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00:00:02 The IIA
The Institute of Internal Auditors presents All Things Internal Audit.
00:00:06 The IIA
In this episode, Rob Clark Jr.
00:00:08 The IIA
and Fabio Pimpao discuss how internal auditors can communicate more effectively with boards and executive leaders.
00:00:15 The IIA
They explore how to simplify complex risks, use storytelling to drive impact, and align messaging with what boards care about, from financial and reputational risk to strategic priorities.
00:00:28 The IIA
The conversation also covers practical tips for preparing for board presentations, leveraging AI, and building trusted relationships across the organization.
00:00:40 Rob Clark Jr.
Welcome to all things internal audit from the IAA.
00:00:45 Rob Clark Jr.
How are you doing today?
00:00:47 Fábio Pimpão
Thank you, Rob.
00:00:47 Fábio Pimpão
It's a pleasure to be here with you.
00:00:50 Rob Clark Jr.
Tell us just a little bit about your background and what your current title is and where you are and how long you've been in internal audit.
00:00:55 Fábio Pimpão
I'm the internal audit director here for Whirlpool Corporation and also a member of the board of directors of the IIA.
00:01:02 Fábio Pimpão
I've been working as an auditor for more than 20 years, actually, different organizations and different countries.
00:01:08 Fábio Pimpão
I'm from Brazil, but I already live in Mexico, Brazil, United States, went back to Brazil, went back now to United States.
00:01:15 Rob Clark Jr.
Wow.
00:01:15 Rob Clark Jr.
Well, they are lucky to have you with your...
00:01:18 Rob Clark Jr.
prolific background and a member of the global board of the IAA.
00:01:22 Rob Clark Jr.
That is super impressive.
00:01:23 Rob Clark Jr.
Thank you for what you and the other board members do to help to support our profession.
00:01:28 Rob Clark Jr.
So just a little bit about me for those of you listening.
00:01:30 Rob Clark Jr.
I'm Rob Clark Jr., the Chief Audit Executive for City of Hope.
00:01:35 Rob Clark Jr.
And I have been in the audit profession for actually over 30 years and have been the past president of the
00:01:44 Rob Clark Jr.
Atlanta chapter of the Institute of Internal Auditors.
00:01:46 Rob Clark Jr.
So Fabio, from your experience working with multinational organizations and boards, how has the role of internal audit and board conversations evolved over the last decade?
00:02:00 Fábio Pimpão
I would say that actually changed it like a lot and especially
00:02:03 Fábio Pimpão
because the board members, the audit committee members are changing A lot.
00:02:07 Fábio Pimpão
So back in the past, we're going to have much more like board members that were pure like financial.
00:02:13 Fábio Pimpão
And right now, our things are evolving.
00:02:16 Fábio Pimpão
We have like board members, audit committee members with different backgrounds and actually have like board members that have like internal audit background, GRC background.
00:02:26 Fábio Pimpão
So those type of interaction really helps, I would say, like internal audit, because then we're going to have like several board
00:02:33 Fábio Pimpão
members, they really understand how we operate because we might have board members that actually they were like internal auditors back in the past.
00:02:41 Fábio Pimpão
So having this type of support, I would say,
00:02:46 Fábio Pimpão
put us internal audits like in a different spot.
00:02:48 Fábio Pimpão
This can help us much more to drive a little bit like efficient, make sure that yes, we can have like a better budget, we can have like different connections, I would say.
00:02:58 Fábio Pimpão
So I can clearly see that yes, we are right on the right path.
00:03:03 Fábio Pimpão
And one of the things that now with the new standards that actually were effective beginning of 2025, that we have like the essential conditions, which is part of the domain tree, that help us kind of a lot because it's not too
00:03:16 Fábio Pimpão
three-way Rd.
00:03:16 Fábio Pimpão
but kind of almost like a three-way because we have internal audit responsibility, the board responsibility, senior management responsibility.
00:03:24 Fábio Pimpão
Now it makes much more clear to see where we are and actually what are the responsibilities and how we can actually collaborate between different stakeholders.
00:03:32 Fábio Pimpão
So that's another thing that changed it kind of a lot and helped us a lot, I would say, us as internal auditor.
00:03:39 Rob Clark Jr.
Yeah, absolutely.
00:03:40 Rob Clark Jr.
It's interesting because
00:03:42 Rob Clark Jr.
You mentioned how involved and how knowledgeable some of your board members are.
00:03:47 Rob Clark Jr.
And I too have the blessing of having board members to whom I report that do have audit background.
00:03:55 Rob Clark Jr.
But let's face it, some of our colleagues who are listening to this call right now, or listening to this, might not necessarily have that same level of internal audit experience
00:04:06 Rob Clark Jr.
or expertise on the board, and what tips and tools would you suggest from your vantage point for those of our colleagues who might not necessarily have.
00:04:16 Rob Clark Jr.
deep internal audit experience in their board members.
00:04:19 Fábio Pimpão
That's an interesting point.
00:04:21 Fábio Pimpão
I would say that every time that we have a different situation or like a different board member or a new like board member that we need to explain some complex topics, I would say, always try like to simplify as much as we can.
00:04:34 Fábio Pimpão
As an example, if we have like a specific risk or a problem that we want to bring to attention, I usually try to connect very
00:04:43 Fábio Pimpão
Clearly, I was speaking about, do we have a financial problem?
