Why do so few internal auditors become Non-Executive Directors?

Why do so few internal auditors become Non-Executive Directors?

Why do so few internal auditors become Non-Executive Directors?


Why do so few internal auditors become Non-Executive Directors, asks Carolyn Clarke. Organisations need their skills and expertise.


Internal auditors have a unique place in an organisation – generally they are the only people, other than the CEO, with a direct reporting line to the board. At the very least, the chief audit executive (CAE) or head of internal audit attends the audit committee and, sometimes, the board risk committee and the full board as well. We have access to the inner workings of the board, giving us a direct opportunity to observe and learn the mechanics and dynamics of what works and what does not.

In addition, we are privileged to be often the only function with a view across the entire organisation. To deliver on our mandate effectively, we must understand and appreciate the organisational strategy. We must probe and challenge the critical operational decisions. We must have our own perspective on the risks to the delivery of the strategy and the issues that could take the organisation off course. In financial services organisations, the chief risk officer will have a similar view, but that role is not common outside the regulated sectors.

Like board members, we have a helicopter view and can connect disparate facts and details to draw a picture of what is (and isn’t) working well and we have expertise in both financial and operational controls, which are often the focus of boards through both the audit and risk committees. Many organisations also ask the CAE to comment on behaviours, so we develop expertise in identifying healthy risk behaviours. This is a great background for a future member of a remuneration committee.

“During my eight years as a non-executive director, I have been surprised to see so few internal auditors take up non-executive director (NED) roles,” says Eilish Jamieson, a former CAE in financial services, non-executive director and now a leadership coach. “Not only are CAEs well accustomed to governance matters and engaging with their board, but the qualities that define an effective NED – independent mindset, integrity, strategic thinking, challenging but supportive communicators – could just as easily describe the qualities of an effective CAE.”

Why are there so few internal audit professionals on boards?

Part of the answer is historical. The profession of internal audit in its current format is relatively new. I believe we can point to the financial crisis of 2008 as a turning point. The manifestation of both organisational and systematic risks brought the need for risk articulation, mitigation and assurance into clear focus. Shortly after this crisis, I spent three years working overseas. When I returned, I was stunned by the change in the professionalism and seniority of the CAEs I met across all sectors. The profession had matured from one where most senior leaders had moved from external audit roles with a primarily financial focus, to one where CAEs understood the broad and strategic nature of the risks that need to be assessed and had the experience to do so.

Many of the great leaders of our profession who emerged from that period are still in full-time demanding roles and may lack the capacity to take on non-executive responsibilities. This is perhaps part of the challenge.

However, I think the problem is more pervasive. Internal audit reports through the audit committee. The natural progression on to a board would be via this committee. However, these roles are dominated by former external auditors and finance directors (themselves often from an external audit background). If internal audit is to take more of these roles, we need to champion change. After all, the audit committee looks not just at the financials but also at the internal controls in an organisation and we are ideally placed to ask the right questions and probe management on their approaches and efficacy in this area.

Businesses of the future will need to balance people, planet and profits. Audit committees, with their responsibility for oversight of the system of risk management and internal control, will need to get under the surface of the data, processes and activities that drive both financial and non-financial reporting. Much has been written about the need for clearer reporting standards on environmental, social and governance (ESG) matters, but little on how directors assure themselves that the processes and, most importantly, culture, underpinning these disclosures are appropriate. Many internal audit functions now consider corporate culture as a vital part of their work and this again gives us vital experience in an area that needs to be monitored by the board both because it’s best practice and because is required by the corporate governance code.

Furthermore, CAEs are accustomed to speaking up in the board room – to probing and highlighting the issues that the directors may not want to hear. We have learned to hold our ground and to be resilient. We have also learned the “bedside manner” necessary to deliver difficult messages with empathy and diplomacy, while ensuring the right actions are taken. We have had to be forward-looking and to consider how our organisations can optimise their use of data and AI.  These are all essential capabilities for a director.


Changing perceptions is not easy. Head-hunters and search firms are used to looking in the same places and few understand our profession. We have to take responsibility for this. We need to lift each other up and talk to our boards about how and when they should look to our colleagues and peers as a rich seam of potential. Those of us already on boards must be role models and bring in our experience with clarity and confidence.

If you are wondering how to start, there are many opportunities. Sally Clark, who retired from her role as chief internal auditor of Barclays in 2019, says that she thought it would be difficult to find a board role. “In hindsight, I was wrong. Over the past few years, numerous search firms have come knocking,” she says. “My experience as a CAE and of sitting in the board room, having board-level conversations, understanding governance, risk, control and culture, asking questions and joining the dots to connect individual issues and see what is not working has proven invaluable now I am on boards and chair an audit committee. I would really encourage more internal auditors to consider a future as a NED.”

Most of us began our board careers in a voluntary capacity. There are numerous charities and third-sector organisations desperate for our skills. Choose something you are passionate about, but that also aligns with your professional experience and sector where possible. Do your due diligence in the same way you would in your professional career to make sure the chemistry is right and that your capabilities are valued.

If you are in an under-represented group, there are organisations that will offer support. I’ve worked closely with Deloitte’s board practice and Women on Boards. Nurole is a good web-based platform promoting board roles and is accessible to all.

“I encourage clients to consider NED roles earlier in their career rather than waiting until they are looking to retire from their executive career,” Jamieson adds. “A NED role can be the career boost that many, particularly women, need to increase their confidence, impact and strategic thinking. If external roles are not an option, then look for opportunities internally to join committees, or take up a Group NED role. All of these will contribute to building your board profile, so that you are well positioned for an external NED role when the time is right.”

Talk to your board directors, particularly your audit committee chair. I believe my day job has gained huge value from my also being a director. I understand the concerns and challenges that directors face first-hand and I can see how the reports and information I produce in an internal audit role would affect them. It gets me out of the weeds and focused on the issues of real strategic importance. A role on a board is the best development opportunity for a current or aspiring CAE.

Most importantly, you must have confidence that you are capable and that you have the experience and skills. It doesn’t matter that there are not (yet) large numbers of role models with seats on the board. This will come and you can be part of the journey.


Carolyn Clarke is founding partner, Brave Within LLP and non-executive director of Starling Bank, Elcogen plc and Agilyx AS



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