In the article “Are Intergroup Differences Between the Audit Committee and the Rest of the Board Associated with Monitoring Effectiveness?”, authors Marleen Willekens, Katelijne Langendijk, and Lieselot Vankerckhoven address an important question in corporate governance. They ask whether differences in background, expertise, and experience between the audit committee and the rest of the board of directors improve the board’s ability to monitor financial reporting and internal controls. Published in Accounting, Organizations and Society in 2025, their study challenges the common belief that greater similarity among board members is always beneficial for oversight and decision-making.
Drawing on theories of social identity and upper echelons, the authors suggest that diversity between subgroups of the board can reduce groupthink and increase vigilance. Instead of seeing difference as a barrier to communication, they explore how dissimilarity between the audit committee and the broader board may create a constructive tension that strengthens monitoring. The audit committee, as the primary gatekeeper of financial reporting quality, may perform more effectively when its members bring unique perspectives that are not duplicated elsewhere on the board.
The authors analyze data from 815 U.S. firms over the period from 2015 to 2019. They measure intergroup differences in five dimensions: functional background, education, board tenure, independence, and gender. They then assess how these differences relate to three key indicators of monitoring effectiveness. These include the presence of material weaknesses in internal control over financial reporting, the likelihood of financial restatements, and the selection of a Big 4 audit firm. Their results show that certain forms of intergroup dissimilarity especially in function and tenure are associated with stronger oversight outcomes.
One key finding is that audit committees whose members have different professional backgrounds from the rest of the board are less likely to be associated with internal control weaknesses. Functional dissimilarity appears to enhance the committee’s ability to detect and question financial risks. Members with distinct perspectives, such as expertise in regulation, finance, or operations, may identify control problems that a more homogeneous group might overlook. This suggests that a blend of complementary experience can improve scrutiny and reduce blind spots in governance.
Another notable result concerns board tenure. The authors find that when audit committee members differ from the rest of the board in how long they have served, companies are less likely to restate their financial reports. This may reflect the benefits of combining fresh insights with institutional memory. Newer members may challenge assumptions or identify emerging risks, while longer-serving members bring context and continuity. Together, this diversity in tenure strengthens the committee’s ability to spot inconsistencies and promote accurate reporting.
The study also examines differences in education and gender but finds less consistent effects on monitoring outcomes. While educational and gender diversity are frequently linked to improved governance in other settings, their influence in this study is weaker. The authors suggest that these forms of diversity may play a greater role in broader strategic discussions rather than the specific technical functions of audit oversight. Alternatively, their effects may be more symbolic than substantive in this context.
To ensure the robustness of their findings, the authors run multiple sensitivity tests. They account for factors such as industry, company size, financial performance, and the presence of a Big 4 audit firm. The results remain stable across these specifications, reinforcing the conclusion that audit committee dissimilarity can enhance board monitoring. These findings have important implications for how companies design their governance structures and how regulators evaluate board effectiveness.
The authors emphasize that diversity is most useful when it is targeted and deliberate. Rather than aiming for diversity for its own sake, firms may benefit from configuring boards with an intentional mix of overlapping and non-overlapping expertise. When audit committees are structured to bring in perspectives that differ from those of the rest of the board, they are more likely to fulfill their monitoring responsibilities with rigor and independence. This insight offers a practical path for improving board oversight without necessarily increasing board size or complexity.
As corporate boards face mounting pressure to address financial complexity, cybersecurity, and ESG risks, this research offers timely and evidence-based guidance. Audit committees, in particular, may strengthen their effectiveness not by mirroring the board, but by diverging from it in meaningful and thoughtful ways.
The full article “Are Intergroup Differences Between the Audit Committee and the Rest of the Board Associated with Monitoring Effectiveness?” by Marleen Willekens, Katelijne Langendijk, and Lieselot Vankerckhoven was published in Accounting, Organizations and Society in 2025 and is available online.