACD) released a blog for first-time directors appointed to boards and how realizing the full extent of what the audit committee is responsible for can be an eye opener.
Which of the following areas does the audit committee typically oversee?
- Fraud
- Financial statements
- Data privacy
- Whistleblower policies
- Third-party risk
- All of the above
- None of the above
The correct answer, all of the above, won’t surprise anyone who’s served on an audit committee. They know they meet more often than other committees (an average of nine times a year) and their meetings are typically longer than those of other committees.
In the past 10 years, the number of first-time directors appointed to S&P 500 boards has risen from 24 percent of the incoming class to 33 percent, according to Spencer Stuart. Fewer of today’s newly appointed directors are current or former CEOs, and more are women and minorities with other executive experience, such as line or functional leadership.
Along with this shift to selecting directors with more varied backgrounds, we’ve noticed another growing trend: More companies are putting new board members without financial expertise on their audit committees.
Review the full blog on the NACD's website.