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PurposeThe purpose of this paper is to examine the intellectual capital (IC) performance of the Australian Financial Sector for the period 2006‐2008. It also aims to examine the relationship between IC performance and the financial performance of the financial sector.Design/methodology/approachThe value added intellectual coefficient (VAIC) approach developed by Pulic is used to determine the IC performance of the Australian financial sector. The required data to calculate different constituents of IC was obtained from the annual reports of Australian Financial Sector companies.FindingsThe value creation capability of financial sector in Australia is highly influenced by human capital. About two thirds of the sample companies have very low levels of intellectual capital efficiency. The performance of various components of VAIC and overall VAIC differs across all subsectors in the financial sector. Investment companies have high value VAIC due to higher a level of human capital efficiency, as compared to banks, insurance companies, diversified financials and RIETs. Insurance companies are more focussed on physical capital rather than human and structural capital leading to lower VAIC.Research limitations/implicationsThe paper analyses IC performance of only one sector of the Australian economy and there is a relatively narrow three‐year period for the data collection. However, a comparative analysis of various sub sectors in the Australian financial sector justifies the contributions made by this study.Practical implicationsThe findings may serve as a useful input for financial institutions to apply knowledge management in their institutions and in addressing the factors affecting IC performance in order to maximise their value creation. It will also help the management of companies in other sectors, especially those in knowledge‐based industries, in understanding the contributions of various components of intellectual capital in their growth.Originality/valueThis is the first paper that examines the relationship of intellectual capital performance with financial performance of financial sector companies in Australia.

Purpose – This study aims to examine whether the integrated reports prepared in accordance with the King III Code of corporate governance regulation are providing the information intended of an integrated report, i.e. to communicate the “ability of an organisation to create and sustain value”. Second, it explains the behaviour of companies listed on the Johannesburg Stock Exchange (JSE) when responding to the regulation to publish an integrated report. The King III Code of corporate governance requires companies listed on the JSE to prepare annually an integrated report or provide reasons for not doing so. Design/methodology/approach – This paper uses legitimacy theory to formulate two alternative propositions on how JSE-listed companies may disclose information relating to a number of capitals, as described by the International Integrated Reporting Committee, in response to the King III Code. Annual/integrated reports of the top 25 JSE listed companies for the years 2009/2010 and 2011/2012 are content-analysed for the presence of information on capitals. The change in the extent of disclosure of capitals is analysed using t-tests to test the propositions. Findings – The results show that the introduction of integrated reporting in South Africa has resulted in an increase in the extent of disclosure of human, social and relational, natural and intellectual capital information of the listed companies. The increment in the disclosure of social and relational capital is statistically significantly greater than the increment in the disclosure of other capitals. The findings indicate that JSE-listed companies are adopting a legitimation strategy based on symbolic management when preparing integrated reports. Practical implications – This study sheds light on the relevance of regulating corporate reporting within a setting where companies are already voluntarily reporting on social, environmental, human, intellectual and natural capital information. Findings have implications for policymakers who have mandated or considering mandating integrated reporting. To the South African policymakers, in particular, this study highlights the need for incorporating, within the listing rules, minimum requirements in relation to the nature and content of an integrated report. Originality/value – This paper provides the first initial evidence on the impact of the introduction of integrated reporting regulation, followed by limited guidance to preparers, on the nature and extent of disclosure of capitals. This study extends the work of Solomon and Maroun (2012) by explaining disclosure practices of South African-listed companies in relation to information on relational, human and intellectual capital.

PurposeThe purpose of this paper is to examine the intellectual capital (IC) performance of Australian banks for the period 2005‐2007. It also aims to examine the relationship amongst various constituents of IC performance.Design/methodology/approachThe value added intellectual coefficient (VAIC™) approach developed by Pulic is used to determine the IC performance of the Australian banks. The required data to calculate different constituents of IC was obtained from the annual reports of Australian banks.FindingsThe paper reveals that VAIC™ has a significant relation with human costs and the value addition made by the Australian banks. All Australian owned banks have relatively higher human capital efficiency than capital employed efficiency and structural capital efficiency. The size of the bank in terms of total assets, total number of employees and total shareholders equity has little or no impact on the IC performance of the Australian owned banks.Research limitations/implicationsThe paper analyses IC performance of only 11 Australian owned banks. However, the more than 90 per cent market share enjoyed by these banks still promises a degree of validation of the results of the paper from the Australian perspective or similar banking structure in some countries.Practical implicationsThe findings may serve as a useful input for bankers to apply knowledge management in their institutions and in addressing the factors affecting IC performance in order to maximise their value creation. The findings of the study would also provide some information to the stakeholders and potential investors to assess the value creation capabilities of this group of banks.Originality/valueThis is the first paper that examines the relationship of VAIC™ and the size of the firms for Australian owned banks in Australia.

Purpose – The purpose of this paper is to measure the intellectual capital performance of Indian banks and established a relationship between intellectual capital and return on assets (ROA). The paper also compared the intellectual capital performance of public sector and private sector banks. Design/methodology/approach – This study is based on secondary data from the top 20 Indian banks. Ten banks were selected from each of the public and private sectors on the basis of paid-up equity capital. The analysis was made using the value added intellectual coefficient, the coefficient of variation, exponential growth rates, trend analysis, Yule’s coefficient, the coefficient of correlation, the F-test and the t-test. Findings – The study revealed that private sectors have performed relatively better regarding the creation of total information coefficient (IC). However, the ROA was still below the international benchmark of > 1 percent. The major cause of the lower IC and the reduced ROA is disproportionate to the increase in capital employed and escalating non-performing assets in the Indian banking sector. Practical implications – The study focussed on managers and identified the causes of lower performance. It proposed numerous strategies to improve the aggregate score of IC, which is closely related to bank profitability. Originality/value – This is the first study to make a comparative analysis of intellectual capital performance in public and private sector banks in India and in addition to the traditional style of measuring sectoral performance. Further, the study employed new statistical tools, such as Yule’s coefficient of association, to establish the association between performance variables.