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Intellectual capital management

The importance of financial assets in the determination of a company’s market value is decreasing fast and it is equally recognised that non-financial (or intangible) assets are now the main drivers of performance and market value. To date however there exist little or no objective quantitative measures of intangible assets, and where they are claimed to exist (e.g. in the valuation of brands, intellectual property, patents, etc.) they are very specific and limited in scope.

intellectual_assets

AREOPA – with whom Boda & Partners signed a strategic alliance agreement – has developed a model for identifying and quantifying intangibles as components of intellectual capital (IC). This model serves to evaluate a company’s return on all the capital it employs, helping to explain the difference between book and market value. It also provides guidance as to how and where management should put its attention to grow the organisation’s overall IC.

Boda & Partners positions intellectual capital calculation as a management tool and not as a simple financial calculation of the intangible assets of the organization and thus explaining the difference between book value and market value. Management wants to understand the value of the intellectual capital of the organization. By giving a monetary value to the intellectual capital, management starts to understand the value and the impact.

Boda & Partners’ 4-Leaf Model® identifies the sources of added value and competitive advantage in businesses and in particular of virtual organizations - collaborative networks of otherwise independent economic entities - that build their business models around the internet using minimal financial assets.