“Like anyone responsible for a team of this size, I am very reliant on the people working for me, especially those managing the various internal audit and risk assessment teams that make up this department globally,” Smith says. “It’s essential that I get to know those people as well as I possibly can. I need to understand what their issues and problems are and then help them to develop the skills and tools they need to deal with them.”
She adds that, although the people side of her job can be very challenging, it is also one of the most rewarding.
“It’s a great feeling when you receive positive feedback or when you see people you have supported go on to make progress in their careers.”
On the job training
Although managing people has been such a central part of her job, Smith was, like many internal auditors, plunged in at the deep end without any formal training. “When you’re starting out and are given your first opportunity to manage a team, it hits you that you suddenly have this big responsibility,” she recalls. “While I have had lots of help and support during my career, there is still a lot to learn as you go along.”
After qualifying as a chartered accountant at KPMG, Smith received a solid grounding as an internal auditor at Allied Domecq. After about five years with the drinks company, she got her first big break into internal audit management at Argos. She stayed for another five years, first as an internal audit manager and then as head of audit, before an opportunity came up at Exel Logistics, then the largest logistics operation in Europe and now part of DHL.
“Sarah Blackburn – at that time head of audit and assurance at Exel and a past president of the IIA – was looking for an audit development manager to build the right team and methodology for the company,” she says. When Blackburn moved on, Smith filled her shoes, becoming head of audit and getting her first stab at managing a global team. It was, she says, probably the most influential stage of her career, enabling her to travel internationally and opening the door to senior roles at Tate & Lyle and, ultimately, Kingfisher.
“That was a great opportunity for me, especially on the people management side,” Smith says. “I found managing teams from different countries and cultures, all of which would respond in different ways, both fun and a real challenge.”
Looking back over her career, Smith doesn’t think the profession’s need for these core interpersonal skills has changed.
“It has always been essential in internal audit to have ‘softer’ skills, such as good relationship building and communication – and I don’t think that will ever change.”
When Smith interviews people for jobs in her department, it is these skills – or the potential lack of them – that she is most alert to in a candidate.
“I ask myself whether I would like to be audited by this person,” she says. “Would I be happy to put them in front of the company’s IT director or the marketing director? If someone isn’t equipped with great interpersonal skills and is not able to build good working relationships with their boss, the finance director, the board, the audit committee and key managers, I don’t think they are capable of doing an effective job.”
Even in the risk assessment elements of Kingfisher’s activities, Smith rates the importance of interpersonal skills highly.
“A big part of the job of our risk assessment team is sitting down with people, listening and understanding their views, and then helping them to articulate what they see as the key risks,” she says. “They have to be able to deal with people diplomatically, develop relationships with them and also challenge and question their views constructively.”
Although the need for great interpersonal skills may have remained constant in the profession, Smith has observed significant changes. Foremost among them is a shift in thinking about the skills and experience required to meet the needs of organisations such as Kingfisher.
“Over the years people have realised that a team needs a mix of skills and experience. While finance skills are still valid, so are those in other areas such as commerce and business. At Kingfisher, for example, we have brought a commercial audit manager on board to help develop our commercial skills,” she says, adding that there is scope to broaden the knowledge of her internal audit function further over the coming years. “I would like to see more people come into internal audit from the business for a few years – from the buying team or store operations, for example – to work for us and then go back into the business to progress their careers.”
Extend and improve
With that in mind, CPD is something to which Kingfisher is firmly committed and an area that Smith is keen to develop as group audit and risk management director. “When I joined the company, the internal audit teams in the operating companies and risk assessment team weren’t really working as a single unit,” she says. “I wanted to get them to work more closely and under a common methodology.”
Part of that is finding ways to develop further as a whole team, rather than each of the operating companies following separate development programmes. “We’ve identified the key competencies that we all share, the six things that we all need to excel at, and we’ll use this insight to drive a programme of training and development activities across the whole team, to add to the work already under way at a local level.”
Raising the level of understanding and staying abreast of current issues will be essential if Smith’s team is to help Kingfisher achieve its overriding aim: “to deliver faster growth and higher returns by working together to become the world’s expert at making home improvement easier for customers”.
“Internal audit has a key role in helping the business to do that, so we need to ensure that we deliver the best service possible,” she says. “That will mean taking on board the issues that are of growing importance to the business, such as sustainability, innovation and building our common brands. Sustainability in particular is a relatively new area for internal audit, so it will require certain skills that we haven’t needed before.”
The challenge ahead for Smith is to ensure that her team can meet the changing needs of the business, while also challenging the organisation where necessary in those new areas of interest. “And, while we address these emerging issues, we need to make sure that we continue to conduct the right level of work in the more traditional areas of internal audit,” she stresses. “We also need to understand that it’s a difficult period for retail organisations, so it’s essential that we prioritise our work and are seen to be adding real value.”
With the wealth of experience and expertise in her profession, Smith says that there’s a valuable informal network that she can call on for support.
“There are many people I can ring up if I have an issue who will share their experiences and opinions, regardless of whether we are competitors or are in different industries,” she says. “It’s important that we harness that network.”
She also believes that the profession, having missed several chances to raise its profile, could be bolder in promoting itself.
“When I look back, I can think of a number of occasions – such as when the Cadbury report on corporate governance came out in 1992 – when everyone said this would be the time internal audit made a name for itself,” Smith says. “There is only going to be more legislation – and it’s important that internal audit has a seat at the table and a stronger voice as we move forward.”