Last week, our partner Wolters Kluwer hosted a webinar on a crucial topic: effective stakeholder management for internal auditors. Jonathan Chapman, the speaker, shared his experience in managing complex stakeholder relationships and provided participants with valuable tips and tools to enhance their impact. Here are some interesting statistics and key takeaways from the session.
During the webinar, participants responded to several poll questions, revealing insightful perspectives on the current state of stakeholder management within the profession. One key takeaway was that the primary challenge in ensuring effective stakeholder communication lies in the relationship between the IA department and its stakeholders. A lack of stakeholder engagement and misalignment of expectations were identified as major issues.
In my former role as CEO of IIA Sweden, I often grappled with the question: how can we better communicate the value of internal audit? The poll results underscore the need for clearer and more assertive storytelling about the profession. However, many internal auditors find this difficult; it goes against their inherent professional instincts. Richard Chambers captures this sentiment well in his book *Agents of Change*: “A facet that complicates internal audit’s struggles with improving its reputation is that many in the profession see any attempt to promote or communicate our value as unseemly…There has always been an aversion among internal auditors to come off as used-car salesmen.” This mindset contributes to the profession’s ongoing struggle with stakeholder engagement and expectation alignment.
Chambers further argues that promoting the value of internal audit is not “marketing” but “awareness creation,” a vital responsibility to ensure stakeholders understand the mission and potential of internal audit in serving their organizations.
The poll results indicate there is still much work to be done—only 14% of respondents reported having a customized engagement plan for each of their stakeholders. This, along with the high attendance at the webinar, shows that there is a strong need to increase the impact of internal audit departments.
Key Takeaways
1. Leverage Technology for Efficiency: Internal auditors must address the issue of insufficient resources and tools by fully utilizing Audit Management Software. This technology can free up time and professionalize the delivery of timely and relevant information to stakeholders.
2. Clarify Mandates to Improve Engagement: Stakeholder engagement often suffers due to a lack of a clear mandate set by the Audit Committee or Board, which is part of the internal audit charter. Additionally, stakeholders are sometimes unaware of the internal audit’s mandate. It’s crucial to explain how stakeholders can benefit from internal audit work and how they can request specific topics or risks to be included in audit scopes.
3. Recognize the Diverse Needs of Stakeholders: Internal audit has many stakeholders with varying needs. Primary stakeholders include the Audit Committee, the Board, the CEO, and the CFO or the administrative report of the Chief Audit Executive (CAE). Secondary stakeholders comprise other chief officers and senior management across different regions, business lines, or entities. These groups require different, targeted communication strategies.
4. Align Communication with Organisational Strategy: Perceived information overload by stakeholders often results from poor alignment of internal audit communication with the organisation’s strategy and objectives. To address this, establish a common risk taxonomy with other internal and external assurance functions (e.g., internal control, risk management, compliance, and external auditors) and tailor the internal audit message to various stakeholders. Primary stakeholders may prefer summarised reports with trends and insights, while secondary stakeholders often seek detailed findings, recommendations, and action plans.
Would you like to discuss how we can help improve your stakeholder management through the right technology and methodology? Feel free to reach out—our team at BR1GHT and I would be happy to share our advice and experiences. For more information about our propositions, visit our website at https://br1ght.eu/internal-audit-function/
