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Board Characteristics and Intellectual Capital Disclosures: Evidence from Sri Lanka

Authors:

K. A. D. P. M. Chandraratne ,

University of Kelaniya, LK
About K. A. D. P. M.
Graduate, Department of Commerce and Financial Management
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C. Pathirawasam,

University of Kelaniya, LK
About C.
Department of Commerce and Financial Management
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M. Shamil Mohamed

University of Kelaniya, LK
About M. Shamil
Department of Commerce and Financial Management
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Abstract

Purpose: The purpose of this study is two-fold. First, to examine the state of intellectual capital disclosures. Second, to investigate the relationship between board characteristics and intellectual capital disclosures.

 

Design: This study selected thirty non-financial listed companies with the highest market capitalization from the Colombo Stock Exchange in Sri Lanka. An intellectual capital disclosure index comprising 61 items was developed to understand the level of intellectual capital disclosure in the selected companies. Panel data analysis techniques were applied to test the proposed hypotheses.

 

Findings: Results indicated that role duality and proportion of female directors have a significant and positive impact on intellectual capital disclosures. Firm leverage was found to have a significant and negative effect on intellectual capital disclosures. Insufficient empirical evidence between other corporate board characteristics and intellectual capital disclosure in Sri Lanka may be attributed to a non-mandatory corporate disclosure environment.

 

Originality: This is among the few studies to examine the link between corporate governance and intellectual capital disclosures employing panel data in Sri Lanka. However, a discourse on the role of corporate governance and corporate disclosures is warranted in a small island developing economy with a fragile financial system like Sri Lanka.

 

Future Research Directions – The study calls for more studies to investigate the relationship between corporate governance and intellectual capital disclosures in the case of Sri Lanka by employing data from different industries for longer periods.
How to Cite: Chandraratne, K. A. D. P. M., Pathirawasam, C., & Mohamed, M. S. (2021). Board Characteristics and Intellectual Capital Disclosures: Evidence from Sri Lanka. South Asian Journal of Finance, 1(2), 92–108. DOI: http://doi.org/10.4038/sajf.v1i2.33
Published on 31 Dec 2021.
Peer Reviewed

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