To achieve organizational trust, companies will need to seize two critical opportunities.
Organizational trust is woven through every layer and corner of your company. It reverberates across the multiple disciplines in which your business operates. It’s simultaneously data aware, people focused and forward looking.
Organizational trust is the foundation for trusted interactions with regulators, third parties, investors and customers. But to achieve organizational trust, companies will need to seize two critical opportunities. They must reimagine the Internal Audit (IA) function, and they must embrace the future of work.
As globalization and technology have increased the complexity of enterprise functions, stakeholders (audit committees, executive management and others) have been asking more of IA. Unfortunately, even as IA made incremental technical improvements during the last 20 years, the function’s fundamental methodology remains unchanged.
That approach focuses on downside risks, those that represent a negative outcome and must be eliminated, avoided, mitigated or transferred. This downside-only perspective is a narrow one. Without a lens on upside and outside risk, IA has little to no harmonization with the business at large.
To be sure, controls and compliance are part of the picture, but IA can add additional value in more strategic ways. By introducing automation into controls and compliance, for instance, IA professionals can build tighter alignment with other aspects of the business and thus achieve a more holistic view of enterprise risk.
The growing emphasis from the boardroom on workplace culture is another opportunity. With a strategic mindset, IA can help identify key people-related risks across the organization and deliver tangible value at the C-level.
These types of proactive, forward-looking activities will be hallmarks of the reimagined IA function. It’s a perspective that will enable IA to be a partner with the business at large.
The future of work
Tied to legacy processes and thinking, few companies are prepared for the future of work — the ways work will get done, where it will happen and who will do it. The lack of preparation is not surprising given the magnitude of disruptive forces reshaping the workplace, including high real estate costs, industry convergence, the rise of gig work and the countless effects of digital.
- Key strategic goals for employers should include:
- Hiring the right people with the right strategic skills
- Building workforce adaptability and agility
- Mitigating new people risks related to compliance
- Managing and measuring performance with fairness and transparency
- Enabling a purpose-led culture people
Related to the last goal above, the “why” of work — for the employee — is also changing. Companies must understand their people more deeply and develop workplace strategies that engage and inspire them.
This growing emphasis on closer engagement between an organization and its people can manifest in many forms, including flexible working arrangements, an empathic approach to career development and a sense that an employer values the employee’s overall well-being.
Employees also increasingly expect companies to prioritize ethical action over maximizing profit. And as it turns out, that mindset is also good for business. It helps firms attract and retain the best talent, who are more likely to make outsized contributions to the company’s success.