Corporate governance and intellectual capital disclosures in CEOs’ statements

Abstract

Purpose The purpose of this paper is to study the influences of corporate governance on intellectual capital disclosures in chief executive officers’ (CEOs’) statements in annual reports. Design/methodology/approach Index score, word count and overall tone of CEOs’ intellectual capital disclosures are calculated to represent the extent, amount and tone of these disclosures, respectively. With a sample of 78 FTSE 100 companies, this paper uses content analysis and empirical analysis to examine the impacts of board size, board composition and shares concentration on the above three measures of CEOs’ intellectual capital disclosures, controlling for company size, profitability and leverage ratio. Findings Empirical results demonstrate a significant positive relationship between board composition and the extent, amount and tone of CEOs’ intellectual capital disclosures and a significant negative relationship between shares concentration and the amount of these disclosures. Originality/value This paper focuses on the impacts of corporate governance on CEOs’ intellectual capital disclosures. It also groundbreakingly measures the tone of CEOs’ disclosures.

Corporate Governance Mechanism on Intellectual Capital Disclosure and Firm Value

“…The existence of independent commissioners in the board of commissioners structure is expected to be able to supervise management, so that management will be more transparent with company information. The results of this study do not support the findings of several previous studies [21] [12] [9] which prove that the existence of independent commissioners will increase the extent of intellectual capital disclosure.…”

“…Most of the research on the factors that influence intellectual capital disclosure is company characteristics, including company size, profitability, leverage, type of industry and company age [11]. Currently, corporate governance is a hot target when looking for determinants of intellectual capital disclosure [12]. Corporate governance establishes a framework for efficiency and honesty, as well as corporate transparency and accountability.…”

Corporate Governance and Disclosure Verifiability as Determinants of Disclosure Tone in the Egyptian Context

“…First, non-executive members can hold a percentage of the company's shareholding which may lead non-executive to be more self-interested and less independent. In addition, non-executive members can sit on the board for long periods of time and this enables them to make close relationships with the other board members and, hence, minimises their independence (Yan, 2017). Accordingly, the higher the number of non-executive members on the board, the more positive disclosure tone.…”

Intellectual Capital Disclosure, Information Asymmetry, Cost of Capital, and Firm Value: Empirical Studies on Indonesian Manufacturers

“…The analysis of intellectual capital disclosure employees equal-weighted index, in which a scoring system that assigns a point of each intellectual capital information sub-category pertaining to any of three categories being considered (Ferreira et al, 2012). The calculation of intellectual capital disclosure index is as follow (Yan, 2017):…”