00:04:47 Fábio Pimpão
Do we have a compliance issue?
00:04:49 Fábio Pimpão
Do we have a image reputational issue?
00:04:54 Fábio Pimpão
Or we have even kind of, if we bucket in different, I would say, and simple process that we can clearly connect, what is the real problem?
00:05:03 Fábio Pimpão
This will speed it up kind of the process and the board member will be much more comfortable.
00:05:08 Fábio Pimpão
Because let's face it, we do not want to go like a lot of into the details in this type of conversation with the board members.
00:05:15 Fábio Pimpão
Because several reasons.
00:05:16 Fábio Pimpão
First, we don't have like enough time.
00:05:17 Fábio Pimpão
Usually like we have like 15 minutes or half an hour maximum that we have to explore, like a lot of talk.
00:05:24 Fábio Pimpão
So you need to be like very objective, very specific.
00:05:28 Fábio Pimpão
Because in a nutshell, they want to see, do we have a problem?
00:05:31 Fábio Pimpão
And if you ask, do we know how to handle the problem?
00:05:35 Fábio Pimpão
Do we know that actually we are prioritizing or not the problem?
00:05:38 Fábio Pimpão
And actually what we're going to do with this risk, are we going to accept, are we going to mitigate, are we going to transfer, are we going to eliminate?
00:05:46 Fábio Pimpão
So if you have that much clearer and...
00:05:49 Fábio Pimpão
very defined, I would say, like the definitions.
00:05:52 Fábio Pimpão
These will simplify a lot the expectations and honestly, how we should handle this type of conversations with like a board member.
00:06:00 Rob Clark Jr.
I love that.
00:06:01 Rob Clark Jr.
And I talk a lot with our audit colleagues and I do a lot of speaking at different conferences and workshops.
00:06:08 Rob Clark Jr.
And one of the things that I frequently speak on is the importance of communication to the board.
00:06:16 Rob Clark Jr.
And what I have heard from the interactions that I've had on facilitating different quality assurance reviews, in virtually every QAR, regardless of the industry, I've heard similar sentiments from the board members, from the executives when we as the QAR team are reviewing them.
00:06:37 Rob Clark Jr.
And that is, we would hear this consistently, I wish the auditors were better communicators.
00:06:45 Rob Clark Jr.
because what happens, and I would ask a follow-up, well, what is it that is making them not as effective?
00:06:51 Rob Clark Jr.
Well, they're very detail-oriented, but sometimes they're talking at such a technical level that we don't quite understand.
00:06:59 Rob Clark Jr.
And all of us from the board are afraid to raise our hands to ask a question that might be perceived as elementary.
00:07:06 Rob Clark Jr.
So we just sort of nod our heads, but as they leave the room, we all look at each other saying,
00:07:10 Rob Clark Jr.
Did anyone understand what they were talking about?
00:07:12 Rob Clark Jr.
I have no clue.
00:07:13 Rob Clark Jr.
So simplifying the message that you mentioned is absolutely critical.
00:07:17 Rob Clark Jr.
And I'll be honest, one of the ways that I use AI is in summarizing, of course, within our domain, within our tenant, within our organization, just walled off.
00:07:27 Rob Clark Jr.
So I'm not putting this into ChatGPT, but I'm putting within Copilot in our organization.
00:07:31 Rob Clark Jr.
I will feed our information together in there and then say, I put the prompt in, how would you explain this to a fifth grader?
00:07:40 Rob Clark Jr.
And people take something that my mind and my staff's mind seem really clear, but you would rephrase it in such a way that it makes it much more impactful and makes the message really resonate.
00:07:55 Rob Clark Jr.
I love what you're saying in terms of trying to make that simplified and to make that understandable.
00:08:00 Fábio Pimpão
No, yeah, that's a great point.
00:08:02 Fábio Pimpão
And actually, we do kind of the same, of course, we have like Gemini, that's kind of the authorized
00:08:08 Fábio Pimpão
tool that we have.
00:08:09 Fábio Pimpão
But yes, we want to try to simplify as much as possible.
00:08:13 Fábio Pimpão
And of course, we have to train that.
00:08:14 Fábio Pimpão
We train with different levels of staff to make sure, does that make sense?
00:08:18 Fábio Pimpão
If I send like a material to someone in my team and they don't understand, of course, someone like in a senior management or board, they will not understand.
00:08:27 Fábio Pimpão
So it's important that, yes, we have like different interactions with different levels from your department to make sure, does that make sense?
00:08:33 Fábio Pimpão
Is it clear enough?
00:08:35 Fábio Pimpão
Because let's face it, right, of course, we're bringing
00:08:38 Fábio Pimpão
some complex risk right now, like to the board, we're discussing like tariffs, we're discussing supply chain disruption, we're discussing artificial intelligence, cyber attack.
00:08:48 Fábio Pimpão
So of course, so put yourself like in a board position to deal with so different topics and make sure that you can clearly understanding, again, 5 minutes, 10 minutes that you have, you need to be like very specific, you know, to be very direct, make sure that here is the problem that we have,
00:09:08 Fábio Pimpão
Yes, it is a priority.
00:09:09 Fábio Pimpão
And yes, we have a plan in place and I have all the support that I need from senior management to the C-level and things like that.
