Intellectual Capital Communication: Evidence from Social and Sustainability Reporting

Abstract

Purpose -The purpose of this study is to investigate the level and quality of intellectual capital information communicated through social and sustainability report for a sample of 37 Italian listed company over two years (2005 and 2006).Design/methodology/approach -The study use the resource based theory to explain the relationship between corporate social responsibility and intellectual capital. Content analysis is applied through a multidimensional framework composed by three main disclosure profiles (time orientation, nature and type of information) which permits to analyse in depth the quality of intellectual capital information.Findings -The results highlight significant and increasing presence of intellectual capital information in CSR reports which is communicated principally in non financial, quantitative and non time specific terms. Human capital is the most reported category followed by relational and organisational capital. The results indicate there are many similarities between the two typology of report contributing to the ongoing debate on corporate reporting practices.Practical implications -The results suggest that the integration between IC report and CSR report is a plausible issue and that could be useful to enhance the transparency and the understanding of company processes and activities both for internal and external stakeholders.Originality/value -Very few studies have analysed the intellectual capital in CSR report in atheoretical and mono-dimensional way. Moreover the resource base theory has been scarcely applied to explain the disclosure of intellectual capital even if there are several similarities between the two perspectives.Keywords: intellectual capital, disclosure, social and sustainability reporting, resource based view, corporate social responsibility Article Type: research paperThe authors are grateful to James Guthrie for the discussion about the idea of this paper, to the participants at the "4 th Workshop on visualising, measuring, and managing intangibles and intellectual capital" (Hasselt, 2008) and at the "XIII Workshop of AIDEA study group on communication to financial markets" (Bari, 2009 2 IntroductionIn the last decade, in the field of intellectual capital (IC) research, most attention was placed on companies' intellectual capital voluntary disclosure (ICVD) analysis to assess companies attitude in reporting such information. In general voluntary disclosure is an important aspect of the overall company communication process because it permits to enhance the level of company transparency, to differentiate the company from their competitors and to generate positive financial and social effects. Voluntary disclosure can be defined as the information that is not required by laws or regulations or the information that goes beyond the minimum required in a mandatory area (Williams, 2008). This information can be made through public and/or private communication channels which have different recipients and different communication objectives. Public channels, s...

Do Corporate Social Responsibility and Corporate Governance Influence Intellectual Capital Efficiency?

“…Finally, the third category of IC has received different definitions by the prior literature. In particular, some authors refer to relational capital (e.g., References [18][19][20]27]), while other adopt the concept of social capital [14,28,51]. Indeed, consistent with Youndt and Snell [14] (p. 338), the two concepts are convergent as social capital [69,70] in organizational and sociological theories is "virtually identical" to what Bontis [53] called relational capital.…”

“…However, very few studies have analyzed and empirically tested the relevance of CSR for IC development (e.g., References [15,27,28,47,48]). Most of the prior research has deepened the relationship between CSR and IC, mainly from an accounting point of view, by focusing on the convergence of CSR reporting and IC reporting (e.g., References [16][17][18][19][20][21][22][23]25]). In his manifesto for transformational IC research, Dumay [26] advises researchers to face new challenges in IC studies by reconsidering the reporting approach to IC, thus soliciting an increasing interest in managing IC and in IC praxis.…”

“…With regard to the relationship between CSR and IC, researchers have specifically shown a prevalent interest in the accounting implications of both CSR and IC reporting (e.g., References [16][17][18][19][20][21][22][23]). Accordingly, the prior studies adopt content analysis as the main instrument of investigation and fail to consider the managerial implications related to the impact of CSR on IC development.…”

Do Stakeholder Expectations Shape Organizational Intellectual Capital Reports?

“…Intellectual capital has become the key driver of value creation for all kind of organizations, and ICMMR systems, originally conceived for for‐profit organizations, are increasingly employed in the public and NPOs sector (Kong, ). In the paper, we look at the ICR with the same lens used generally for investigating the CSR report, that is, from a stakeholder accountability perspective, given the convergence points between CRS and IC statement, as underlined by many studies focused on the overlapping of the processes (Demartini and Paoloni, ) and of the elements included in both reports (Cordazzo, 2005) and on the disclosure of IC elements in the CSR reports (Passetti et al ., ; Oliveira et al ., 2010)…”

CSR and Financial Performance: Trick Or Treat? A Longitudinal Study on Holistic CSR Practices

“…These data are provided by firms in a clear and verifiable manner, similar to economic and financial data, in order to provide a comprehensive picture concerning their sustainable efforts (KPMG, 2008). Further academic research has also highlighted the benefits of voluntary and consistent disclosure (Allegrini & Greco, 2011;Cinquini et al, 2012) of non-financial information related to intellectual capital, with a peak focus on human capital, that can derive from increased transparency regarding operations, as well as improved relationships with various stakeholder groups (Passetti et al, 2009;Robb et al, 2001). Strong CSR management is viewed either as a competitive asset or a liability for firms that still often present irresponsible actions and behavior (Mirvis & Googins, 2006;Wu, 2014).…”