Board Structure and Disclosureof Intellectual Capital:Anempirical Studyin an Emerging Market
Abstract
Capital market regulatorshaveconcentrated oncompany transparency, including and also intellectual capital disclosure (ICD) throughout the previous decade. Jensen and Meckling (1976)stated that high disclosurecan reduce agency costs and theuncertaintyfaced by investors. This research aims to explore the ways the board structure, comprising board size,independence, female board members and CEO dichotomy, affects intellectual capital disclosure within Indonesia. A sample comprising 323non-commercial companies in7industries listed publicly from 2008 to 2017 onIndonesia Stock Exchanges (IDX)was analyzed using ordinary least squares (OLS) regression. This
study found a positive and significant impact of board size which implied that a higher total number of members of the board of directors results in a higher extent of ICD. The larger the number
of outside board members, the better. This makes the board more independent and allows it to provide a higher level of corporate governance to shareholders. The findings revealed the level of ICD significantly and negatively affected CEO duality statistically.Thecomplete findings indicated robust implications of board structure for ICD. This study may be utilized to facilitate higher intellectual capital awareness and foster ICD execution by IDXcapital market administrators.
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