https://www.mdu.se/

The purpose of this paper is to explore how fund mangers, as cultured observers, make sense of social, environmental and ethical (SEE) information about companies. The paper uses a qualitative research approach involving in depth interviews with fund managers in Sweden. The analysis is influenced by a combination of system and network theories where social networks are imposed on fund managers when they make sense of corporate information. With reference to a growing SRI market, the rationales of social forces imposed on fund managers do not seem to have changed in order for them to include social aspects. Instead, these aspects are taken care of elsewhere in organizations, leaving fund managers as nodes in social networks, outside. However, if social aspects become an issue for the market positioning of companies, they could probably make more of a difference to the rationales of social forces surrounding fund managers.

During the last few decades, Intellectual Capital (IC) has been recognized as an important resource in firms. In order to improve IC reporting, a number of guidelines have been initiated in Europe and in Japan. The capital market has been one important target group for these initiatives. However, actors on the capital market seem to be ambivalent towards IC information. They both demand and find such information useful, and at the same time, they seem to lack interest in it.

This thesis contains five papers that aim to explore how actors on the capital market deal with IC information. A qualitative research approach is applied involving interviews with 14 fund managers in Stockholm. In the analysis of the data, fund managers are seen as ‘cultured observers’, meaning they are influenced by social forces when they observe IC information. Three social forces were identified as being imposed on the respondents. These forces represent social logics that are created in the relationship between the fund managers and

·         the organization in which they work

·         the market price and rationale

·         the agendas around certain companies

The seemingly increased complexity of IC information does not always bother fund managers. The rationale of interacting social networks reduces this complexity in order for the information to make sense in their meaning-based reproduction.

With respect to ethical funds, this thesis suggests that the rationales of the three social forces above do not seem to have changed in order to include social aspects. Instead, these aspects are taken care of elsewhere in organizations, leaving fund managers outside of their potential for compromising market rationales. Furthermore, fund managers tend to reduce the complexity of information concerning personnel and the working environment by depending on having the right management in organisations.

This thesis contributes by increasing our understanding of how the social environment influences fund managers when they observe IC information. By regarding fund managers as ‘cultured observers’ it explores how complexity is dealt with, an approach that contrasts with assumptions within finance theory about profit maximizing actors. Here, the market price and rationale represent one social force among many.

Det projekt som vi redogör för i den här rapporten är ett led i enspännande och samhällsrelevant internationell forskning, delvispådriven av olika regeringar och mellanstatliga organisationer avseenderedovisning, styrning och kommunikation av icke-materiellaresurser som t.ex. kompetens, kundrelationer och miljöfrågor.

Forskningen inom området kan sägas ha startat under 1980-talet och tog ordentlig fart i mitten av 1990-talet. Det var dock först i början av 2000-talet som intresset för forskning kring kapitalmarknadskommunikation vaknade på riktigt allvar, troligen bl.a. som en följd avaktiemarknadens volatilitet.

Vår tes i skriften är att sociala skillnader mellan olika aktörer måste beaktas vid kommunikationen mellan företag och finansmarknad. Informationen tolkas på olika sätt beroende på vilken social kulturman tillhör. Man kan säga att de olika tolkningarna speglar ”två sidorav samma mynt”.

Purpose - The purpose of this paper is to explore how Japanese Financial Institutions (JFI) acquire and use company intellectual capital (IC) information and other associated intangibles information in their common structured and routine equity investment decisions and how this activity contributed to knowledge creation in the JFIs concerning knowledge of companies, markets and emotions.

Design/methodogy/approach – The research employed a multi-case design, using four JFI cases. The JFIs and their IC use were discussed in terms of Nonaka and Toyama’s ’theory of the knowledge creating firm’ (2005). The associated concepts of ‘Ba’, ‘SECI’ and ‘Kata’ were conceptually located within the internal and external order emerging in the cases and were used to analyze JFI knowledge creating behavior. Despite the limits to SECI or Kata processes noted in the cases, these concepts were valuable in analyzing the case data.