00:09:16 Fábio Pimpão
If you have a very good storytelling, that's going to be much more easy.
00:09:20 Fábio Pimpão
And again, and also we need always to be prepared for different types of questions.
00:09:25 Fábio Pimpão
People are going to have questions, you know.
00:09:27 Fábio Pimpão
So it's something that I always like to do.
00:09:28 Fábio Pimpão
Okay.
00:09:29 Fábio Pimpão
I always try to think if I'm presenting, and then again, going back to the prompt of Gemini that I think you mentioned, that's always a good idea.
00:09:36 Fábio Pimpão
So try to prompt that.
00:09:37 Fábio Pimpão
If you're a board member and I'm presenting this to you, what are the questions that you have for me?
00:09:43 Fábio Pimpão
And then, of course, you're going to receive some nice questions.
00:09:45 Fábio Pimpão
OK, I might be prepared for this question A, B, and C.
00:09:48 Fábio Pimpão
And then you can write the framing and make sure that, yes, you can do a better job when you have this type of presentation.
00:09:54 Fábio Pimpão
So those are the things that, yes, to me are very helpful and drive us some better result when we're doing this type of presentation.
00:10:00 Rob Clark Jr.
I love that.
00:10:01 Rob Clark Jr.
I love that.
00:10:02 Rob Clark Jr.
Well, you can't go to any conference
00:10:05 Rob Clark Jr.
without having AI be all over that as a central theme.
00:10:11 Rob Clark Jr.
And you mentioned AI.
00:10:13 Rob Clark Jr.
So boards today are dealing with more complexity than ever, the cyber risks, supply chain disruptions, what's going on in the geopolitical environment, and adoption of artificial intelligence.
00:10:27 Rob Clark Jr.
What are some of the tips that you would suggest to our colleagues who are listening to this on how internal audit can help
00:10:35 Rob Clark Jr.
directors focus on what really matters.
00:10:39 Fábio Pimpão
Yeah, I think one of the, to me, one of the strategy that, and again, I think even go back a little bit to the standards, right?
00:10:45 Fábio Pimpão
So what internal audit can do, it goes outside the pure, like internal audit.
00:10:50 Fábio Pimpão
And one of them that we've been discussing like a lot as part of the IA, it is enterprise risk management, right?
00:10:56 Fábio Pimpão
Okay, so of course, there's several things that
00:10:59 Fábio Pimpão
It is green that we can do as part of internal things that are yellow, yes, we can do it, but watch out, but then red, of course, we're not owning risk and things like that.
00:11:08 Fábio Pimpão
So, to me, like having like a robust enterprise risk management program that, yes, you're sharing with the board three, four times per year, what is kind of the top 10?
00:11:20 Fábio Pimpão
10 to 15 risks that this is the priority for the company.
00:11:24 Fábio Pimpão
And actually, there's a management system in place that we know, okay, every quarter, okay, this risk goes up and down.
00:11:31 Fábio Pimpão
Again, tariffs and geopolitics, to your point, I think we're facing right now with the wars that happen like across the globe, that impacts like a lot like supply chain management, right?
00:11:40 Fábio Pimpão
It's impact like fuel price and consequently, all the cost of our products might be impacted, right?
00:11:48 Fábio Pimpão
So if you have like a clear process
00:11:50 Fábio Pimpão
in place that yes, you can share what is the methodology, how you are managing all those 10 or 15 risks, I would say, that we have.
00:11:59 Fábio Pimpão
And again, this is not kind of internal, that responsibility to manage those risks.
00:12:04 Fábio Pimpão
But yes, we are here much more to be like to facilitate the process, to challenge management.
00:12:09 Fábio Pimpão
Okay, so this specific risk that we're discussing, like geopolitical, so what is the key risk indicator that you have that you can monitor that we're going to open now?
00:12:20 Fábio Pimpão
And guess what?
00:12:21 Fábio Pimpão
If now we have a residual risk, what we're going to do with that?
00:12:24 Fábio Pimpão
Are we going to accept that?
00:12:26 Fábio Pimpão
Actually, we're going to implement like a new control, a new monitoring control, or something like that.
00:12:31 Fábio Pimpão
So bringing that to board in a very, again, a good summary that actually we know where we are and what is kind of the priority.
00:12:39 Fábio Pimpão
Because it really changed industry by industry, region by region.
00:12:43 Fábio Pimpão
So it's important as you really need to understand the environment that you're living.
00:12:48 Fábio Pimpão
More and more, you understand your business.
00:12:50 Fábio Pimpão
business, that is a great benefit from internal audit that consequently will process all the information nicely to the board.
00:12:58 Fábio Pimpão
Okay, here's kind of the priorities that we have.
00:13:00 Fábio Pimpão
And yes, we have like a good plan in place to tackle the cyber, artificial intelligence.
00:13:05 Fábio Pimpão
What are the risks?
00:13:06 Fábio Pimpão
What are the opportunities and how we're prioritized?
00:13:09 Fábio Pimpão
If you have that very nicely, this will add value for sure for the organization.
00:13:15 Rob Clark Jr.
I love that.
00:13:16 Rob Clark Jr.
Earlier, Fabio, you mentioned something that I wanted to pick up on, and you talked about the importance of storytelling.
