The most important thing the CEO can do is bring a supportive tone from the top.
Summary: To gain a better understanding of what our characters need to do to successfully transform XYZ’s Internal Audit function, we asked each of our contributors to place themselves into one of the character’s roles.
Steve Singer: wearing the CEO hat
The most important thing Malcolm can do is bring tone from the top support of Melanie’s initiative. He needs to be overt about his purpose and his mandate, and his tone needs to reflect the confidence he has in the direction he’s taking.
As a CEO focused on aggressively growing the company, he needs to be certain that his house is in order from a risk perspective. He will be looking to Melanie and her team to give him that certainty — to help the company navigate the risks and the challenges emblematic of an aggressive growth strategy.
Marshall Franklin: applying the lens of the Audit Committee Chair
Sashi is an Audit Committee Chair concerned about balancing shareholder protection with the CEO’s expanding risk appetite. She needs to serve as the conscience of the company.
As Melanie’s functional supervisor, Sashi needs to create an open door policy with Melanie. They should meet regularly outside of formal meetings to build a deep and trusting relationship.
Sashi needs to help Melanie understand the risk profile of the organization and how it has changed. She needs to make sure that the business is protected, while empowering Melanie to take Internal Audit from a compliance role to that of a business advisor working to make the business better.
Eric Chia: through the eyes of the CFO
As her administrative supervisor, Hans needs to provide Melanie with the guidance and support she needs.
Melanie is new to XYZ. Hans can help her by making introductions for her, enabling her to develop strong connections to the business units. He needs to be a champion, regardless of the lingering reservations he may have about her transformation vision.
Hans may also want to consider working with Melanie to engage a third party to perform a review of XYZ’s Internal Audit function. This would enable both Melanie and Hans to clearly understand the function’s current state and how it compares to XYZ’s peers.
From there, they could develop action steps to move quickly toward their future state goals.
Jacqueline Wagner: the CAE perspective
Melanie has developed a preliminary plan. What she needs to do next is build a strong business case that addresses the CFO’s concerns.
She needs to develop and document a vision that garners buy-in from everyone. Once she has done that, she’ll be able to find a third-party provider that shares her vision and that is best positioned to help her execute that vision.
From there, she will need to build a detailed transformation plan that outlines each step — prioritized and sequenced — that gets her Internal Audit function from its current state to its desired future state. She will also need to develop a measurement system to evaluate her successes and her failures.
Finally, she will need to communicate through every channel available to her — Audit Committee reports, newsletters, intranet site — to effectively build her brand as well as that of the Internal Audit function.
