IIA East Region
Enhancing Our Influence – Dr Ian Peters (Chief Executive)
IIA East – AGM 2015
The Power of Persuasion – Dale Carnegie Training
21 July 2015
haysmacintyre
26 Red Lion Square, London WC1R 4AG, United Kingdom
IIA East
Enhancing our influence
Dr Ian Peters
Chief Executive
Tuesday 21st July, 2015
Meeting Expectations
• Challenges and opportunities
• The Institute’s response
• Enhancing our influence
• Questions
Challenges for the Public Sector
• Lord Browne’s 2013/14 annual report highlighted the nature of change
within government and the implications for the management of risk :• “ [ The role of government ] has increasingly become a commissioning
body, buying and managing a range of complex services and commercial
relationships against an economic backdrop requiring efficiencies and cost
savings. As a result it needs to be the smartest buyer in the nation, with
much more effective management of risk”.
Source : The Government’s Lead Non-Executive’s Annual Report, 2013-14
Challenges for the private sector
The revised UK Corporate Governance Code raises the bar for Boards in four
key areas :
•
•
•
•
Going concern, risk management and internal control
Culture and tone at the top
Remuneration
Shareholder engagement
“The changes to the Code are designed to strengthen the focus of companies
and investors on the longer term and the sustainability of value creation.”
Stephen Haddrill, CEO, Financial Reporting Council, September 2014
Bad behaviour: a recurring problem
• Banks
• Supermarkets
• Health service
• Local government (child abuse)
• Pharmaceuticals
Boards’ accountability redefined?
The Prudential Regulation Authority is now consulting on plans to outline the
collective and individual responsibilities of board members in regulated firms in
the areas of:
• Culture
• Risk appetite and risk management
• The respective roles of executive and non-executive directors
• Knowledge and experience of non-executive directors
• Board committees
Key themes
Higher expectations of organisations amongst their key stakeholders including the
public and the media :
• Stronger ethical behaviour throughout organisations and their suppliers
• Better conduct in relation to consumers
• Reliable, accessible and transparent public reporting
Shifting the focus for internal audit
Hence, there are greater expectations of internal audit to assess:
•
•
•
•
Tone at the top
Culture
Business strategy / management information
Public reporting (e.g. Annual Reports, Strategic Reports, Integrated
Reports)
These expectations raise a number of issues for internal audit, in particular:
• Its Independence and authority
• Its scope and priorities
Key initiative: Financial Services Code
• Response to the regulators
• As much for executives and non-executives as internal audit
• Relevance beyond financial services
• Has put internal audit firmly on the agenda
Independence and authority of internal audit
• The primary reporting line for the Chief Internal Auditor should be to the
Chairman of the Audit Committee.
• The Audit Committee should be responsible for the Chief Internal Auditor’s:
o appointment/removal
o performance, objectives setting and remuneration
• The Chief Internal Auditor should be at a senior enough level within the
organisation to give him or her the appropriate standing, access and
authority to challenge the Executive
o normally Executive Committee level
• “Internal Audit should have the right to attend and observe all or part of
Executive Committee meetings and any other key management decision
making fora.”
Scope and priorities of Internal Audit
•
Internal Audit’s scope should be unrestricted
•
A risk based approach should be taken in setting priorities:
o ” Internal Audit should make a risk-based decision as to which areas within
its scope should be included in the audit plan – it does not necessarily have
to cover all of the potential scope areas every year.“
•
Risk assessments and prioritisation of Internal Audit work:
o “In setting its scope, Internal Audit should take into account business
strategy and should form an independent view of whether the key risks to
the organisation have been identified and how effectively they are being
managed.”
Scope should include:
• Internal governance
• Information for strategic and operational decision-making
• Setting of, and adherence to, risk appetite
• The risk and control culture of the organisation
• Poor customer treatment, conduct and reputational risk
• Key corporate events (e.g.. M&A)
• Whether outcomes match objectives of policies and processes
The response
The response
Key Initiative: Auditing Culture
“Internal audit… can provide confidence that there is a strong commitment to
good conduct and that it is actually being translated into everyday behaviours,
but also, more importantly, where it is not.” Sir Winfried Bischoff , Chair, FRC.
Some key points from our report on auditing culture:
•
Corporate culture must be analysed, defined and disseminated by the board
(what is expected must be explicit)
•
There must be appetite and support from the top of the organisation
•
Internal audit must be given a clear mandate (in the Audit Charter)
Auditing Culture
Key points from our report continued:
• Internal audit will need to use qualitative as well as quantitative methods and will
need to be willing to move out of it’s comfort zone into subjective judgements
• There must be a relationship of trust between AC Chair and the HIA to allow for
informal discussion about subjective judgements (gut feel)
• Internal audit must be well regarded in the organisation and hold non-adversarial
relationships with clients. It must have the confidence of management
Challenges for boards, audit committees and internal
audit
• Relationships and trust are key
• Internal Audit must have the right position and standing in the organisation
• Promoting objectivity and independence
• Access and engagement (e.g. Executive Committee)
• Value of “gut feel” – a willingness to listen to the HIA’s view, not just the ‘hard
evidence’
• Appointing people with credibility
Enhancing our influence
• Identifying key issues in relation to good governance
• Focussing on internal audit’s relevance
• Engaging with key stakeholders
• Adding value to the debate
• Offering solutions
Questions
The Power of Persuasion:
Enhancing our Influence with
Critical Stakeholders
Presented by:
Mark Sharratt
Dale Carnegie Training
Page 21
Agenda
Influence: “the power or capacity of a person to be a
compelling force on the actions, behaviour, opinions of others”
 Define the attributes and qualities of key individuals of
influence
 Apply principles for engaging with and influencing even
the most difficult stakeholders across the business
 Raise the profile and effectiveness of Internal Audit within
the business
 Commitments
Page 22
Introductions
 Who We Are
 What We Do
 Share a Personal Experience:
 Who is your ‘Most Challenging Stakeholder’?
