This study aims to look at how corporate governance, specifically internal mechanisms of corporate governance, affects the value relevance of reported accounting earnings of listed firms on the Ghana Stock Exchange.
The study used the Ohlson valuation model with a panel dataset, employing pooled regression analysis with random effects.
The findings indicate that net asset value per share is value relevant on the Ghanaian market, and even more so when the board size is small or the CEO also doubles as the board chair. Board independence as captured by the percentage of non‐executive directors on the board is relatively irrelevant in the market valuation of shares, and when relevant has a negative effect.
The value relevance of accounting information on the Ghanaian financial market, by implication, requires that the necessary rules and supervision regarding financial reporting must be provided to ensure that the information that reaches the investing public is therefore a true reflection of the underlying economic value of firms, so that capital allocation decisions based on these sources will be efficient.
