Waypoints: Ideas and Insights to Navigate Enterprise Complexity

One of the benefits of working with a variety of clients is that the PMM team is able to observe excellence in governance first hand. Many of our clients are putting best practices to work in their organizations, and they have high expectations for the performance of their boards of directors and their audit committees. I’d like to share some of the traits I see as hallmarks of high-performing audit committees. You can use my observations to assess the performance of your own audit committee. After all, you might be one of the companies we think are the best.

Volkswagen is in trouble. Independent testing revealed last fall that VW had cheated diesel emissions tests in the United States. This news precipitated a dramatic decline in the company’s stock price, investigations by the EPA and Congress, and threats of lawsuits from VW owners.

If the recent financial crisis taught us anything, it taught us the value of a high-functioning board of directors. An educated, involved board can help steer an organization away from needless risk and into a balanced governance structure – the board handles oversight while management handles day-to-day operations.