Does corporate governance moderate the relationship between intellectual capital and sustainability reporting in G20 countries?

Abstract

Purpose The present work aims to investigate the influence of intellectual capital (IC) components, human, structural and relational, on the quality of sustainability reporting (SR). It further examined how corporate governance moderates this relationship within the context of G20 countries. Design/methodology/approach Using a panel data set of 427 international companies from G20 nations between 2018 and 2024, data were collected from the Thomson Reuters Eikon ASSET4 database and corporate annual reports. The hypotheses were tested using multivariate linear regression. Findings The results of this study indicate that the IC components contribute to improving the quality of sustainability reports. It also reveals that human capital has a significant positive effect, while structural capital shows a positive but marginally significant relationship with SR. In contrast, relational capital has no significant direct effect; however, its contribution becomes positive and significant when corporate governance is considered as a moderating factor. Furthermore, the results suggest that corporate governance strengthens the relationship between the IC components and SR. Practical implications The findings show that human capital and structural capital improve the quality of SR, while effective corporate governance strengthens this relationship. The study therefore provides useful implications for companies and regulators to enhance reporting transparency and reduce the risk of greenwashing. Originality/value Contrary to the scant literature, this study provides a realistic conclusion on the relationship between IC components and SR, aligning with current trends that emphasize the role of IC through corporate governance, which strengthens this relationship. The study contributes to the literature by providing a comprehensive and accurate view of SR within the study through an improved SR framework and efficient methodology. It adds value in the contemporary market, where the competition is SR-driven.