2018 Priorities for Boards and Audit Committees | KPMG | US

2018 Priorities for Boards and Audit Committees

2018 Priorities for Boards and Audit Committees

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On the 2018 Board Agenda

Board agendas should continue to evolve in 2018—the game-changing implications of technology/digital innovation, scrutiny of corporate culture and leadership, growing demands for companies to address environmental and social issues, and investor expectations for greater board engagement and diversity and long-term corporate performance will all drive a sharper focus on positioning the company for the future.
Combined with a slow-growth economy, uncertainty around tax, trade, and infrastructure policies, and geopolitical tensions at precarious levels, the year ahead will require a careful balance of near-term focus, agility, and long-term thinking.

Drawing on insights from our work and interactions with directors and business leaders over the past 12 months, we’ve highlighted six items for boards to consider as they focus on their 2018 agendas—on the critical challenges at-hand and on the road ahead.

  • Help the company keep focused on long-term performance.
  • Expect disruption to continue full-force with technology and “digital” at its core.
  • Be sensitive to risks posed by the tone at the top and organizational culture.
  • Learn to live with cyber risk and refine boardroom discussions about cyber risk and security.
  • Promote effective shareholder engagement, including engagement with activists.
  • Focus on building a board that is designed to align with a company’s future needs—recognizing that diversity and healthy turnover are key.

On the 2018 Audit Committee Agenda

Financial reporting, compliance, and the risk and internal control environment will continue to be put to the test in 2018—by slow growth and economic uncertainty, technology advances and business model disruption, cyber risk, greater regulatory scrutiny and investor demands for transparency, as well as dramatic political swings and policy changes in the U.S., UK, and elsewhere. Focused, yet flexible agendas—exercising judgment about what does and does not belong on the committee’s agenda, and when to take deep dives—will be critical.

Drawing on insights from our recent survey work and interactions with audit committees and business leaders over the past 12 months, we’ve highlighted seven items that audit committees should keep in mind as they consider and carry out their 2018 agendas.

  • Stay focused on job No. 1 – financial reporting integrity.
  • Financial reporting quality starts with the CFO and the finance organization; maintain a sharp focus on leadership and bench strength.
  • Monitor management’s progress on implementing FASB’s revenue standard and other accounting changes on the horizon, and stay apprised of tax legislative and regulatory developments.
  • Focus internal audit on the company’s key risks, beyond financial reporting and compliance.
  • Reinforce audit quality and transparency.
  • Monitor the impact of the business and regulatory environment, as well as tone at the top and corporate culture, on the company’s compliance programs.
  • Make the most of the audit committee’s time together—effectiveness requires efficiency.

For more information, download the full reports below.

READ MORE ARTICLES IN JNET - ISSUE 1, 2018

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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