The next era of governance: The rapidly evolving audit committee chair role

Talking points

• The audit committee chair role continues to evolve in response to rapid changes in the business landscape.
• Deloitte’s new report, The Audit Committee Chair of the Future, shares insights from leading Fortune 500 audit committee chairs.
• Four key themes emerged across risk, leadership skills, continual learning, and committee practices. 

Through my meetings with audit committee chairs, I’ve witnessed firsthand the profound transformation of their role in response to today’s rapidly evolving business environment. The pace of change—driven by emerging risks, technological innovation, and heightened stakeholder expectations—continues to increase the complexity of this pivotal board position.

Recognizing these shifts, we interviewed audit committee chairs from leading Fortune 500 companies across industries such as health care, telecommunications, entertainment, retail, defense, chemicals, utilities, insurance, and private equity. The goal? To provide practical guidance for audit committee chairs in their quest to navigate complexity and drive positive change.

I am excited to share our findings in a new report: The Audit Committee Chair of the Future: Redefining leadership for the next era of governance. Here is a preview of key insights from the report.

How audit committee chairs are navigating emerging risks

The audit committee chair role has evolved from focusing mainly on financial reporting and compliance to also anticipating and managing a broad spectrum of risks. Cybersecurity, data privacy, and technology risks are among the top priorities, especially with the rapid acceleration of artificial intelligence (AI). Interviewees also highlighted growing discussions about risks related to tariffs, supply chains, and geopolitical shifts.

Only 12% of S&P 500 companies had risk committees in 2024, and the majority were financial services companies.^₁ As a result, risk oversight increasingly falls on the audit committee. In fact, the audit committee has become the de facto risk committee.

From technical experts to strategic leaders

Which capabilities are essential for next-generation audit committee chairs? Given the expanded audit committee responsibilities, many of the chairs we interviewed highlighted the need for skills, experience, and leadership qualities that go beyond financial reporting and accounting. While financial expertise remains important, interviewees stressed the value of broader business and risk management experience, technology and cybersecurity knowledge, and global perspective. Other top qualities they indicated that should be exhibited to be successful include intellectual agility, adaptability, varied board service, commitment to learning, and strategic insight.

The importance of continual learning and curiosity

Intellectual curiosity can play an important role in business success. This perspective emerged as a key finding in our audit committee chair interviews.  

To help keep skills and critical thinking sharp in a rapidly changing environment, most audit committee chairs emphasized the need for intellectual curiosity, along with ongoing education and continual learning for themselves and committee members. They noted that the most effective audit committees are often those whose members actively engage in both formal and informal learning.

Are committee processes ready for the future?

Many of the audit committee chairs we interviewed questioned whether the traditional audit committee structure can meet the challenges of the future. They underscored the need to modernize both the audit committee structure and process to enhance agility and effectiveness in overseeing emerging risks and evolving responsibilities. Specific topics discussed in these conversations included:

• Meeting cadence. The traditional quarterly meeting cadence may no longer be sufficient in an environment where risks can emerge and evolve rapidly. There may be an increasing need for more frequent, shorter meetings, or even ad hoc sessions to address urgent issues as they arise.
• Committee composition. Should boards and audit committees add specialists to the board or audit committee to address emerging risks, such as cybersecurity and AI? The answer to this much-debated question depends on the specific committee and its needs. 
• Committee coordination. Integrating audit committees with other committees through overlapping membership can help manage risk but increases complexity, requiring careful coordination. Joint meetings can address cross-committee issues but should be managed to avoid information overload.
• Use of technology. Some chairs noted that technologies like AI can make operations more efficient by automating tasks and synthesizing information. But effective and responsible use of AI in the boardroom remains an unresolved challenge.
• Meeting materials. The increasing volume and complexity of materials can hinder issue identification. Leading practices shared in the report to help overcome this issue include video pre-reads and concise executive summaries.

What role can Deloitte play?

Deloitte can advise audit committee chairs as they adapt and prepare for changing governance responsibilities and expectations. To learn more, please download The Audit Committee Chair of the Future report.

Endnotes

¹  Spencer Stuart, 2024 U.S. Spencer Stuart Board Index.

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