New York (Aug. 20, 2002) -- In light of the wave of corporate and accounting scandals, three of four senior executives expect their boards of directors to play a more active role in corporate oversight, and half have made or plan to make changes to their audit committees, according to a survey by PricewaterhouseCoopers.
Over half of U.S. executives (51 percent) and nearly one-third in Europe (32 percent) report that the audit committee of their board already has, or will, make changes in its makeup or procedures, according to PricewaterhouseCoopers' Management Barometer. PwC polled 145 U.S. chief financial offices and managing directors, and 97 in Western Europe.
According to the survey, 75 percent of executives believe their board generally will be more assertive. Among U.S. respondents, 57 percent of said their board will have more input in identifying and managing risk, 55 percent said they'd have more input on company's business structure and transactions. The same number said they'd have more input on auditor independence, while 47 percent said they'd have more say on the code of conduct.
Almost a third of U.S. executives report that their company has or will hold more-frequent audit committee meetings, 31 percent said they'd hold longer audit committee meetings, while 26 percent said they'd require additional education of audit committee members. Fifteen percent said they have or would make changes in audit committee composition, and the same number said they'd make changes in the committee's charter.
Overall, more than 90 percent of executives gave their board good marks for knowledge of the key aspects of the company's business.
U.S. senior executives see their board as adding considerable value in the following areas: acquisitions, strategic alliances, joint ventures (63 percent); corporate strategy (56 percent); executive compensation and incentives (52 percent); financial reporting (50 percent); risk management (47 percent) and feedback on operating plans (47 percent).
While 59 percent of U.S. respondents rate their board's advice and counsel to management during times of corporate crisis or economic distress as very or extremely helpful, 10 percent said the board wasn't particularly helpful in such situations. The report also found that 52 percent of American executives view the executive compensation programs set by their board as very or extremely effective for motivating management.
-- Electronic Accountant Newswire staff
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