The moderating effect of board homogeneity on the relationship between intellectual capital disclosure and corporate market value of listed firms in Nigeria

This paper examines whether or not concentration of board members based on ethnicity and religion can impact on intellectual capital disclosure and thereby influence the corporate market value in Nigeria. This article reports the results from a two-step dynamic system generalized method of moment estimation based on 455 firm-year observations from 91 listed firms on the main board of the Nigeria Stock Market for the period 2010-2014. The study measures board homogeneity based on religious and ethnic affiliations of corporate board members in line with upper echelons theory in explaining their moderating effect on the relationship between intellectual capital disclosure and firm value which is proxied by cost of capital and share price volatility. The empirical results indicate that board ethnic and religious composition has moderating effect on the relationship between intellectual capital disclosure and cost of corporate market value. Though the finding might not be extended to smaller firms which could be a limitation, the results of this study are useful to all stakeholders especially the financial reporting council of Nigeria in policy formulation and perhaps issuance of corporate governance standard that would provide a more diversified board than currently being practiced in the country among the larger firms. The study is the first to consider moderating effect of religious and ethnic composition on the relationship between intellectual capital (IC) disclosure and corporate market as well as controls for heteroscedasticity and endogeneity issues by adopting two-step system generalized method of moments as a parameter estimator

Determinant of human capital disclosure in the post IFRS regime: an examination of listed firms in Nigerian / Mutalib Anifowose, Hafiz Majdi Ab. Rashid and Hairul Azlan Annuar

This paper examines the possible determinants of human capital disclosure among listed firms in Nigeria. This paper reports the results from a longitudinal panel data based on 442 observations of firms listed on the main board of Nigeria Stock Market for the period 2012-2014. The paper contributes to the literature by extending previous determinant of intangible asset disclosure studies by considering the Nigerian economics and business environment due to recent adoption of international financial reporting standards. Base on agency and proprietary cost theories, the study employs seven possible determinant of voluntary disclosure and developed checklist for human capital based prior studies. The results of longitudinal data analyses indicate a significant positive of firm’s age, size and industry classification on human capital disclosure whereas the auditor’s types, profitability, inherent risk and joint audit have significant negative influence of the of disclosure. The findings have practical implication for financial reporting council of Nigeria in developing HC disclosure standard and investors might utilise the findings in investment decision making process

Determinant of human capital disclosure in the post IFRS regime: An examination of listed firms in Nigeria

This paper examines the possible determinants of human capital disclosure among listed firms in Nigeria. This paper reports the results from a longitudinal panel data based on 442 observations of firms listed on the main board of Nigeria Stock Market for the period 2012–2014. The paper contributes to the literature by extending previous determinants of intangible asset disclosure studies by considering the Nigerian economic and business environment due to recent adoption of international financial reporting standards. Based on agency and proprietary cost theories, the study employed seven possible determinants of voluntary disclosure and developed a checklist for human capital based on prior studies. The results of longitudinal data analyses indicate a significant positive influence on firm’s age, size and industry classification on human capital disclosure whereas the auditor type, profitability, inherent risk and joint audit have a significant negative influence on the of disclosure. The findings have practical implication for financial reporting council of Nigeria in developing HC disclosure standards and investors might utilise the findings in investment decision making process

Intellectual capital efficiency and corporate book value: evidence from Nigerian economy

Purpose – The purpose of this paper is to examine the value relevance of intellectual capital (IC) by analysingtherelationshipbetweenICefficiency(ICE)andcorporatebookvalueoflistedfirmsonmainboard of Nigeria Stock Exchange. Design/methodology/approach – This study applies the resource-based theory in formulating two hypotheses that guide the results analysis. By employing a two-step dynamic system generalised method of moments (GMMs), and controlling for the possible endogeneity effect on the parameters estimated, for a sampleof 91 listedfirmson main boardof NigeriaStock Exchange, this studyinvestigates theassociationof ICEandcorporatebookvalue,namely,cashflowfromoperationandeconomicvalueadded(EVA),usingdata over the 2010 to 2014 financial years. Findings – The results show a significant positive relationship between overall ICE and corporate book value (cash flow from operation and EVA). This study contributes to recent evidence concerning the value relevance of IC information to investors and other interested stakeholders. Research limitations/implications – The generalisation of the results to smaller firms, in the alternative securities market, may be inappropriate as study sampled listed firms on the main board of Nigerian Stock Exchange. Practical implications – Those charged with governance should be concerned with the investment and management of IC as it enhances the economic value and operating cash flow in line with the resource-based theory. Originality/value – This study is first to consider the ICE study across all sectors in the Nigerian economy using modified Pulic value added intellectual capital. The study controls for heteroscedasticity and endogeneity issues by adoption of two-step dynamic system GMMs

