Effect of Corporate Governance on Intellectual Capital: Empirical study of Nigerian Quoted Non-Finance Company

Abstract

The corporate governance has always been a source of interest in the Nigeria corporate entities especially as most bankrupt companies that were listed in the Nigerian Exchange Group are as a result of poor corporate governance measure. In line with this narrative, the study analyzes the impact of corporate governance on Nigeria's intellectual capital using publicly traded non-finance enterprises on the floor market of the Nigerian Exchange Group. Intellectual capital, as evaluated by the value-added intellectual coefficient, is the dependent variable while Board size, independence, board meetings, board ownership, board gender diversity, and director salary are all considered as the independent factors. In addition, the model was regulated by the profitability variable, which is consistent with previous research. The data set used in this study covers the period from 2011 to 2020. The selection of companies for inclusion in the sample was based on purposive sampling. For the final sample size of 30 non-financial firms, the study relied on the availability of data for all research variables across a 10-year period. The study found that only board independence and director compensation have a significant impact on intellectual capital. Consequently, and the study concluded that increasing director salaries and the number of independent non-executive directors will result in a significant loss of intellectual capital. In line with these findings, the study recommended that there should be a reduction in director compensation as this will enhance intellectual capital of firms in this sector.