A global review of the literature on and proxies of busy boards and audit committees

Abstract

PurposeThis study comprehensively reviews the global literature on busy boards and audit committees.Design/methodology/approachSix eight articles on busy boards and audit committees from prominent accounting journals are reviewed and analyzed under the “reputation” and “busyness” premise.FindingsMost studies advocating the “reputation” hypothesis have the consensus that busy directors have their benefits (knowledge spillovers), particularly regarding sharing their in-depth knowledge, experiences and expertise. This phenomenon is pronounced for younger and IPO firms, which have high advising and financing needs. From the “busyness” perspective, busy directors are too overboard in carrying out their duty effectively and responsibly.Practical implicationsThis study identifies future research avenues on busy boards/audit committees and suggests that policymakers and regulators should limit the number of board appointments.Originality/valueThis is the first study to extensively amalgamate research on busy directors and audit committees. It reveals the various proxies used to measure the busyness of board and audit committee members and the consequences of busyness.