The role of Structural Capital in Risk-related Disclosure Quality: An Empirical Analysis

This paper discusses about the possible relationship between intellectual capital (IC) and non-financial information. Given the growing attention of regulators for the content of mandatory companies’ non-financial information, the study investigates the role of Structural Capital (SC), as one of the components of IC, in the Risk-related Disclosure Quality (RDQ) requested by the set of Italian laws. The empirical analysis is based on a sample made of 51 large undertakings and groups. The study uses content analysis to assess the RDQ from firms’ corporate reports. We use regression analysis to examine if there is an influence of SC toward RDQ. Results reveal that the positive association exists between RDQ and SC. Moreover, we provide some support to the positive correlation between SC and the firm’s size. Our paper contributes to existing risk reporting literature as a pioneering study identifying an IC driver to determine the quality of risk and risk management information. For practitioners, the paper helps in understanding the role of IC in enterprise risk reporting to afford the business an opportunity to thrive and ultimately enjoy the fruitful success.