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

Despite research on corporate governance and shareholder value, the tool through which corporate governance translates into shareholder value remains contested. Some studies report a strong relationship between corporate governance and shareholders' Value, while others find weak or context-dependent effects. Drawing on existing theories amidst conflicting literature on the impact of corporate governance on shareholder value, we investigate to explain how and when Corporate Governance Mechanisms drives Shareholders’ Value with specific focus on the Internal Audit Performance among listed Companies on the Ghana Stock Exchange. An explanatory research design was employed, with a sample size of 300, resulting in a response rate of 74.3%. We deployed Partial Least Squares Structural Equation Modelling (PLS-SEM) to test a mediation model in which Internal Audit Performance (IAP) conveys the effects of Corporate Governance Mechanisms onto Shareholders Value. The results demonstrate that Corporate Governance Mechanisms exert a strong positive effect on Internal Audit Performance and the Internal Audit Performance, in turn, has a large impact on Shareholders’ Value, while the direct effect of Corporate Governance on Shareholders’ Value is non‑significant. Bootstrapped tests confirm practically full mediation, suggesting a strong synergy between Corporate Governance and Internal Audit Function in value creation. Our research resolves the empirical puzzle of Corporate Governance–Shareholders’ Value by identifying the Internal Audit Function as the missing governance engine. We offer regulators, management and boards a roadmap for strengthening audit functions to maximise shareholders' Value. We also recommend strategic alignment of internal audit and governance functions with corporate objectives.