PAY ATTENTION TO THE "BLIND SPOTS"

Since 2008, many US reform initiatives have focused on reinforcing oversight mechanisms: setting up board-level audit and risk committees, seeking board members with a financial profile or strong operational experience, reinforcing control over compensation, and so on. Today, there is an urgent need for boards of directors and management to dedicate more time to "strategic foresight." They need a different approach to developing the company's strategy and managing its achievement to ensure they are not missing the types of "blind spots" that led to the recent failures. Internal auditors can help make sure this happens. Internal audit has an opportunity to increase its relevance, but the profession must: 1. improve auditor understanding of strategic planning; 2. develop new tools to assess whether blind spots are understood and addressed by the board and management; and 3. create a shared knowledge base of corporate failures due to strategic failures, including lessons learned and how auditors could have made a difference.