Directors feel 'under-qualified for audit committee roles'
One in five blue-chip directors does not feel qualified to take up an audit committee chairman's role due to increasingly onerous regulations
An annual corporate governance survey has shown that company directors feel
increasingly under-qualified to take on board positions such as audit committee
chairmanships.
The survey, by Ernst & Young, found that one in five blue-chip directors
believe they are not qualified to fulfil the role of audit committee chair.
Gerald Russell, senior partner at Ernst
& Young, said many company directors feel totally under-qualified to take on
the role of audit committee chair.
‘This is being further exacerbated by the upcoming requirements of the 8th
Directive, which has far reaching implications for audit committee members
around having the right level of experience to undertake the role,’ said
Russell. ‘Business literacy and relevant financial experience is no longer
enough.’
He added that if a candidate had not been a finance director, CFO or auditor
in the past past years, then they would be ‘pretty stuck when it comes to
meeting the prescriptive financial and technical accounting detail required for
an audit committee role.’
The survey also paints a negative picture of attitudes to the non-executive
director (NED) recruitment market: 1 in 3 respondents stated that the talent
pool of UK NEDs is shrinking because the role is ‘onerous’, ‘demanding’ and ‘the
risk and damage to somebody’s career and CV is huge and the reward is relatively
small.’
Further reading:
E&Y claims ‘evolution’ in audit committee roles