Corporate governance: audit committee chairs concur on best practices.

• Author: Marshall, Jeffrey
• Position: Regulatory compliance managing methods

In the post-Sarbanes-Oxley era, the audit committee has emerged as one of the most visible and important board committees; its role in identifying and managing risk has never been more critical to the company it serves, or under as much scrutiny. So says a new report by the Financial Officer practice of global executive search firm Spencer Stuart.

The report, "The Global 50: Perspectives of Leading Audit Committee Chairs 2005," invited audit committee chairs of 50 global companies to discuss the major challenges and issues faced by audit committees and the impact of heightened pressures and demands. The result is a document that examines how changing regulatory requirements have affected the functioning and composition of the audit committee, the committee's interaction with corporate management and advisers and committee recruitment. Based on consensus of those participating (which include audit committee chairs from BP plc, Comcast Corp., Dell Inc., Campbell Soup Co., Gannett Co., JPMorgan Chase & Co., Unilever N.V., Microsoft Corp., etc.), the report lists these best practices:

* Appreciate your responsibilities, not just to shareholders or the board, but to fellow committee members. Recruit value-added members to the committee who will be helpful immediately and hold each other accountable for continually raising the bar.

* Even as you juggle the myriad new regulatory requirements, do not lose sight of the big picture. Keep an open mind. Be flexible.

* Establish stretch, but realistic goals within the committee's charter and create a framework to...