Findings – Company IC information contributed to earnings estimates and company valuation. Impressionistic and emotional information about intangibles contributed to JFI feelings and confidence in their valuation and information use. Both led to investment decisions. JFI knowledge was an important component of the key interacting and informed contexts used by JFIs to make collective sense of these different but complementary types of information in investment decision making. This created opportunities for improved disclosure and accountability between JFIs and their investee companies. Common patterns of behaviour across the JFIs were counterbalanced by variety and differences noted in JFI behaviour. These included differences in JFI investment philosophy and ‘landscape’.

Practical implication – The findings provide important insights in how JFI knowledge creating patterns could limit or progress a common language of communication between companies and markets on the subject of intellectual capital. This could impact on the quality of corporate disclosure and accountability processes. The results will be used in the context of a further development of the Disclosure of Intellectual Assets Based Management in Japan.

Originality – The paper combines ideas from the ‘knowledge creating firm’ with conventional ideas of finance, and of disclosure and accountability. This combined theoretical analysis demonstrated a novel and robust theoretical context to interpret the unique Japanese case data, and the distinctive empirical patterns emerging from it.

In the middle of the 1990s, a number of OECD conferences were held to encourage attention to the question on how to account for intangibles.  The OECD initiative was based on the notion that intangibles appear to be increasingly important as determinants of enterprise growth, productivity gains, profitability and wealth creation. However, the importance of intangibles exceeds the current ability to recognise and measure them. This gap is also evident in external reporting, which might cause miss-allocation in capital markets. At the OECD conference in Helsinki, 1996 two possible ways forward were identified. One was extending the use of human resource accounting (representing a financial approach) and the other was using the promising idea of intellectual capital (representing av non-financial approach). During the following two year, the two basic possibilities were discussed at a number of meetings took place and the idea of non-financial information focusing intangibles and the using of the concept IC was further enforced. consensus was reached that something has to be done in order to encourage the development of voluntary guidelines for using a non-financial approach when measuring, reporting and managing intangibles.

The purpose of this paper is to explore how Japanese Financial Institutions (JFI)

acquire and use company intellectual capital (IC) information and other associated intangibles

information in their common structured and routine equity investment decisions and how this

activity contributed to knowledge creation in the JFIs concerning knowledge of companies,

markets and emotions. Company IC information contributed to earnings estimates and company

valuation. Impressionistic and emotional information about intangibles contributed to JFI

feelings and confidence in their valuation and information use. Both led to investment

decisions. JFI knowledge was an important component of the key interacting and informed

contexts used by JFIs to make collective sense of these different but complementary types of

information in investment decision making. This created opportunities for improved

disclosure and accountability between JFIs and their investee companies. Common patterns of

behaviour across the JFIs were counterbalanced by variety and differences noted in JFI

behaviour. These included differences in JFI investment philosophy and ‘landscape’.

 Purpose – The purpose of the present paper is to discuss the Guideline for Intellectual Property Information Disclosure (GIPID) in relation to the ambitious aspirations behind the guideline and in that way develop a future research agenda aiming at addressing the main challenges regarding the construction of guidelines for future IC reporting. Design/methodology/approach – The purpose will be achieved by comparing the GIPID with two other IC guideline proposals, namely MERITUM and the Danish Guideline for Intellectual Capital Statements, respectively, from a capital market communication perspective and from a management control perspective. References are made to 12 Japanese companies that have published IP reports. The sample companies operate in a wide range of nine industries covering, for example, security, manufacturing, transportation, and chemistry, and comprise large as well as small firms.

Findings – The study identifies four major challenges for intellectual capital guidelines and reporting. These challenges regard market communication, management control, uniqueness versus comparability, and confidentiality versus accountability. The paper concludes with a number of questions of vital importance for future research within the research area.

Originality/value – This is one of the first papers that discuss the Japanese Guideline for Intellectual Property Information Disclosure as well as to compare it with similar European guidelines.