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In this issue of the Diligent Minute (subscribe here), Nithya B. Das, Chief Legal & Administrative Officer at Diligent, discusses the transformative potential of collaboration between governance and audit.
Earlier this year, Diligent had the extraordinary privilege of engaging in conversations with governance and audit leaders at the Society for Corporate Governance and the Institute of Internal Auditors (IIA) conferences held in Washington, D.C. What stood out? The management and mitigation of risk sit squarely at the intersection of corporate governance and internal audit.
Throughout my career as a CLO, I have witnessed firsthand how a strong relationship between audit and governance contributes to the prosperity of an organization. These two functions jointly undertake critical initiatives such as enterprise risk management (ERM), coordinating seamlessly with internal audit, accounting, FP&A (financial planning and analysis), and management to ensure our ERM program is both comprehensive and effective. More broadly, this collaborative partnership ensures that internal audit’s findings and recommendations receive due attention and are appropriately acted upon, leading to enhanced risk management and improved organizational performance and resilience.
And yet, far too often, internal audit and governance teams fail to work together as effectively as they should. Despite sharing common objectives, collaboration with counterparts such as audit and accounting teams can be challenging due to competing priorities. To overcome these obstacles, pre-planning and understanding each other’s priorities are essential.
Legal teams require precise, complete data in a finished format for disclosures, board decks, and committee materials, delivered promptly to meet stringent deadlines. Meanwhile, audit teams seek increased access to the board to not only heighten leaders' risk awareness but also to empower them to proactively identify new growth and opportunity areas stemming from risk assessments. Ultimately, audit teams aim for governance teams to recognize their potential as proactive partners in driving strategy and growth, rather than being seen solely as enforcers.
Leaders at the Society and IIA conferences echoed my experiences and perspectives, affirming that a strong relationship between internal audit and the governance structure is fundamental to an organization's success. Watch the video below to hear from these leaders — who are dismantling barriers and elevating standards — on:
Together, governance and audit functions drive organizations forward, making them more resilient and adaptable in an ever-changing business landscape. Watch our exclusive video to learn more.
Internal audit and governance: Navigating risk, together
In the current business landscape, which is both dynamic and intricate, organizations are confronted with an array of risks that have the potential to profoundly affect their operations, reputation, and financial standing. Changing regulatory environments and the emergence of AI have created a new set of hurdles for audit departments within organizations.
With new challenges continuously mounting, risk is often seen as a negative — but that has more to do with siloed auditors who are still seen as the ‘policeman’ of the company rather than an integral part of corporate planning. We asked industry leaders how the evolving relationship between internal audit and governance functions is changing this narrative.
"We expect our internal auditors to be more than just reporters; they must be communicators and collaborators. This cultural shift within organizations presents an opportunity for enhanced communication, relationship building, and development between the chief audit executive and their board," says Mike Peppers, Chief Audit Executive of The University of Texas System.
Hear from these thought leaders about how working together helps them to identify and prioritize the risks and opportunities that matter most:
Visit https://www.diligent.com/lp/clarifyrisk for more.
