Blog: Internal Audit Must Monitor Ethics in the Corner Office, Too
In his blog, IIA President and CEO Richard Chambers, CIA, QIAL, CGAP, CCSA, CRMA, shares his personal reflections and insights on the internal audit profession. Here’s an excerpt from his latest post:
In a recent review of PwC’s annual Strategy & CEO Success Study, I was stunned by one revealing statistic. In 2018, more CEOs lost their jobs because of ethical lapses than for poor financial performance or battles with their boards. This has never happened before in the study’s 19-year history.
Frankly, I found the results of the PwC study to be very troubling. After all, I have echoed The IIA’s view for years that internal audit should report administratively to CEOs. If these same CEOs are now being fired for ethical misconduct in record numbers, what does that mean for internal audit’s prospects to carry out its important work free of interference?
After some reflection however, I asked myself some probing questions about the results of the PwC study. Were CEOs less ethical in 2018? Is there an epidemic of bad behavior in the corner office? The growth in ethics-related firings more likely stems in part from the #MeToo movement, which brought scrutiny to executive misconduct. Additionally, board members are feeling pressure to provide adequate oversight as investors and regulators push for more accountability. If my theories are correct, what should internal auditors take away from these developments?