Authors: Laith Nasrawin 1, 2, *, Abdul Razzak Alshehadeh 3, Iqbal Jebril 4, Haneen A. Al-Khawaja 5, Nasir Albalawee 6
Affiliations:
1School of Law, The University of Jordan, Amman, 11942, Jordan
2School of Law, Al-Zaytoonah University of Jordan, Amman, Jordan
3Faculty of Business, Al-Zaytoonah University of Jordan, Amman, Jordan
4Faculty of Science and Information Technology, Al-Zaytoonah University of Jordan, Amman, Jordan
5Department of Financial Technology and Banking, Faculty of Business, Ajloun National University, Ajloun, Jordan
6Department of Law, Faculty of Law, Jadara University, Irbid, Jordan
This study investigates the role of governance mechanisms — including the Board of Directors, Audit Committee, Compensation Management, Internal Audit, and External Audit — in reducing agency costs and promoting legality and sustainable growth in industrial companies listed on the Amman Stock Exchange. The study included all 53 listed industrial companies as the research sample. Financial reports and statements from the period 2018 to 2022 were analyzed using statistical methods, with a focus on regression analysis to test the research hypotheses. Previous studies have reported mixed results regarding the relationship between governance mechanisms, agency cost reduction, legality, and financial performance. The findings of this study show clear evidence that governance mechanisms have a significant positive effect on reducing agency costs and supporting sustainable growth. These results highlight the importance of strengthening corporate governance practices to achieve better financial outcomes and ensure legal compliance.
Corporate governance, Agency costs, Sustainable growth, Governance mechanisms, Financial performance
https://doi.org/10.21833/ijaas.2025.05.022
Nasrawin, L., Alshehadeh, A. R., Jebril, I., Al-Khawaja, H. A., & Albalawee, N. (2025). The impact of governance measures on agency cost reduction, legality, and sustainable growth. International Journal of Advanced and Applied Sciences, 12(5), 230–241. https://doi.org/10.21833/ijaas.2025.05.022