The Impact of Corporate Governance Integration and Organizational Innovation on Value Creation and Financial Performance of Listed Companies in Iran

Abstract

This study investigates the effect of corporate governance integration and organizational innovation on value creation and financial performance among Iranian listed companies. The research aims to identify how the alignment of governance mechanisms—such as board structure, ownership concentration, and audit independence—with innovation practices contributes to sustainable value creation. A quantitative approach was adopted using secondary financial data from 124 firms listed on the Tehran Stock Exchange over the period 2019–2024. Governance quality was measured through board composition and shareholder dispersion, while innovation was evaluated through R&D intensity and new product development indices. Financial performance indicators included return on assets (ROA), return on equity (ROE), and Tobin’s Q. Using panel data regression and structural equation modeling (SEM), the results reveal that the synergy between governance quality and innovation intensity significantly enhances firm value and profitability. Moreover, innovation plays a mediating role between governance practices and financial performance, confirming that effective corporate governance stimulates organizational innovation, which in turn drives value creation. The study provides practical insights for regulators and managers in emerging markets, highlighting the importance of integrated governance frameworks that support innovation-driven financial sustainability.