- Foreword and Introduction
- 1. Introduction
- 2. The Audit Committee’s functions and responsibilities
- 3. Membership of the Audit Committee
- 4. Relationships with key stakeholders
- 5. Conduct of the Audit Committee
- 6. Assessment of the Audit Committee’s performance
- Part 2
- Part 3
PDF of Checklists And Proforma [0.5MB]
Rotation of committee members can be a useful means of introducing new perspectives to Audit Committee deliberations. It also enhances the opportunity for a greater number of board members or entity managers to gain an in-depth, first-hand understanding of the Audit Committee’s responsibilities and the important role the committee plays in the entity’s governance arrangements. The rotation of members is also an important vehicle for strengthening the independence of the committee.
It is important to balance stability with change in the membership of the committee to ensure there is consistency over time in its considerations, and to maintain a sufficient level of knowledge and experience on the committee.
Generally, an individual’s tenure on the Audit Committee would be three years, with a one plus one year option, particularly for external members. Any extension of a member’s tenure on the committee should be approved only after the Chief Executive/Board, as appropriate, has made an assessment of the member’s performance as a committee member.
It is better practice for the Chief Executive/Board to adopt a phased approach to the rotation of members to preserve an appropriate level of knowledge and expertise of committee members. To lessen the impact of the loss of an experienced member, the committee may also wish to have new members join the committee before exiting members depart. As this would result in a temporary increase in the number of members, such an option should be provided for in the committee’s charter.
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