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Non-Executive Directors & Changing Nature Of Audit Committees

Windram, Brian; Song, Jihe

Authors

Brian Windram

Jihe Song



Abstract

In this paper we provide a descriptive summary of a postal survey of FT 500 UK company audit committee chairman on the operations of UK audit committees. The survey represents an “insider view” of the activities of audit committees and the characteristics of non-executive directors and contributes to the continuing debate on corporate governance reforms. In particular we report on company boards and their composition, audit committee chairman and their outside directorships, financial literacy and remuneration and various aspects of audit committee activity. Our survey shows that UK audit committees and corporate boards have undergone many changes in the last decade since the last comprehensive survey reported in Collier (1992). Our study on the current level of activity within major UK corporate audit committees deepens understanding of the roles and characteristics of non-executive directors and the operation of UK audit committees. In particular our survey shows that there is a significant shift in audit committee activities from the traditional financial reporting role to a greater focus on internal control and risk management. Independence is overwhelmingly seen as the most significant attribute of an audit committee member. Lack of time is perceived to be the greatest impediment to audit committee effectiveness but pressure from executives and an unclear remit are surprisingly prevalent problems even after ten years of corporate governance reforms.

Citation

Windram, B., & Song, J. (2004). Non-Executive Directors & Changing Nature Of Audit Committees. Corporate Ownership & Control, 1(3), 108-115. https://doi.org/10.22495/cocv1i3p10

Journal Article Type Article
Publication Date 2004
Deposit Date Aug 23, 2019
Publicly Available Date Aug 23, 2019
Print ISSN 1727-9232
Peer Reviewed Peer Reviewed
Volume 1
Issue 3
Pages 108-115
DOI https://doi.org/10.22495/cocv1i3p10
Keywords non-executive directors; audit committees; director fees; financial literacy
Public URL http://researchrepository.napier.ac.uk/Output/1168318

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