SlideShare a Scribd company logo
1 of 25
Download to read offline
THE RISE (AND FALL) OF THE INTELLECTUAL CAPITAL STATEMENT: WHATEVER HAPPENED TO THE LEGITIMACY OF INTELLECTUAL CAPITAL REPORTING IN DENMARK? 
Authors 
Christian Nielsen, University of Aalborg 
Robin Roslender, University of Dundee and University of Aalborg 
Stefan Schaper, G.d’Annunzio University, Pescara 
Commentary by 
John Dumay, Macquarie University, Sydney 
Critical Perspectives in Accounting Conference 2014 
July 8 2014
Overview
Research question? 
• 
Original ICS was formulated in 2000 and project ended over a decade ago in 2003. 
• 
failure to significantly develop the ICS, or its counterpart in the form of the Intellectual Capital Report is a puzzle 
• 
absence of literature that explores what has actually happened to the ICS within Denmark since 2003. 
• 
It was these questions that motivated a study of the fate of ICS practice within the cohort of companies participating in the project between 1997 and 2003.
Analytical Framework 
Figure 1: Extended phases of organizational legitimacy (Tilling and Tilt, 2010: 75)
Research Method 
• 
Phase 1: identifying the potential research sample 
– 
102 companies 
• 
11 from the first project, 89 New Guideline project companies and the two coordination and consulting organizations.
Research method 
Still exist 53% 
Liquidated / Unknown status 16% 
Have merged 20% 
Transformed 7% 
Cleavage 4% 
Partly exist 31% 
Companies's current status
Research method 
Original, same company 28% 
Original, not same company 50% 
New contacts 22% 
Status of interviewees (n° of interviewees: 64)
Research method 
• 
Phase 2: revisiting the guideline companies 
– 
semi-structured interviews 
– 
telephone rather than face-to-face interviews 
– 
semi-structured interview guide was designed following the research themes of establishing, maintaining and (possibly) abandoning the ICS project within the company.
Why did the companies participate in the guideline project? 
INTERNAL interest of mainly 1 person 28,5% 
INTERNAL interest at company level 43% 
EXTERNAL reasons 28,5% 
Why started? (42 answers)
What did the project companies report on intellectual capital? 
Mainly about employees 59% 
ALL elements 21% 
Processes 10% 
customers 7% 
Technology 3% 
Main focus? (29 answers)
What did the project companies report on intellectual capital? 
Internal 46% 
External 32% 
Both 22% 
Internal or external purpose of IC reporting (37 answers)
How were intellectual capital reporting practices maintained within companies? 
HR 21% 
COMMUNICATION 7% 
FINANCE 7% 
R&D 3% 
SALES 3% 
Interdisciplinary group 35% 
Small workgroup 24% 
How organized? (29 answers)
Were intellectual capital reporting practices substantially embedded? 
Integrated with existing 30.4% 
Mainly questionnaires 13.0% 
Created own databases 26.1% 
Yes, not specified 8.7% 
No 17.4% 
Source of problems 4.3% 
Used automatized processes? (23 answers)
Extension or the disestablishment of intellectual capital reporting practices? 
0% 
20% 
40% 
60% 
80% 
100% 
0 
1 
2 
3 
4 
5 
6 
7 
>10 
Number of ICS done by companies (65 statements) 
Average % of companies
Did intellectual capital reporting continue in other ways? 
Well, we developed our own guidelines and followed that practice, we established our own structure, we didn't followed the national guidelines, in fact we were earlier than the guidelines, we looked of course at it and took out something but we thought our own were better.
What were the perceived effects of the guideline project? 
NO 26% 
YES 15% 
YES, potentially 10% 
YES, mainly in relation to HR 21% 
YES, mainly external perception 18% 
YES, awareness of recourses 10% 
