Essentially two are the main field of study related to intellectual capital: studies that measure intellectual capital in economic-quantitative terms and studies on intellectual capital disclosure directed to highlight information on intellectual capital in the same way that the economic-financial information can influence the decisions of a potential investor (Rees and Sutcliffe, 1994).
Focusing on the latter topic, as our contribution falls in it, the first study is Guthrie and Petty (2000). The authors develop a framework of characteristics/attributes of intellectual capital, derived from Sveby’s Intangible Asset Monitor to encode and analyze the annual reports of 20 listed companies in Australia for the year 1998, with the purpose of determining the level of the IC disclosure (ICD) in the Australian context. From this study many others start, generally focused on a single country, some analyse the presence of information on intellectual capital, others also the extension and others the quality of disclosure (Guthrie & Petty, 2000; Abeyesekera, 2000; Brennan, 2001;
Bozzolan et al., 2003). Generally the analyses are cross-industry even if sometimes the analysis focuses on a particular sector (Shareef and Davey, 2006; Scheneider and Samkin 2008). Limited are those that include banks in their sample analysis (Williams, 2001; Abdolmohammadi, 2005; Bontis, 2002; Goh and Lim, 2004; Guthrie and Petty, 2000;
Oliveras et al., 2008; Vandemaele et al. 2005; Vergauwen and Alem, 2005; Oliveria et al., 2010; Khan and Khan, 2010) or focused only on the banking sector (Khan and Ali, 2010; Mention, 2011; Haji and Mubaraq, 2012).Banking activity, in fact, is a high-knowledge business services and its characteristics are suitable to be analysed in terms of IC, which represents a critical resource in the process of corporate value creation. The activities of banks requires human resources with a good education, qualified and continuously updated (Alvesson, 2000), generally involves relationships with customers and rely, in large part, to the development of new products and services, integration of information and communication technologies (ICTs) (Mention & Bontis, 2012).
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Khan and Ali (2010) are the first authors to present a study that analyses the annual reports to assess the ICD in 20 listed banks in Bangladesh in the period 2007-2008. The framework of analysis is Sveiby (1997) as modified by Guthrie and Petty (2000). The authors, in order to take into account the characteristics of the banking sector, insert other items, such as "banks recognition for services", "banks market share", "banks reputation for services" and
"number of training for emplooyee." The method of analysis is the content and the items used are 21. The data are qualified with the value of "0" if the information is absent and "1" if the information is present and the unit of analysis is the word count. The information that prevail are those on human capital (65%) followed by those on the relational capital (20.8%), and those relating to structural capital (14.2%).
The second study is Mention (2011), who examines the practices of voluntary reporting on intellectual capital by analyzing the annual report of five European banks. The analysis is conducted over a period of nine years (2001- 2009) through the content analysis, that identifies for each of the three categories (human capital, structural capital and relational capital), five subcategories2 and different indicators. The framework used is Guthrie and Petty (2000) modified to take account of the peculiarities of the banking environment. The information acquired are qualified with the value "0" if absent, "1" if qualitative and "2" if quantitative in nature. The unit of analysis is the text unit. The analysis shows an increase in all categories of intellectual capital in the period and on average it should be noted that the category of majour interest is human capital (43 % of the information), followed by the relational capital (34%) and then structural capital (23%).
The third study deals with the ICD in the banking sector is Haji and Mubaraq (2012), who examines, for the period 2006-2009, the annual reports of 20 Nigerian banks. These authors do not adopt a specific framework of reference even if they adopt the classic division of intellectual capital. The researchers identified 44 items and qualify the information with "0" if absent and "1" if present. The most consistent information are those relating to structural capital (average 36%), followed by those on human capital (34%) and then by the relational capital (30%).
All studies above cited were conducted in other countries; the absence of previous research justifies exploratory approach of this study, recommended in those situations in which knowledge about a particular topic are limited (Selltis et al., 1976). In the three studies mentioned, the method of research is content analysis3. This method, in fact, is the most appropriate in studies of disclosure of intellectual capital in annual reports, social reporting and other corporate documents (Yamagami & Kokubu, 1991; Guthrie & Petty, 2000; Unerman, 2000; Brennan, 2001;
Bozzolan et al. 2003; Oliveira et al, 2006; Beattie and Thomson, 2007; Cordazzo, 2007; Vergauwen et al, 2007;
Abeyesekera, 2008 Abeyesekera & Guthrie, 2005; Oliveras et al, 2008).
Research objective and methodological approach
Objective of this study is to investigate the amount and the type of intellectual capital information (human, relational and structural capital) reported in the sustainability reports of Italian banking firms. The analysis is conducted on a voluntary reporting documents, such as new forms of corporate disclosure, that may be useful to provide information based on intellectual capital (Zambon, 2003; Cordazzo, 2005) for the years 2006 and 2012. Specifically, the analysis is carried on the sustainability reports. The methodology of analysis, in line with the existing literature, is content analysis, which is a useful method to extract information (April et al., 2003), which allows to identify the different components of intellectual capital and to understand, analyze and describe information about the intellectual capital in the documents selected for the analysis. The objective of this method can be found to represent the behaviour of organizations in terms of intellectual capital disclosure.
