Knowledge management practices and sustainability reporting: the mediating role of intellectual capital

Abstract

Purpose This study's aim is twofold: First, to establish the relationship between intellectual capital, knowledge management practices and sustainability reporting practices; second, to examine the mediating role of intellectual capital in the relationship between knowledge management practices and sustainability reporting practices. Design/methodology/approach This study is cross-sectional and uses a questionnaire survey of accountants in the financial services firms in Uganda. The data were analyzed using Statistical Package for Social Sciences and MediGraph program (Excel version). Findings Results indicate that intellectual capital and knowledge management practices are significantly related to the sustainability reporting practices among financial services firms in Uganda. Also, intellectual capital mediates the relationship between knowledge management practices and sustainability reporting practices. Originality/value Using perceptions, this study demonstrates how internal resources and capabilities can promote sustainability reporting in financial services firms in developing countries. Specifically, this study provides first time evidence on the mediating role of intellectual capital in the relationship between knowledge management practices and sustainability reporting practices. 📚 Further Readings 📖 Knowledge management strategies, intellectual capital, and innovation performance: a comparison between high-and low-tech firms Buenechea-Elberdin , M. , Sáenz , J. and Kianto , A. · (2018) · Journal of Knowledge Management , Vol. 22 No. 8 , pp. 1757 -1781 A Table A1 Table A1 Rotated component matrix for knowledge management practices Statement Component 1 2 3 4 5 Our institution uses confidentiality, employee guidance and other informal means to protect its strategic knowledge regarding sustainability reporting practices 0.918 Our institution uses information technology in internal communication throughout especially on matters related to sustainability reporting 0.917 Our institution has a career plan for employees that encourages continuous learning in the area of corporate reporting especially sustainability reporting 0.917 Our institution transfers sustainability reporting knowledge from experienced to inexperienced employees through mentoring 0.911 Our institution has systems that capture and deal with information about sustainability reporting processes 0.907 Our institution uses information technology to communicate with external stakeholders sustainability information 0.906 Our institution makes systematic use of best practices and lessons learned in corporate reporting such as sustainability reporting practices 0.902 Our institution encourages formal mentoring practices where best sustainability reporting practices are shared 0.900 Our institution uses information technology to collect sustainability information from various departments 0.894 Our institution systematically collects best practices and lessons learned in the field of sustainability reporting 0.893 Our institution informs clients, suppliers and employees about overall institution's performance through a sustainability report 0.893 Our institution systematically compares its strategic knowledge in corporate reporting and competence to that of its competitors 0.889 Our institution uses information technology to enable efficient information search and discovery especially on better and modern corporate reporting practices 0.887 Our institution best practices in one department are shared with other departments 0.879 Our institution team work is encouraged especially when it comes to reporting 0.876 Our institution uses information technology to develop new reporting practices with external stakeholders such as the Institute of Certified Public Accountants of Uganda 0.871 Our institution gives incentives when its aims are achieved and efficiently communicated to all stakeholders 0.862 Our institution uses information technology to analyze knowledge acquired in the field of sustainability reporting in order to make better decisions 0.861 Our institution databases are frequently accessed and updated to include new reporting standards such as the GRI 2016 sustainability reporting standards 0.845 In our institution, the responsibility for strategic knowledge management has been clearly assigned to a specific person 0.839 Our institution encourages knowledge transfer through instruments such as inter-functional teams, quality circles and improvement groups 0.835 Our institution research and development projects are provided with control mechanisms to monitor them 0.834 The management information System of this institution contains all knowledge, including its strategic direction on sustainability reporting 0.800 Our institution uses patents, agreements, legislation and other formal means to protect its strategic knowledge especially on sustainability reporting 0.775 We offer our employees opportunities to deepen and expand their expertise in corporate reporting practices such as sustainability reporting 0.771 Our institution strategic knowledge is protected from those stakeholders to whom it is not intended 0.721 Our institution invests in technology, research and development projects to enhance its corporate reporting 0.695 Our institution information is easily accessed without any limitation through a sustainability report 0.686 Our institution obtains feedback from finished research and development projects especially those aimed at improving our reporting practices that is used in developing new projects 0.631 In our institution, inter-departmental projects are carried out especially those related to improved corporate reporting 0.575 In our institution, supervisors encourage employees to question existing knowledge on sustainability reporting to improve practice 0.906 In our institution, supervisors allow employees to make mistakes, and they see mistakes as learning opportunities 0.904 In our institution, supervisors encourage employees to share sustainability reporting knowledge at the work place 0.903 In our institution, supervisors share sustainability reporting knowledge in an open and equal manner 0.794 Our institution provides formal training to employees in personal skills such as corporate reporting skills 0.885 Our institution provides formal