An Interview with
Independent Audit Limited
Business Development Director
Independent Audit are leaders in board evaluation.
In simple terms, our business is all about helping clients understand and improve their governance. We take a wider-ranging and more practical view than many reviewers: as well as reviewing boards, we also look at the effectiveness of other parts of the governance and assurance framework and how they support a board’s work.
2 December 2019
Tell us about your background, and how you came to found your company?
We are specialists in the effectiveness of boards and governance. We have a reputation for forward-looking, practical reviews that tackle your challenges in your unique situation.
Over 17 years, we’ve worked with organisations of many shapes and sizes, and with differing governance objectives. Most are listed, for example FTSE 100 reviews include: BP, British American Tobacco, Centrica, CRH, DCC, easyJet, INTU, Fresnillo, Hammerson, Imperial Brands, Land Securities, Lloyds Bank, Man Group, Morrisons, National Grid, Next, Rolls-Royce, SSE, Segro, Smith & Nephew, Smiths Group and Weir Group.
Other clients include regulators (the FCA, The Pensions Regulator, The Financial Ombudsman and the FRC), mutuals (Nationwide, The Co-op, Royal London), subsidiary boards (Bank of Ireland, BNY Mellon, Merrill Lynch International, QBE Europe) and public sector bodies (UK Export Finance, British Business Bank, Network Rail). We also work with pension funds, membership organisations and partnerships (such as the BMW UK Pension Fund, the Unilever UK Pension Fund, Engineering Employers Federation, Oil & Gas UK, and The Football Association).
In simple terms, our business is all about helping clients improve their governance to help improve business performance. We take a wider-ranging and more practical view than many reviewers: as well as reviewing boards, we also look at the effectiveness of other parts of the governance and assurance framework and how they support a board’s work. We have worked on risk and controls at a wide variety of clients ranging from HSBC and Tate & Lyle to the Bank of England and TSB.
What is most important to you and your organization – mission, vision, or core values? Why?
We’re known for our insight and practical suggestions. And for relating governance to the business so that every client report is unique and recognisable, not generic.
Extensive team experience
Our experience is unparalleled as a group of senior consultants who have not only extensive board review credentials but who also bring specialisms in risk, audit, remuneration, and dynamics. That’s why we’re so well-equipped to assess every angle of boards and committees at work.
Used by more than 175 organisations, from enormous to tiny, our online governance self-assessment tool distils our experience. By asking interesting questions in a unique way, Thinking Board® engages respondents and helps clients understand both the scale and root causes of any issues.
Our place in the market and our publications place us at the heart of current thinking on what it means for a board to be ‘effective’. We’re also helping boards to rethink their work on risk. And we’ve developed models for assessing audit, risk, and compliance effectiveness.
We don’t come armed with a checklist. We spend time getting to know our clients and want to hear them talking about those things that matter to most to them. That way, we’re able to truly understand the issues. Our development suggestions are bespoke, relevant and forward-looking.
Can you explain briefly how your service(s)/product(s) works?
Externally-Facilitated Board Review with Board Evaluation Questionnaire
You might not be ready for a full interview-based board effectiveness review. If that’s the case, our questionnaire-based evaluation will meet your needs for an external review.
With this approach, we use our online evaluation tool, Thinking Board®. You conduct a self-assessment using our questionnaires and we analyse the results, write the report and discuss our findings with the Board directly.
This all adds up to a thorough external review that brings a lot more value than you might expect from a self-assessment. It makes it quick and easy, but it’s still rigorous.
Board Evaluation Software for Internal Board Evaluations
If it’s the first time you’re conducting a board review and want to get started on the right track, or you’re not required to have an external board evaluation, then our online questionnaire self-assessment board evaluation tool, Thinking Board® is a good alternative.
Or perhaps you want a three-year follow-up approach. Many organisations are now looking for ways to follow up on their external Board review with a self-assessment progress check. This might be with a specific questionnaire looking at actions from the external board evaluation.
