PracticeAuditAudit boards lack FDs

Audit boards lack FDs

New audit committees, set up to improve corporate governance, risk a shortage of suitable finance directors to sit on them.

Link: Audit committees – Where to next?

Management recruitment specialist Executives Online claims that many businesses are already finding it difficult to recruit FDs willing to take on audit committee responsibilities as well as their own full-time jobs.

The new combined code states that at least one member of the audit committee must have recent and relevant financial experience. It further states that all committee members must be non-executive directors.

‘Although it is not usually a full-time position, membership of an audit committee is increasingly becoming a demanding and time-consuming role, especially for larger companies,’ said Norrie Johnston, managing director of Executives Online.

‘The new code says the audit committee members must be independent non-executive directors and the chairman of the audited company is ineligible for membership.’

He said that finance directors are highly experienced and used to standing up and saying when they think something is wrong for a business.

John Collier, from executive search company Glenn Irvine International and former secretary general of ICAEW, said: ‘It is getting more and more difficult for someone to do the job of chairman (of the audit committee) and to do the job of finance director for a large company.’

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