training to employees in work-related subjects such as sustainability reporting 0.866 The creation of new knowledge especially sustainability reporting knowledge is one of our criteria for work performance assessment 0.817 The ability to apply knowledge acquired from others is one of our criteria for work performance assessment 0.737 Our employees have an opportunity to develop their competence through training tailored to their specific needs especially those related to sustainability reporting 0.589 Our institution organizes face-to-face meetings to discuss corporate reporting practices when necessary 0.845 We enable informal interaction between members of our financial institution 0.818 Our institution work duties are defined in a manner that allows for independent decision making 0.772 Our institution strategy addresses the development of knowledge and competences related to modern corporate reporting practices 0.829 Our knowledge and competence management strategy is communicated to employees clearly and comprehensively 0.683 Eigen values Percentage of variance Cumulative percentage 25.963 50.065 50.065 3.472 10.741 60.805 2.986 8.905 69.711 2.171 5.483 75.194 1.346 4.667 79.861 Note(s): Kaiser–Meyer–Olkin Measure of Sampling Adequacy = 0.807; Approx. Chi square = 4150.712; df = 990; Sig = 0.000 Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization Key: 1 – Learning mechanisms and information technology practices; 2 – Supervisory work; 3 – Human resource management practices; 4 – Work organizing; 5 – Strategic knowledge management Source(s): Primary data B Table A2 Table A2 Rotated component matrix for intellectual capital Statement Component 1 2 3 4 5 Things that we have learned have improved the reporting practices of this organization 0.885 The financial institution has learned and acquired a lot of new and important information that is relevant for corporate reporting 0.877 We honor our other stakeholders demands on time 0.847 The expertise of our financial institution inspires trust in stakeholders 0.845 In this financial institution, we have learned how to use technologies to improve our reporting 0.841 We keep our promises and agreements 0.837 Our financial institution seeks to take the interests of its stakeholders into account in its operations 0.831 We honor our clients demands on time 0.826 We have a well-defined organizational structure 0.814 The way our financial institution operations are characterized by an atmosphere of trust 0.802 Our financial institution displays her services nearer to our customers 0.763 Our financial institution has a great deal of useful knowledge in documents and databases 0.744 This financial institution promotes a culture of team work 0.736 This financial institution has clear values that guide its employees 0.732 Our employees are quick at adopting technologies that improve the image of this financial institution 0.722 Our financial institution has developed information technology facilities to support transparency 0.704 Our financial institution has developed team working contexts 0.693 We have improved our online processing systems and are now very fast 0.689 Employees in this financial institution are result oriented because of the systems that are in place 0.677 Our employees are fast at adopting new technologies aimed at improving this financial institution's legitimacy 0.675 Our employees enhance their capabilities through interactions 0.667 Our systems make it easy to access relevant information 0.656 Our institution's culture supports the sharing of information from sector associations 0.621 Our employees are found of minimizing costs while adopting new technologies that aim at upgrading the financial institution's image 0.605 We have self-driven employees 0.840 Our employees can with stand pressure from work 0.828 Our employees have a high level of expertise especially in corporate reporting 0.822 This financial institution's employees are knowledgeable about their work 0.813 Employees in this financial institution voice their opinions 0.798 Our employees are highly skilled at their jobs 0.795 Our employees are highly motivated in their work 0.776 This financial institution usually employs staff who are highly qualified 0.771 Our employees are bright 0.742 Our employees are satisfied with our working conditions 0.730 Our employees always come up with new ideas on how to improve corporate reporting 0.726 Our employees are the best in the industry 0.708 Our employees perform their best to achieve financial institution goals 0.700 We always upgrade employees' skills especially in the modern reporting practices 0.694 We have a succession training program designed for our employees 0.690 We strive to build our employees to others' level in other institutions in the same industry 0.690 We do not have a big trouble if individuals left since all our systems are documented 0.687 Our employees have the ideal competence in sustainability reporting 0.687 Our employees provide technical skills to our customers 0.685 Our employees learn from their colleagues 0.682 Employees in this financial institution are socially competent 0.678 Our employees are good at problem handling 0.663 We get the most out of our employees 0.662 Most of our employees are more creative 0.649 We have a clear recruitment program 0.604 Level of commitment of our staff to work is very high 0.579 Our employees always think actions through 0.576 Our employees cooperate in teams 0.561 Our employees cannot do anything without thinking about its repercussions 0.531 Our clients appreciate the use of sustainability reports 0.750 We have a good network system with our customers 0.727 Our clients are knowledgeable in interpreting sustainability reports 0.709 Our employees have the courage to make bold and difficult decisions regarding our clients welfare 0.662 This financial institution has many clear openings to its customers 0.638 We usually get new ideas on compliance through our customers 0.627 Our employees assist one another in job related activities 0.756 Our employees frequently collaborate to solve problems 0.735 Internal cooperation in our financial institution runs smoothly 0.708 Our employees once in a while have an outing together as a group 0.693 In this financial institution, we help one another when it comes to social activities 0.689 In this financial institution, we share internally knowledge regarding new