Since the global financial crisis of 2008, board members have been expected to actively engage in risk management; however, many directors serve on multiple boards and are overburdened. This study examines the relationship between busy directors and firms’ financial distress risk (FDR). Using a US sample from 1999 to 2024, we find that busy directors increase FDR. This suggests that they are less effective in monitoring, which leads to excessive risk in the form of higher financial distress. This relationship persists across diverse specifications in which we adopt different measures for financial distress and busy directors, use additional control variables, and incorporate firm fixed effects. Our main results remain consistent when subjected to robustness analysis using generalized method of moments (GMM), two-stage least squares (2SLS), entropy balancing, and propensity score matching (PSM). Furthermore, while channel analysis indicates that CEO entrenchment and the number of analysts following a firm do not significantly change the core relationship between board busyness and financial distress, the effect of busy boards on FDR persists only under low competition. This effect disappears when competition (i.e., external monitoring) is high, suggesting that strong external monitoring mitigates the negative impact of director busyness. Moreover, busy directors increase FDR when firms operate under high financial constraints. In contrast, this relationship becomes insignificant under low financial constraints. Finally, the additional analysis results show that the joint effect of a busy board and FDR lowers financial performance. Our findings suggest important implications for investors and policymakers.