00:13:21 Rob Clark Jr.
That is, I believe, a huge skill set that is underutilized by a lot of our audit colleagues.
00:13:29 Rob Clark Jr.
Because what the boards and executive leaders expect is that, yeah, we're going to be left brain nerds.
00:13:35 Rob Clark Jr.
But if when we get up in front of the board or executive leadership,
00:13:39 Rob Clark Jr.
We are, our voices shaking and quivering and are nervous.
00:13:43 Rob Clark Jr.
If we don't look confident, how confident is your audience going to be in your own message?
00:13:49 Rob Clark Jr.
So working on those skills is absolutely critical.
00:13:52 Rob Clark Jr.
And storytelling is one of the ways to actually convey that message in a way that is not just talking off the slides, but creating an illustration.
00:14:02 Rob Clark Jr.
Tell us about an example without necessarily diverting or divulging
00:14:08 Rob Clark Jr.
confidential information that would put you in trouble with your employer.
00:14:10 Rob Clark Jr.
Don't do that.
00:14:11 Rob Clark Jr.
But just generically, how do you use storytelling to have more of an impact to your audiences?
00:14:18 Fábio Pimpão
That's a great point, Rob.
00:14:19 Fábio Pimpão
And honestly, every time, and we have that planned in our calendars, I would say, but every time that we're going to have like the audit committee meeting, we start with a storytelling memo.
00:14:32 Fábio Pimpão
Okay, so we just put like a Google Docs and say, okay, what's going to be like the message
00:14:37 Fábio Pimpão
to the audit committee.
00:14:39 Fábio Pimpão
This meeting, okay, the objective of this meeting, we will discuss like talent assessment, we will share the quality assurance review results.
00:14:46 Fábio Pimpão
So we already mapping what's going to be like the comments.
00:14:49 Fábio Pimpão
And based on that, we'll start, okay, talent assessment.
00:14:52 Fábio Pimpão
So what's going to be like the storytelling of a talent?
00:14:55 Fábio Pimpão
I said, Yes, we have like a diverse group, 60% of people at gender diversity.
00:15:02 Fábio Pimpão
Actually, we have like 80% of the people are certified, so we start putting all in high bullets.
00:15:09 Fábio Pimpão
I think what are kind of the main priorities that we wanna share that that's...
00:15:14 Fábio Pimpão
With the overall storytelling, so then we go to the second topic, and based on that, we start to discuss it like as a team, we'll say how we can expand a little bit more, and does that make sense?
00:15:24 Fábio Pimpão
Because, again, going back to what we discussed, so we need to find the break-even point between the details and...
00:15:32 Fábio Pimpão
not get lost into the weeds.
00:15:34 Fábio Pimpão
We want to make sure that yes, we're sharing enough information that the board can understand.
00:15:39 Fábio Pimpão
Yes, I got the logic.
00:15:40 Fábio Pimpão
So yes, you're sharing kind of what is your overall talent process.
00:15:44 Fábio Pimpão
You guys are here.
00:15:46 Fábio Pimpão
Those are kind of the achievements.
00:15:48 Fábio Pimpão
You guys have those opportunities.
00:15:49 Fábio Pimpão
That's going to be kind of the next steps.
00:15:51 Fábio Pimpão
Okay, so there's a clear logic that we can start like a storytelling.
00:15:55 Fábio Pimpão
We share a little bit of where we are and the next steps.
00:15:58 Fábio Pimpão
And then, okay, we can close this chapter and go to the following one.
00:16:01 Fábio Pimpão
It's going to be quality assurance review or whatever is going to be part of the agenda.
00:16:05 Fábio Pimpão
So having that clear, Rob, I think if we start that months in advance and just brainstorming a little bit, what's going to be the output that you're going to put, what's going to be like the final
00:16:16 Fábio Pimpão
message that you're going to share with the board and then going backwards, I would say, and start putting that all the storytelling and then again, train that, make sure that you like engineering prompt to, okay, does that make sense?
00:16:28 Fábio Pimpão
The storytelling makes sense.
00:16:29 Fábio Pimpão
What are the questions that we're going to receive?
00:16:31 Fábio Pimpão
combining that, I think it's a very nice exercise that sometimes can take like a couple of months to create like all the storytelling, but it's a huge benefit.
00:16:40 Fábio Pimpão
Sometimes people don't realize that you just need to spend a little bit more time just creating that and putting what if and what if and what if.
00:16:49 Fábio Pimpão
This will drive like a better output.
00:16:51 Fábio Pimpão
But to me, it's a great recommendation.
00:16:52 Fábio Pimpão
Just start like Google Doc and just put in some ideas and just do fine tuning as get close to the board meeting, I would say, you know.
00:17:01 Rob Clark Jr.
That's great.
00:17:01 Rob Clark Jr.
I love that.
00:17:02 Rob Clark Jr.
Those are some great practical tips.
00:17:03 Rob Clark Jr.
And what I also do, in addition to coming up with and crafting that story and that narrative, what I do prior to every board meeting is I record myself into a room where I close the door and I just use my phone and I just present as if I were sitting in front of the board, whether in person or virtual.
00:17:27 Rob Clark Jr.
actually.
00:17:28 Rob Clark Jr.
And then I'll go back and I will use that recording in three different ways.
