This paper reviews the existing literature on IT governance to assess whether IT governance has contributed to delivering business value from IT and if so, how. The conducted literature review has shown the scarce number of studies that focus on why and how effective IT governance may lead to business value. By using a structured literature review analysis, the paper has offered a number of insights to the topic of IT governance: a) provided a systematic definition of effective IT governance based on a multi-dimensional framework, b) listed benefits of effective IT governance, and c) identified mechanisms that lead effective IT governance to those benefits. This paper takes a step towards addressing the ‘why’ and ‘how’ knowledge gaps by synthesising the fragmented knowledge to provide the best that is known about the subject and to identify future research directions.