This Audit Committee Handbook (“Handbook”) draws on insights and learnings from the BLC's interaction with thousands of audit committee members, audit and governance professionals, and business leaders in Belgium and in over 40 countries worldwide for more than 20 years.
Audit committees have been through numerous challenges over the past few decades: corporate accounting scandals at the start of the millennium; the dot-com bubble of the late 1990s; the 2007–2008 financial crisis and the subsequent reforms throughout the world; and a global pandemic that also put increasing emphasis on climate change, inclusion, equity, and diversity, and geopolitical uncertainties.
The insights gained and lessons learned have clearly set a high bar for audit committees (and boards), and the accelerating speed and complexity of doing business will, no doubt, keep pushing that bar higher. Technology and innovation, globalization and de-globalization, environmental, social, and governance (ESG) reporting, high inflation, geopolitical turbulence, and other disruptive forces are shaping a risk and regulatory landscape that few could have envisioned 15, 10, or even five years ago.
By and large, we see Belgian audit committees adapting to these changes and challenges – refining their agendas and oversight processes and, in some cases, reassessing their skills and composition, contributing to improved governance.
Keeping pace will require agendas that focus on what's most important, allocating time for robust discussion and, perhaps most importantly, understanding the tone, culture, and rhythm of the organization.
This Handbook is intended to be a practical, user-friendly reference for both new and seasoned audit committee members, and for management and internal audit teams that work with the audit committee. To that end, this Handbook covers the fundamentals – such as basic requirements and responsibilities and key areas of oversight – and offers insights into the current challenges and leading practices shaping audit committee effectiveness in Belgium today. It is written for Belgian audit committees and people working with Belgian audit committees and serves as a resource for both listed and unlisted companies in the private and public sector.
Of course, there is no one-size-fits-all; the practices discussed in this Handbook should be considered in the context of the audit committee's needs and circumstances. Nevertheless, certain guiding principles underlie the effectiveness of every audit committee, and the right principles can help ensure that company-specific practices are applied effectively.
Some of the issues covered in this Handbook – such as cybersecurity and the impact of emerging technologies, including big data, geopolitical, and macro-economic evolutions – are clearly matters that require the full board's attention. These and other broader issues are included, however, as the audit committee has an important role to play (at least as a catalyst) in helping to ensure that key issues, particularly those related to risk and compliance, are being addressed appropriately.
At the back of this Handbook, you will find several appendices intended to provide practical support to audit committees.
We hope this publication offers practical guidance to help audit committees identify and achieve their objectives, and add value to the board, the organization, and its stakeholders.