Positive effects? (39 answers)
Discussion 
• 
ICS was used principally for internal reporting purposes 
• 
ICS simply didn’t provide value for money and had been overtaken by new priorities as companies evolved 
• 
was both well-conceived and resourced, and staffed with representatives from academia, industry, the audit profession and government
Discussion 
• 
In the absence of any mandatory reporting requirement, it was easy for companies to adopt a minimalist approach to IC reporting. 
• 
decade on from the guideline project it is possible to see parallels in relation to recent interest in business models and integrated reporting. 
• 
IC remains valid a decade on from the end of the guideline project.
Conclusion? 
• 
Suggest that whatever legitimacy might be identified with the outcome of guideline project remains moth-balled. 
• 
This legitimacy has not been lost as a consequence of being shown to be a chimera (fantasy) possibly in the context of the renewed debate about the future of financial reporting. 
• 
Left to their own devices, companies are generally happy to account and report in ways that are regarded by them as meeting the information needs of their principal stakeholders 
• 
As long as the regulatory authorities are prepared to support powerful stakeholders little or nothing can be expected to change.
Critique 
• 
The Danish IC statement is put upon an artificial pedestal based on rhetoric rather than fact: 
– 
“continues to be identified as being in the vanguard of developments within the field of intellectual capital disclosure”. 
– 
“the resultant Intellectual Capital Statement (ICS) stands out due to a combination of sound theoretical underpinnings and its empirical grounding, in opposition to most of the other initiatives that were largely based on theoretical perspectives or much smaller empirical samples than the 100 plus companies involved in the Danish project”.
Critique 
• 
Literature review on IC reporting is stuck in the 1990s and early 2000s. A lot has happened since then especially in: 
– 
Europe (InCaS, RICARDIS); 
– 
Germany (Wissensbilanz) over 350companies; 
– 
Austrian Universities; 
– 
Hong Kong IPD project with over 600 SMEs; and 
– 
Japan’s Intellectual asset management report project currently with 297 companies (366 reports) 
See Svieby’s website and Dumay & Roslender (2013) for a listing of IC frameworks.
Critique 
• 
Considering the plethora of other IC projects mentioned why would we be only concerned with an “absence of a body of literature that explores what has actually happened to the ICS within Denmark since the termination of the Danish Guideline Project in 2003”? 
• 
What is the research question and how does the research contribute to the ‘state of the art’ of IC research?
Critique 
• 
Why does legitimacy theory come before the research? 
– 
Establishes pre-set ideas and categories before data is collected 
– 
Why not stakeholder theory per your (conclusion)? 
– 
Why is legitimacy theory only mentioned 3 times and Tilling & Tilt (2010) not mentioned at all after page 12?
Critique 
• 
Results are descriptive and not much different from the results of early research. 
• 
Figure 10 is misleading as it adds to more than 100% (0 and 1 are cumulative and >1 are subsets of 1). 
• 
Why mention “Integrated Reporting” at the end of the paper? Why not in the literature review?
The way forward? 
• 
Current and up to date literature review 
• 
Focussed research question 
• 
Remove the pedestal from under the ICS or backup the rhetoric 
• 
If using ‘legitimacy theory’ explain why better and refer to it in your results, discussion and (conclusion) and not just as a frame for the papers headings

