The new challenge of Integrated Reporting: has it really improved corporate disclosure on Intellectual Capital

This study investigates the quality of intellectual capital disclosure (ICD) within integrated reporting (IR). We performed a longitudinal analysis with the aim of addressing if a significant IC quality improvement occurred. We analysed 424 integrated reports, issued by 53 international companies operating in different industries over eight years (2013-2020). A manual content analysis was performed to assess the ICD quality. Findings reveal that the average level of ICD quality is low, for IC considered as a whole and for each of its three categories, while the IC category described most is that of relational capital. The quality of ICD increases over time. Investors and stakeholders need to know more about the quality of companies reports about intellectual capital to guide their decision-making process. The study supports proprietary cost theory as it highlights a limited quality of ICD in IR even if with an improving trend over time