This study empirically tested a research model and hypothesis extracted and based on IT governance and knowledge sharing theories. In this study we targeted CIO and IS managers to find the effects of the degree of knowledge sharing between CEO and CIO regarding five areas of IT governance decision-making: IT principles, IT architecture, IT infrastructure, business application needs, and IT investment and prioritization, on IT and business alignment. Additionally we studied the effects of business alignment on the effectiveness of information systems. Results showed that the degree of knowledge sharing in CEO and CIO on IT principles, IT infrastructure, IT investment and prioritization had a positive influence on IT and business alignment, ultimately showing a positive influence on the effectiveness of information systems. This research has shown that fording the preferable relationship between IT and business affected by performing high quality decision making based on knowledge sharing and consequently it also is a basis to provide a positive influence to the effectiveness of the information system.