At The Schwan Food Company, the establishment of an internal audit department (IAD) was
driven by personnel changes at the top executive levels. The first non-family-member CEO, M.
Lenny Pippin, came on board with nearly 30 years experience in the food industry. At about the
same time, David Kidwell, Dean of the Carlson School of Management at the University of
Minnesota, began his service as the new audit committee chairman. Three years later, Tracy Burr,
formerly a partner at Ernst & Young as well as at Deloitte & Touche, was hired as the new CFO.
This new leadership helped the company to slowly make changes, such as an improved governance
structure with the establishment of an IAD, but at the same time allowed it to retain the positive
aspects of the company’s corporate culture, including a high standard of ethics, values, and hard
work. Thus, the creation of the IAD was part of a company-wide effort to improve the control and
governance structures for a privately-held, but global, company that has the goal to double its size
in five years.