00:17:33 Rob Clark Jr.
Number one, I will watch it with the sound completely off.
00:17:38 Rob Clark Jr.
I'll critique myself to see and ask myself, would I want to watch me?
00:17:44 Rob Clark Jr.
Was I animated?
00:17:45 Rob Clark Jr.
Were my facial expressions, my body language, my smile, my hand gestures, my how am I presenting myself?
00:17:52 Rob Clark Jr.
Would I want to sit and watch myself?
00:17:54 Rob Clark Jr.
The second way I use that recording is I listen to it without watching the video.
00:18:01 Rob Clark Jr.
And I just listen.
00:18:03 Rob Clark Jr.
I listen for the pace.
00:18:04 Rob Clark Jr.
I listen for vocal variety.
00:18:06 Rob Clark Jr.
Was I talking in just a monotone voice like this the whole time?
00:18:10 Rob Clark Jr.
Or was I ending every sentence as if it were a question and a high note?
00:18:15 Rob Clark Jr.
Because that gets really annoying.
00:18:16 Rob Clark Jr.
I would listen for filler words or phrases or ums, the ahs, the likes, you know,
00:18:23 Rob Clark Jr.
things like that end up diminishing your credibility.
00:18:27 Rob Clark Jr.
Then I use that recording and I transcribe it and actually go through and edit it.
00:18:33 Rob Clark Jr.
Just as if I were editing a document, I go back and I would tweak that.
00:18:37 Rob Clark Jr.
How can I say that more succinctly?
00:18:39 Rob Clark Jr.
How can I say that?
00:18:40 Rob Clark Jr.
Is that the best way to phrase that?
00:18:42 Rob Clark Jr.
There's got to be a better way to explain that.
00:18:44 Rob Clark Jr.
And then I just do that over and over and over.
00:18:47 Rob Clark Jr.
So by the time I get to the board meeting,
00:18:50 Rob Clark Jr.
I'm ready to go on this and I feel like it's something I wouldn't even need my notes or PowerPoint slides because I've gone over this so many times that it's just a part of me.
00:18:59 Rob Clark Jr.
What are some of the tips that you use for getting prepared for presenting to the board?
00:19:04 Fábio Pimpão
Yeah, and actually when you give like this example, I remember kind of an interesting training that I did, I don't know, like 15 years ago or something like that, was exactly like that.
00:19:14 Fábio Pimpão
So you start the training,
00:19:17 Fábio Pimpão
and someone was recording you, can you just do like a quick presentation about yourself and hobbies and things like that?
00:19:24 Fábio Pimpão
And then you watch that and was so like, okay, who is this person who is presenting?
00:19:29 Fábio Pimpão
Every time that you see yourself presenting, give us like a different.
00:19:34 Fábio Pimpão
perspective, I would say.
00:19:36 Fábio Pimpão
And the training was very good because then in the end, during the training, you receive a lot of tips and start practicing that.
00:19:42 Fábio Pimpão
And in the end, you do exactly the same presentation, then you can compare that.
00:19:46 Fábio Pimpão
So it was like phenomenal, I would say, like the difference when you first were being recorded and then in the end, then you have like a final product, I would say.
00:19:54 Fábio Pimpão
So those are kind of great tips.
00:19:56 Fábio Pimpão
And as I mentioned to you, something that I keep training
00:20:00 Fábio Pimpão
training kind of a lot with different members, I would say.
00:20:03 Fábio Pimpão
And honestly, not only with internal audit, because speaking audit to internal audit, that's easy because people will understand.
00:20:10 Fábio Pimpão
I would also recommend training with different areas.
00:20:14 Fábio Pimpão
Speak with the lawyer, with the legal department, speak with finance, speak with AGR.
00:20:19 Fábio Pimpão
If you have like good connections across your company, that yes, you can train a little bit.
00:20:23 Fábio Pimpão
Because again, those are like people that they're not auditors, so they can
00:20:28 Fábio Pimpão
share some tips with you and say, well, I don't understand what you mean by that.
00:20:32 Fábio Pimpão
Okay, so maybe I need to rephrase that or maybe I need to change something here that is not clear.
00:20:37 Fábio Pimpão
So I have like different types and honestly.
00:20:40 Fábio Pimpão
Sometimes even family can help you here.
00:20:42 Fábio Pimpão
I already trained, of course, with my family, and it was kind of some good results because then I had totally independent people that are not even part of a corporate environment, I would say, that can bring some other tips that, yeah, I didn't pay attention to that.
00:20:56 Fábio Pimpão
So I totally agree.
00:20:57 Fábio Pimpão
So you have like different.
00:20:59 Fábio Pimpão
trainees with different people, this would kind of add a lot to the table that you're going to be much more prepared when the day comes, I would say.
00:21:06 Rob Clark Jr.
I love that.
00:21:07 Rob Clark Jr.
As long as you don't just do this in practice to your mom, right?
00:21:12 Rob Clark Jr.
Because your mom is just going to be, oh, that's perfect.
00:21:14 Rob Clark Jr.
Abio, you're wonderful.
00:21:15 Rob Clark Jr.
You did everything perfectly.
00:21:17 Rob Clark Jr.
Exactly.
00:21:20 Fábio Pimpão
That's fair.
00:21:21 Rob Clark Jr.