More Related Content

What's hot

Running Successful University Industry Projects Barcamp 07
Running Successful University Industry Projects Barcamp 07Running Successful University Industry Projects Barcamp 07
Running Successful University Industry Projects Barcamp 07
Tiang Cheng
 
Facing the future: Sense-making in Horizon Scanning
Facing the future: Sense-making in Horizon ScanningFacing the future: Sense-making in Horizon Scanning
Facing the future: Sense-making in Horizon Scanning
Totti Könnölä
 

What's hot (20)

Exploring the use of signals in the venture emergence of new technology-based...
Exploring the use of signals in the venture emergence of new technology-based...Exploring the use of signals in the venture emergence of new technology-based...
Exploring the use of signals in the venture emergence of new technology-based...
 
Soete - A Sky without Horizons
Soete - A Sky without HorizonsSoete - A Sky without Horizons
Soete - A Sky without Horizons
 
Boosting Malaysia's National Intellectual Property System for Innovation
Boosting Malaysia's National Intellectual Property System for InnovationBoosting Malaysia's National Intellectual Property System for Innovation
Boosting Malaysia's National Intellectual Property System for Innovation
 
Universities as engines of growth
Universities as engines of growthUniversities as engines of growth
Universities as engines of growth
 
Impact of public research
Impact of public researchImpact of public research
Impact of public research
 
Jos announcement
Jos announcementJos announcement
Jos announcement
 
Kris Boschmans
Kris BoschmansKris Boschmans
Kris Boschmans
 
Hoskens - State of the art in capturing firm level indicators
Hoskens - State of the art in capturing firm level indicatorsHoskens - State of the art in capturing firm level indicators
Hoskens - State of the art in capturing firm level indicators
 
Why should we light the fuse for collaboration between academic researchers a...
Why should we light the fuse for collaboration between academic researchers a...Why should we light the fuse for collaboration between academic researchers a...
Why should we light the fuse for collaboration between academic researchers a...
 
Running Successful University Industry Projects Barcamp 07
Running Successful University Industry Projects Barcamp 07Running Successful University Industry Projects Barcamp 07
Running Successful University Industry Projects Barcamp 07
 
Innovation policies for inclusive growth
Innovation policies for inclusive growthInnovation policies for inclusive growth
Innovation policies for inclusive growth
 
Project 5 L and M and adoption
Project 5   L and M and adoptionProject 5   L and M and adoption
Project 5 L and M and adoption
 
Jankowski - Findings from an ongoing examination of metrics on innovation
Jankowski - Findings from an ongoing examination of metrics on innovationJankowski - Findings from an ongoing examination of metrics on innovation
Jankowski - Findings from an ongoing examination of metrics on innovation
 
Facing the future: Sense-making in Horizon Scanning
Facing the future: Sense-making in Horizon ScanningFacing the future: Sense-making in Horizon Scanning
Facing the future: Sense-making in Horizon Scanning
 
University Industry Partnership For Innovations
University Industry Partnership For InnovationsUniversity Industry Partnership For Innovations
University Industry Partnership For Innovations
 
University-Industry Innovative Collaboration Perspectives Report (innovosource)
University-Industry Innovative Collaboration Perspectives Report (innovosource)University-Industry Innovative Collaboration Perspectives Report (innovosource)
University-Industry Innovative Collaboration Perspectives Report (innovosource)
 
Innovation Policy Explained
Innovation Policy ExplainedInnovation Policy Explained
Innovation Policy Explained
 
985 paper presentation -banff 2015
985 paper presentation -banff 2015985 paper presentation -banff 2015
985 paper presentation -banff 2015
 
Competition lecture
Competition lectureCompetition lecture
Competition lecture
 
Cohen - Measuring innovation: An alternative survey based approach
Cohen - Measuring innovation: An alternative survey based approachCohen - Measuring innovation: An alternative survey based approach
Cohen - Measuring innovation: An alternative survey based approach
 

Similar to Comments cpa-042 -- criticism of IC Reporting

Similar to Comments cpa-042 -- criticism of IC Reporting (20)

DISCOVERY PATHS: EXPLORING EMERGENCE AND IT EVOLUTIONARY DESIGN IN M&A
DISCOVERY PATHS: EXPLORING EMERGENCE AND IT EVOLUTIONARY DESIGN IN M&ADISCOVERY PATHS: EXPLORING EMERGENCE AND IT EVOLUTIONARY DESIGN IN M&A
DISCOVERY PATHS: EXPLORING EMERGENCE AND IT EVOLUTIONARY DESIGN IN M&A
 
8 fines research roadmap 2025
8 fines research roadmap 20258 fines research roadmap 2025
8 fines research roadmap 2025
 
