The role of the audit committee chair is undergoing a significant expansion as companies confront accelerating enterprise risks, artificial intelligence adoption, sustainability regulation and rising stakeholder scrutiny, according to a global report by Deloitte.
Based on interviews with nearly 50 audit committee chairs across the Americas, Europe, Asia and Africa, the report finds that while governance practices are increasingly converging across regions, audit committee chairs are taking on responsibilities that extend well beyond traditional financial reporting and compliance.
The audit committee is increasingly absorbing broader risk oversight responsibilities that once belonged to other board committees, one audit committee chair said in the report. Some chairs added that the committee should be renamed the Audit and Risk Committee.
FROM FINANCIAL WATCHDOGS TO ENTERPRISE RISK OVERSIGHT
Deloitte’s findings show that audit committee chairs are no longer focused primarily on accounting standards, audits and financial controls. Instead, they are being drawn deeper into oversight of enterprise wide risks, including cybersecurity, data privacy, supply chains, geopolitical disruptions, tariffs and sustainability related financial exposures.
The report notes that the role of the audit committee chair has become one of the most demanding and influential positions on the board as regulatory requirements expand and stakeholder expectations intensify.
Technology risk, particularly artificial intelligence, has emerged as a central agenda item. One chair described artificial intelligence as a major shift comparable to the advent of the internet, requiring entirely new control frameworks and governance approaches.
According to the report, audit committee agendas are increasingly covering identification and mitigation of artificial intelligence risks, approval of vendors and use cases, oversight of how artificial intelligence is used in financial reporting systems, inclusion of appropriate disclosures in financial statements and monitoring of evolving artificial intelligence regulations across jurisdictions.
You cannot have control functions still sitting and doing things the way they always did, one chair said. It is about linking emerging opportunities and risks to existing agenda items.
SUSTAINABILITY REPORTING ADDS TO AUDIT COMMITTEE BURDEN
Sustainability reporting has become a core audit committee concern in several regions, particularly Europe, following the introduction of mandatory sustainability disclosure requirements.
Deloitte cited its analysis of early sustainability reporters, which found that many organisations underestimated the complexity of mandatory disclosures, particularly around data quality, internal controls and cross functional coordination.
With sustainability disclosures increasingly linked to financial risk and capital allocation decisions, audit committee chairs are expected to work closely with finance teams and sustainability specialists to oversee reporting quality and controls. The report said sustainability is likely to remain a standing audit committee agenda item as regulatory frameworks continue to evolve.
AUDIT COMMITTEE CHAIRS PUSHED INTO STRATEGIC BOARD ROLES
The study highlights a clear shift in expectations for audit committee chairs, from being primarily technical accounting experts to acting as strategic leaders who integrate financial reporting, risk oversight and board decision making.
The audit committee chair has to be forward looking to understand the strategic discussions at the board and bring them forward in the audit committee before they materialise and become hard to manage, one chair said.
Another chair described the role as being a true sparring partner for the chief financial officer and for the heads of key control functions including internal audit, risk and compliance.
While financial expertise remains essential, chairs said audit committees increasingly benefit from broader business, risk management, technology and industry experience among members, supported by external advisers where required.
CONTINUOUS LEARNING BECOMES ESSENTIAL
As audit committee mandates widen, chairs stressed the importance of continual learning and intellectual curiosity across committees.
Ongoing education on technology, regulation, global risks and emerging business models is increasingly viewed as necessary, even though formal continuing education requirements differ across jurisdictions.
If you believe in lifelong learning, then it is the best thing that can happen to you, one chair said. Because if you want to do the job well, you are forced to stay up to date.
Another chair added that while deep technical expertise is not required in every area, audit committee members must understand the implications of emerging technologies. You do not have to understand how the electrons work in artificial intelligence, but you need to have some sense of what it can do and what the risks are.
COMMITTEE STRUCTURES AND PROCESSES UNDER PRESSURE
Traditional audit committee structures and quarterly meeting cycles are being tested by the speed and complexity of emerging risks, the report found.
Several chairs said quarterly meetings may no longer be sufficient, pointing to the need for shorter, more frequent or ad hoc meetings, improved information flows and clearer prioritisation of issues.
There is also debate over whether boards should add specialists for areas such as cybersecurity or artificial intelligence. However, most chairs favoured well rounded committees supplemented by external experts rather than narrowly focused specialists.
The best questions come from the people who do not have the deepest expertise in certain areas, one chair said.
GOVERNANCE ROLE AT A TURNING POINT
Deloitte concluded that audit committees are operating at a governance turning point, with their effectiveness increasingly dependent on how well chairs and members adapt to expanded mandates and faster moving risks.
The report said audit committee leadership has become an always on role, requiring vigilance, adaptability and the ability to manage a risk landscape that continues to evolve without pause.