You want to make sure that you're getting critical feedback from folks, but that's great.
00:21:26 Rob Clark Jr.
So one of the things we often have to deal with complex details.
00:21:31 Rob Clark Jr.
So just what are some of the practical ways that you help to translate technical audit observations into insights that really resonate with the board?
00:21:42 Rob Clark Jr.
How do you take the complex and demystify it such that
00:21:48 Rob Clark Jr.
the management and board understand that and that we don't try to just baffle them with showing them how brilliant we are and our technical expertise because quite frankly, people are more impressed if you're able to take the complex and simplify it to explain it to a fifth grader.
00:22:04 Rob Clark Jr.
So how do you team do that?
00:22:07 Fábio Pimpão
Yeah, that's a great point.
00:22:08 Fábio Pimpão
I would say that initially, if you have like a big problem, you need to break that into smaller problems.
00:22:15 Fábio Pimpão
So if you
00:22:17 Fábio Pimpão
Start training that, okay, I have as an example, like all the several companies are facing like that, like tariff, okay, that's a big deal, we're not sure, we're not sure what's going to happen, up and down, left or right or whatever, but if we have kind of this big problem, we need to start working into smaller problems that, yes, we can.
00:22:36 Fábio Pimpão
translate that in an easy way just to go to, okay, yes, and again, I think that connects with the enterprise risk management that I mentioned, because that can be one of the big deals that we can highlight.
00:22:47 Fábio Pimpão
Yes, tariff, it's one of the big deals that all the companies, all manufacturing companies are facing right now.
00:22:55 Fábio Pimpão
But yes, we're able just to simplify a little bit more.
00:22:58 Fábio Pimpão
What does that mean?
00:22:59 Fábio Pimpão
Okay, tariff is almost like a buzzword, I would say, right now.
00:23:03 Fábio Pimpão
So what does it really mean?
00:23:04 Fábio Pimpão
So if you can't translate that big problem
00:23:07 Fábio Pimpão
What's going to be kind of the impact, I would say, to the company?
00:23:10 Fábio Pimpão
And actually, what are the actions that we're doing that we can simplify a little bit more about the process and the solution itself?
00:23:18 Fábio Pimpão
Because one of the things is only bringing the problem, which doesn't solve like anything, right?
00:23:23 Fábio Pimpão
So we want to make sure that when we're discussing that, yes, we have this risk, we have kind of this problem, we already simplified, but also now we have like different actions that management is doing.
00:23:36 Fábio Pimpão
And
00:23:36 Fábio Pimpão
A combination of all these actions, of course, this will drive like a better process, I would say.
00:23:42 Fábio Pimpão
So it's one of the exercises that again, I keep working not only with the team, but also with different stakeholders and how we can simplify that.
00:23:50 Fábio Pimpão
Okay, can you just, is there kind of a smaller problem that we can combine, smaller problems that would be like a big problem?
00:23:57 Fábio Pimpão
So maybe we need to go.
00:23:58 Fábio Pimpão
different areas, I would say.
00:24:00 Fábio Pimpão
So working a little bit more with the stakeholders, with the risk owner, and because they're kind of the risk expert, right?
00:24:07 Fábio Pimpão
So some of the things that kind of a watch out that I always, before we're going to speak for on behalf of the risk owners, you need to make sure that you're 100% kind of aligned what was the problem and actually what is the possible action plan.
00:24:21 Fábio Pimpão
Because those things that are very complex,
00:24:24 Fábio Pimpão
Again, internal audit, it's not the expert in tariff, it's not the expert in geopolitics, it's not going to be the expert in cyber, it's not going to be the expert in artificial intel, but you need to be the expert in actually working with different stakeholders and make sure that you can.
00:24:41 Fábio Pimpão
word synthesize, I would say, in a better way, that management will understand that, the board will understand that.
00:24:46 Fábio Pimpão
That's kind of how we're expert, you know, we're expert kind of synthesizing and working closely with the key stakeholders, right?
00:24:52 Rob Clark Jr.
Absolutely.
00:24:53 Rob Clark Jr.
There's a couple things that I have found from my vantage point.
00:24:56 Rob Clark Jr.
And that is when not just auditors, but any of the senior leadership is reporting to the board.
00:25:02 Rob Clark Jr.
And if they are just talking about the conditions,
00:25:06 Rob Clark Jr.
That is not likely to translate.
00:25:09 Fábio Pimpão
Exactly.
00:25:09 Rob Clark Jr.
We need to keep asking the question, so what?
00:25:12 Rob Clark Jr.
Because of that condition, so what?
00:25:14 Rob Clark Jr.
Ultimately, for us to be able to get the board's attention, we need to boil it down to two critical questions.
00:25:23 Rob Clark Jr.
What is the financial risk to this?
00:25:26 Rob Clark Jr.
What is the reputational risk to this?
00:25:30 Rob Clark Jr.
Correct.
00:25:31 Rob Clark Jr.
as much as we might be able to continue to pull that thread until it answers those questions clearly, that's when I have seen that we get the head nods from the board, that they get that.
00:25:42 Rob Clark Jr.
They might not necessarily understand all the conditions of what contributed to the cybersecurity issue, but they do understand the financial impact and the reputational impact, and that's what gets their attention.