Megs-KT Interim report presentation October 2012
Megs-KT Interim report presentation October 2012Megs-KT Interim report presentation October 2012
Megs-KT Interim report presentation October 2012
 
X Conference on Intellectual Capital
X Conference on Intellectual CapitalX Conference on Intellectual Capital
X Conference on Intellectual Capital
 
B1 Predicting developments: Future Technologies and Their Applications
B1 Predicting developments: Future Technologies and Their ApplicationsB1 Predicting developments: Future Technologies and Their Applications
B1 Predicting developments: Future Technologies and Their Applications
 
Session 4 a i alriw 2014 session 4a squicciarini and lemouel
Session 4 a i alriw 2014 session 4a squicciarini and lemouelSession 4 a i alriw 2014 session 4a squicciarini and lemouel
Session 4 a i alriw 2014 session 4a squicciarini and lemouel
 
Smespire at "Powered by INSPIRE" March 2013
Smespire at "Powered by INSPIRE" March 2013Smespire at "Powered by INSPIRE" March 2013
Smespire at "Powered by INSPIRE" March 2013
 
Introduction
IntroductionIntroduction
Introduction
 
ILRI Seminar_Presentation by AHall_Our search for effective research and inno...
ILRI Seminar_Presentation by AHall_Our search for effective research and inno...ILRI Seminar_Presentation by AHall_Our search for effective research and inno...
ILRI Seminar_Presentation by AHall_Our search for effective research and inno...
 
ALFRED_MUTANGA_CABIF
ALFRED_MUTANGA_CABIFALFRED_MUTANGA_CABIF
ALFRED_MUTANGA_CABIF
 
Ai in financial services
Ai in financial servicesAi in financial services
Ai in financial services
 
Overcoming Optimism Bias in Portfolio Planning
Overcoming Optimism Bias in Portfolio PlanningOvercoming Optimism Bias in Portfolio Planning
Overcoming Optimism Bias in Portfolio Planning
 
Theorizing ict4d
Theorizing ict4dTheorizing ict4d
Theorizing ict4d
 
Theorizing ict4d
Theorizing ict4dTheorizing ict4d
Theorizing ict4d
 
The Born Global Strategy
The Born Global StrategyThe Born Global Strategy
The Born Global Strategy
 
The Born Global Strategy
The Born Global StrategyThe Born Global Strategy
The Born Global Strategy
 
Artificial Intelligence: a driver of innovation in the Banking Sector
Artificial Intelligence: a driver of innovation in the Banking Sector Artificial Intelligence: a driver of innovation in the Banking Sector
Artificial Intelligence: a driver of innovation in the Banking Sector
 
4boards.ai
4boards.ai 4boards.ai
4boards.ai
 
The future of work in europe
The future of work in europeThe future of work in europe
The future of work in europe
 
How to conduct a literature review: A literature review on knowledge manageme...
How to conduct a literature review: A literature review on knowledge manageme...How to conduct a literature review: A literature review on knowledge manageme...
How to conduct a literature review: A literature review on knowledge manageme...
 

More from Asia Pacific Intellectual Capital Centre Ltd

More from Asia Pacific Intellectual Capital Centre Ltd (20)

Does Hong Kong have an informal diplomatic role for China on the New Silk Roa...
Does Hong Kong have an informal diplomatic role for China on the New Silk Roa...Does Hong Kong have an informal diplomatic role for China on the New Silk Roa...
Does Hong Kong have an informal diplomatic role for China on the New Silk Roa...
 
