The influence of board size on intellectual capital disclosure by Kenyan listed firms

Purpose – The purpose of this paper is to examine the effect of board size on firms disclosing more, rather than less, strategic and tactical intellectual capital resources using the top 26 of the 52 firms ranked by the Nairobi Stock Exchange for market capitalization in 2002 and in 2003. This study identifies intellectual capital disclosure by three separate categories: internal capital, external capital, and human capital. Hence, this study examines the influence of board size on six disclosure outcomes. Design/methodology/approach – The study develops hypotheses using the resource dependency theory. Using content analysis for data generation, this study classifies firms that disclose more versus those that disclose less, using the mean for all firms for each disclosure outcome. Findings – Using logistic regression, the study examines the influence of board size on each disclosure outcome and finds that firms disclosing more tactical internal capital and more strategic human capital have larger boards. Practical implications – The findings provide insights into how a larger board size can help boards to overcome skill deficiencies in making more discretionary disclosure related to future earnings. Originality/value – This study analyses the influence of the board size on six aspects of intellectual capital disclosure.