Purpose – The purpose of this paper is to explore the extent to which the practice of integrated reporting (IR) in organisations can be a vehicle for furthering and sustaining the practice of accounting for intellectual capital (IC). It introduces the eight papers forming this Journal’s special issue on “Extending Intellectual Capital through Integrated Reporting” that demonstrate how organisations are developing practices at the nexus of IC and IR.

 Design/methodology/approach – The paper takes the form of a review of the eight papers, and it connects the outcomes from these papers into some future research directions based on an interpretive approach and the authors’ expertise on IC and IR.

 Findings – The papers published in this special issue provide a useful foundation for extending the research project on IR-led IC accounting. However, there is a lack of research in this special issue that goes much beyond third-stage IC research, which is directed at strengthening IC practices inside organisational boundaries.

 Research limitations/implications – This commentary highlights that IR provides many opportunities to reinvigorate the field of IC accounting. Insights provided in this commentary may be relevant to understand and evaluate future iterations of IC accounting.

 Practical implications – While it is essential to understand how IR works in practice moving beyond organisational boundaries it is even more critical if companies are to survive and thrive in an increasingly turbulent business operating environment. Thus, this commentary offers arguments as to how IC and IR research can extend into fourth and fifth stage research paradigms.

 Originality/value – This commentary places the eight papers published in the Journal’s special issue on “Extending Intellectual Capital through Integrated Reporting” within the context of IC accounting to explain the trajectory of research that connects IC and IR and reveals gaps in this field of research.

[Editorial] Intellectual capital accounting in the age of integrated reporting: a commentary


Purpose
This study aims to examine the factors affecting intellectual capital disclosure (ICD), especially in the agriculture and mining sectors in Indonesia and Thailand. Additionally, this study discusses the difference in ICD levels between Indonesia and Thailand.


Design/methodology/approach
The sample used is companies listed on the Indonesia Stock Exchange and Stock Exchange of Thailand from 2013 to 2017. The method used is a content analysis of 380 annual reports (150 from Thailand and 230 from Indonesia). This study uses a panel regression model. Variables tested are firm size, market shares, minority shareholders, profitability, leverage and the focus on ICD components such as human capital disclosure, structural capital disclosure and relational capital disclosure.


Findings
IC disclosures in financial statements are generally oriented to past events and focus more on the human capital component. Overall, ICDs in Thailand are more qualified than in Indonesia. The findings support the stakeholder and legitimacy theories. It was found that the greater the company’s resources, the higher the quality of disclosure of all intellectual capital (IC) components. Conversely, when associated with the position in the market, companies reduce the disclosures. As the company has gained the government’s legitimacy, management’s passion for revealing more about its ICD is diminishing.


Research limitations/implications
This study focuses on the agriculture and mining sectors in Indonesia and Thailand. The annual report is the primary medium to observe IC in qualitative and quantitative ways, yet firms would use other means to disclose their IC. This study deploys the content analysis method, in which the determination of scores is based on the researchers’ judgment.


Originality/value
This study contributes to the ICD-related literature by focusing on the agriculture and mining industries and multinational scopes. The ICD valuation is extended to the quality of disclosures, in which numerical and monetary figures also support the disclosures. This study also examined minority shareholders’ role in ICD quality, which is infrequent in ICD literature.


The contributing factors of intellectual capital disclosures in agriculture and mining sectors of Indonesia and Thailand


Purpose
This paper aims to develop a conceptual framework for extended external reporting (EER) influences (EERI), including sustainability, non-financial, integrated and value reporting. Using the Environmental Legitimacy, Accountability, and Proactivity (ELAP) framework as the base, we modify its proposed concepts and linkages using relevant conceptual models, prior reviews and findings of recent studies on EER. This paper presents contributions of the special issue on “non-financial and integrated reporting, governance and value creation” and avenues for future research.


Design/methodology/approach
Drawing on relevant conceptual models, prior reviews and recent EER studies, we reframed the ELAP framework into a framework that theorises the factors that affects, or are affected by, EER.


Findings
The EERI framework poses relationships between and within proactivity, external verification, accountability and legitimacy. It also consolidates possible determinants and consequences of EER. The papers published in this special issue contribute further insights on factors that influence reporting practices, processes and suggestions for capturing and communicating value creation information, and the value of integrated reports and assurance to capital providers.


