Companies that ignore human capital will "go the way of the dinosaurs," according to Graham Ward, newly elected president of ICAEW

Companies that ignore human capital will "go the way of the dinosaurs," according to Graham Ward, newly elected president of the Institute of Chartered Accountants in England & Wales (ICAEW). Ward believes that cultivating and measuring the "great intangible" of human capital is the next major challenge for both company boards and their accountants. "It's now too important to be left to the specialists."

Launching ICAEW's new publication, Human Capital and Corporate Reputation: Setting the Boardroom Agenda, he called on accountants to develop vital measurements of value in

this area. "Measuring intangibles like human capital may seem like a break with my profession's traditions but it is essential to building Britain's sustain-able economic success". Ward identified four key steps:

  • detailed reporting to help investors understand how human capital builds long-term corporate value. This should cover the kind of people a company employs, their skills, training philosophy and investment, knowledge management systems and recruitment strategies. The operating and financial review provides one vehicle for this
  • developing agreed measurement techniques or benchmarks for human capital. Simply identifying and recording intangible assets and indicating their value would be a step in the right direction
  • devising new strategies for creating and sustaining human capital, involving the creation of a learning culture within the company and links with the educational sector
  • ensuring an ethical underpinning to corporate activities. Human Capital and Corporate Reputation: Setting the Boardroom Agenda, ICAEW 2020 Steering Group, 2000, is available free of charge at www.icaew.co.uk/institute/cbp/docu-ment.asp

    Reputational capital
    ICAEW is holding a conference on rep-utational capital, organised by the centre for business performance, in London in the spring of 2001. Issues will include:

  • key elements of social/reputational capital
  • importance of corporate culture in enhancing such capital
  • managing risks
  • measuring social/reputational capital
  • linkages to employees/investors and government
  • community programmes
  • environmental performance
  • building social capital in a global environment.

    For further information, contact: Susie Woodfield, Tel: 020 7920 8573, email: swoodfield@icaew.co.uk

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