Dynamic Approach to Defining Intellectual Capital of Board of Directors and Its Structure

Abstract

Nowadays the value of modern companies is mainly created by intellectual capital. Paper analyses different approaches to defining intellectual capital of a company and its elements. We present and support the authors’ point of view that intellectual capital of a company can be generated by internal and external stakeholders of a company. While admitting the importance of all affiliated stakeholders of a company, the authors of the paper focus on the board of directors as the most important mechanism of corporate governance. The paper provides the definitions of the board of directors’ intellectual capital and its two elements, human capital and social capital. The latter concepts are based on the dynamic approach. Based on literature review of empirical papers we reveal the relationship between different elements of intellectual capital of board of directors and companies’ financial performance indicators.