Summer 2010 

The Striking Reality of Intangibles

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"This has now turned into a reputation matter, financial and political, and that is why you will now see more of me.."

BP Chairman Carl-Henric Svanberg
18 June 2010

45.6%. That's the RepuStars II (TM) Index return since January 2009. The benchmark S&P 500 Composite Index gained 18.22% over the same time period.

Here's the back story. In late spring, the Intangible Asset Finance Society began publishing financial metrics that put "money where our mouth is." Academically, of course. Each week, we publish on the Mission:Intangible blog updated values for two composite equity market indices that reflect the added value of reputation resilience.

The data are provided courtesy of Steel City Re. They indicate, as shown below in the data from the posting 2 August, that reputation has value. Select interval changes in the magnitude of the indices are shown below.

   


To put this in perspective, remember that recent headline risk events have transformed risk and reputation management into a burning platform issue. This is because the value at risk comprises 65% of the median public company’s value (82% of the average S&P500 constituent company). Recent regulatory and quasi-governmental rulings are also potent drivers. Examples are the proposed revisions to the Basel II accords, SEC Proxy Rules 33-9089, the release of ISO 31000:2009, publication of the Blue Ribbon Report on Risk Governance by the National Association of Corporate Directors, and the legal fallout of Stone v. Ritter (DE). These are all issues of central importance to the Society.

Reputation is created through the effective management of corporate intangible assets – specifically, the business processes that govern ethics, innovation, quality, safety, sustainability, and security. The relationship between and among these process, risk, reputation and value are described in the Society's recently-published book, Mission: Intangible – Managing Risk and Reputation to Create Enterprise Value (www.missionintangible.com -- Intangible Asset Finance Society with Trafford Press, March 2010).

MISSION:INTANGIBLE, the Blog

In addition to the weekly financial metrics, the blog of the Society offers critical comments on intangible asset management, reputation, and finance matters appearing in today's headlines. This past quarter, themes addressed included Security: Trust matters, Financial services sector; reputation; Big Box Retailers: Price, quality, and location; Multiline retail sector; KeyCorp: Say nay on pay; Air freight/Couriers sector, Dominos Pizza: Tangible value in an intangible world; Restaurants sector, Reputation vs. IP vs. Intangible Assets; Oil refiners & distribution sector; resilience; Securities brokerage; Automobiles sector, risk; safety; Oil, gas and consumable fuels sector; Holistic supply chain management; security; sustainability; and much more.

Companies analyzed included Goldman Sachs (NYSE:GS); Costco Wholesale Corporation (NASDAQ:COST); Dillards (NYSE:DDS); JC Penny (NYSE:JCP); Kohl (NYSE:KSS); Macy's (NYSE:M); Sears (NASDAQ:SHLD); Target Corporation (NYSE:TGT); Wal-Mart Stores (NYSE:WMT); KeyCorp (NYSE:KEY); Berkshire Hathaway (NYSE:BRK.A); Colgate Palmolive (NYSE:CL); CR Bard (NYSE:BCR); Google (NASDAQ:GOOG); UPS (NYSE:UPS);; FEDEX (NYSE:FDX); Dominos Pizza Inc. (NYSE:DPZ); 09-Jun-2010 BP (NYSE:BP); Toyota Motor Corporation (NYSE:TM); Walgreen Company (NYSE:WAG); Halliburton (NYSE:HAL); Transocean Ltd (NYSE:RIG);Walt Disney Company, The (NYSE:DIS); Palm, Inc. (NASDAQ:PALM); and many more. Learn More - Mission:Intangible



MISSION:INTANGIBLE Monthly Briefings

This series of moderated conversations are fabulous educational events. We have a terrific line up with leading authorities addressing core issues on a broad range of intangible asset drivers of value: reputation, IP semantics, security, leadership, IP markets, and more.

You won't want to miss these. As Joff Wild, editor of Intellectual Asset Management magazine noted, “For executives looking to find ways in which to engage with boardrooms reluctant to embrace the intangibles message, reputation could well be a very neat way to get a foot in the door and take control of this vital area.”

Slides are available for download on the Society's events page in advance of each program, and we strongly encourage audience-sourced questions before and during the event. There is no cost to the slides or to participate in the broadcast, but we do ask attendees to register. Register now for the next Mission Intangible Monthly Briefing.

In addition, if you should miss an event, or if you would like to review an event, an archival set comprising the slide presentations and audio recordings are available for each of the prior events through the Society's store. Society members receive a substantial discount.  Learn More - Monthly Briefing


Briefing Friday 9 July at 12h00 ED

Program: Building corporate reputation in the post-BP marketplace.

Jonathan Salem Baskin, global brand strategist, speaker, and author of Branding only Works on Cattle and Bright Lights Dim Bulbs; in dialogue with Nir Kossovsky, CEO, Steel City Re a risk and reputation management consultancy, author of Mission: Intangible. Managing risk and reputation to create enterprise value, and Executive Secretary of the Society to discuss brand, reputation, and the interplay between operational risk, authenticity, and responsible marketing.

Briefing Friday 6 August at 12h00 EDT

Program: You say IP. I say IPR.

