Audit committees, typically composed of directors with financial expertise, play a pivotal role in corporate governance. However, in a recent survey of 266 audit committee members, Deloitte's Center for Board Effectiveness and the Center for Audit Quality found that most believed enhancements were needed for their committees to become truly effective, as reported by Fortune.
"One of the surprises to me was that only about a third of the audit committee members mentioned that they felt their committee was very effective and didn't need to really make any enhancements," said Krista Parsons, Deloitte's Audit Committee Program Leader. Cybersecurity and enterprise risk management remain top priorities for audit committees, with talent acquisition in finance and internal audit, compliance, and finance transformation also significant concerns.
Notably, there's a growing recognition of the need for internal audit to add more value, requiring the right expertise. Furthermore, despite the increasing importance of AI governance, many audit committees have not adequately addressed it, reflecting a broader need for CFOs and board members to adopt a holistic approach to AI integration.
CFOs like Shannon Nash of Alphabet's Wing, anticipate a shift towards more comprehensive AI governance in 2024, emphasizing the evolving landscape of financial leadership responsibilities. “As a CFO and as a member of the audit committee of a public company board, I can view the role through both lenses," Nash said. "What I predict for 2024 is that CFOs will take a more company-wide holistic look at AI, especially generative AI.”
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