The relationship advantage: Maximizing chief audit executive success by Richard F. Chambers, Charles B. Eldridge, Paula Park, and Ellen P. Williams As chief audit executives (CAEs) find themselves in a highly visible, pressure-packed role, many have come to realize that business and financial acumen are no longer enough. Relationship acumen —the ability to establish and maintain strong connections with key stakeholders—is now also a prerequisite for success. Given most auditors’ accounting background, such interpersonal savvy hasn’t been readily ascribed to the profession. Accountants, by nature, were often green-eyeshade-wearing bean counters… but that stereotype has crumbled. Corporations increasingly view the role as critical, and look beyond the walls of internal audit when filling it; many make the position a short-term, rotational, executive-development platform. Armed with broader organizational experience, these non-traditional CAEs in fact exhibit impressive relationship-building skills. CAEs certainly need them. Most have dual reporting structures—to the CFO, CEO, or another C-level officer (administratively) and to the audit committee chair (functionally)—and so they must craft effective relationships with both. That can mean navigating complex, competing stakeholder agendas, including with external auditors, regulators, and others. Thus, if management wants a CAE in a business partnering or consultant’s role—which is increasingly the case—while the board is looking for an advisor and internal watchdog, the CAE must traverse these seemingly conflicting agendas and preserve a good working relationship with everybody. “We try to operate as a professional services organization,” said Mike Cowell, who heads the internal audit function at TIAA-CREF. “We ask, ‘Who are our customers?’ and we focus on what they see as value and how can we help them be successful. Yes, we must be an independent and objective audit organization, but if we can do our work and deliver our March 2011 Relationship acumen, or the ability to initiate and develop strong connections with key stakeholders, is becoming more crucial to chief audit executives, who must navigate complex needs and competing agendas of senior managers and audit committees.