00:25:55 Fábio Pimpão
I agree.
00:25:55 Fábio Pimpão
Yeah, that's a great point.
00:25:57 Fábio Pimpão
It's something that has always tried to work, okay, what's going to be the financial impact?
00:26:01 Fábio Pimpão
Do you have sometimes even like a compliance, I would say, just following kind of legislation laws, especially now again, therapy, which is a big deal, and reputational to your point.
00:26:11 Fábio Pimpão
So if you try to summarize what's going to be kind of the impact, then again, if you're putting yourself into
00:26:17 Fábio Pimpão
board shoes, I would say, it would be like much more, okay, now I got it.
00:26:21 Fábio Pimpão
I understand that actually.
00:26:23 Fábio Pimpão
I maybe not get it exactly kind of the condition because there's so many complexities there, but I do understand what's going to be the impact if that's not perfect.
00:26:30 Fábio Pimpão
Perform it well, or if it's with the company we decided not to prioritize, or if you don't put like the right resource, because then that sometimes generates some good discussions and based on, okay, so let's talk with you.
00:26:42 Fábio Pimpão
Do we need to change resource?
00:26:44 Fábio Pimpão
Do we need like to invest more?
00:26:46 Fábio Pimpão
How are we gonna address that?
00:26:47 Fábio Pimpão
So, sometimes the risk response, I would say...
00:26:51 Fábio Pimpão
this generates some better outcomes, even for the company, I would say, because then the board will understand a little bit more how we can, he or she can advise a little bit more about the next steps of the company, right?
00:27:00 Rob Clark Jr.
I love this.
00:27:01 Rob Clark Jr.
Well, while we're winding down here, there's a theme I wanted to pick up on.
00:27:05 Rob Clark Jr.
And you talked throughout this discussion about the various individuals that you work with, the other administrators and other folks that you might want to try to run ideas by, the board members themselves.
00:27:17 Rob Clark Jr.
I tell my team all the time that
00:27:20 Rob Clark Jr.
The internal audit business is a relationship business that we have to foster collaborative, trusted relationships with the individuals with whom we work, with that we, our audit clients, as well as our board.
00:27:35 Rob Clark Jr.
And we need to foster those relationships so that they trust us and we get to know them as individuals, as people.
00:27:43 Rob Clark Jr.
They see us as being part of the same team.
00:27:46 Rob Clark Jr.
We're not the external auditors.
00:27:48 Rob Clark Jr.
We are the internal auditors.
00:27:49 Rob Clark Jr.
We're the ones who are paid.
00:27:51 Rob Clark Jr.
We have the same person signing our paycheck as the person that we are auditing.
00:27:56 Rob Clark Jr.
And by fostering those collaborative relationships, it helps to be able to break down those walls and develop a connection where people see us as a trusted, valued advisor.
00:28:07 Rob Clark Jr.
We can say we want to aspire to those.
00:28:10 Rob Clark Jr.
I want to be a, we are trusted advisors.
00:28:13 Rob Clark Jr.
We're value-added advisors.
00:28:14 Rob Clark Jr.
Well, are we?
00:28:16 Rob Clark Jr.
It says who?
00:28:16 Rob Clark Jr.
It says us or it says our audit clients.
00:28:19 Rob Clark Jr.
So what are some of the things that you do in your communication to where that you are helping to foster those types of collaborative relationships?
00:28:27 Fábio Pimpão
Yeah, no, that's a great point, Robert.
00:28:28 Fábio Pimpão
And actually, you touched some important points that I want to highlight, actually.
00:28:33 Fábio Pimpão
Again, there's a difference between being dependent and being isolated, again.
00:28:39 Fábio Pimpão
So
00:28:39 Fábio Pimpão
We're independent.
00:28:41 Fábio Pimpão
We're the third line and makes sense.
00:28:43 Fábio Pimpão
We report to the board and dotted line to sea level.
00:28:46 Fábio Pimpão
But it doesn't mean that we're isolated.
00:28:48 Fábio Pimpão
It means that, yes, we are under the same mission and vision of all the thousand employees that we have here.
00:28:54 Fábio Pimpão
So we work to the same direction.
00:28:57 Fábio Pimpão
So that's one of the things that every time that
00:29:00 Fábio Pimpão
So first thing, it's advocate, right?
00:29:02 Fábio Pimpão
So being like a leader is kind of our responsibility to make sure that, yes, we maintain like the right connections, we participate in different town halls, operations town halls, finance town halls, sales town halls, or however is going to be the structure of your company.
00:29:17 Fábio Pimpão
But being there and work closely with different stakeholders and make sure that you advocate that, yes, we're not only like assurance providers or compliance or whatever.
00:29:27 Fábio Pimpão
Yes, we are here like just to add value
00:29:30 Fábio Pimpão
we can do like advisory service as well.
00:29:34 Fábio Pimpão
So there's several types of service that, yes, we can continue doing without jeopardizing kind of our independence as well.
00:29:41 Fábio Pimpão
And most of the errors and most of the companies, they do not know that.
00:29:45 Fábio Pimpão
They only see that, yes, how come the journal auditors as a compliance or SOX providers or things like that.
00:29:52 Fábio Pimpão
But once you start to advocate a little bit more, the types of service that we can provide and actually we can add value and actually
00:30:00 Fábio Pimpão
We're having kind of discussion, even today it's okay, we have like a problem X.
