Building a Culture of Excellence at Kimberly-Clark Corporation
Company Headquarters — United States
Number of Countries Operates in — 35
Number of Employees in Company — 43,000
Industry — Consumer Packaged Goods
Annual Revenues — US$19.7 billion (as of 2014)
Number in IA Function — 30+
Number of Years IA Function Has Been in Place — 40+
IA Director/CAE Reports to — Senior Vice President and Legal
“We cannot just think we understand the business; we have to know that we do. We have to shape the audit plan to make sure we deliver impact and drive results.”
- Stephen Frimpong
Every day, one-quarter of the world’s population purchases a Kimberly-Clark product. Founded 143 years ago, the global consumer packaged goods (CPG) company today employs 43,000 in 56 countries, with manufacturing operations in 35 countries, and sells its iconic brands in more than 175 countries. In 2014, Kimberly-Clark Corporation (K-C) reported sales of US$19.7 billion.
K-C helps people live cleaner, more organized and healthier lives, and its internal audit team is also focused on wellness – the company’s wellness. “Audit is a wellness check, not a test,” says Stephen Frimpong, vice president of internal audit at K-C for the past five years. “We provide feedback in terms of the overall health of the organization, and how to improve and add value to the business.”
This new attitude toward internal auditing represents a significant change to the internal audit landscape at K-C in the past five years. The audit team consists of 33 professionals, with teams in Asia-Pacific, Latin America and North America. The mission of the internal audit organization is to provide assurance on controls across K-C and bring in talent as a pool for future leaders for the business. Since Frimpong joined K-C half a decade ago, the team has helped to transform the way internal audit interacts with business units and leaders throughout K-C.
A Team in Transition
Similar to the internal audit team, K-C itself has been undergoing a transition – becoming a more global company, but with a regional presence that allows employees to shape their own destiny and work environment. The result is not only greater job satisfaction throughout K-C, but also greater commitment to the company; this, in turn, has spurred growth and expansion for K-C.
“In the midst of all this change, we knew we needed to step back and redesign the internal audit function,” says Frimpong. “We are now regionally focused and regionally shaped. This gives us greater connection to the business, as well as more alignment with various cultures and languages.”
With this approach, the internal audit team can conduct risk assessments at a regional level, making the assessments more detailed and accurate. Although it takes time – about four months, on average – to collect, analyze and synthesize the data, the benefits are clear.
The regional approach ensures that internal audit is well known throughout the regions it serves. Frimpong says, “We have a seat at the table, and business leaders proactively contact us to become involved in new projects or initiatives. We cannot just lock ourselves in a room and come up with a plan,” he says. “We cannot just think we understand the business; we have to know that we do. We have to shape the audit plan to make sure we deliver impact and drive results. You simply cannot underestimate the power of engagement.”
Hiring for the Future
“To make sure we keep up with the needs and expectations of our K-C stakeholders, we carefully consider the profiles of the individuals we hire,” Frimpong says. “We want people who have the ability to deliver ‘critical-thinking’ – who think about risk in many different, specific ways. On the other hand, we also want ‘elastic thinking’ – those who can consider issues more broadly and connect to the big picture.”
Driving Cultural Change
“The internal audit team at K-C impacts cultural change by performing impactful audits that transform the way we look at risk management in the company. Our objective and focus is to conduct audits that affect the risk landscape and support a culture of accountability,” says Frimpong
Training and education is another aspect of cultural renewal at K-C. The internal audit department’s Centers of Excellence, as well as the Internal Audit University, provide training and mentoring for internal auditors to become subject-matter experts in a range of topics, from SOX to audit technology
“Technology is a primary focus for us,” Frimpong says. “When it comes to big data, we are looking forward to a future when technology is a true enabler for internal audit. Our auditors are highly engaged in the evolution of the audit work at K-C. We rotate auditors regionally on a regular basis, which is an exciting way to build expertise and share knowledge and cultural insights across teams.”