The Role of Corporate Governance in Influencing the Relationship Between Intellectual Capital and Financial Performance in the VUCA Era

Ririh Dian Pratiwi, Anis Chariri


This paper examines the ability of corporate governance in moderating the relationship between intellectual capital and financial performance. Resource Based Theory explains how companies use their resources to achieve financial performance, depending on their management. Intellectual capital is measured by the Value Added Intellectual Capital (VAIC) model, which consists of three components (VACA, VAHU, STVA). Financial performance in this paper is measured using Return on Assets (ROA). Corporate governance in this paper includes independent board of commissioners, managerial ownership and institutional ownership. This paper uses secondary data in the form of annual reports of manufacturing companies listed on the Indonesia Stock Exchange. The sample obtained by purposive sampling method amounted to 141. Data analysis was carried out by Moderating Regression Analysis (MRA), previously, the classical assumption test was carried out. The results showed that managerial ownership and institutional ownership were able to moderate the relationship between intellectual capital and financial performance. Meanwhile, the independent board of commissioners is unable to moderate the relationship berween intellectual capital and financial performance. The conclusion is that the amount of share ownership by managerial or institutional is able to control the company's intellectual capital in creating good financial performance. However, the proportion of independent commissioners is not able to influence the relationship between intellectual capital and financial performance. This research is able to contribute to the knowledge that intellectual capital is able to influence the achievement of the company's financial performance, which is influenced by the size of managerial ownership and institutional ownership. The VUCA era which is characterized by volatility, uncertainty, complexity and ambiguity certainly has an impact on the survival of an entity. Entities or companies with good governance will be able to manage their resources well (including intellectual capital) in producing optimal financial performance. Further research is suggested to add control variables such as firm size, or conduct research with the period before, during or after the crisis in a country.


Intellectual Capital; Corporate Governance; Financial Performance

Full Text:



P. Klarner, G. Probst, and M. Kircher, “The forward-looking board of directors,” Deloitte & Swiss Board Institute, 2020. .

M. Iranmahd, M. Moeinaddin, N. Shahmoradi, and F. Heyrani, “The effect of intellectual capital on institutional ownership and firm performance,” Int. J. Acad. Res. Accounting, Financ. Manag. Sci., vol. 4, no. 2, pp. 5–12, 2014, doi: 10.6007/IJARAFMS/v4-i2/724.

A. Buallay, R. Cummings, and A. Hamdan, “Intellectual capital efficiency and bank’s performance: A comparative study after the global financial crisis,” Pacific Account. Rev., vol. 31, no. 4, pp. 672–694, 2019, doi: 10.1108/PAR-04-2019-0039.

S. Khajavi, M. H. Ghadirian-Arani, and H. Fattahi-Nafchi, “Intellectual capital and earnings quality: A comprehensive investigation,” Int. J. Learn. Intellect. Cap., vol. 13, no. 4, pp. 316–337, 2016, doi: 10.1504/IJLIC.2016.079353.

S. Nimtrakoon, “The relationship between intellectual capital, firms’ market value and financial performance: Empirical evidence from the ASEAN,” J. Intellect. Cap., vol. 16, no. 3, pp. 587–618, 2015, doi: 10.1108/JIC-09-2014-0104.

S. M. Allameh, “Antecedents and consequences of intellectual capital: The role of social capital, knowledge sharing and innovation,” J. Intellect. Cap., vol. 19, no. 5, pp. 858–874, 2018, doi: 10.1108/JIC-05-2017-0068.

M. Haris, H. Yao, G. Tariq, A. Malik, and H. Javaid, “Intellectual Capital Performance and Profitability of Banks: Evidence from Pakistan,” J. Risk Financ. Manag., vol. 12, no. 2, p. 56, 2019, doi: 10.3390/jrfm12020056.

I. I. R. Council, Capitals Background Paper For <IR>, no. March. 2013.

A. Buallay, A. M. Hamdan, S. Reyad, S. Badawi, and A. Madbouly, “The efficiency of GCC banks: the role of intellectual capital,” Eur. Bus. Rev., vol. 32, no. 3, pp. 383–404, 2020, doi: 10.1108/EBR-04-2019-0053.

