Intellectual Capital Disclosure: Some Evidence from Healthy and Distressed Banks in Italy

Abstract

The article investigates the intellectual capital disclosure of Italian banks over the years 2016-2017, applying the specific lens of healthy and distressed banks. To this end, we used content analysis and encoding techniques. The main results point out that intellectual capital (IC) disclosure is generally poor and that the intensity of disclosure varies slightly between healthy and distressed banks. Regarding the quality of disclosure, healthy banks present a higher, albeit modest, tendency to disclose non-qualitative and forward-looking information, maybe due to the fact that they are more focused on the strategies and the relationships with stakeholders as opposed to a more short-term approach of the distressed banks. To complement our study on healthy and distressed banks, we repeated the analysis focusing on bank size and independent directors. In this case, results do not show relevant differences in terms of IC disclosure. Hence, our findings suggest the need to consider banks' IC disclosure as a strategic asset for increasing, among others, transparency and reputation.Sustainability 2020, 12, 3174 2 of 20 considered a "phenomenon of interrelationships and interactions, having each component little value if considered per se, but as a whole it represents great value for the organization" [8].In respect of the individual types of capital, it is possible, consistent with the existing literature, to detect some characterizing features. Human capital, defined by Sveiby [4] as "the capacity to act in a wide variety of situations to create both tangible and intangible assets", consists of personnel's attributes (e.g., knowledge, skills, motivation, experience, abilities); some of them are linked to individuals (such as technical competence, previous experience, and creativity), while others are connected with the firm as a whole (e.g., teamwork, healthy work environment). Brooking [2] defines structural capital as "the skeleton and the adhesive of the organization, which strengthens the company and creates a close and coherent relationship between individuals and their processes", so that it may be regarded as the knowledge inherent in a single organization. Some examples include procedures, systems, cultures, databases, technologies, and organizational learning capacity. Lastly, relational capital focuses on the relations of a firm with third parties, such as customers, suppliers, investors, and creditors, and also includes the external perception of the firm. For this, it may relate to elements such as image, customer loyalty and satisfaction, and environmental activities [9].It is therefore clear how the IC could be enhanced within a knowledge-based scenario, taking into account that only a profitable knowledge management, aimed at achieving the best benefit of stakeholders, may represent a significant driver of the companies' success [9]; this is particularly significant in the case of banks, as "perfect" representatives of a knowledge-based economy. Thus, IC is essential in the banking activity [6]: banks...

Intellectual capital disclosure practices of financial institutions in an emerging economy

“…Findings of banking sector and NBFI sector indicate that ICD level of 73% of sample banks is not more than 35%, whereas 83% of NBFI discloses less than 30% of IC information. In brief, majority of the sample companies disclose less than 35% of IC items, and these results complement the prior findings of low level of ICD in the listed financial institutions of Bangladesh, which is consistent with the prior study by Birindelli et al (2020) for the Italian banks. Therefore, these results reiterate and complement the prior support of HH1.…”

Divulgación de información no financiera sobre capital intelectual en el reporte integrado: un estudio de caso en el mercado de capitales argentino

“…Estos núcleos se vinculan a través de dos nodos centrales relacionados a los sistemas de información y de comunicación ("digital", "internet", "app"). Asimismo, se destaca la coocurrencia entre los términos "digital" y "transformación", lo cual puede relacionarse al fenómeno de creciente digitalización y desintermediación que caracteriza al sector bancario (Birindelli et al, 2020;IIRC, 2015;Mention, 2011), y que ha incrementado la relevancia de capitales no financieros, como el intelectual, para crear ventajas competitivas (Doni et al,2019, IIRC,2015.…”

“…De este modo, se advierte, en línea con Santis et al (2019), que la información sobre Capital Intelectual del BMA se relaciona con la dimensión estructural del CI, en tanto involucra elementos intangibles asociados con los sistemas de información y comunicación y con la capacidad del BMA de "transformarse", adoptando nuevas tecnologías que le permitan ofrecer a sus clientes mejores experiencias y nuevas formas de atención. Si bien el CE tiende a ser la dimensión del CI menos divulgada por los bancos (Beretta et al, 2019;Melloni, 2015;Santis et al, 2019), Birindelli et al (2020) observaron un incremento en la información sobre CE vinculado a la categoría "sistemas de comunicación", evidenciando su creciente centralidad en la relación entre los bancos y sus stakeholders, lo cual resultaría consistente con el caso del BMA.…”

“…En el caso del BMA, la información divulgada en este apartado se refiere a los procesos medioambientales y, en ese sentido, de acuerdo con Ficco et al (2021b), puede relacionarse con la dimensión estructural del CI. Los resultados obtenidos a partir de la interpretación de los gráficos de similitud referidos a los capitales del MIRI evidencian que los RI del BMA incluyen información no financiera sobre CI, lo que se encuentra en línea con los estudios previos (Beretta et al, 2019;Birindelli et al, 2020;Melloni, 2015;Salvi et al, 2020;Santis et al, 2019), apoyando la idea de que el CI está resurgiendo como parte del RI (De Villiers et al, 2014). Se aprecia asimismo que, aunque esta información se presenta bajo la estructura de capitales del MIRI, en el caso analizado se verifican empíricamente las asociaciones identificadas, a nivel conceptual, entre esos capitales y las tres dimensiones que se reconocen en la literatura específica del CI.…”

A qualitative analysis of bank credit risk disclosure: Evidence from the Canadian and Italian banking sectors

“…The risk disclosure literature has focused on various types of disclosures, including not only the disclosure on banking risks (Birindelli & Ferretti, 2017; Drago & Mazzucca, 2005; Malinconico, 2007), but also that on various emerging topics including information technology (Panetta et al., 2019), intellectual capital (Birindelli et al., 2020), and corporate social responsibility (Carnevale & Mazzuca, 2012). Surprisingly, the literature that focuses specifically on the disclosure on credit risk is particularly scant, although it is considered as the most important type of risk for commercial banks.…”