By Kent Burns, CPA
Communication is one of the Chief Audit Executive’s most important navigational tools, and the role of the CAE as a communicator has never been more critical. What, how and how much you communicate can mean the difference between success and failure on many levels. What’s working? Here are insights and perspectives from a few audit leaders that I’ve spoken to lately.
Reporting: Less is More
Shortly after one of my professional colleagues arrived as Chief Audit Executive of a multi-billion dollar, publicly-traded company, he went to his fellow Execs and asked a simple question: Do you read my reports? The answer he consistently got was, “Gee I try to…but really…I don’t.” Ouch. So what did he do? He switched to a bullet-point-driven format he describes as “an executive summary, one page, every issue risk described in no more than two sentences, along with a rating.” Then, he made a deal with those execs, telling them, “I just want you to commit that when the report comes out, you’ll read this page. And if you stop there, that’s fine. If you see something that interests you, each of these entries has a dedicated page to learn more about it.”
The impact? He says, “We’ve gotten a lot of traction getting the right level of communication and the right commitment from executive management to pay attention to the report. He then added, “It’s one of my biggest wins since joining the company.”
Presenting: PowerPoint Is Not the Storyteller
Regardless of what you may think, the Audit Committee and the Board are there to see and hear you. They want to hear a crisp, concise assessment of risk and what you’re doing to manage it. They don’t want to look at 30 slides. The Audit Committee understands that you’re working hard. Giving them too much information sets you up to waste time answering inane questions. Just put the important stuff in the deck. As one CAE said to me, “If everything is in the PowerPoint, then why am I there? This approach allows me to evolve the conversation in a way that I think is meaningful.”
Recruiting: You Need a Better Story
Great recruiting is great story telling. Early career accountants and CPAs have a poor and inaccurate perception of internal audit. They don’t know what they don’t know. To compound matters, audit and recruiting professionals do a poor job of telling a story that attracts talent. CAE’s must craft the right message – the right story – and then empower their team and recruiting support to own and tell that story. Be prepared to tell recruits how and why internal audit is a good fit for them. And don’t just focus on the technical. Luci Roberts, Vice President of Internal Audit at Beam Suntory treats hiring like a “team recipe”. Roberts says, “I used to hire clones.” Now she asks herself, “What do I need in the current mix of people that I have?” She then uses personality assessments to help her discern the right cultural fit.
Retention: More is More
Multigenerational diversity has turned into multigenerational disparity due to the expectations of the millennial workforce. Always faced with losing their best and brightest to other areas of the business, CAE’s must now manage a restless staff expecting lots of individual interest and attention around what they work on, how they work on it, how they should get rewarded and how quickly they should move up. Mark Frohman, VP of Internal Audit at ADP says, “We’re finding that we can’t communicate enough and we can’t ask enough questions about what an individual wants for their career.” Frohman meets “at least” once a quarter with every staff and senior auditor to talk about career and nothing else: “what is it they want to do next, what kind of training are they taking to get themselves there, what kind of audits can we put them on to get them exposure to certain businesses to actually figure out what might be next for them.” Beyond that, he says, “The Directors that work for me meet once a month with the folks on their team as well.”
The Bottom Line
Chief Audit Executives and other audit leaders who are average communicators are rapidly becoming extinct. Raise your communication game. You’ll be glad you did.