Contemplating the usefulness of intellectual capital reporting

Purpose – Dumay and Garanina (2013) asserted that, even though intellectual capital (IC) researchers would like to continue developing new models, existing models seem to not be used in practice. Nielsen et al. (in press) discovered that almost all companies that were originally involved in the Danish project of guidelines for intellectual capital statements (ICS) have abandoned their work with ICS a few years after the project ended. The purpose of this paper is to inquire the underlying reasons and conditions that drove these organisations to stop using the acquired framework. Design/methodology/approach – This study is based on both survey and in-depth interview data from key employees of 58 organisations. Qualitative content analysis employing thematic coding is used to crystallise aspects among the provided reasons, to categorise them, and to investigate possible relations. Results are interpreted through a conceptual framework containing elements diffusion theory, management fashion and fads theory and lifecycles as well as implementation failure of knowledge management (KM) techniques. Findings – A multitude of reasons and conditions are discovered as having affected companies’ decisions to interrupt their ICS practices. Underlying aspects principally refer to deliberately taken decisions but also to a substantial number of exogenous factors and conditions. Their common denominator is identified in the low perceived value of ICS, both internally from a KM perspective and externally in relation to the disclosure practice. This leads to the conclusion that ICS can be considered a hierarchically diffused management fashion whose implementation within these companies failed, and its lifecycle subsequently ended with rejection. Research limitations/implications – This study is limited due to the particular composition of the selected research sample, which, together with the qualitative nature of the research, restricts the possibility of any generalisations of the results to the broader field of IC and extra-financial reporting. Originality/value – It represents a large-scale attempt to directly investigate organisations’ and managers’ reluctances towards ICS measuring and reporting, its perceived value, and the failure of its persistent implementation.