innovations 0.624 The operations of our financial institution can be described as creative and inventive 0.807 In this financial institution, we have started to share knowledge with financial institutions that are ahead of us in reporting practices 0.637 Eigen values Percentage of variance Cumulative percentage 39.137 27.153 27.153 5.568 26.818 53.971 3.410 9.646 63.617 2.479 9.534 73.151 1.743 4.963 78.114 Note(s): Kaiser–Meyer–Olkin Measure of Sampling Adequacy = 0.796; Approx. Chi square = 4242.133; df = 1081; Sig = 0.000 Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization Key: 1 – Structural capital, 2 – Human capital, 3 – External relational capital, 4 – Internal relational capital, 5 – Renewal capital Source(s): Primary data C Table A3 Table A3 GRI standards based disclosure index Environmental performance disclosures The amount of materials used The amount of recycled input materials used The amount of energy consumed within the organization from renewable sources such as solar, wind, geothermal and hydropower energy among others The amount of energy consumed within the organization from non-renewable sources such as coal, oil, natural gas and nuclear energy among others The amount of energy consumed outside the organization from renewable sources The amount of energy consumed outside the organization from non-renewable sources The amount of the reduction in energy consumption The amount of the reductions in energy requirements of production processes The amount of water withdrawn from all sources The amount of water recycled The amount of (in carbon dioxide equivalent) direct greenhouse gas emissions The amount of (in carbon dioxide equivalent) energy indirect greenhouse gas emissions The amount of (in carbon dioxide equivalent) other indirect greenhouse gas emissions The amount of reduction of greenhouse gas emissions The amount of emissions of ozone-depleting substances The amount of water discharge by quality and destination The greenhouse gas emissions intensity The water sources significantly affected by withdrawal of water The operational sites owned in protected areas The operational sites adjacent to areas of high biodiversity value Significant impacts of our activities on biodiversity Habitats protected Habitats restored The number of water bodies affected by the used water discharges The number of cases of non-compliance with environmental laws The number of new suppliers that were screened using environmental criteria set by NEMA The negative environmental impacts in the supply chain and actions taken Social performance disclosures The number of new employee hires The number of employee turnover The amount of benefits provided to full-time employees that are not provided to temporary or part-time employees Matters of parental leave of our staff The minimum number of weeks' notice provided to employees prior to the implementation of significant operational changes The number of workers representation in formal joint management–worker health and safety committees The types of injury that occurred to the employees during the year The rate at which employees are injured during our production processes Any occupational diseases that affect employees The lost days of employees due to injuries sustained at work The number of employees who were absent during the year The employees who were injured during the production process The number of workers with high incidence or high risk of diseases related to their occupation The health and safety topics covered in formal agreements with trade unions The number of workers representation in formal joint management–worker health and safety committees The average hours of training per year per employee The programs for upgrading employee skills The percentage of employees receiving regular career development reviews The number of females and males on the board The number of females and males on the management team The number of males and females in the organization The ratio of basic salary of women to men The number of incidents of discrimination The corrective actions taken in the event of any discrimination The operations in which the right to freedom of association may be at risk The operations in which the collective bargaining may be at risk The operations at significant risk for incidents of child labor The operations at significant risk for incidents of forced or compulsory labor The security personnel trained in human rights policies The incidents of violations of rights of indigenous peoples The operations that have been subject to human rights reviews or impact assessments The employee training on human rights policies undertaken by this firm Significant investment agreements that include human rights clauses or that underwent human rights screening The operations with local community engagements The operations with local community development programs The operations with significant impacts on local communities New suppliers that were screened based on our sensitivity on societal issues The negative social impacts in the supply chain Any political contributions to various political parties or politicians Incidents of non-compliance concerning the health and safety guidelines Incidents of non-compliance with marketing communications guidelines The complaints concerning breaches of customer privacy The complaints concerning losses of customer data Any non-compliance with laws and regulations in the social area Economic performance disclosures The profit (loss) made The revenues made The operating costs of the firm The dividends paid Payments to government (taxes and penalties) The financial implications due to climate change The retirement plans for our employees The financial assistance received from government Ratios of standard entry level wage by gender The proportion of senior management hired from the local community The infrastructure investments supported The significant indirect economic impacts The proportion of total expenditures on local suppliers The operations assessed for risks related to corruption Communications about anti-corruption policies and procedures Training about anti-corruption policies and procedures The confirmed incidents of corruption and actions taken Legal actions for anti-competitive behavior the firm was involved in Legal actions for anti-trust practices the firm was involved in Legal actions for monopoly practices the firm was involved in