00:30:04 Fábio Pimpão
Okay, is there something that we can do it here just to support the business?
00:30:08 Fábio Pimpão
Because if there's no business, there's no all that, you know, in the end everything's going to go away, you know.
00:30:14 Fábio Pimpão
So it's something that, yes, we want to make sure that how we can support business.
00:30:18 Fábio Pimpão
Is there kind of different types of service that we can help, can be...
00:30:22 Fábio Pimpão
different types of advisor.
00:30:24 Fábio Pimpão
We can be like training.
00:30:25 Fábio Pimpão
We can support the reconciliation process just to make sure that we can advise a little bit how to enhance process.
00:30:31 Fábio Pimpão
We can participate in system implementation without being like the owners, but kind of advising with different controls.
00:30:38 Fábio Pimpão
We can advise on policies.
00:30:40 Fábio Pimpão
We can do like workshops with different groups just to try to streamline like the process, like be more efficient.
00:30:47 Fábio Pimpão
So to me, again, goes back to
00:30:50 Fábio Pimpão
try to advocate as much as we can that we're not police officers, but yes, we can do much more than that.
00:30:57 Fábio Pimpão
We have again, and the expectations of auditors nowadays, it's huge, right?
00:31:03 Fábio Pimpão
Like if we go back like 100 years ago, it was pure like,
00:31:07 Fábio Pimpão
accounting, accounting.
00:31:08 Fábio Pimpão
And nowadays, of course, we need to know accounting, process, internal controls, legal, supply chain, artificial intelligence, cybersecurity, and the list goes on.
00:31:17 Fábio Pimpão
We always need to be 100% prepared.
00:31:20 Fábio Pimpão
And more and more, if business day understand all the knowledge that we have, that we are process-oriented, that we understand like an end-to-end and we can support with more efficiency and support like new process, that'll be kind of a great way that
00:31:35 Fábio Pimpão
I would apply that on a daily basis and work closely with different stakeholders that yes, we can do like much more than just being like an assurance provider.
00:31:43 Rob Clark Jr.
I love that.
00:31:44 Rob Clark Jr.
If you have just one tip on how to more effectively communicate with the board, how would you summarize that in one statement?
00:31:53 Fábio Pimpão
How would you say, Rob, yes, if you have to enhance, then actually we need to enhance.
00:31:58 Fábio Pimpão
You need to do like a better job.
00:32:00 Fábio Pimpão
And 1st,
00:32:01 Fábio Pimpão
identify your priorities with the board because board members are totally different than the companies are different.
00:32:07 Fábio Pimpão
So first you need to understand what is the expectation from the board.
00:32:11 Fábio Pimpão
So that's the first one.
00:32:12 Fábio Pimpão
Second one, make sure that you have a good storytelling as we discuss it.
00:32:18 Fábio Pimpão
And 3rd, but not
00:32:21 Fábio Pimpão
less important, I would say, we need to make sure that how we can drive impact, how we want to make sure that they understand what is the value added behind.
00:32:31 Fábio Pimpão
So if you have like these three pillars, in my opinion, you can do like a much better job and communicating with the board, I would say.
00:32:38 Rob Clark Jr.
I love that.
00:32:39 Rob Clark Jr.
To the person listening to this, what the essential takeaways are that you want the board to walk away with, what the essential points are and the critical decisions that they're going to need to make, or the information
00:32:50 Rob Clark Jr.
that is something that they can walk away with a clear understanding.
00:32:55 Rob Clark Jr.
Don't make it 13 slides.
00:32:57 Rob Clark Jr.
Make it one slide.
00:32:59 Rob Clark Jr.
Maybe you can include the rest of it as a part of the appendix.
00:33:01 Rob Clark Jr.
Good point.
00:33:02 Rob Clark Jr.
I just make every member of my team, I let them know if you want to be considered for promotion, you have to get involved in Toastmasters, which is a group that just helps you to work on presentation skills.
00:33:13 Rob Clark Jr.
That's not a paid advertisement.
00:33:15 Rob Clark Jr.
I'm just somebody who believes in the importance of ongoing personal professional development.
00:33:20 Rob Clark Jr.
work on those skills, become a good storyteller, as Fabio said, learn to simplify the complex, be focusing on the impact.
00:33:30 Rob Clark Jr.
I love what you said there, Fabio, too.
00:33:32 Rob Clark Jr.
And we then will have somebody else tell us that we are indeed value-added advisors.
00:33:40 Rob Clark Jr.
Fabio, I can't thank you enough and say, Obrigada, for being a part of this forum today, and I wish you well, and I look forward to seeing you at future conferences.
00:33:50 Rob Clark Jr.
And I'm sure you'll have our content.
00:33:52 Rob Clark Jr.
People are going to have your contact information.
00:33:54 Rob Clark Jr.
We'd love to get a chance to continue the conversation.
00:33:56 Fábio Pimpão
Thank you.
00:33:57 Rob Clark Jr.
On behalf of our Institute of Internal Auditors, I want to thank everyone for joining in, and we'll see you on the other side.
00:34:06 The IIA
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00:34:10 The IIA
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00:34:16 The IIA
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00:34:28 The IIA
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00:34:31 The IIA
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