Superior Governance Without Audit Committees

ICFAI University Working Paper

9 Pages Posted: 9 Nov 2004

See all articles by Shann Turnbull

Shann Turnbull

International Institute for Self-Governance; Sustainable Money Working Group; New Garden City Alliance


Audit committees have not worked and cannot be relied upon to protect investors unless they become a separate board elected by investors on a democratic rather than a plutocratic basis. A separate "watchdog" board elected by minority investors provides superior protection for investors. It also reduces board costs while protecting the reputation and integrity of directors and any dominant shareholder, reduces the need for prescriptive stock exchange rules on board composition and structure or prescriptive legislation on audit processes.

This article reviews the origins of audit committees and how they are now expected to carry out functions for which they were not designed. The reasons why a board audit sub-committee have not and cannot work are considered. The use of separated elected officers to carry out the functions of an audit committee in various non-Anglophone countries is reviewed. Detailed consideration of a form developed by the author in Australia is provided with a variant proposed in the Australian Parliament.

Keywords: Audit committee, corporate governance, watchdog board

JEL Classification: G34, G38, K22, L22, M42

Suggested Citation

Turnbull, Shann, Superior Governance Without Audit Committees. ICFAI University Working Paper, Available at SSRN: or

Shann Turnbull (Contact Author)

International Institute for Self-Governance ( email )

PO Box 266 Woollahra
Cell: +61418222378
Sydney, New South Wales 1350
+61293278487 (Phone)
+61280655905 (Fax)

SKYPE: shann.turnbull

Sustainable Money Working Group ( email )

Holyoake House
Hanover Street
Manchester, M60 0AS
United Kingdom

New Garden City Alliance ( email )

113 Guinness Court
London, UK, SE1 3TA
United Kingdom
+44 207 378 1902 (Phone)


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