Audit & Beyond 2021, AuditBoard’s third annual user conference, brought together thousands of audit, risk, and compliance professionals virtually and hundreds in person at Terranea Resort in Los Angeles, CA. Top of mind for all speakers and attendees was how risk professionals can step up to enable organizational success and informed decision making in today’s dynamic risk environment. Watch the conference highlights video, read some of the top takeaways from the keynote sessions, and continue the conversation by registering for our ongoing thought leadership webinar series.
1. Organizations must manage risk as a strategic business driver.
As risk demands continue to accelerate, the capacity of most organizations to manage risk hasn’t kept pace — creating a business resilience gap. AuditBoard’s executive keynote explored how risk leaders can equip themselves to help their organizations navigate a world where risk velocity and volatility are the new norm, and where business decisions across the organization each now carry more risk.
“The world is now at an inflection point in how organizations think about and manage risk,” said Scott Arnold, CEO and President of AuditBoard. “At this point where everything has gone digital, disruption is everywhere, and everyone has moved to a hyper-dispersed organization — leaders must now manage risk as a strategic business driver.”
With this tectonic shift in risk management, a modern, connected risk platform is essential to close the business resiliency gap by bringing new insights to risk across the organization, freeing up teams to focus on the risks that matter most, breaking down silos, and embedding risk awareness into the front lines of the business — enabling organizations to optimize the risk/value equation.
2. Value protection is important, but value creation is critical — and we must work together to achieve it.
How audit, risk, and compliance professionals perceive their roles and mission was the subject of Richard Chambers’s keynote. He traced the original concept of lines of defense back to medieval castles designed to protect the crown jewels, noting that organizations do not exist to merely protect value — they must evolve, grow, and create value to serve shareholders and stakeholders.
“We have a common objective. The first line, second line, third line — all of us aren’t just going to help to protect value,” said Chambers. “We’re going to help to create. We’re going to help our organizations succeed in the way that they are ultimately designed to succeed.”
The Institute of Internal Auditors’ updated Three Lines model was refreshed to deemphasize silos, embrace more collaboration, and acknowledge the importance of value creation — and risk leaders must continue to expand their view of their mission. By working together, audit, risk, and compliance professionals will bring expertise and insights to enable better decision making around risk, and not only protect, but also enhance and create value in the decade ahead.
3. Effective ethical cultures drive long-term business success.
What drives sustainable success for organizations? Cynthia Cooper drew on her experiences as the former WorldCom Chief Audit Executive and whistleblower who exposed the largest accounting fraud in history, considering what characteristics unite companies who have achieved long-term sustainable success — and what traits cause organizations to cease to exist long before their potential lifespan.
“How an organization makes choices when an unrelenting focus on profits collides with values such as honesty, transparency, and do no harm is of imminent importance,” said Cooper.
Tone at the top is a key indicator for organizational success or failure. Having an effective ethical culture characterized by executive actions that model core values is indicative of long-term business success. WorldCom exemplified two drivers of organizational failure — poor strategic decisions and fraud and unethical decisions at the highest levels. Fraud doesn’t happen in a vacuum, and Cooper encouraged all audit, risk, and compliance professionals to step into the arena and proactively assess organizational culture to prevent the failures that brought down WorldCom.
If you attended Audit & Beyond in person or virtually, we hope that you took home insights and inspiration to effect positive change and add value in your organizations. Thank you to all of our speakers and attendees — and we hope that you continue the learning and conversation with AuditBoard’s thought leadership webinar series.