Competitiveness and disclosure of intellectual capital: an empirical research in Portuguese banks

Abstract

If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.*Related content and download information correct at time of download. Purpose -The purpose of this paper is to investigate the level of intellectual capital (IC) awareness among Portuguese bank managers and which disclosure techniques are most common. The annual report is regarded by some authors as the most important vehicle of information about banks' affairs because of some specific characteristics of banks' activities. However, organizations are increasingly using their webpages to disclose a broad spectrum of information. The objectives of this study are twofold: to investigate how Portuguese bank managers perceive the impact of IC disclosure on the bank's competitiveness; and to assess the extent to which Portuguese banks voluntarily report their IC in annual reports vs webpages. Design/methodology/approach -The methodology involved in the exploratory study includes the collection of secondary data -annual reports and websites -collected from the 28 banks operating in Portugal, and semi-structured interviews from 25 banking managers. Content analysis is applied using a constructed index based on two European frameworks -Intellectus and InCaS -slightly modified to take into consideration the peculiarities of the sector. Findings -Results show higher level of IC disclosure in annual reports than that provided in websites. Human capital and structural capital are the most reported category in annual reports and, conversely, the disclosure of relational capital is higher in the webpages. Findings are found similar in comparison to various other studies on the subject which reveal very low level of IC disclosure, not yet receiving priority from the mentors of banks. Interviews reveal that not many managers recognize the need and significance of measuring and reporting IC, although it is recognized as a driver of competitiveness. For protecting business confidentiality, banks do not want to report information of sensitive nature.Research limitations/implications -The analysis is limited to a single sector. Future research can expand to other industries (e.g. manufacturing, technological, services) to enable a more comprehensive understanding of IC disclosure in Portugal. The cross-sec...

The intangible index in bank management

“…Our study confirms first that the level of the disclosure of intangible assets is not high for Spanish financial institutions, which is in line with previous findings. Likewise, Ferreira et al (2017) found a global index in the annual report of 36.93% and of 28.60% in corporative websites. Likewise, Munthopa (2013) found an intellectual capital disclosure index of 32%, corresponding to 40% for internal capital category, 32% for external capital, and the rest 28% for human capital.…”

“…4). Continuing the important line of work that has already been started by classical authors such as Williams (2001) and, more recently, by authors such as Ferreira et al (2017), in Table1 it has been incorporated the most relevant aspects of this topic.…”

“…Banks are a type of organization were voluntary disclosures is a relatively unknown practice, despite persistent social demand for transparency due to the unease that arises after an economic crisis (Kohlbeck, 2004;Bravo, Abad & Trombetta, 2009;Abdifatah & Mubaraq, 2012;Chen, Danbolt & Holland, 2014;Ferreira, Ribeiro, Gomes-Rodrígues & Muñoz, 2017). They are considered responsible, to high degree, for the recession and, for this reason, additional information is required to explain their behaviour not only on an economic level but also from an ethical point of view.…”

“…They are considered responsible, to high degree, for the recession and, for this reason, additional information is required to explain their behaviour not only on an economic level but also from an ethical point of view. Following Ferreira et al (2017), the financial turbulence in this sector is a key issue to managing information, transparency, and reliability as a way to obtain trust and security.…”

“…Some recent analysis of disclosure of intangible assets in financial institutions can be found in the following papers. Ferreira et al (2017) analysed the Portuguese bank´s policies regarding the disclosure of intangible assets in annual reports and corporate websites, and concluded that the former hold more information of this kind. Munthopa (2013) studied the scope of the voluntary disclosure of intellectual capital of commercial banks in Malawi.…”