Pages from gii 2016 -- the age of innovation diplomacy
Pages from gii 2016 -- the age of innovation diplomacyPages from gii 2016 -- the age of innovation diplomacy
Pages from gii 2016 -- the age of innovation diplomacy
 
Hk rating - The Most Innovation Cities in Asia Pacific
Hk rating  - The Most Innovation Cities in Asia PacificHk rating  - The Most Innovation Cities in Asia Pacific
Hk rating - The Most Innovation Cities in Asia Pacific
 
HK Ranking - Global Innovation Index 2016 (full-report- 2016-v1)
HK Ranking  - Global Innovation Index 2016 (full-report- 2016-v1)HK Ranking  - Global Innovation Index 2016 (full-report- 2016-v1)
HK Ranking - Global Innovation Index 2016 (full-report- 2016-v1)
 
Our HK Foundation -- The Ecosystem of Innovation and Technology in HK (Dec 20...
Our HK Foundation -- The Ecosystem of Innovation and Technology in HK (Dec 20...Our HK Foundation -- The Ecosystem of Innovation and Technology in HK (Dec 20...
Our HK Foundation -- The Ecosystem of Innovation and Technology in HK (Dec 20...
 
CITIE Report 2015
CITIE Report 2015CITIE Report 2015
CITIE Report 2015
 
Human Freedom Index - 2015 by Cato Institute
Human Freedom Index - 2015 by Cato InstituteHuman Freedom Index - 2015 by Cato Institute
Human Freedom Index - 2015 by Cato Institute
 
Government-sponsor Future Centres (3 March 2016)
Government-sponsor Future Centres  (3 March 2016)Government-sponsor Future Centres  (3 March 2016)
Government-sponsor Future Centres (3 March 2016)
 
政府參與的 未來中心
政府參與的 未來中心政府參與的 未來中心
政府參與的 未來中心
 
HK Innovation and Technology Policy presentation by Nick Yang at HKGCC Member...
HK Innovation and Technology Policy presentation by Nick Yang at HKGCC Member...HK Innovation and Technology Policy presentation by Nick Yang at HKGCC Member...
HK Innovation and Technology Policy presentation by Nick Yang at HKGCC Member...
 
Crowdsourcing for democracy_f_www-libre
Crowdsourcing for democracy_f_www-libreCrowdsourcing for democracy_f_www-libre
Crowdsourcing for democracy_f_www-libre
 
ITB Connectivity
ITB ConnectivityITB Connectivity
ITB Connectivity
 
Future of manufacturing_driving_capabilities
Future of manufacturing_driving_capabilitiesFuture of manufacturing_driving_capabilities
Future of manufacturing_driving_capabilities
 
Wef gac ageing_white_paper
Wef gac ageing_white_paperWef gac ageing_white_paper
Wef gac ageing_white_paper
 
Top 10 emerging_urban_innovations_report_2010_20.10
Top 10 emerging_urban_innovations_report_2010_20.10Top 10 emerging_urban_innovations_report_2010_20.10
Top 10 emerging_urban_innovations_report_2010_20.10
 
Managing complex change
Managing complex changeManaging complex change
Managing complex change
 
Kicking Away the Ladder -- the “Real” History of Free Trade
Kicking Away the Ladder -- the  “Real” History of Free TradeKicking Away the Ladder -- the  “Real” History of Free Trade
Kicking Away the Ladder -- the “Real” History of Free Trade
 
Dutch Future Centres for Public Sector
Dutch Future Centres for Public SectorDutch Future Centres for Public Sector
Dutch Future Centres for Public Sector
 
IP Trading Final Report
IP Trading Final ReportIP Trading Final Report
IP Trading Final Report
 
Industry 4.0 -- Roland berger t2014-04-03
Industry 4.0 -- Roland berger t2014-04-03Industry 4.0 -- Roland berger t2014-04-03
Industry 4.0 -- Roland berger t2014-04-03
 

Recently uploaded

Easier, Faster, and More Powerful – Alles Neu macht der Mai -Wir durchleuchte...
Easier, Faster, and More Powerful – Alles Neu macht der Mai -Wir durchleuchte...Easier, Faster, and More Powerful – Alles Neu macht der Mai -Wir durchleuchte...
Easier, Faster, and More Powerful – Alles Neu macht der Mai -Wir durchleuchte...
panagenda
 

Recently uploaded (20)

TEST BANK For, Information Technology Project Management 9th Edition Kathy Sc...
TEST BANK For, Information Technology Project Management 9th Edition Kathy Sc...TEST BANK For, Information Technology Project Management 9th Edition Kathy Sc...
TEST BANK For, Information Technology Project Management 9th Edition Kathy Sc...
 
