The Effects of Boards Composition, Rewards and Ownerships on Intellectual Capital Efficiency of Banks in Nigeria

Abstract

This paper examines the impact of corporate governance mechanisms on intellectual capital efficiency (ICE) of Nigerian Banks. The data for the study were generated from the audited financial statements of the sample banks for the period of 11 year (2003 - 2013). The study adopted Value Added Intellectual Co-Efficient (VAIC) methodology which includes three ICE components: human capital efficiency, structural capital efficiency and capital employed efficiency. Corporate governance mechanisms considered in this study are Boards Composition, Managerial Rewards, and Ownership Structure. The study controls for the return on equity and leverage of banks. The regression results show that the corporate governance attributes considered in this study are good indicators of (ICE) because their impact are positively and significantly at less than 1% with R-square of 58% and adj R-square of 55%. Also the two control variables are significantly related with intellectual capital efficiency. This implies that corporate governance have significant impact on ICE of firms in the Nigerian banking industry. Therefore, the study recommends that board should acquire political skills which are necessary to effective governance. In order to improve ICE, board should make it as their responsibility to develop and sustain healthy relationships and maintain open, two-way communication with all constituencies of staff in order to incite their IC towards organization’s success.

The Effects of Independent Commissioner, Managerial Ownership, Foreign Ownership, and Profitability on Intellectual Capital

“…This result is supported by the researches of [12] which proved that independent commissioner does not have a significant impact on intellectual capital. However, they contradict the results of [29] which states that independent commissioner affects intellectual capital significantly in a positive direction. They also contradict the result of [18] which proved that independent commissioner has a negative and significant influence on intellectual capital.…”

Board Diversity and Intellectual Capital Performance of Listed Non-Financial Service Firms in Nigeria

“…This shows that the composition of the board in terms of the ratio of non-executive directors to total directors positively and significantly affected the intellectual capital performance of the non-financial services firms in Nigeria. This is in line with those of Isa et al (2016);Dashtabayaz et al (2020), Ali et al (2021). However, it is in contrast to that of Faisal et al (2016).…”

“…First, there are few studies in this field in Nigeria. The very few Nigerian studies in this instance are the studies of Isa and Ismail (2016) on the impact of board composition on the intellectual capital efficiency of Nigerian banks and Yahaya and Tijjani (2020) on the impact of internal corporate governance instruments on intellectual capital in eight publicly traded oil and gas companies in Nigeria. Second, the VAIC approach is the most extensively used method for assessing IC performance in the literature.…”

Yönetim Kurulu Yapısı Çeşitliliği ve Entelektüel Sermaye Performansı: Borsa İstanbul Firmaları Üzerine Dinamik Panel Veri Analizi

“…Entelektüel katma değer katsayılarının hesaplanabilmesi için ilk önce katma değerin (VA) hesaplanması gerekmektedir. Katma değer (Value Added) hesaplaması aşağıda yer alan denklemle ifade edilebilir (Al-Musalli & Ismail, 2012;Komnenic ve Pokrajcic, 2012;Isa ve Ismail, 2015;Hatane vd., 2017).…”