So what makes a great CAE? Well I think it depends. It depends on what the audit team’s size and activities are. For any reasonably sized audit team I think the key thing is an ability to work through others. Well what does this mean? I think it is an ability to ensure that everything you would do, if you were able to clone yourself and do it all, is done by others.
First this requires that the CAE is very clear and has a clear vision of what they would do. I have seen some CAEs who do not and have no vision. They had no sense of what ‘up’ is. If the CAE is unable to set the standard then they are likely to confuse, frustrate and limit the ability of the team under them. This does not mean that the CAE must know or be able to do everything, but they must have a vision of what good looks like, a Platonic ideal if you like, of what good internal audit looks like.
Having a vision of what good, at an ideal or principles-based level is, they must then be able to articulate this to their team in a principles-based way. This can then enable their team or ‘followers’ to have a compass through which to navigate audit decisions. A good test is whether, when you are absent as a CAE (holiday etc), that the decisions and actions taken by your team are those that you would have made.
Then there is being demanding and expecting standards. Not unattainable standards, but challenging ones. I believe internal auditors occupy a privileged area in an organisation. They have the luxury of hindsight and the absence of executive responsibility. They also have positional power, enshrined in access to the top and whole of the organisation and an organisational platform (at audit committee) to make their voice heard. So the quid pro quo for this to hold themselves to a high standard. I aim this to represent always being one step ahead or one step better than the management team I serve. Perhaps this culture comes from my time working in a big four professional services firm, where we believed we were one step above and better than our clients. I am sure this was true in some, but certainly not all, cases. This does not mean being better, but means using the space granted to internal audit, to work to help an often hard pressed management team.
Another great CAE factor is an emphasis on CPD and personal actualisation, both leading through example, but also for the team. Encouraging people to develop is key in my view. Auditors need confidence in themselves and their abilities as they spend their lives always at the edge of their ignorance, tackling something new, something unfamiliar. To do this requires confidence and an ability to learn. I have never stopped learning and value every day at work where I am challenged.
Challenge is also important. An ability to get challenge accepted as a core part of audit, as not a bad thing. I need to be challenged, through challenge I grow, modify and strengthen, my views and my work. So it is for the audit team as a whole. The CAE needs to create a non hierarchical environment where diverse views of the team and clients are accepted and valued. I do not believe in binary right and wrong, merely, a sense of what feels right, but accepting that this can be differentially understood and valued by people. Thus varied views are key to finding the opinion that ‘feels’ right, but recognises diversity of views.
Honesty and straightforwardness are important. Being able to debate, discuss, give good and bad news without win or loss are key to a CAE’s success. This is important with clients and the team. People should be able to trust that a CAE will tell it ‘how it is’ without fear or favour.
Finally I model my leadership views on a great friend of mine, a professor that taught me during my undergrad degree. He was ethical, moral, and despite being a high achiever, was generous in action and spirit to others. He expected the best, but the worst you would ever hear is slight disappointment, never to be berated. Despite being very senior and successful, in any room of people at a party he would always seek out the lowliest, most lost person, and offer them support. So I think a CAE should seek to bring the best out of the whole team, not just the stars, or those most admired and liked by them.
Overall I think a CAE needs to model best practice and focus as much on followership as leadership, for it is no good a CAE leading away if no one is following.