TopCryptoSupers 12thReport OrionX May2024
TopCryptoSupers 12thReport OrionX May2024TopCryptoSupers 12thReport OrionX May2024
TopCryptoSupers 12thReport OrionX May2024
 
AI presentation and introduction - Retrieval Augmented Generation RAG 101
AI presentation and introduction - Retrieval Augmented Generation RAG 101AI presentation and introduction - Retrieval Augmented Generation RAG 101
AI presentation and introduction - Retrieval Augmented Generation RAG 101
 
Free and Effective: Making Flows Publicly Accessible, Yumi Ibrahimzade
Free and Effective: Making Flows Publicly Accessible, Yumi IbrahimzadeFree and Effective: Making Flows Publicly Accessible, Yumi Ibrahimzade
Free and Effective: Making Flows Publicly Accessible, Yumi Ibrahimzade
 
A Business-Centric Approach to Design System Strategy
A Business-Centric Approach to Design System StrategyA Business-Centric Approach to Design System Strategy
A Business-Centric Approach to Design System Strategy
 
Designing for Hardware Accessibility at Comcast
Designing for Hardware Accessibility at ComcastDesigning for Hardware Accessibility at Comcast
Designing for Hardware Accessibility at Comcast
 
Simplified FDO Manufacturing Flow with TPMs _ Liam at Infineon.pdf
Simplified FDO Manufacturing Flow with TPMs _ Liam at Infineon.pdfSimplified FDO Manufacturing Flow with TPMs _ Liam at Infineon.pdf
Simplified FDO Manufacturing Flow with TPMs _ Liam at Infineon.pdf
 
Microsoft CSP Briefing Pre-Engagement - Questionnaire
Microsoft CSP Briefing Pre-Engagement - QuestionnaireMicrosoft CSP Briefing Pre-Engagement - Questionnaire
Microsoft CSP Briefing Pre-Engagement - Questionnaire
 
Easier, Faster, and More Powerful – Alles Neu macht der Mai -Wir durchleuchte...
Easier, Faster, and More Powerful – Alles Neu macht der Mai -Wir durchleuchte...Easier, Faster, and More Powerful – Alles Neu macht der Mai -Wir durchleuchte...
Easier, Faster, and More Powerful – Alles Neu macht der Mai -Wir durchleuchte...
 
Speed Wins: From Kafka to APIs in Minutes
Speed Wins: From Kafka to APIs in MinutesSpeed Wins: From Kafka to APIs in Minutes
Speed Wins: From Kafka to APIs in Minutes
 
Introduction to FDO and How It works Applications _ Richard at FIDO Alliance.pdf
Introduction to FDO and How It works Applications _ Richard at FIDO Alliance.pdfIntroduction to FDO and How It works Applications _ Richard at FIDO Alliance.pdf
Introduction to FDO and How It works Applications _ Richard at FIDO Alliance.pdf
 
Intro in Product Management - Коротко про професію продакт менеджера
Intro in Product Management - Коротко про професію продакт менеджераIntro in Product Management - Коротко про професію продакт менеджера
Intro in Product Management - Коротко про професію продакт менеджера
 
Extensible Python: Robustness through Addition - PyCon 2024
Extensible Python: Robustness through Addition - PyCon 2024Extensible Python: Robustness through Addition - PyCon 2024
Extensible Python: Robustness through Addition - PyCon 2024
 
FDO for Camera, Sensor and Networking Device – Commercial Solutions from VinC...
FDO for Camera, Sensor and Networking Device – Commercial Solutions from VinC...FDO for Camera, Sensor and Networking Device – Commercial Solutions from VinC...
FDO for Camera, Sensor and Networking Device – Commercial Solutions from VinC...
 
