Internal corporate governance mechanisms and intellectual capital disclosure: evidence from Tunisia

This paper examines the effect of internal corporate governance mechanisms on intellectual capital disclosure. Using data of 27 non-financial listed Tunisian firms, the current study provides evidence in support of the nonlinear relationship between corporate governance and Intellectual capital disclosure. The empirical results show that the structure and the way the board of directors' functions are systematically significant factors determining intangible capital disclosure. The empirical tests indicate that managers, majority shareholders as well as institutional shareholders have a significant effect on the informative transparency of intangible capital. These results seem to corroborate the view that an increase in corporate governance mechanisms has a positive effect on voluntary disclosure. Furthermore, tests of the nonlinear hypothesis show that an increase in the number of board members up to nine, and an increase in the number of majority shareholders up to 67% have a beneficial effect on intangible disclosure. However, as these variables increase beyond a turning point, the effect inverts and cuts off the improvement of voluntary disclosure of intangibles.