The mediating role of intellectual capital in the relationship between corporate governance and financial performance in the Tehran Stock Exchange

The purpose of this study is to evaluate the effect of corporate governance mechanisms on the financial performance of firms and the mediating role of intellectual capital in this relationship. The study population consists of the companies listed on the Tehran Stock Exchange. Using systematic elimination, 98 companies were selected as the final sample, covering the period 2009-2014. The results indicate that corporate governance mechanisms have no significant effect on intellectual capital. The only corporate governance indicator to have no effect on financial performance is the percentage of institutional investors. However, the independence of the board directors, the percentage of free float and board size all have a positive impact on financial performance. Other results showed that intellectual capital has a negative effect on financial performance. Moreover, it was revealed that intellectual capital has a negative mediating role only in the relationships of board independence, the percentage of free float and board size with financial performance.