Linux Foundation Edge _ Overview of FDO Software Components _ Randy at Intel.pdf
Linux Foundation Edge _ Overview of FDO Software Components _ Randy at Intel.pdfLinux Foundation Edge _ Overview of FDO Software Components _ Randy at Intel.pdf
Linux Foundation Edge _ Overview of FDO Software Components _ Randy at Intel.pdf
 
Portal Kombat : extension du réseau de propagande russe
Portal Kombat : extension du réseau de propagande russePortal Kombat : extension du réseau de propagande russe
Portal Kombat : extension du réseau de propagande russe
 
Measures in SQL (a talk at SF Distributed Systems meetup, 2024-05-22)
Measures in SQL (a talk at SF Distributed Systems meetup, 2024-05-22)Measures in SQL (a talk at SF Distributed Systems meetup, 2024-05-22)
Measures in SQL (a talk at SF Distributed Systems meetup, 2024-05-22)
 
ASRock Industrial FDO Solutions in Action for Industrial Edge AI _ Kenny at A...
ASRock Industrial FDO Solutions in Action for Industrial Edge AI _ Kenny at A...ASRock Industrial FDO Solutions in Action for Industrial Edge AI _ Kenny at A...
ASRock Industrial FDO Solutions in Action for Industrial Edge AI _ Kenny at A...
 
WebAssembly is Key to Better LLM Performance
WebAssembly is Key to Better LLM PerformanceWebAssembly is Key to Better LLM Performance
WebAssembly is Key to Better LLM Performance
 
Where to Learn More About FDO _ Richard at FIDO Alliance.pdf
Where to Learn More About FDO _ Richard at FIDO Alliance.pdfWhere to Learn More About FDO _ Richard at FIDO Alliance.pdf
Where to Learn More About FDO _ Richard at FIDO Alliance.pdf
 

