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CCEG SOCIAL VALUE & INTANGIBLES REVIEW as a cost rather than an investment. Intellectual capital is poorly captured other than in some categories of intellectual property. Social and relationship capital is poorly captured, although some aspects of these can be shown when externally purchased – e.g., the value of a purchased brand or a customer list. Finally, natural capital is largely ignored. The challenge is that many organizations still fail to understand and manage all six organizational capitals as an integrated system.

International Standards Organization issued ISO 10668:2010 as a framework for the effective creation of a monetary value for a brand. Indicators that assess human engagement within an organization can be shown to suggest a positive approach to human capital. In addition, the effectiveness of organizational leadership in sustaining a positive culture can be indicated through the results of 360° leadership assessments.

Internal audit results for compliance in areas such as process management, using frameworks such as ISO 9001 and Current reporting gives little insight into decisions made to environmental management such as ISO 14001 can also forego increased financial capital (profits) in exchange for contribute to assessing the health of manufactured capital and natural capital. Audits the growth of other “capitals” against standards such as SA like social capital (investing The challenge is that many organizations still fail to 8000 or more recently ISO time and resources in the understand and manage all six organizational capitals 26000 can be used to indicate community), relationship as an integrated system. an organization’s culture and capital (creating financial settlements with dissatisfied customers in order to protect investment in building relationships with suppliers and third the brand) or human capital (costs associated with the parties. These approaches are individually likely to provide ongoing continual development of people). In reality, the holistic answers, and most will be subjective rather than decisions made to sustain one capital by moving resources objective. But, together they will begin to build a framework from one to another should enhance overall organizational of metrics that reflects organizations on a “whole system” basis. value and sustainability over time. Once there is an understanding of the intangibles that make up the $4 out of $5 then the question arises – how do you monitor the creation, sustainability, enhancement and depletion of these intangibles or “capitals?” The work of organizations like Seratio in identifying and measuring social value is one of many unique initiatives aimed at filling this information gap. There are also existing approaches such as brand valuation that can help provide indicators around intangibles. The

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Professionals of any background who provide input and contribute to decision making have what may be called a “sacred trust” to ensure their input is independent and objective. All professionals need to step back and reflect to make sure any evaluations and suggestions made as part of decision-making input is “in context.” The evolving work around integrated reporting and the management and understanding of intangibles is a critical part of this, especially for accountants who need to make sure their vision is clear.

February 2017

Profile for CCEG

Social Value and Intangibles Review February 2017  

CCEG Social Value & Intangibles Review (SVIR) – February 2017 Centre for Citizenship, Enterprise and Governance journal on Social Impact and...

Social Value and Intangibles Review February 2017  

CCEG Social Value & Intangibles Review (SVIR) – February 2017 Centre for Citizenship, Enterprise and Governance journal on Social Impact and...

Profile for seratio