Exploring voluntary external disclosure of intellectual capital in listed companies. An integrated intellectual capital disclosure conceptual model
| Date | 09 January 2017 |
| DOI | https://doi.org/10.1108/JIC-01-2016-0019 |
| Pages | 149-169 |
| Published date | 09 January 2017 |
| Author | Elisa Giacosa,Alberto Ferraris,Stefano Bresciani |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & Finance,Accounting/accountancy,Behavioural accounting |
Exploring voluntary external
disclosure of intellectual capital
in listed companies
An integrated intellectual capital disclosure
conceptual model
Elisa Giacosa
Department of Management, University of Torino, Torino, Italy
Alberto Ferraris
Department of Management, University of Torino, Torino, Italy and
Graduate School of Economics and Management, Ural Federal University,
Yekaterinburg, Russia, and
Stefano Bresciani
Department of Management, University of Torino, Torino, Italy
Abstract
Purpose –The purpose of this paper is to create a conceptual model that practically assists companies to
produce an effective voluntary external intellectual capital disclosure (ICD) and valorises both the company’s
and the stakeholders’role. It illustrates the relationship among voluntary ICD mechanisms and it takes into
consideration the feedback mechanism from external stakeholders.
Design/methodology/approach –Nielsen and Madsen’s (2009) study constitutes the framework of the
conceptual model, as it refers to a “sender to receiver”model, which is particularly useful for the research.
Findings –An effective ICD may only be achieved through a com bination of decisions taking into
account each individua l company’s needs and those of stakeholders’ones. In addition, the dimensions on
which the conceptual mode l is based are already in use i n other widespread disc losure models, and this
favours the company.
Research limitations/implications –Limitations concern design features, recipients and validity of the
conceptual model. In terms of theoretical implications, the model emphasizes an “integrated ICD”approach;
in addition,the model is based on some dimensions whichcharacterize widespread and generalcommunication
models already in use.
Practical implications –First, this relates to the production of an effective ICD when considered as
“one-way information”, from the company to the stakeholders. Second, this relates to the interaction between
the company and its stakeholders, within a dyadic exchange.
Originality/value –The conceptual model is based on some dimensions which characterize widespread and
general communication models already in use, which in the model are applied to ICD. Therefore, companies
may favour making an ICD, as they are already confident and familiar with these dimensions.
Keywords Stakeholders, Intellectual capital, Disclosure, Intellectual capital disclosure, Listed companies,
Voluntary external disclosure
Paper type Conceptual paper
1. Introduction
The communication process allows a company to interact with its stakeholders (Meigs et al.,
2001). They need an open, honest, transparent and comprehensive communication strategy
(Giacosa, 2012; Nielsen and Madsen, 2009) for evaluating the company’s economic and
business activity (Strathern, 2000) and the consequent supply of resources. In light of some
well-publicized accounting scandals, such as those of Enron and Parmalat, the need for
transparent and comprehensive communication has never been more pressing. Indeed, the
“lack of innocence”(Strathern, 2000) caused such major financial misdemeanours.
Journal of Intellectual Capital
Vol. 18 No. 1, 2017
pp. 149-169
© Emerald PublishingLimited
1469-1930
DOI 10.1108/JIC-01-2016-0019
Received 31 January 2016
Revised 20 July 2016
2 September 2016
4 September 2016
18 September 2016
Accepted 18 September 2016
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1469-1930.htm
149
Integrated
intellectual
capital
disclosure
Within the communication process, the company has to focus on disclosure, revealing
information that was previously secret or unknown (Dumay, 2016) about its assets and
resources. Among them, intellectual capital (IC) represents a relevant intangible asset
(Blair and Wallman, 2001; Goldfinger, 1997). Therefore, one of the dominant research topics
in IC is the production and dissemination of intellectual capital disclosure (ICD), which is
particularly relevant for companies characterized by significant levels of intangible assets
(Gelb, 2002). The relevance of ICD is confirmed in the recent and wide-ranging literature on
the topic. Marzo and Scarpino (2016), for example, explained how ICD allows a company to
focus on all categories of human, organizational (structural) and relational capital. In
addition, Chiucchi and Montemari (2016) focussed their attention on how and why a
company produces an effective ICD. Researchers often use ICD and IC reporting
interchangeably, despite the fact that they are not synonymous. Referring to IC, disclosure
refers to “the revelation of information that was previously secret or unknown”, while
reporting presents a “detailed periodic account of a company’s activities, financial condition
and prospects that is made available to shareholders and investors”(Dumay, 2016).
In the context of ICD, the literature focussed on several means for its dissemination, in
particular on annual reports (Abeysekera and Guthrie, 2005) and different ICR frameworks
(Mouritsen et al., 2001, 2003). Despite their limitations, annual and IC reports have been
considered an appropriate means for ICD dissemination (Adams, 2015; International
Integrated Reporting Council, 2013). However, from an analysis of company practices, there
is very little evidence of companies reporting on IC resources, despite Skandia (1994, 1995)
showing that managing and reporting IC could improve the relationship between a
company and its stakeholders. Recently, Dumay (2016) affirmed that ICR, under the
provision of Skandia, is limited and most of those who believe in reporting-based IC wealth-
creation are not managers, but management gurus, accountants, consultants and academics.
One of the last company reports that resembled an IC report was published by Infosys
(2011). It presents an economic value added statement, with a balance sheet detailing
intangible assets and an intangible assets score sheet. This is not included in the annual
report, but in a separate document entitled “30 years of Infosys: additional information”.
The literature emphasizes the relevance of ICD from a theoretical point of view. Given
that the standardization of soft intangibles (such as IC) is very problematic (Lambert, 1998),
voluntary disclosure could be a more suitable and flexible way forward than a compulsory
one in producing an effective ICD (Giacosa, 2012). In this context, voluntary disclosure
expresses the will of the company in providing additional information to stakeholders more
than a compulsory one (Friedman and Miles, 2001; Quagli and Teodori, 2005). Indeed, some
studies highlighted the relationship between the amount of voluntary disclosure and the
company’s perceived reputation (Hasseldine et al., 2005; Lombardi et al., 2015a), which
influences the level of resource made available from the stakeholders (Leftwich, 1980; Watts
and Zimmerman, 1986). However, a model that illustrates the relationships among voluntary
ICD mechanisms is absent from the literature. This represents an important research gap,
which this paper aims to fill up by proposing a new model of ICD. This allows the firm to
reveal and address a relevant problem: how is it possible to produce an effective voluntary
ICD, in which both the company and the stakeholders play a relevant role? So, this model
may practically assist an effective voluntary external ICD, and it would also make way for a
feedback mechanism from external stakeholders.
Thus, the purpose of our research is to create a conceptual model that practically assists
companies to produce an effective voluntary external ICD and valorises both the company’s
and the stakeholders’role. In particular, this model illustrates the relationship among
voluntary ICD mechanisms, and it takes into consideration the feedback mechanism from
external stakeholders. For these reasons, there are advantages to thinking in terms of our
conceptual model, for both companies and stakeholders. A strong ICD policy could improve
150
JIC
18,1
To continue reading
Request your trial