S. Kurniati, “Stock returns and financial performance as mediation variables in the influence of good corporate governance on corporate value,” Corp. Gov., vol. 19, no. 6, pp. 1289–1309, 2019, doi: 10.1108/CG-10-2018-0308.

R. D. Pratiwi and A. Chariri, “Effectiveness of The Board of Directors and Company Performance: Corporate Governance Perspective in Indonesia,” J. Penelitan Ekon. dan Bisnis, vol. 6, no. 1, pp. 17–27, 2021, doi: 10.33633/jpeb.v6i1.4351.

N. Soewarno and B. Tjahjadi, “Measures that matter: an empirical investigation of intellectual capital and financial performance of banking firms in Indonesia,” J. Intellect. Cap., vol. 21, no. 6, pp. 1085–1106, 2020, doi: 10.1108/JIC-09-2019-0225.

T. M. Shahwan and A. M. Habib, “Does the efficiency of corporate governance and intellectual capital affect a firm’s financial distress? Evidence from Egypt,” J. Intellect. Cap., vol. 21, no. 3, pp. 403–430, 2020, doi: 10.1108/JIC-06-2019-0143.

S. M. Zabri, K. Ahmad, and K. K. Wah, “Corporate Governance Practices and Firm Performance: Evidence from Top 100 Public Listed Companies in Malaysia,” Procedia Econ. Financ., vol. 35, no. October 2015, pp. 287–296, 2016, doi: 10.1016/s2212-5671(16)00036-8.

T. M. Shahwan, “The effects of corporate governance on financial performance and financial distress: evidence from Egypt,” Corp. Gov., 2015, doi: 10.1108/CG-11-2014-0140.

N. Jensen and W. Meckling, “Theory of the firm: Managerial behavior, agency costs, and capital structure,” J. financ. econ., vol. 3, no. 4, pp. 305–360, 1976.

R. Amit and P. J. H. Schoemaker, “Strategic assets and organizational rent,” Strateg. Manag. J., vol. 14, no. 1, pp. 33–46, 1993, doi: 10.1002/smj.4250140105.

B. Wernerfelt, “A Resource-Based View of the Firm Birger,” Strateg. Manag. J., vol. 5, no. 2, pp. 171–180, 1984.

A. Ahmed, M. K. Khurshid, M. Zulfiqar, and M. U. Yousaf, “Impact of Intellectual Capital on Firm Value: The Moderating Role of Managerial Ownership,” SMART J. Bus. Manag. Stud., vol. 15, no. 2, p. 28, 2019, doi: 10.20944/preprints201901.0318.v1.

J. B. Barney, “Resource-based theories of competitive advantage: A ten-year retrospective on the resource-based view,” J. Manage., vol. 27, no. 6, pp. 643–650, 2001, doi: 10.1177/014920630102700602.

Y. Ni, Y. R. Cheng, and P. Huang, “Do intellectual capitals matter to firm value enhancement? Evidences from Taiwan,” J. Intellect. Cap., 2020, doi: 10.1108/JIC-10-2019-0235.

M. Z. Arshad and D. Arshad, “Intellectual capital and SMEs performance in Pakistan: The role of environmental turbulence,” Int. J. Entrep., vol. 22, no. Specialissue, 2018.

C. I. Asogwa, G. N. Ofoegbu, J. I. Nnam, and O. D. Chukwunwike, “Effect of corporate governance board leadership models and attributes on earnings quality of quoted nigerian companies,” Cogent Bus. Manag., vol. 6, no. 1, 2019, doi: 10.1080/23311975.2019.1683124.

M. Prabowo and J. Simpson, “Independent directors and firm performance in family controlled firms: Evidence from Indonesia,” Asia. Pac. Econ. Lit., 2011, doi: 10.1111/j.1467-8411.2011.01276.x.

H. Noradiva, A. Parastou, and A. Azlina, “The Effects of Managerial Ownership on the Relationship between Intellectual Capital Performance and Firm Value,” Int. J. Soc. Sci. Humanit., vol. 6, no. 7, pp. 514–518, 2016, doi: 10.7763/ijssh.2016.v6.702.

C. J. Liang, T. T. Huang, and W. C. Lin, “Does ownership structure affect firm value? Intellectual capital across industries perspective,” J. Intellect. Cap., vol. 12, no. 4, pp. 552–570, 2011, doi: 10.1108/14691931111181724.


  • There are currently no refbacks.