Stock Exchange Adds Polish to Listed Companies

A mid-sized national stock exchange realized that the small and mid-cap companies that list with them are generally undervalued. They felt that a key limitation on valuations is the lack of information communicated to investors and the market about intellectual capital. Today, it is difficult for investors to understand the relationship between intellectual capital—human, structural knowledge and networks—and the earnings performance of the companies.

The first stage of their project involved a self-assessment tool to measure intangibles based on IC Rating™. This stage gave the participating companies a clearer language and a consistent way to describe critical intellectual capital value drivers. The next stages will involve multi-respondent assessments and IC Reporting for investors.

The stock exchange is distinguishing itself by seeking to help its listed companies increase their value. It is recognizing the fact that there is a huge information gap between the information that investors receive today and the information that they require to truly understand companies in today’s knowledge-based economy.

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