Originality/value
Along with the insights provided by papers in this special issue, the conceptual framework can be used to theorise influences of EER and guide future research.


Sustainability, Non-Financial, Integrated, and Value Reporting (Extended External Reporting): A conceptual framework and an agenda for future research

This study provides empirical proof that whole organizational innovativeness is rooted in tacit knowledge due to its potency of human capital creation and, that a learning culture composed of a learning climate and mistakes acceptance component fosters human capital development. The main practical implication is that if the IC components are externally rather than internally determined in the particular organization embedded in the specific healthcare system, human capital's power to create an innovative solution is diminished even if the learning culture is developed. So, practically, private healthcare organizations are more innovative than public. Novelty: This study exposed how tacit knowledge creation driven by learning culture and its mistakes acceptance critical component drives next IC components structure, which influences internal performance innovation in the healthcare sector driven by private and public funds. Findings were obtained from a healthcare industry sample composed of 350 cases from Poland and 365 from the United States. Data were analyzed using the structural equation modeling method using Amos and OLS regression using SPSS PROCESS macro. 

Tacit knowledge influence on intellectual capital and innovativeness in the healthcare sector: A cross-country study of Poland and the US

PurposeThe present study aims to extend the knowledge of intellectual capital disclosure (ICD) disclosure practices in the Italian Healthcare Organisations (HCOs) context. The ultimate goal of the study is to provide fresh insight into the possible explanatory factors that may drive the extent of ICD provided by Italian HCOs via the web.Design/methodology/approachThe present study applies a manual content analysis on the websites of a sample of 158 HCOs to determine the level of voluntary ICD. A multivariate regression model is estimated to test the association between different variables – size, gender diversity in top governance positions, financial performance and indebtedness – and the level of ICD provided by sampled HCOs through their official websites.FindingsContent analysis results reveal that – in the absence of mandatory requirements – Italian HCOs tend to use websites to disclose information about IC. Particular attention is devoted to Structural and Relational Capital. The statistical analysis pinpoints that size and indebtedness negatively influence the level of ICD. In contrast, the presence of a female General Manager (GM) positively drives ICD. Also, it is observed that Research and University HCOs and those located in the Italian Northern Regions are particularly prone to discharge accountability on IC through websites.Originality/valueTo the best of the authors’ knowledge, this is the first study that examines voluntary ICD practices through websites in the Italian HCOs' context. Also, since prior studies on IC in the healthcare context are mainly descriptive or normative, this is the first study examining the potential determinants of ICD provided by HCOs in terms of size, gender diversity in top governance positions, financial performance and indebtedness.

/pdf/intellectual-capital-disclosure-and-its-determinants-in-1uehm01z.pdf

Intellectual capital disclosure and its determinants in healthcare organisations – Evidence from Italy

The aim of our research is to give empirical and theoretical solutions to some criticalities of the original International Integrated Reporting Framework (IIRF). Indeed, it takes as value creation only the increase of the capitals triggered by business activities, overlooking the fulfilment of the institutional mission that is the actual value creation lever.,The present paper introduces a case study aimed at implementing the IIRF in an Italian non-profit healthcare organisation. The research is based on theory building from cases, action research and interventionist approach. IIRF was adopted because of its claimed ability to support the communication process to stakeholders and the control of value creation. However, IIRF shows several weaknesses.,An adjusted version of IIRF is suggested, highlighting the role played by IC in the organisational business model and in the value creation process. The adjusted seems able to foster awareness of the role IC in value creation in healthcare organisations.,In this paper no one of the singles pieces of the adjusted framework is innovative by itself, but jointly they give raise to an innovative solution, able to address the disclosing and managerial needs of the examined organisation. The single case study permits to us to test the weaknesses of the IIRF claimed in the literature, to suggest some adjustments to the original framework and to validate their effectiveness. Thanks to the single case study we then built theoretical constructs developing theory inductively; now the suggested framework can be further tested and validated in other organisations.,The paper introduces an innovative approach to IC reporting and disclosure in healthcare organisations. This is relevant not only for external communication but also for internal aims supporting managers in decision and actions.

