On the role of internationalization of firm-level corporate governance: The case of audit committees

Research Question/IssueMotivated by the agency theory and the findings of linguistic studies, we analyze the association between the internationalization of a firm's audit committee and its corporate governance.Research Findings/InsightsBased on data from 2159 publicly traded European firms from 15 countries for the period 2000–2018, we find that firms with foreign directors on their audit committees are associated with lower financial reporting quality. The association is mitigated by stronger country-level investor protection and a higher similarity among intra-committee languages. We further find that foreign directors on the audit committee are related to stock prices being less informa…