Proposed governance principle and procedure for a university endowment fund

No doubt that endowment fund contributes much towards social and economic development in different societies.The same have been proved by University Endowment Funds (UEF) like the top ten UEF and others. This contribution on the society on high learning process is made possible through this fund under a corporate structure that directs all its activities. Due to the importance of governance in any organization, hence this study aims to analyse current governance structure, specifically bord composition of the top five UEF. From it, sugeestions can be given for universies undertaking Islamic endowment fund for improvements so as to become much better in terms of perfomance through good governance structure. Data were retrived through content analysis from top five UEF reports. The study observed that there were two forms of board structure used on the governance of endowment funds at universities. These include single-tier and two-tier model. While the former comprises of a board that oversee the activities of the fund, the latter consists of board of trustee that formulate the policies and investment committee that executes the policies formulated. In either of the two model, the average size of the board is 9 members. The board comprises of male and female members and the meetings are held 4 times a year. Also, most of the funds engage in real estate business and most of the board members are professional finance experts. Based on the aforementioned, it is suggested that the management of the fund should be separated from the university management

Directors’ remuneration in listed small and medium scale firms: does corporate governance matter?

The study examines the relationship between corporate governance on directors’ remuneration of listed small and medium scale firms in Malaysia over the period of 2014 to 2017 on the 274 listed small and medium enterprises on the Bursa Malaysia. Six potential corporate governance mechanisms were utilised as surrogates which include Size, executive ownership, CEO duality, family relationship, independent non-executive directors on the remuneration committee, and board meetings and amount of remuneration package of all the directors was used as dependent variables. By controlling for potential endogeneity among the variables, the study estimates the data with system dynamic generalised method of moment. The result from this estimate reveals that five out of six corporate governance mechanisms significantly affect the directors’ remuneration among listed small and medium enterprises in Malaysia. The study concludes that CEO duality, board size, directors’ ownership, the presence of independent director on the remuneration committee and board meetings have a significant impact of directors’ remuneration among listed small and medium enterprises in Malaysia. Hence, the study recommends that the regulators should consider these factors in order tominimise the agency problem in this category of listed firms in the country. Though the findings from this study confirm the proposition upon which agency theory was developed, the scope of the studyis limited to small firms. Thus, the generalisation of the findings to large firms might not be feasible

Intellectual capital disclosure and corporate market value: Does board diversity matter?

Purpose – The purpose of this paper is to examine the relationship between IC disclosure and the corporate market value (CMV) of listed firms on the main board of Nigeria Stock Exchange and to test the moderating effect of religious and ethnic composition of board members on the relationship. Design/methodology/approach – This study applies the signaling and upper echelons theories in formulating four hypotheses that guide the results analysis. By employing a two-step dynamic system generalized method of moments and controlling for the possible endogeneity effect on the parameters estimated for a sample of 91 listed firms on main board of Nigeria Stock Exchange, this study investigates the association of IC disclosure with CMV, namely, cost of capital and market capitalization, and the moderating role of religious and ethnic composition on such association using data over the 2010 to 2014 financial years. Findings – The results show a significant positive relationship between overall IC disclosure and market capitalization and a negative impact on cost of capital, which are in line with the hypothesized propositions. The moderating effect of board diversity is also confirmed. This study contributes to recent evidence concerning the value relevance of IC information to investors and other interested stakeholders and the established moderating role of board diversity in IC disclosure-related studies. Practical implications – The regulators may consider development of standards on board composition about religious and ethnic composition in order to curb the domination from same group in the board room. Those charged with governance should be concerned with the disclosure of IC information in the financial statements as it has value relevance to the investors, in line with signaling theory. Social implications – The ethnic and religious composition of board members is a significant factor within the board room and needs to be given adequate consideration. Originality/value – This study is the first to consider IC disclosure across whole sectors in the Nigerian economy and looks upon ethnicity and religious affiliation of boards as moderating variables. The study controls for heteroscedasticity and endogeneity issues by adopting two-step dynamic system generalized method of moments

Intellectual capital and information asymmetry: recent evidence from Nigerian economy

The aim of this study is to examine the value relevance of intellectual capital by analyzing the relationship between intellectual capital (IC) disclosure and information asymmetry of listed firms on main board of Nigerian Stock Exchange. This study applies signalling theory in formulating hypothesis that guides the results analysis. By employing a two-step dynamic system generalized method of moments, and controlling for the possible endogeneity effect on the parameters estimated for a sample of 91 listed firms, this study examines the relationship between quality of IC disclosure and information asymmetry using data over the period of 2010 to 2014 financial years. The results show a significant negative association between overall IC disclosure and information asymmetry. This study recommends that management should be concerned with the adequate disclosure of IC related information as it affects the capital market activities and investors’ investment decisions. The study is first to consider the IC disclosure study across all sectors in the Nigerian economy using two-step system generalized method of moment