/pdf/implementing-integrated-reporting-to-disclose-intellectual-32zhquy9v9.pdf

Implementing integrated reporting to disclose intellectual capital in health organisations: a case study

The paper aims to propose an integrated reporting (IR) framework rooted in Freeman’s stakeholder theory (ST). The proposed framework modifies the international integrated reporting framework (IIRF) and aims to overcome criticisms related to its focus on investors and the abandonment of sustainability.,The paper develops a modified IIRF based on an in-depth analysis of the IR and ST literature. The framework was then applied to a non-profit health-care organisation to verify its theoretical assumptions.,The modified IIRF was conceived as a ready-to-use tool. By applying it to a business case, it was validated with respect to whether and how it could help achieve better and more stakeholder-oriented reporting. The findings enabled us to validate the use of the tool not only for reporting but also for the self-assessment of organisations with respect to embedding ST.,The modified IIRF was implemented only in one case, and further implementations are needed to comprehensively identify its strengths and weaknesses, both in for-profit and non-profit organisations.,The revised IIRF represents an updated tool for reporting and disclosing the value created by an organisation for itself and for its stakeholders including the external entities affected by the impacts engendered by the organisation. In this way, the IIRF can give visibility to all value created and the value creation process, including sustainability matters. This allows integrated thinking processes to be incorporated accordingly, supporting better management.,This paper suggests three adjustments to improve the IIRF’s ability to incorporate ST as a theoretical foundation. The adjusted IIRF is a ready to-use-tool specifically highlighting what value or values an organisation delivers (its outcomes), for whom (its stakeholders) and how (its specific business processes) within a business model effectively connecting them. From this point of view, it fits the rising stream about the evolution of the sustainability reporting fostered jointly by the international integrated reporting council and sustainability accounting standard board, and by the European Union.

Value creation disclosure: the international integrated reporting framework revisited in the light of stakeholder theory


 Beginning in the early 2000s, the industry has applied a lot of attention, effort and protocol toward drilling automation routines in the interest of advancing efficiency and consistency, and most of all, safety. The routines that have grown in maturity and gone mainstream blend data interpretation from advanced algorithms and apply actions to downhole and/or surface machines to achieve the desired outcome. Directional drilling stands our as one field that has proven successful. Well control has been pursued with less enthusiasm in the automation space. Some effort has gone into automating a segmented well control workflow. A fully closed loop automated workflow that detects and controls has not reached commercial maturity yet.
 A key challenge for the pursuit of a fully closed loop influx management routine is detection. The data signatures that present themselves remain difficult to interpret consistently. This may be due to the wide range of variables that influence the interpretation. The drilling fluid, reservoir fluid and pressure, and the drilling state when the influx initiates are only a few.
 This paper will describe and demonstrate new technology that improves upon a process used since 2014, targeting the most important step of advancing early kick detection. This new generation of algorithms and workflows reduce gain and loss detection thresholds, can enable kick tolerance reduction, and will also minimizes false alarms. As dynamic pressure management and primary well control techniques become more complex, so to, do the challenges associated with the prompt and accurate detection of gains and losses. The new algorithms and workflows have been developed to ensure compatibility with surface backpressure Managed Pressure Drilling (MPD) systems, as well other techniques such as riser annulus height control.
 With increasingly stringent environment regulations being implemented worldwide, it is becoming essential for drilling operations to not only detect gains and losses, but to also monitor subsea equipment to avoid unplanned releases of drilling fluid. A side benefit of accurate gain and loss detection also enables detection of such leaks from subsea equipment. The case studies presented here will focus on the results obtained while running this technology in both conventional mode, and MPD mode. Additionally, a case study will describe how the detection application is then coupled with applied backpressure MPD and previously developed work automating circulation of the influx in SPE-194089-MS, attempting to fully close the automated influx management loop.
 Beyond the technology, human factors remain a barrier. To break these barriers, validation under robust conditions is essential.

Pier Maria Ferrando

Papers

Implementing integrated reporting to disclose intellectual capital in health organisations: a case study

Value creation disclosure: the international integrated reporting framework revisited in the light of stakeholder theory

Advancing Influx Detection Toward Automated Well Control