The intellectual capital of corporate governance for overcaming a crisis

Despite the growing interest in the field of IC, there is still a lack of evidence and literature on the importance of IC in companies’ turnarounds, an issue that is even more pressing due to Covid-19. The pandemic is impacting corporates’ performances all over the world and most of them will face turnaround processes after the end of the emergency. In this scenario, our paper aims to study the positive role of intellectual capital on overcoming economic-financial distress. More particularly, assuming that IC - represented by corporate governance’ professional background, skills, knowledge, internal and external relationships - is one of the firm’s key factor and that, through the turnover of corporate governance, new knowledge and organizational capital is introduced, we presume that IC helps the competitiveness and thus the positive conclusion of the recovery plan. In order to demonstrate that some changes in the corporate governance could reconfigure the IC, increasing the chances to carry out a successful turnaround, we considered four case studies of Italian companies that have positively overcome a crisis. The analysis showed that the intellectual capital of corporate governance influences the success of the turnaround processes. Even though further investigations are essential to fully understand the role of IC in the treatment of a crisis, our results suggest that it is possible to view IC as a lever for overcoming economic-financial distress and, particularly, that the renewal of corporate governance positively influences the turnaround outcome