Audit committees should function at varying stages of performance—in the same manner as does a manager in relation to new employees, a president in relation to senior executive vice presidents, a nation in relation to its neighbor nations. As reliable evidence of quality performance persists, oversight responsibilities are reduced. I was reminded of this when I read one sentence in the article—a potentially powerful one: “Members of the audit committee are role models.” By its performance, the audit committee may elevate performance throughout the company and, therefore, change the nature of the committee’s oversight strategies.
I would like to see the insightful authors explore the observations, the reports, the insight from conversations with management that are critical for a reliable judgment of executive leadership quality. What evidence gives an audit committee—as well as the board—assurance that executive leadership has reached a level of consistent behavior that trust is warranted?
Effective, wise oversight leads to less need for such oversight, not more. Wise parents, wise supervisors, wise company heads implement this simple observation. While it appears somewhat Utopian, it is attainable for an audit committee, too.
Mary Ellen Oliverio, CPA
New York City