Discourses of transparency in the intellectual capital reporting debate: Moving from generic reporting models to management defined information

In the last decade, transparency has become a necessary mantra for both publicly listed companies and government institutions. Intellectual capital reporting is often related to this goal of enhancing the transparency of business and public institutions. In this paper we emphasize that a movement is seen in the intellectual capital reporting debate, which we argue can be approached as two different discourses of transparency, namely one discourse based on generic reporting versus a second discourse based on management driven information. In other words, one discourse highlights as much information to stakeholders as possible, but seems to be in the process of being substituted by another, which emphasizes reporting what is seen from the perspective of management, namely the “right” information, and only that. The argument for the latter discourse is that it will make intellectual capital reporting more transparent, because of users’ bounded rationality and other constraints such as time. This, however, has the implication that users of intellectual capital reporting may become victims of management's selected “right” information, by [Strathern, M. The tyranny of transparency. British Educational Research Journal 2000;26:310–32] designated as the “tyranny of transparency”. Also, we emphasize the problems of perceiving transparency as a goal and not a means.     

Value creation and business models: Refocusing the intellectual capital debate

There is currently significant debate worldwide regarding business reporting. The concept of the ‘business model’ has entered into the discourse, as has the concept of ‘integrated reporting’, adding to the established debate regarding accounting for intangible assets and, more generally, intellectual capital (IC). Despite the tradition of extensive interdisciplinary borrowing in accounting, relevant literatures on business models and on modern managerial perspectives on competitive advantage have, to date, largely been ignored within the accounting literature. The main contribution of this conceptual paper is to identify and discuss the key features of these literature strands and their linkage to contemporary debates on narrative reporting. These conceptual linkages between IC, value creation and business models are illustrated by means of interview evidence from eleven company cases. It is concluded that the business model concept offers a powerful overarching concept within which to refocus the IC debate. The concept is holistic, multi-level, boundary-spanning and dynamic. The analysis supports the current calls for integrated disclosure around the central business model story. Suggestions for future research are offered.     

Corporate reporting of intellectual capital: Evidence from UK companies

This paper reports the results of an empirical investigation into the intellectual capital reporting practices of UK companies in four distinct sectors. It differs from prior intellectual capital reporting studies in that it analyses a wide range of corporate reports for their intellectual capital content. It finds major differences between the elements of intellectual capital reported in each sector studied. The study also finds that a range of different types of corporate reports were used for communicating intellectual capital information, and that the annual reports were not a good proxy for the proportion of disclosures across all corporate reports analysed in this study.     

IAS/IFRS and financial reporting quality: Lessons from the European experience

This paper discusses the effects of the adoption of IAS/IFRS in Europe on the quality of financial reporting. In doing so, it adopts the perspective of stock market investors and focuses on value-relevance research. The adoption of IAS/IFRS in Europe is an example of accounting standardization among countries with different institutional frameworks and enforcement rules. This allows investigating whether, and to what extent, accounting regulation per se can affect the quality of financial reporting and leads to convergence in financial reporting. This is a key issue for standard setting purposes as IAS/IFRS have been adopted in very diverse countries all over the world, and many others are likely to adopt them in the near future.     

The First Step of the Capital Flow from Institutions to Entrepreneurs: the Criteria for Sorting Venture Capital Funds

We contribute to the knowledge of the capital flow from institutional investors via venture capital (VC) funds as intermediaries to their final destination, entrepreneurial ventures. To this end, we conduct a world‐wide survey among limited partners to determine the importance of several criteria when they select VC funds. We find the top criteria to be the expected deal flow and access to transactions, a VC fund's historic track record, his local market experience, the match of the experience of team members with the proposed investment strategy, the team's reputation, and the mechanisms proposed to align interest between the investors and the VC funds. A principal component analysis reveals three latent drivers in the selection process: ‘Local Expertise and Incentive Structure’, ‘Investment Strategy and Expected Implementation’, and ‘Prestige/Standing vs. Cost’. It becomes evident that limited partners search for teams which are able to implement a certain strategy at a given cost. Thereby, they focus on an incentive structure that limits agency costs.