7 questions for internal auditors to ask business leaders
The last few years have been challenging and while 2022 is all set to see continued volatility and uncertainty, there is also opportunity. Internal auditors need to keep pace on all fronts to provide relevant advice and assurance.
In their article The CEO agenda in 2022: Harnessing the potential of growth jolts, thought leaders McKinsey suggest that the pandemic triggered growth in some sectors and a further two growth jolts are possible for organisations that respond positively to current uncertainties and shape strategy to adapt to post-pandemic normality.
While some narrative in the report relates to the United States, the same observations are true here in the UK and Ireland. The management of current uncertainties includes:
- Inflation - highest levels for decades and outside the experience of the majority of leaders: leverage procurement, pricing, or balance sheet strategies
- Labour mismatch - a high number of workforce seeking change in role: focus on developing talent and consider productivity tools including automation
- Supply chain shortages - widespread issues across industries impacting availability and costs: successful companies use advanced analytics
- Pandemic impacts - new variants and short-notice suppression measures, disruption: bolster resilience both operational and emotional, demonstrate support and purpose
- Geopolitical concerns - rising tensions around the world heighten a variety of risks: understand geographic risk profile and collaborations for trade, etc
- Energy market volatility - cost pressures and potential infrastructure breakdowns: focus on energy transition opportunities and targets, balance threat with opportunity
As internal auditors there are seven questions we can ask of our business leaders in conversation or as part of an engagement.
- Is our organisation adopting a strong growth mindset in its medium-term strategy as the pandemic evolves?
- Is the board spending as much time creating new businesses as you are improving your business?
- Is our organisation ready for the energy transition – and the immense economic impact it could carry?
- Is our organisation embracing new technology as quickly and holistically as it did new ways of working at the start of the pandemic?
- Is our organisation investing in human capital with the same discipline and intensity as capital expenditures?
- Is our organisation remapping its global footprint in response to outside stressors?
- Is the board and senior management demonstrating a strong growth orientation in its leadership?
If you are not in a position to ask these questions yourself, perhaps share this blog with your head of audit or suggest discussing them as a team to develop your critical thinking skills.
You need to keep pace with the risks to be able to audit at the speed of risk.
Content reviewed: 25 February 2022