I recently had the distinct privilege of joining several IIA volunteers, including former IIA Global Chairman Denny Beran, on the podium of the New York Stock Exchange (NYSE) to ring the opening bell. This once-in-a-lifetime experience is one I will cherish for many reasons, not the least of which is the exchange’s acknowledgement of The IIA’s 75th anniversary.
It is significant and appropriate that members of our esteemed profession stood on that podium. The NYSE is a strategic friend and ally to internal audit as the only U.S. stock exchange that currently requires listed companies to have internal audit functions.
Indeed, in a ceremony before the opening bell, an executive of the NYSE praised the work of The IIA, and he indicated the pride the exchange felt in featuring our brand as part of that day’s opening-bell proceedings.
In a world where business grows more complex and dynamic every day, it is encouraging to know that the NYSE recognizes internal audit’s value to the organizations it serves and its crucial role in good governance practices.
Yet, recent events would suggest that corporate commitment to good governance practices has slipped. A number of scandals involving well-known organizations have eroded public trust in American markets and those around the world. These failures not only rock investor confidence, they also embolden activist investors, and invite greater regulatory scrutiny and mandates.
These scandals along with several additional factors also feed a growing distrust of corporations. Some might suggest that this distrust is self-induced as C-suite executives appear disconnected from the plight of the average worker, some boards would rather defer to management than provide true oversight, and misaligned or toxic cultures trounce good governance practices.
What is needed to help ease this growing loss in confidence is a concerted effort to recommit to good governance practices. Internal auditors can begin this effort by performing self-appraisals of the audit functions where they work. Some key questions include:
Beyond this self-analysis by internal audit, there must be a commensurate analysis by other players in corporate governance including management, the board, and regulators. Each must in its own way examine its commitment to understanding and supporting good governance practices.
The IIA’s 75-year commitment to improving the internal audit profession should be viewed as a commitment to enhancing good governance. While myriad changes in business operations have occurred since 1941, and nowhere is it more dramatic than technology-driven risk, internal audit practitioners have remained steadfast in their obligation to provide assurance in this area.
The IIA ringing the opening bell at the NYSE should serve as a clarion call for all organizations — not just publicly traded companies — to commit to good governance and to embrace the tried-and-true tools and practices that make it possible.
This is something you will be hearing much more about from The IIA in the very near future.