AI governance, financial performance and firm value

As firms increasingly integrate artificial intelligence (AI) into strategic decision-making and operations, they face a dual challenge: realizing its economic potential while managing associated risks. AI governance provides the structures and processes needed to address this challenge, yet evidence remains limited on whether such governance generates measurable economic benefits for firms. To address this gap, this study examines the relationships among AI governance, financial performance and firm value. Using panel data from listed firms in Thailand, the study employs partial least squares structural equation modeling to test the proposed relationships. The results show that AI governance is positively associated with financial performance, indicating that effective governance strengthens operational oversight, improves data management and the allocation of AI-related resources, and reduces implementation inefficiencies. Although the direct relationship between AI governance and firm value is not statistically significant, the indirect association through financial performance is positive and statistically significant. This finding indicates that AI governance enhances firm value indirectly by strengthening financial performance. Overall, the findings position AI governance as an organizational capability that translates effective oversight and resource management into stronger financial performance and, ultimately, higher firm value.