Governance in Focus: What the 2024 Transparency Barometer Reveals About Audit Committees and Boards

In today’s dynamic business landscape, the role of the audit committee and board of directors has never been more critical—or more scrutinized. As I reviewed the 2024 Audit Committee Transparency Barometer Report (Report), I was struck by not only the progress organizations have made in transparency and governance but also by the untapped opportunities lying just beneath the surface.

This Report is not just a set of numbers—it is a story of evolving expectations. It highlights how boards are stepping up to meet the challenges of a world that demands more oversight, more expertise, and more accountability. But it also underscores areas where we have plateaued and where real impact lies just beyond our current practices.

Effective Governance isn't about just about the decisions made-it's about building a process that drives informed, accountable, and impactful decision making! JTM '24

Building Stronger Boards

The widespread adoption of skills matrices among S&P 500 companies—85% have now disclosed them—represents a leap forward in transparency. Investors and stakeholders want to know not only who is on the board but also what specific expertise they bring. A skills matrix is more than a list of credentials; it is a window into how boards align their composition with emerging challenges.

But here is the question: Are skills matrices being used as static disclosures, or are they dynamic tools guiding board recruitment, development, and decision-making? The most effective boards do not just check the box; they actively fill gaps and adapt their governance to ensure they are ready for the next challenge, not the last one.

The data in the Report highlights a clear trend: large-cap companies are leading the way, with mid- and small-cap companies following closely. Organizations that do not adopt these practices risk signaling misalignment with investor expectations.?

Cybersecurity as a Boardroom Priority

As we turn the page to cybersecurity, the numbers show progress—64% of S&P 500 boards now disclose audit committee oversight of cybersecurity risks, and 60% have a cybersecurity expert. This growth is encouraging, but it is not enough. Cyber risks are escalating, and the financial and reputational stakes of a breach have never been higher.

This is not just about having the right expertise—it is about how boards integrate cybersecurity into their broader risk management framework. It is about ensuring that every member understands the fundamentals of cyber risks and how they intersect with the organization’s strategy. With the SEC Cybersecurity Disclosure Rule in full effect, transparency here is not simply good governance—it’s an imperative.

ESG Oversight: More Than a Buzzword

The same can be said for ESG. Sustainability expertise on boards is up, with 59% of S&P 500 boards now reporting at least one ESG expert. Yet, only 34% of audit committees disclose oversight of ESG-related risks. This gap is telling.

Investors are not just looking for boards that oversee ESG—they are looking for boards that integrate ESG into the fabric of the organization’s governance. With new regulations like the SEC Climate Disclosure Rule driving consistency in reporting, audit committees must step up to ensure the same rigor applied to financial reporting is now being applied to ESG reporting.

Telling the Audit Committee’s Story

One theme that runs throughout this report is the need for boards and audit committees to tell their stories better. Plateauing disclosure rates around auditor tenure, fee evaluations, and reappointment considerations are missed opportunities. Investors do not just want to know what the committee decided—they want to understand how it got there.

This transparency is not just about compliance; it is about trust. By highlighting the unique factors that shaped their decisions, boards can demonstrate their commitment to quality, independence, and oversight in ways that resonate deeply with stakeholders.

What’s Next?

The 2024 Report reminds us that progress is not linear—it is iterative. It challenges boards, audit committees, and senior leaders to push beyond the plateaus, embrace transparency, and adapt to a rapidly changing governance, risk, and compliance landscape.

For leaders, the question is not whether to act—it is how quickly you can adapt. Skills matrices, cybersecurity governance, ESG oversight—these are not check-the-box exercises. They are opportunities to lead with purpose, respond to stakeholder expectations, and build organizations that are resilient, transparent, and accountable.

Let us use this moment to reimagine what good governance looks like. Because when boards and audit committees tell their stories well, they do not just meet expectations—they set new standards for what is possible.

Have a great day! Jonathan Marks

Source:

Center for Audit Quality (CAQ) Annual Audit Committee Barometer -https://www.thecaq.org/audit-committee-transparency-barometer