Some More Top Issues Lists for 2011

Some More Top Issues Lists for 2011

With the first week of the New Year just about over, I have come upon three more top issues lists for directors and management in 2011. Consider this an addendum to my Dec. 21 post.

One list comes from the very prolific and opinionated Norman Marks of the Institute of Internal Auditors, a thought leader on internal audit, corporate governance, risk management and compliance who is responding to KPMG Audit Committee Institute's Ten To-Do's for Audit Committees in 2011 list. Another is the annual list of Top Challenges for Financial Executives by Marie N. Hollein, president and CEO of Financial Executives International. The other list, which I just received today, comes from Michael Rasmussen, president and owner of Corporate Integrity LLC, a corporate governance, risk management and compliance (GRC) think tank and advisor.

In his Jan. 5 Marks on Governance blog post, Marks gives a retort to ACI's list saying any Top 10 list for directors on public companies in 2011 should lead with the myriad of issues related to risk management. In fact, he is the only one I could find who attempted to create a true Top 10 list. All the others decided against putting the issues in any particular order. (For the record, the ACI list includes risk-related issues in three of its 10 "To-Do's.")

"My list would definitely include in the top five priorities a focus on whether the information management uses to run the business is timely, current, and reliable," Marks wrote. "This is an issue that caused a number of businesses to fail. Not only were they relying on historical operational performance data, but risk-related information was also old. In some cases, executives did not receive key pieces of information. The board should also question whether it is receiving complete, reliable, current, and timely information."

The Top five issues in his list (click here for his full list) are:

1. The adequacy of risk management processes and framework

2. Coordinating oversight of governance and risk management with the board and other committee

3. Cash flow, credit, and capital structure

4. The quality and timeliness of information used to run the business (This is an issue Marks says is quite important since a number of businesses that failed during the financial crisis relied on old risk-related information and historical operational performance data.)

5. Formal reports by internal audit on the adequacy of governance, risk management, and related internal controls

(For the record, six of Marks' Top 10 issues are risk-related and his is the only list I can find that includes any mention of internal audit.)

Read the rest of this article on the Corporate Governance Blog, a blog by Gary Larkin