 What got/gets in the way of the relationship?
 What would be the benefit of winning them round more
easily?
Page 23
Becoming a Key Person of Influence
Influence: “the power or capacity of a person to be a
compelling force on the actions, behaviour, opinions of
others”
Think of a person you have known that you have known
that you would consider to be persuasive & influential
Now consider, what was it about them that caused them
to be so influential?
Page 24
Becoming a Key Person of Influence
What qualities, traits, and attributes
do we need to possess to become
a Key Person of Influence in our
organisation?
Page 26
Triangle of Success
Page 27
Win People to Your Way of Thinking
 The only way to get the best
of an argument is to avoid it.
 Show respect for the other
 Try honestly to see things
from the other person’s point
of view.
person’s opinion. Never say,  Be sympathetic with the
“You’re wrong.”
other person’s ideas and
desires.
 If you are wrong, admit it
quickly and emphatically.
 Appeal to the nobler motives.
 Begin in a friendly way.
 Dramatize your ideas.
 Get the other person saying
 Throw down a challenge.
“yes, yes” immediately.
 Let the other person feel that
the idea is his or hers.
Page 28
The Power of Effective Communication
and Human Relations
Expressive
Amiable
Driver
Analytic
Page 29
Understand Our Own Style
Page 30
Relating with Different Styles
Page 31
Commit to Influence Others
Page 32
Agenda
Influence: “the power or capacity of a person to be a
compelling force on the actions, behaviour, opinions of others”
 Define the attributes and qualities of key individuals of
influence
 Apply principles for engaging with and influencing even
the most difficult stakeholders across the business
 Raise the profile and effectiveness of Internal Audit within
the business
 Commitments
Page 33
The Power of Persuasion:
Enhancing our Influence with
Critical Stakeholders
Presented by:
Mark Sharratt
Dale Carnegie Training
Page 34
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Page 35
IIA East Region
AGM 2015
21 July 2015
haysmacintyre
26 Red Lion Square, London WC1R 4AG, United Kingdom
IIA East Region - AGM 2015
Your Committee
• Chairman
Chris Brookes
• Deputy Chairman/ Louise Woodward
Secretary
• Treasurer
Mark Leckie
(Rexam PLC)
(Royal Bank of Scotland)
(haysmacintyre)
IIA East Region - AGM 2015
Your Committee
• Comm’ee Member David Alexander
(Consultant)
•
(RGP)
(Deutsche Bank)
(Starr Underwriters)
(Govt IA Agency)
(HMRC)
•
•
•
•
Richard Clarke
Sissel Heiberg
Xina Li
Pirjo Shaer
Joanne Stanley
IIA East Region - AGM 2015
Annual Report 2014-15
• Events held in 2014-15:
- Student (Pre-Exam) Training (KPMG) April 2014
- Auditing Fraud, Bribery & Corruption (Kirkland Ellis) May 2014
- AGM and Speed Networking (haysmacintyre) June 2014
- Cyber risks (BDO) October 2014
• Other activity
- Worked very closely with South region to help ensure events were
shared in London and get them off the ground
- Support with IIA International Conference in July 2014
- Recruiting new Committee members to support the Region’s members
Treasurer’s Report
April 2014 - March 2015
– Income
£2,890*
– Expenditure
£(2,144)**
– Surplus
£746
* From 4 events held (1 free networking event)
** Includes IIA central admin charge of £2,093
Treasurer’s Report
• 4 successful events held generating revenue of
£2,890
• Room / drinks and food – provided by
sponsors on a pro-bono basis
• Minimal costs other than £2,093 IIA central
administration cost
• Budget in year to 31.3.16 is a surplus of
£2,040 before IIA central administration costs
IIA East Region - AGM 2015
2015-16 Plan
• Events
–
–
–
–
–
–
–
Student Event – Exam Preparation (London Baker Tilly) 28th April 2015
AGM and Networking (London Deutsche Bank) 12th May 2015 (P)
Performance Management (London haysmacintyre) 21 July 2015
Project Management (London Royal Bank of Scotland) 5 October 2015
Student Event – Exam Preparation (London) October 2015*
Construction Audits (Chelmsford / London) December 2015*
Cyber risks (Norwich / London) January / February 2015*
* Provisional (dates to be advised)
• P – Postponed due to poor take up
IIA East / South Mentor Scheme
What is it?
•Provides IIA East & South Members with access to a volunteer mentor
•Advice and support in relation to professional Internal Audit development
Benefits for the person being mentored?
•enhanced training and career development
•influence in their attitudes and professional outlook
•guide them round major decisions
Benefits for the Mentors?
•satisfaction from helping others and seeing them progress
•deeper and broader knowledge of their own and other organisations
•job enrichment and the chance to build wider networks