The purposes of this are twofold. First, it investigates whether firm performance is affected by the size of the board of directors (BoDs) and the presence of women on the Boards. Second, it tests whether the extent of firms’ intellectual disclosures moderates the effect of these two variables.
A company’s performance is measured based on shareholder wealth. A total of 1,330 firm-year data were analyzed. The data covered a five-year period of analysis (2015–2019). The sample was drawn from non-financial Indonesian public companies. The hypotheses were tested using moderated regression analysis.
The results indicate that BoD size affects company performance, whereas the presence of women does. Another finding is that intellectual capital can help a company’s BoD improve its performance. The findings confirm the importance of the role of intellectual capital for the company in improving performance, and consequently, management should improve its intellectual capital disclosures.
One potential limitation of this study is that it does not distinguish between several components of intellectual capital, including relational, structural and human capital. Therefore, to more fully comprehend which component contributes to the creation of corporate value, future research may employ an alternative measure of intellectual capital that can divide intellectual capital into many components.
The results presented here may serve as a guide for capital market investors and stockholders regarding the importance of paying attention to intellectual capital, a valuable asset that can assist business management and enhance business performance.
This study tested the role of intellectual capital in moderating the effect of the characteristics of the board of directors and firm performance in non-financial Indonesian public companies.
