Purpose – This paper aims to examine the effects of the board of directors’ characteristics on audit fees and to
assess the mediating role of political connections.
Design/methodology/approach – This study uses a data set comprising 714 instances of companies listed
on the Amman Stock Exchange spanning the years 2009–2022. The analysis used ordinary least squares
regression, and to address potential endogeneity issues, the two-stage least squares model was applied.
Findings – The findings show that there are positive relationships between a higher proportion of
independent directors, board financial experience and audit fees. The study also reveals that CEO duality
is negatively associated with audit fees. The outcomes indicate that the positive effects of corporate
board characteristics, such as an increased percentage of independent directors and board financial
expertise, in ensuring trustworthy financial reports are nullified in the presence of politically connected
directors.
Research limitations/implications – This study encourages scholars to delve deeper into the intersection
of corporate governance mechanisms and political connections, particularly in developing markets where such
dynamics are prevalent.
Practical implications – The study’s findings offer valuable insights and practical implications for
policymakers, regulators and corporate managers in Jordan, as well as other developing countries with similar
institutional frameworks. These insights are essential for designing effective corporate governance structures
that protect shareholders. Moreover, the study’s relevance extends beyond Jordan, demonstrating broader
international applicability. Additionally, companies should consider separating the roles of CEO and board
chair to mitigate audit-related risks, particularly in politically-sensitive environments.
Originality/value – While past studies have explored various attributes of corporate boards, none have
specifically examined the connection between board characteristics and audit fees, especially considering the moderating impact of political connections. The research is among the first to address this gap, providing
significant evidence that enriches the existing body of literature.
Purpose – This paper aims to examine the effects of the board of directors’ characteristics on audit fees and to
assess the mediating role of political connections.
Design/methodology/approach – This study uses a data set comprising 714 instances of companies listed
on the Amman Stock Exchange spanning the years 2009–2022. The analysis used ordinary least squares
regression, and to address potential endogeneity issues, the two-stage least squares model was applied.
Findings – The findings show that there are positive relationships between a higher proportion of
independent directors, board financial experience and audit fees. The study also reveals that CEO duality
is negatively associated with audit fees. The outcomes indicate that the positive effects of corporate
board characteristics, such as an increased percentage of independent directors and board financial
expertise, in ensuring trustworthy financial reports are nullified in the presence of politically connected
directors.
Research limitations/implications – This study encourages scholars to delve deeper into the intersection
of corporate governance mechanisms and political connections, particularly in developing markets where such
dynamics are prevalent.
Practical implications – The study’s findings offer valuable insights and practical implications for
policymakers, regulators and corporate managers in Jordan, as well as other developing countries with similar
institutional frameworks. These insights are essential for designing effective corporate governance structures
that protect shareholders. Moreover, the study’s relevance extends beyond Jordan, demonstrating broader
international applicability. Additionally, companies should consider separating the roles of CEO and board
chair to mitigate audit-related risks, particularly in politically-sensitive environments.
Originality/value – While past studies have explored various attributes of corporate boards, none have
specifically examined the connection between board characteristics and audit fees, especially considering the moderating impact of political connections. The research is among the first to address this gap, providing
significant evidence that enriches the existing body of literature.