CIPR welcomes CIMA and Brand Finance Report on intangible value
CIPR Chief Executive, Alastair McCapra, has welcomed the publication of research by Brand Finance and the Chartered Institute of Management Accountants (CIMA), on the valuation of the UK’s ‘intangible assets’.
The comprehensive annual study of 58,000 companies across 120 stock markets reveals that, since 2012, undisclosed intangible value has grown 50% to $27 trillion, accounting for more than a third of the average firm’s enterprise value.
According to the report, failure to effectively account for intangibles risks the undervaluation and acquisition of strong brands such as Cadbury’s or Astra Zeneca, threatening jobs, government income and the success of the government’s ‘long-term economic plan’.
CIMA and Brand Finance have put forward a very challenging proposition to UK businesses – failing to understand the intangible value of your organisation means underestimating what it is actually worth. In fact much of the intangible value of organisations rests in their relationships. Building relationships is key to the creation of sustainable value in business, and Public Relations is the strategic management discipline which nurtures relationships and is therefore an essential part of the leadership of an organisation with a grip on its intangible value.
Integrated Reporting (IR) demonstrates how an organisation’s strategy, governance, performance and prospects lead to the creation of tangible and intangible value. This sort of extended reporting should become the expectation in our corporate culture, adding value to communities beyond investors and creating the potential for more dialogue and deeper relationships founded on trust.
I would add to CIMA’s timely and welcome intervention the further challenges of understanding how to manage the creation of intangible value through strategic public relations and the need to move towards integrated reporting.
Notes to editors
About the Chartered Institute of Public Relations (CIPR)Founded in 1948, the Chartered Institute of Public Relations (CIPR) is the Royal Chartered professional body for public relations practitioners in the UK and overseas. The CIPR is the largest membership organisation for PR practitioners outside of North America. By size of turnover and number of individually registered members, we are the leading representative body for the PR profession and industry in Europe.
The CIPR advances professionalism in public relations by making its members accountable to their employers and the public through a code of conduct and searchable public register, setting standards through training, qualifications, awards and the production of best practice and skills guidance, facilitating Continuing Professional Development (CPD), and awarding Chartered Public Relations Practitioner status (Chart.PR).