Even the routine of audit committee meetings can provide a simple contrast between a value-adding and an energy-sapping audit committee chairman (ACC). Working together with the finance director to manage the agenda proactively is far superior to simply reacting to whatever the FD serves up and then adding random items on the hoof during the meetings.
Good practice includes looking ahead over the next year or so, thinking about who, other than audit committee members, should attend particular meetings and how to spread agenda items so as not to overload the annual results meeting. The internal and external auditors also benefit from this degree of planning, knowing what is expected of them and when.
Setting down some rules of engagement around style, length and timing of distribution of papers for the audit committee meetings is also helpful. Certainly, it is a lot better than returning to this topic anew every time a meeting takes place, as I have seen happen on numerous occasions. Similar protocols around pre-audit committee meetings between ACCs, FDs and internal and external goes some way to avoiding last-minute crisis planning of such interactions.
Far more valuable to FDs is an ACC who is thinking about potential ‘black swans’ and engages in informal dialogue with FDs on such thoughts well away from the formal ACC meetings. Ideally, FDs and ACCs should have a running agenda of items that they are considering, and they should do so well in advance of their becoming urgent.
Such an agenda can include accounting, financing, risk management, internal control, systems issues or talent management, none of which are welcome immediately before a results announcement.
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