Our point of departure: all organizations are either creating or destroying value; regardless of tax status, the involvement of governments or bi-laterals like the World Bank and IMF.
Value is the only commonality in an increasingly complex, challenging and interdependent world.
The assets we have under our command are predominantly the intangible assets we must learn how to manage: people, environmental services, reputation. Each of these must be cultivated if we are to achieve long-term success as leaders and investors.
In the 1980's, financial statements captured at least 75% on average of the true market value of major corporations. By 2001 that figure had dropped to 15%, averaged across the S&P 500. (Baruch Lev, Intangibles: Management, Measurement and Reporting: Washington, D.C. Brookings Institution, 2001.)
The growing importance of intangibles to company valuations was underscored by the announcement by the U.S. Financial Accounting Standards Board that it will be issuing binding disclosure requirements about companies' intangible assets by 2007. This will clearly accelerate the integration of intangibles into mainstream financial analysis and its affect on share price.
At ValueNewsNetwork.com and Value magazine we seek to offer those managing in this environment the insights and understandings necessary to achieve our greatest possible success.
We approach this discussion with no pat answers or prescriptive doctrine but with an understanding that the best tools for maximizing value will be developed out of a crosscutting dialogue among those creating the answers to the emerging challenges of our time.
The value being pursued today goes beyond our traditional understanding of the term. Yes, a large part of value creation has to do with maximizing economic value and financial returns for shareholders. Yet, it is increasingly obvious that in order to maximize economic value one must consider not simply the easily defined indicators we have traditionally relied upon, but rather the less easily defined aspects of value that are extra-financial and often social and/or environmental in nature.
We welcome you to this dialogue and look forward to bringing you some of the most provocative thinkers and doers of our time.