From CEO to chairman: Does leadership legacy influence the ESG–audit fees nexus? Evidence from UK FTSE 350 companies

Purpose – This study aims to examine whether the chairman's status as a former chief executive officer (ex-CEO) moderates the relationship between environmental, social and governance (ESG) performance and audit fees in UK companies. It explores how leadership legacy shapes the extent to which ESG engagement is reflected in audit pricing. Design/methodology/approach – Using a panel dataset of the Financial Times Stock Exchange (FTSE) 350 firms from 2017 to 2024, the study investigates the ESG–audit fee nexus. Audit fees serve as a proxy for audit effort and perceived audit risk, while ESG performance is measured using overall and pillar scores. A moderation model assesses the effect of the chairman's ex-CEO status. Findings – Results show a positive correlation between ESG performance and audit fees, indicating that greater ESG involvement increases reporting complexity and audit scrutiny. However, when the chairman is a former CEO, this relationship weakens, suggesting that leadership legacy influences auditors' risk assessments. Leadership continuity, such as the presence of an ex-CEO chairman, may reduce how auditors evaluate risk. Research limitations/implications – The study focuses on FTSE 350 firms between 2017 and 2024. Future research could extend the analysis to multi-country settings and alternative audit quality measures. Practical implications – For boards, the findings raise questions about balancing continuity and independence during leadership succession. For auditors and regulators, the results highlight how governance structures influence audit pricing and the credibility of ESG reporting. Originality/value – This study links ESG performance, leadership legacy and audit pricing, showing that ex-CEO chairmanship weakens the ESG–audit fee relationship.