Hiring shortfalls and disruptive technologies will be among the main topics of discussion within audit committees and boardrooms next year, according to a pair of new reports from KPMG.
KPMG’s Board Leadership Center foresees the need to develop new talent not only in the executive and employee ranks of companies, but also in the boardroom itself. “Take a hard look at the board’s composition,” said report on the 2019 board agenda. “Is the talent in the boardroom diverse and aligned with the company’s strategy and future needs?”
The report also advises connecting digital disruption with risk management and strategy, and making CEO succession and talent development throughout the organization a priority.
The other report, on the 2019 audit committee agenda, advises audit committees to monitor management’s progress on implementing new accounting standards as well as the Securities and Exchange Commission’s Staff Accounting Bulletin 118 on implementing tax reform. Audit committees should also discuss the new reporting requirements for critical audit matters with their outside auditing firms and reinforce audit quality by setting clear expectations. The report also recommends giving non-GAAP financial measures, along with other key operating metrics and cybersecurity disclosures, “a prominent place on the audit committee agenda.” Internal audit should also be focused on other key risks beyond financial reporting and compliance.
“Keeping pace with digital advances and disruptive risk, and driving a strategy focused on long-term value will hinge on having the right talent in the boardroom and throughout the company,” said Dennis T. Whalen, leader of the KPMG Board Leadership Center, in a statement. “Corporate culture and understanding the views of investors, customers, employees, and communities, also will be key to helping the company navigate for future success.”
The offices for the accounting firm KPMG LLP stand in Los Angeles, California, U.S., on Tuesday, April 9, 2013. KPMG LLP resigned as the auditor for two companies and fired the partner overseeing its Los Angeles audit practice amid allegations the person leaked confidential client information to a third party who used it to make stock trades. Photographer: Patrick T. Fallon/Bloomberg
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