Rokiah Ishak

Proprietary costs of intellectual capital reporting: Malaysian evidence

Purpose - – The purpose of this paper is to examine the relationship between intellectual capital (IC) performance (value-added intellectual coefficient (VAIC)) and company characteristics with IC disclosure (ICD) in Malaysian listed companies. Design/methodology/approach - – Sample of the study is 68 biggest Malaysian companies listed in Malaysian Stock Exchange based on market capitalization in year 2006. The paper follows the classification of ICD by Huang Findings - – Results of the study show that VAIC is negatively related to ICD. Further classification of VAIC shows that intellectual capital efficiency and human capital efficiency are negatively related to ICD whilst structural capital efficiency is not related to ICD. Company size and leverage are found to be positively related to ICD. Research limitations/implications - – Negative association between VAIC and ICD suggests that companies reduce ICD for competitive advantage reason which supports the proprietary cost theory. The findings of the study may provide some evidence to regulators to enhance the reporting practices of IC for the benefits of users of financial reporting in making relevant decisions. The focus should be given on the reporting of human capital items. Originality/value - – This is the first paper to use IC framework by Huang

The Effect of Board Attributes on Real Earnings Management in Nigerian Financial Institutions

The purpose of this study is to examine the relationship between board attributes and real earnings management of listed Nigerian financial institutions. The residuals from Roychowdhury model (2006) is used to proxy real earnings management. Data were collected from 45 financial institutions quoted on the Nigerian Stock Exchange (NSE) from 2011 to 2016. For analysis purpose, the Panel Corrected Standard Errors (PCSEs) regression was utilized. The regression result shows that board meeting and board expertise have a significant positive impact on real earnings management. Whereas, female directors has a significant negative influence on real earnings management. The study recommends that the authorities concerned in Nigeria should concentrate on the recent technique of real earnings management (cash flow from operation, discretionary expenses and cost of goods sold) known to board members in developed economies in order to play a pivotal role in constraining corporate managers to act opportunistically in the ordinary course of business activities and preparing financial reports.

Intellectual Capital Disclosure: The Effect of Family and Non-Executive Directors on Board

The study examines the effect of corporate governance characteristics on the intellectual capital (IC) disclosure in public listed companies in Malaysia.Samples of the companies are 55 companies from the top 100 companies in 2006 based on market capitalization.Data are collected for 2 years (2006 and 2011).The t-test analysis shows that IC disclosure is found more in big size companies, high leverage companies, government-link companies (GLC), and high-tech companies. Results from the regression analysis show that family members on board are negatively related to IC disclosure.This finding is consistent with previous studies that family firms prefer less voluntary disclosure.Further analysis with each component of IC shows that foreign ownership is positively related to structural capital and non-executive directors are positively related to human capital disclosure. This result somehow supports the important role of non-executive directors and foreign ownership to reduce the information asymmetry between managers and shareholders.

Gender diversity: Does ‘relationship’ jeopardise performance?

The objective of this paper is to examine women relationship with other directors and firm performance.Specifically we test for the effect of percentage of women and women relationship on firm accounting performance. The sample uses 263 listed companies on the Main Market of Bursa Malaysia that have women on boards from 2010 to 2012. The results show that women representations on the board do not enhance firm performance.We also find that appointment of women director based on relationship with other board members decreases firm performance. The appointment of women directors on the boards are influence by networking, relationships or family ties.Thus, these findings provide some implications for future study on women and firm performance.

Earnings informativeness, board size, board composition and board leadership structure

One of the functions of board of directors is to monitor the quality of financial reporting.Therefore, it is important to understand whether board of director characteristics influence the quality of financial reporting.This paper examines whether earnings informativeness varies with board size, board composition and board leadership structure. We measure earnings informativeness by earnings and stock returns relationship.Our data consists of 3,761 firm-year observations of Malaysian firms listed on Bursa Malaysia over the period 2001–2012. Our results show that earnings informativeness is greater for firms that separate the roles of Chairman and CEO. However, the evidence shows that earnings informativeness does not vary with board size and board composition.