The Influence of Audit Committee Tenure on Oversight Effectiveness and Corporate Governance Quality

Posted: Jan 24, 2022

• Lila Armstrong
• Spencer Kelly
• Fiona Myers

Abstract

The composition and characteristics of audit committees have long been recognized as critical determinants of corporate governance quality. While extensive research has examined factors such as financial expertise, independence, and meeting frequency, the specific influence of audit committee member tenure remains comparatively underexplored and conceptually ambiguous. This research addresses this gap by developing a comprehensive theoretical framework that conceptualizes tenure not merely as temporal duration but as a multidimensional construct with complex implications for oversight effectiveness. Traditional governance literature has often presented conflicting perspectives on tenure, with some scholars advocating for regular rotation to maintain objectivity and others emphasizing the value of accumulated institutional knowledge. Our study moves beyond this binary debate by examining how tenure interacts with other committee characteristics and organizational contexts to produce varying governance outcomes. We posit that audit committee tenure represents a dynamic equilibrium between competing governance imperatives: the need for fresh perspectives and critical distance versus the benefits of deep organizational understanding and established working relationships. This research examines how this equilibrium evolves over time and under what conditions different tenure patterns optimize governance quality.