Unleash the Value of Intellectual Capital
Although our current accounting and reporting standards still tend to suggest otherwise, value creation by companies is no longer driven by its physical assets, but by its intellectual capital.The value of which is in many cases underappreciated. Intellectual capital is embedded in a company’s human capital, in its relationships and in its structure. It concerns amongst others the specific knowledge people have, their creativity and innovative drive, long-term partnerships with suppliers and customers, research and development, culture and organisational structures.THE IC-MODEL, SHOWN IN HIERARCHICAL ORDER.
By being more open about their intellectual capital, companies can increase the value of its equity and/or achieve more favourable credit terms. We need to manage intellectual capital in order to be able to attract its true value in the following four steps: (1) identify and articulate, (2) prioritize and exploit, (3) measure and calibrate, and (4) report and follow-up. A misconception in this respect is that, given the sometimes tacit nature, it is impossible to determine the value of intellectual capital. Investors on the other hand should become less focused on the financial data in a company’s annual report, and need to start asking questions about the true value drivers.
Bieme was established by Eduard van Gelderen, who has a long track-record in capital markets and is vice-chairman of the European Federation of Financial Societies’ Commission on Intellectual Capital. His aim is to bridge the knowledge gap between companies and their investors by: (1) giving lectures, (2) IC related advisory services, and (3) IC based investor relations services.