Board characteristics and intellectual capital in Palestine: an agency theory approach

Purpose This study examines the impact of board characteristics – specifically board size, board independence and CEO duality – on the level of intellectual capital disclosure (ICD) in non-financial companies listed on the Palestine Stock Exchange. Guided by Agency Theory, the study explores how governance mechanisms influence transparency in reporting intangible assets. Design/methodology/approach A quantitative analytical approach was employed, using data from 32 non-financial companies across the industrial, investment and services sectors for the period 2010–2020, yielding 352 firm-year observations. Intellectual capital (IC) was measured using the Value Added Intellectual Coefficient (VAIC™) model, which provides a structured method for assessing the efficiency of intangible asset utilization. Findings The results show that board size and board independence are positively associated with higher levels of ICD, suggesting that diversified expertise and independent oversight enhance transparency. Conversely, CEO duality negatively affects ICD, indicating that the concentration of power weakens board monitoring. Control variables also showed that older and larger firms disclose more IC, likely due to greater organizational maturity and resources. Social implications The findings contribute to enhancing corporate transparency and accountability in fragile institutional settings like Palestine. Improved ICD not only promotes investor trust but also strengthens social legitimacy, supports sustainable development goals and reinforces the role of businesses in advancing local economic resilience and community well-being. Originality/value This study adds to the limited empirical literature on ICD in emerging markets, particularly within the Arab region. It extends Agency Theory by validating its relevance in a developing country context and demonstrates that effective governance practices – especially board independence and separation of leadership roles – can mitigate agency problems even in the absence of strong regulatory frameworks. The findings offer actionable insights for policymakers, regulators and corporate practitioners aiming to enhance corporate transparency and sustainability in similar settings.