The influence of board size on intellectual capital disclosure by Kenyan listed firms

The influence of board size on intellectual capital disclosure by Kenyan listed firms Purpose – The purpose of this paper is to examine the effect of board size on firms disclosing more, rather than less, strategic and tactical intellectual capital resources using the top 26 of the 52 firms ranked by the Nairobi Stock Exchange for market capitalization in 2002 and in 2003. This study identifies intellectual capital disclosure by three separate categories: internal capital, external capital, and human capital. Hence, this study examines the influence of board size on six disclosure outcomes. Design/methodology/approach – The study develops hypotheses using the resource dependency theory. Using content analysis for data generation, this study classifies firms that disclose more versus those that disclose less, using the mean for all firms for each disclosure outcome. Findings – Using logistic regression, the study examines the influence of board size on each disclosure outcome and finds that firms disclosing more tactical internal capital and more strategic human capital have larger boards. Practical implications – The findings provide insights into how a larger board size can help boards to overcome skill deficiencies in making more discretionary disclosure related to future earnings. Originality/value – This study analyses the influence of the board size on six aspects of intellectual capital disclosure. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Intellectual Capital Emerald Publishing

The influence of board size on intellectual capital disclosure by Kenyan listed firms

Journal of Intellectual Capital, Volume 11 (4): 15 – Oct 19, 2010

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Publisher
Emerald Publishing
Copyright
Copyright © 2010 Emerald Group Publishing Limited. All rights reserved.
ISSN
1469-1930
DOI
10.1108/14691931011085650
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to examine the effect of board size on firms disclosing more, rather than less, strategic and tactical intellectual capital resources using the top 26 of the 52 firms ranked by the Nairobi Stock Exchange for market capitalization in 2002 and in 2003. This study identifies intellectual capital disclosure by three separate categories: internal capital, external capital, and human capital. Hence, this study examines the influence of board size on six disclosure outcomes. Design/methodology/approach – The study develops hypotheses using the resource dependency theory. Using content analysis for data generation, this study classifies firms that disclose more versus those that disclose less, using the mean for all firms for each disclosure outcome. Findings – Using logistic regression, the study examines the influence of board size on each disclosure outcome and finds that firms disclosing more tactical internal capital and more strategic human capital have larger boards. Practical implications – The findings provide insights into how a larger board size can help boards to overcome skill deficiencies in making more discretionary disclosure related to future earnings. Originality/value – This study analyses the influence of the board size on six aspects of intellectual capital disclosure.

Journal

Journal of Intellectual CapitalEmerald Publishing

Published: Oct 19, 2010

Keywords: Boards; Intellectual capital; Kenya

References

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