Audit Committee Appointments

This study examines determinants of audit committee appointment by comparing characteristics of 262 nonexecutive directors appointed to corporate audit committees between 1995 and 1998 with characteristics of 262 nonexecutive, age‐matched control directors. The likelihood of audit committee appointment is found to increase with the degree of outside director independence, and decrease with compensation committee membership, other committee memberships, and the length of board tenure. Importantly, audit committee appointments are unrelated to the amount of stock owned by directors and the number of other directorship posts they hold. Together, these results highlight several director attributes beyond affiliation that could be important in guiding director decisions and suggest the need for further research toward understanding the quality of audit committee appointments.