Audit committees have a lot on their plates. To help manage the workload, audit committees should look at some of the fundamental elements of meetings to ensure that they are functioning as efficiently as possible.
Pre-read materials are one of these elements—they continue to grow in volume as the audit committee becomes busier. Streamlining reporting to focus on issues, trends and themes continues to be one of the top priorities we hear from audit committee members.
Audit committee reporting should be clear, concise, and impactful, and if it isn’t—it might be time for an upgrade. Executive summaries and dashboard reporting can be particularly helpful in this area. In addition, highlighting changes from prior packages, allowing the committee to easily identify what has changed, is another way of making pre-read materials more effective. We have developed some examples of dashboard reporting which audit committees may find helpful.
Here are two examples of dashboards internal audit could use to cover key topics such as trends and themes of reviews, high risk observations and status of remediations plans. We would expect a more detailed summary of observations to follow the dashboard.
This cover page could accompany a more detailed update (including dashboards) and provide a quick summary of action items for the audit committee and highlight any high risk areas that need immediate attention.
Instead of creating a lengthy update for the audit committee that includes text copied from filings, management could use a summary table to highlight significant matters with a cross-reference to the filing for additional detail.
Quarterly Significant Accounting and Reporting Matters summary
As part of recurring reporting on matters of ethics and compliance, management could use a dashboard to summarize whistleblower activity and highlight key trends or issues for the board/committee.
Companies should determine the minimum set of metrics to provide regularly to cover diversity (data), equity (pay and opportunity), and inclusion (engagement and belonging) goals. Management should track the most detailed metrics, while the board will receive a subset of data—an example is illustrated in the appendix of Leading on diversity, equity, and inclusion.
Directors may recognize that culture can be measured both quantitatively and qualitatively. But not all measures are created equal, so boards will need to determine which ones they need in order to get a clear picture of what is going on. In this example, metrics are organized in categories such as behaviors, reputation, people, and performance.