guidelines for managing and reporting on intangibles (intellectual

alike to disclose not only the indicator but also its expected trend <strong>and</strong> its relation
to the company’s future earnings <strong>and</strong> growth.
5.1. Importance of disclosure
For intellectual capital reports to be relevant there has to be a relationship between the
disclosure of in<strong>for</strong>mation on intangibles <strong>and</strong> management activities. There<strong>for</strong>e, two
requirements must be in place:
• First, based on a well-defined strategy, the firm has to have a stated commitment
to sustain <strong>and</strong> develop its intellectual capital.
• Second, in order to adequately communicate its strategy both internally <strong>and</strong>
externally, the firm must disclose, at least partially, in<strong>for</strong>mation on the ef<strong>for</strong>ts
made to sustain <strong>and</strong> develop its intellectual resources.
The first condition puts the Vision of the Firm, that is, its strategic objectives, into
context; i.e., to put the management of intellectual capital on the firm’s agenda.
The second condition is that there is value to be derived from intellectual capital
disclosure. Disclosure has to help improve –<strong>and</strong> not merely describe– relationships with
customers, employees, partners, <strong>and</strong>, in general, the increased emphasis on knowledgesharing
activities across stakeholders <strong>and</strong> organizational boundaries. The disclosure of
in<strong>for</strong>mation on intangibles has an impact on the firm’s image <strong>and</strong> that affects its factor
markets. For instance, it can improve the firm’s ability to attract human resources
through the dissemination of in<strong>for</strong>mation on its professional development plan or
improve sourcing conditions by publishing in<strong>for</strong>mation on its average time-to-payment.
5.2. Elements of the Intellectual Capital Report
The Intellectual Capital Report has three different parts which will be described next:
• The vision of the firm
• The summary of intangible resources <strong>and</strong> activities
• The system of indicators
5.2.1. Vision of the firm
The Vision of the firm identifies:
• The strategic objectives accomplished by the company <strong>and</strong> how its
accomplishment add value <strong>for</strong> its customers <strong>and</strong> other stakeholders. It also
includes the firm’s strategic objectives <strong>for</strong> the future.
• The firm’s critical intangibles that enable the accomplishment of the strategic
objectives through knowledge production processes that create value. It also
identifies the critical intangibles on which the company relies to attain the
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