2 new PwC publications discuss the views of CEOs and audit committees: are these the right concerns?
PwC continues to contribute interesting information. They recently published:
- 15th Annual Global CEO Survey 2012, Confidence Disrupted
- Continuing the Conversation – Directors Speak
The first is the result of a survey of 160 US CEOs (I assume the ‘global’ in the title refers to the fact that these CEOS lead global companies). The most striking aspect of the discussion is the optimism and plans for growth through acquisition of the CEOs. One of the points made by PwC is that the CEOs are prepared to take more risk (they call it increasing their “tolerance and attitude towards risk”) to grow the business. Another is a concern over a shortage of talent – something boards and risk professionals should be alert to.
The second publication is based on PwC-hosted meetings of audit committee members, and is focused on their concerns. While they appear to be happy to be talking about audit committee issues, and not the spotlight that will be on compensation committee members, the discussion is more about (adverse) risks than opportunities. These include:
- the effect on organizations’ whistleblower process of the SEC’s whistleblower bounty program
- IT strategy and risk, particularly for cloud computing and social media
The directors also talk about whether the CEO and board chair positions should be separate and the issue of CEO succession planning.
If I were a board member, I am not sure my concerns and focus would be limited to these few areas. I would be interested in:
- Is the organization sufficiently agile to excel in uncertain times? Can it take advantage of market shifts, changes in regulation, etc? Does the executive leadership team have the information it needs, when it needs it, to move quickly when needed? Can people and other resources be shifted as needed?
- Is the leadership team building for the future (of the company), or for their retirement?
- Given that cash is king and access to credit may not be easy, are we managing that asset and ensuring we will have the necessary liquidity in the future?
- Are we taking advantage of the dramatic advances in technology, or will we be left in the dust by our competitors?
- Social responsibility is growing in importance. What are the company’s plans and priorities, and are they sufficient? What are the risks if we get this wrong? Can we derive value from a greater focus in this area?
What would your agenda be? Do you agree with my five additions?
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Norman Marks on Governance, Risk Management, and Internal Audit 
Like the additions. Would suggest HR issue far bigger than indicated…and note, when talking of values and priorities, risk has been framed as adverse only…but really like the additional questions overall.
I agree with your five additions but just have one additional question. As a board member, I would turn to you and would tell you that these are good questions but would then ask you to lay out specifics of how we should go about determining the answers to each of the questions. What would your specific response be to this question?
Norman – great post. We see many of the additions on your list. Others we see a lot of include: “Are we protecting our sensitive information?” and “Are we protecting our customer’s information?” We’re finding more and more executives just want to know what the trends are for the organization’s business risks and what the tradeoffs are, without getting into the IT details. This is where a lot of CISOs are adding value by putting the business risks of using IT into a business context that their fellow executives – and the board – can understand and act on.
Suzanne Konvicka – Symantec