Thinking Board® is quick, easy to use, gives you an overview report and clearly highlights what is or is not working well.
Interview-Based External Board Evaluation
Independent board evaluation with interviews is our most thorough approach. Our interview-based board evaluations produce a report that is tailored to your Board. It’s about you. And face-to-face discussions mean we can bring out what really matters.
But it’s not just interviews. We review board papers and observe meetings to see how your Board works in practice – aspects of our work that many clients find particularly useful.
An interview-based board review will give you maximum insight and result in practical suggestions for how your Board and committees can develop further.
How has the industry been changing in recent years?
We see board evaluations in east Asia taking off in the same way they have in the UK over the last few years.
As recently as around 10 years ago, most people sitting on boards would never have even heard of a board evaluation. There was no real mechanism for boards to self-reflect or to demonstrate to shareholders how they are focused on their continuous improvement. Board evaluations made their first appearance in the 2012 edition of the UK Corporate Governance Code – with an expectation that all listed companies conduct a review of the Board’s performance each year. For FTSE 350 companies, there is an expectation that the process is facilitated by an external reviewer at least every third year.
Since then, board evaluation has taken off. Many codes of practice have followed the same path, with board evaluations now commonplace in regulated financial services, the public sector, charities and universities. Internationally, many countries are following the precedent, with their Codes closely mirroring that of the UK. Internationally, the market for experienced board evaluators is far less mature than in the UK – it’s a new field, whereas we have been conducting board evaluations since 2002, hence or decision to expand globally.
Expectations have changed too. In the UK, many companies are now in their second or third cycle of external reviews, and we have noticed a clear trend. What was once viewed as a compliance exercise is now a vital part of the Board’s work, and something that more chairmen approach with enthusiasm. Boards expect real value, looking at the inner workings of the Board and how they go about covering the ground they need to, focusing on the strategy and getting the comfort and assurances they need from risk and controls – it’s not about how boards comply with standards.
The standards are set to be driven up once again, with the UK leading the way. BEIS (the government department for Business, the Environment and Industrial Strategy) has launched a review into the board evaluation market. It appears set to place more emphasis on the amount of interaction the reviewer has with the board, and to ensure organisations report properly on what has taken place.
What makes you different from what’s currently available in the market?
Busy boards often feel apprehensive about choosing an evaluation provider. At its worst, the process becomes a compliance burden – it doesn’t add value and just adds cost. At IAL, we care about your Board. We believe that you should never miss the opportunity to reflect and grow. That’s why boards trust us to help them become more effective, and have done so since long before board evaluations became a regulatory requirement.
Drawing on our years of experience as a market leader, our pre-prepared questionnaires are designed to ask the right questions in the right way, saving you time in the process.
The unique structure of the questions encourages additional comments, allowing respondents to explain what’s underlying their scores and helping you to understand the root of any issues and to identify what needs to be improved.
· Practical actions for your board’s development
· Specialist insight into board committees
· Suggestions tied to the context of your organisation
· Rewarding and interesting discussions
· Solutions for your 3-year evaluation cycle and follow-up
· Forward-looking thinking linked to your strategy
What does the future hold for your company?
Growth! The need for high-quality, experienced board reviewers is there, it’s really just a case of how quickly we can get to the different markets. As market leaders in the UK, we are seeing more and more interest from all different sorts of organisations each year. We have opened offices in Asia – focusing on Hong Kong and Singapore to begin with – and also in continental Europe and Ireland. We expect more and more interest internationally, and it would not be a surprise if in five years’ time we are a truly international company.
On the technology side, we continue to develop our questionnaire tool, Thinking Board®, to improve its visuals and benchmarking capabilities. Down the line, we can envisage that AI may enable the platform to produce some quite sophisticated automated written summaries to sit alongside the data graphics, which are already automated. We would like it to be able to produce an automated board paper.