The role of corporate governance in intellectual capital disclosure

Mishari M. Alfraih (Department of Accounting, The Public Authority for Applied Education and Training, Kuwait City, Kuwait)

International Journal of Ethics and Systems

ISSN: 2514-9369

Publication date: 12 February 2018

Abstract

Purpose

This paper aims to examine the influence of corporate governance mechanisms on the extent of intellectual capital (IC) disclosure among companies listed on the Kuwait Stock Exchange (KSE).

Design/methodology/approach

A content analysis approach was used. The association between dependent and independent variables was examined using multiple regression analysis.

Findings

The results suggest that corporate governance mechanisms strongly influence the quantity of IC information disclosed in the annual reports of KSE-listed companies. Specifically, companies with larger boards, higher proportions of external directors and higher blockholder ownership are associated with higher levels of IC disclosure.

Practical implications

The findings highlight the effectiveness of corporate governance mechanisms in promoting IC disclosure. They are a useful guideline for regulators, company management and shareholders regarding corporate governance mechanisms that influence the extent of IC disclosure. Given recent Kuwaiti Government initiatives to promote transparency and the informational efficiency of the stock market, this research provides timely empirical evidence in support of these initiatives.

Originality/value

In the frontier market context, the study contributes to a theoretical understanding of the corporate reporting of IC and the relationship between IC disclosure and corporate governance mechanisms. The findings provide empirical support for the theoretical notion that effective corporate governance plays an important role in increasing the extent of voluntary disclosure.

Keywords

Citation

Alfraih, M. (2018), "The role of corporate governance in intellectual capital disclosure", International Journal of Ethics and Systems, Vol. 34 No. 1, pp. 101-121. https://doi.org/10.1108/IJOES-02-2017-0026

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Publisher

:

Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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