Corporate Governance and Shareholders’ Value: The Mediating Role of Internal Audit Performance—Empirical Evidence from Listed Companies in Ghana

Dawuda Abudu () and Syed Ahmed Salman
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Dawuda Abudu: School of Business and Management, Lincoln University College, Wisma Lincoln, No. 12-18, Jalan SS 6/12, Petaling Jaya 47301, Selangor Darul Ehsan, Malaysia
Syed Ahmed Salman: School of Business and Management, Lincoln University College, Wisma Lincoln, No. 12-18, Jalan SS 6/12, Petaling Jaya 47301, Selangor Darul Ehsan, Malaysia

JRFM, 2025, vol. 18, issue 9, 1-21

Abstract: The relationship between corporate governance and shareholder value remains a subject of contention, with studies reporting positive, weak, or context-dependent effects. Drawing on multiple theoretical perspectives, this study examines how and when corporate governance influences shareholder value, with a focus on the mediating role of internal audit performance (IAP) among listed companies on the Ghana Stock Exchange. Using an explanatory design and a sample of 300 respondents (74.3% response rate), we employed partial least squares structural equation modelling (PLS-SEM) to test the relationships. The findings show that corporate governance significantly enhances internal audit performance, which in turn improves shareholder value. In contrast, the direct impact of corporate governance on shareholder value is insignificant. Bootstrapped tests confirm a near-full mediation effect, positioning internal audit performance as the critical engine that translates governance structures into value creation. These results help clarify the inconsistent findings on the relationship between corporate governance and shareholder value in emerging markets. We provide regulators, boards, and management with a roadmap for strengthening internal audit capabilities and aligning audit and governance functions with corporate objectives to maximize shareholder value.

Keywords: corporate governance; internal audit performance; shareholder value; risk management; compliance management; internal resource management; technical expertise; synergy (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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