Intellectual capital reporting from social and sustainability reports in financial services

Purpose – The purpose of this paper is to analyze the level and the quality of voluntary disclosures of intellectual capital (IC) in the social and sustainability reports in a sample of financial service of Italian listed companies.Design/methodology/approach – We conducted analysis on social and sustainability reports for year 2010 on a sample related to firms selected among the most capitalized Italian listed companies (FTSE MIB). To investigate the “level of disclosure” we identified the presence of IC information, while to evaluate the “IC quality” we constructed a voluntary disclosure index based on content analysis.Research limitations/implications – Subjective judgment is involved in items selection and then in constructing the disclosure index. Other limitation is related to the methodology of content analysis.Practical implications – The results confirm that the social and sustainability report can adequately represent the intellectual capital, especially in order to understand its role in the firm and the interaction with other variables present in the firm.Originality/value – The paper support that a correct management of corporate responsibility practices is an opportunity to develop IC such as a source of value creation. In detail the study highlights the level and determinants of IC disclosure in sustainability reports and highlight the legitimacy and reputation are potential incentives to engage it practice. Moreover, there are few researches regarding the banking industry context for Italian context.