Dr. Roya Ghafele, Lecturer at Oxford University and expert on IP perceptions, and formerly an economist at both the UN World Intellectual Property Organization and Organization for Economic Cooperation and Development; in conversation with Jim Singer, partner at the Pepper Hamilton law firm, a member of the firm's intellectual property practice group and publishes the IP Spotlight blog, and formerly an electrical engineer with an iconic oil firm to discuss whether accounting rules and language hinder the monetization of intellectual property, or, in the alternative whether accounting -- due to its inability to measure intangible asset value -- is becoming progressively irrelevant. Learn more.

Briefing Friday 3 September at 12h00 EDT

Program: Why pay for enterprise security when government is already funded through taxes?

Other than taking basic measures to prevent personal and property crime, tax payers expect the police, national guard, and military to provide security. So it may come as a surprise that government expects the private sector to provide the lion's share of security investment. What is the government's case for putting the burden on the private sector, and is there a business case that can help the private sector rationalize the investment?
 
Sean Lyon, principal, R.I.S.C. International (Ireland), corporate defense pioneer and the architect of the emerging cross-functional discipline of corporate defense management (CDM) in conversation with Robert Liscouski, member of the Board, Implant Sciences (NASDAQ:IMSC) and former Assistant Secretary, US Department of Homeland Security discuss the business case for investing in security processes and the mechanics of building a reputation for security. Learn more.

Briefing Friday 1 October at 12h00 EDT

Program: Who's in charge here?

American jazz great Louis Armstrong once observed, “Rank does not confer privilege or give power. It imposes responsibility." Yet corporate boards are facing a talent crisis, and intangible assets – those odd ‘things’ making up 75% of a company’s market value and invisible to accountants – have no natural corporate champion.

In a moderated conversation, Tony Chapelle, Senior Writer for AgendaWeek, a Financial Times-affiliated news publication focusing on corporate Board issues, will compare notes with Nigel Page, Finance Editor for Intellectual Asset Management magazine, the leading business journal for intellectual property management. Together, they will look at the rash of operational risk crises, headline events, and tarnished reputations (all Board-level events triggered by failures in intangible asset management) and suggest where responsibility might be best centered or apportioned to mitigate risks going forward. Learn more.

Briefing Friday 5 November at 12h00 EDT

Program: IP Markets - They are real, thriving, and expanding.

Stay tuned - details to follow. Learn more.

Recent IAM Magazine Articles from the Society

 

 

IAM magazine, a Globe White Page Ltd publication, is the media partner of the Society. IAM magazine publishes in each issue a contribution from the Society on a noteworthy intangible asset finance matter. And the January, we added case studies on reputation management. Recent publications have covered a consensus vision for the future decade of intangibles, zombie trademarkes, patent assertion licensing and corporate defenses, financially relevant metrics of emotions, the economic value of gender diversity, and intangible asset trends in China. Recent case studies on reputation have covered Johnson &  Johnson, Zale, Toyota, Goldman Sachs, and BP (cover story).

This year, we've also started calling attention to books by our members; last quarter, we announced the first book from the Society titled (what else?), Mission: Intangible. Managing risk and reputation to create enterprise value.  Learn More - IAM


Ongoing IAFS Membership Drive

You have a decision. You know that on February 28, new US SEC regulations drove into the boardrooms risk, reputation and intangible asset management. The C-Suite is looking for answers. Will you be at the table or on the menu?

Here's why. These regs mean that every board member, in fact every top executive, can expect major new challenges. Members of the Intangible Asset Finance Society (IAFS) will be prepared. Here’s how: 

1. Thought Leadership. The IAFS is the only interdisciplinary Society of professionals committed to the financial exploitation of intangible assets. That translates into enhanced pricing power; lower operating and credit costs; and higher net incomes and earnings multiples.

2. Risk Management. A lost reputation can destroy a firm overnight. IAFS can keep you up to date with risk management strategies for ethics, innovation, quality, safety, environmental sustainability, and security.

3. Preferential Pricing. Society members receive preferential rates for IAFS products at our new store and discounted registration to various professional meetings.

To renew your membership through our new on-line store, click here. To apply for membership, click here. 

Questions? Contact the Membership Chairman, David Gould, or the Executive Secretary, Nir Kossovsky. For contact information, click here.

Faced with such a cornucopia of value, how could you do anything but click here for a membership application form?

The IAFS Store

The Society's store offers archived recordings of each Mission:Intangible Monthly Briefing since late 2008. Each package, comprising an audio file and slides, represents the work of leading edge practitioners in the emerging field of intangible asset financial management. Society members receive a substantial discount on each download. We also offer books, including the Society's own publication, Mission: Intangible. Visit our store.

Linked-In IAFS Interest Group

Subtly signal to your colleagues that you know what it takes to create value in those assets that represent the bulk of a company's value today. Linked-In, the business networking website, hosts the IAFS icon that Society Members may wish to affix to their on-line bios. Affirm your commitment to superior intangible asset financial stewardship by joining the Linked-In group, Intangible Asset Finance Society - IAFS.