Committee Preparation
Tailored briefings for each standing committee of the board
Audit Committee
Oversight of financial reporting, internal controls, risk management, and compliance. Meets quarterly with expanded sessions before annual filings.
Committee Members
Patricia Nakamura
Chair · 9 years
Financial controls, audit quality, forecast accuracy
Susan Kowalski
Member · 4 years
Technology risk, digital transformation audit
Richard Dominguez
Member · 13 years
Regulatory compliance, government contracts
Diana Whitmore
Member · 6 years
Environmental liability, litigation risk
Elena Vasquez
Member · 2 years
Cybersecurity, IT controls, risk quantification
Key Topics This Quarter
Q4 cybersecurity incident — incident response adequacy, disclosure obligations, and board notification protocol
Forecast accuracy — three consecutive plan misses require revised methodology review
Covenant compliance — Net Debt/EBITDA at 2.7x with 1.05x headroom to 3.75x covenant
Working capital management — $85M increase driving FCF deterioration
Restructuring charge trend — $62M in FY2025, ongoing across three programs
Internal controls over financial reporting — any material weaknesses or significant deficiencies
Recent Committee Meeting Highlights
October 2025: Committee requested enhanced cybersecurity reporting cadence. This has become urgent post-incident.
October 2025: Discussed forecast accuracy concerns; CFO committed to methodology review by January.
July 2025: Approved revised risk appetite statement with explicit cyber risk tolerance levels.
July 2025: Reviewed external auditor independence and engagement terms for FY2025 audit.
Likely Committee-Specific Questions
“Walk us through the cybersecurity incident timeline. When did management know, and when should the board have been informed?”
CriticalPatricia Nakamura has privately expressed frustration about the notification delay. Elena Vasquez has the receipts — she flagged this vulnerability six times.
“The forecast has missed three quarters. What specific changes have been made to the forecasting process?”
CriticalThe committee directed the CFO in October to present a revised methodology. They expect a concrete deliverable.
“At 2.7x leverage, what stress scenarios have you run against the covenant? What is the trigger for remediation action?”
HighStandard audit committee diligence, but elevated given the margin compression trend.
“Are there any pending SEC inquiries or regulatory matters related to the cybersecurity incident?”
HighDiana Whitmore (former General Counsel at Fluor) will ask this directly. She understands regulatory exposure.
“What is the external auditor's view on the working capital increase and any adjustments to estimates?”
MediumStandard year-end audit committee inquiry, but the $85M increase is unusual.
CEO Preparation Notes
Lead with the cybersecurity incident. Present the full timeline, emphasize no customer data compromise, and present the revised board notification protocol in writing.
On forecast accuracy, defer to the CFO for methodology detail but own the accountability. "The misses happened on my watch and I have directed specific changes."
Have the covenant sensitivity analysis prepared as a handout. Show the quarterly leverage trajectory to 2.9x by end of FY2026.
If asked about disclosure obligations, defer to General Counsel but confirm that the legal team has assessed materiality and determined no filing is required.
Tone should be: factual, transparent, forward-looking. No defensiveness. Audit committee chairs respect management that surfaces problems, not management that hides them.