Performance management

Key performance indicators

The experts we have spoken to considered it important for an audit committee to be well supported - to the extent that there are key performance indicators (KPIs) for the provision of information and support to the committee.

The KPIs for the chief executive might include “procurement of high-quality support for the board’s audit committee”. In turn, a chief executive might address quality, timeliness, completeness, and even training issues in the KPIs of a chief financial officer or other members of the management.

Although responsibility for the audit committee's performance always lies with the board, support is a vital component of strong performance. That support rests, to a considerable extent, in the hands of the management team.

• The Treasury provides a resources page, including a self-review guide, to help boards (and their subcommittees, such as audit committees) to improve their performance. 
• There are also international guides on self-reviews.

Annually reviewing the charter

We were told that often the audit committee’s charter is not regularly reviewed (see for example, our report on Maintaining a future focus in governing Crown-owned companies). For this project, one governor told us that the charter should be reviewed at least annually, and that the audit committee should prepare an annual work programme based on that charter. This ensures that the requirements of the audit committee, as set out in the charter, are addressed throughout the year.