This method consists in classifying the information contained within the document analyzed within a predefined category of items identified with the intent to capture aspects of intellectual capital that you want to analyze. The basic assumption of content analysis is that the amount of information available reflects the importance of the information (Krippendorff, 1980). The application of content analysis involves the classification of the information available in the various categories in line with a predefined schema or identified criteria (Guthrie and Petty, 2000; Abeyesekera, 2008).
The application of content analysis involves reading the document of social reporting and coding of information based on the framework identified. In the contribution we have chosen to examine the level and extent of information on intellectual capital in the documents of voluntary reporting, in particular in sustainability reports, available on the website of the banks. It is, in other words, interested in analyzing the voluntary disclosure on IC, as it is considered important in
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order to provide a complete view of the firm (Campbell and Rahman, 2009). The research analyzed the need for information to decision makers reveal that market participants consider important and useful information on the IC to make investments (Abhayawansa and Guthrie, 2010).
The items used to make the analysis follows the pattern for intangibles of Sveiby (1997), who identifies the internal structures (structural capital), the external structures (relational capital) and employee competence (human capital). To take account of the purpose and object of the analysis, the items of analysis have been modified according to the sector analyzed, in order to have a better convergence with the item that much more likely to be reported by banking institutions (Guthrie & Petty, 2000). In this context, useful references are Mention (2011), Shih et al. (2010) and Ordonez (2003), as will be specified. The content analysis, following the literature (Krippendorff, 1980; Weber, 1990), was developed in the following steps: a) definition of the unit of analysis; b) defining the categories and c) development of an unambiguous coding rules.
Definition of the unit of analysis
With regard to the first phase, the existing literature identifies as a unit of analysis a word, a sentence or paragraph.
Milne and Adler (1999) believe the word is not reliable, because it has a different meaning depending on the context of reference of the sentence and is therefore considered the most appropriate sentence for this type of analysis.
However, since a sentence may contain more information, including on different aspects of intellectual capital in order to avoid bias in the analysis could be considered the unit of text as the unit of analysis; in this case, the different information needs to be captured for the different components of intellectual capital. Items have been investigated focusing on information and not on the expression of the single word. Therefore the research has sought and counted the information expressed in the sustainability reports concerning each single item. Have been deleted the double information on the same item and information contained in the table and charts have been counted only in case if they supply an additional information not explained in the body of the report.
Defining the category
In this paper, intellectual capital is defined and analyzed using three broad categories: human, structural and relational capital.
Human capital consists of the set of skills and knowledge of employees who can be further improved with training. It includes also experiences that can be developed with training programs. Human capital can be analyzed at micro level (individual) or macro level (enterprise).
Relational capital is linked to the organization and its relationship with external elements such as customers, suppliers and shareholders. Examples of relational capital in banks are customers, brand loyalty, customer satisfaction, strategic alliance and coalitions.
The structural capital can be, instead, defined as knowledge created by an organization and which can not be separated from the same.
Consistent with the existing literature (Bontis, 2003; Guthrie and Petty, 2000; Striukova et al. 2008) for each category were identified sub-categories (items) and indicators (Table 2), trying to capture the most important aspects with regard to context analysis. The selection of items is the most critical aspect (Marston and Shrives, 1991, Bukh et al., 2005) and in order to make this choice less subjective, items were selected taking into account the items identified in Mention’s study (2011). Mention (2011) identifies a framework of analysis with reference to the study of Shih et al. (2010) on human capital in financial institutions and the study of Guthrie and Petty (2000) for the structural capital and relational adapting the items according to the banking sector. These items have been integrated with the indicators identified by Ordonez (2003) and subsequently with indicators derived from the study of some sample documents.
The coding process of intellectual capital information
The data was first coded by category and then by subcategory. In line with the purpose of this study to concentrate on the qualitative character of intellectual capital disclosure, repetitions were ignored. In order to identify the level of disclosure, the information was coded in a dichotomous way, whose value was set at "1" if the item is present and "0"
otherwise. It was made this choice in order to avoid areas of subjectivity that tend to be present when the assignment of the value includes a weighing (Williams, 2001). The extent of disclosure was measured by counting the frequency
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of the presence of the three categories and their subcategories. The frequency, in fact, indicates the importance of a particular element (Krippendorff, 2004). Finally we constructed a Disclosure indexes (ICI) (Haniffa and Cooke (2005); Ghazali (2007)). ICI calculate “the number of information-related items that a given report contains based on a predefined list of the possible items” (Bukh et al., 2005). The total disclosure score was computed as the unweighted sum of the scores of each item (Cooke, 1989). All items were considered relevant to all firms. The formula to calculate ICDi is the following:
(1)
where Dij assumes the value of “1” if were found information on the item and zero otherwise and “n” is the maximum number of items reported in the document.
The use of disclosure indices in studies of accounting and reporting of business practices is widely used (Marston and Shrives, 1991, Guthrie et al., 2004), as these studies represent an aspect of the quality of disclosure that may be captured by a measure "sum" (Beattie, 2002; Bukh PN, 2005). To mitigate the main problem of content analysis (accuracy of information), the collecting data was conducted on sustainability documents separately by all the three authors and then compared where it showed discrepancies.