Strategic Audit Guidelines

I. Current Situation

– A. Current Performance

– How did the corporation perform the past year overall in terms of return on investment, market share, and profitability?

– B. Strategic Posture

– What are the corporation's current mission, objectives, strategies, and policies?

– Are they clearly stated or are they merely implied from performance?

– Mission: What businesses) is the corporation in? Why?

– Objectives: What are the corporate, business, and functional objectives? Are they consistent with each other, with the mission, and with the internal and external environments?

– Strategies: What strategy or mix of strategies is the corporation following? Are they consistent with each other, with the mission and objectives, and with the internal and external environments?

– Policies: What are they? Are they consistent with each other, with the mission and objectives, with the strategies, and with the internal and external environments?

– Do the current mission, objectives, strategies, and policies reflect the corporation's international operations — whether global or multi-domestic?

II. Corporate Governance

– A. Board of Directors

– Who are they? Are they internal or external?

– Do they own significant shares of stock?

– Is the stock privately held or publicly traded? Are there different classes of stock with different voting rights?

– What do they contribute to the corporation in terms of knowledge, skills, background, and connections? If the corporation has international operations, do board members have international experience?

– How long have they served on the board?

– What is their level of involvement in strategic management? Do they merely rubber-stamp top management's proposals or do they actively participate and suggest future directions?

– B. Top Management

– What person or group constitutes top management?

– What are top management's chief characteristics in terms of knowledge, skills, background, and style? If the corporation has international operations, does top management have international experience? Are executives from acquired companies considered part of the top management team?

– Has top management been responsible for the corporation's performance over the past few years? How many managers have been in their current position for less than 3 years? Were they internal