Comments cpa-042 -- criticism of IC Reporting

  • 1. THE RISE (AND FALL) OF THE INTELLECTUAL CAPITAL STATEMENT: WHATEVER HAPPENED TO THE LEGITIMACY OF INTELLECTUAL CAPITAL REPORTING IN DENMARK? Authors Christian Nielsen, University of Aalborg Robin Roslender, University of Dundee and University of Aalborg Stefan Schaper, G.d’Annunzio University, Pescara Commentary by John Dumay, Macquarie University, Sydney Critical Perspectives in Accounting Conference 2014 July 8 2014
  • 3. Research question? • Original ICS was formulated in 2000 and project ended over a decade ago in 2003. • failure to significantly develop the ICS, or its counterpart in the form of the Intellectual Capital Report is a puzzle • absence of literature that explores what has actually happened to the ICS within Denmark since 2003. • It was these questions that motivated a study of the fate of ICS practice within the cohort of companies participating in the project between 1997 and 2003.
  • 4. Analytical Framework Figure 1: Extended phases of organizational legitimacy (Tilling and Tilt, 2010: 75)
  • 5. Research Method • Phase 1: identifying the potential research sample – 102 companies • 11 from the first project, 89 New Guideline project companies and the two coordination and consulting organizations.
  • 6. Research method Still exist 53% Liquidated / Unknown status 16% Have merged 20% Transformed 7% Cleavage 4% Partly exist 31% Companies's current status
  • 7. Research method Original, same company 28% Original, not same company 50% New contacts 22% Status of interviewees (n° of interviewees: 64)
  • 8. Research method • Phase 2: revisiting the guideline companies – semi-structured interviews – telephone rather than face-to-face interviews – semi-structured interview guide was designed following the research themes of establishing, maintaining and (possibly) abandoning the ICS project within the company.
  • 9. Why did the companies participate in the guideline project? INTERNAL interest of mainly 1 person 28,5% INTERNAL interest at company level 43% EXTERNAL reasons 28,5% Why started? (42 answers)
  • 10. What did the project companies report on intellectual capital? Mainly about employees 59% ALL elements 21% Processes 10% customers 7% Technology 3% Main focus? (29 answers)
  • 11. What did the project companies report on intellectual capital? Internal 46% External 32% Both 22% Internal or external purpose of IC reporting (37 answers)
  • 12. How were intellectual capital reporting practices maintained within companies? HR 21% COMMUNICATION 7% FINANCE 7% R&D 3% SALES 3% Interdisciplinary group 35% Small workgroup 24% How organized? (29 answers)
  • 13. Were intellectual capital reporting practices substantially embedded? Integrated with existing 30.4% Mainly questionnaires 13.0% Created own databases 26.1% Yes, not specified 8.7% No 17.4% Source of problems 4.3% Used automatized processes? (23 answers)
  • 14. Extension or the disestablishment of intellectual capital reporting practices? 0% 20% 40% 60% 80% 100% 0 1 2 3 4 5 6 7 >10 Number of ICS done by companies (65 statements) Average % of companies
  • 15. Did intellectual capital reporting continue in other ways? Well, we developed our own guidelines and followed that practice, we established our own structure, we didn't followed the national guidelines, in fact we were earlier than the guidelines, we looked of course at it and took out something but we thought our own were better.
  • 16. What were the perceived effects of the guideline project? NO 26% YES 15% YES, potentially 10% YES, mainly in relation to HR 21% YES, mainly external perception 18% YES, awareness of recourses 10% Positive effects? (39 answers)
  • 17. Discussion • ICS was used principally for internal reporting purposes • ICS simply didn’t provide value for money and had been overtaken by new priorities as companies evolved • was both well-conceived and resourced, and staffed with representatives from academia, industry, the audit profession and government
  • 18. Discussion • In the absence of any mandatory reporting requirement, it was easy for companies to adopt a minimalist approach to IC reporting. • decade on from the guideline project it is possible to see parallels in relation to recent interest in business models and integrated reporting. • IC remains valid a decade on from the end of the guideline project.
  • 19. Conclusion? • Suggest that whatever legitimacy might be identified with the outcome of guideline project remains moth-balled. • This legitimacy has not been lost as a consequence of being shown to be a chimera (fantasy) possibly in the context of the renewed debate about the future of financial reporting. • Left to their own devices, companies are generally happy to account and report in ways that are regarded by them as meeting the information needs of their principal stakeholders • As long as the regulatory authorities are prepared to support powerful stakeholders little or nothing can be expected to change.
  • 20. Critique • The Danish IC statement is put upon an artificial pedestal based on rhetoric rather than fact: – “continues to be identified as being in the vanguard of developments within the field of intellectual capital disclosure”. – “the resultant Intellectual Capital Statement (ICS) stands out due to a combination of sound theoretical underpinnings and its empirical grounding, in opposition to most of the other initiatives that were largely based on theoretical perspectives or much smaller empirical samples than the 100 plus companies involved in the Danish project”.
  • 21. Critique • Literature review on IC reporting is stuck in the 1990s and early 2000s. A lot has happened since then especially in: – Europe (InCaS, RICARDIS); – Germany (Wissensbilanz) over 350companies; – Austrian Universities; – Hong Kong IPD project with over 600 SMEs; and – Japan’s Intellectual asset management report project currently with 297 companies (366 reports) See Svieby’s website and Dumay & Roslender (2013) for a listing of IC frameworks.
  • 22. Critique • Considering the plethora of other IC projects mentioned why would we be only concerned with an “absence of a body of literature that explores what has actually happened to the ICS within Denmark since the termination of the Danish Guideline Project in 2003”? • What is the research question and how does the research contribute to the ‘state of the art’ of IC research?
  • 23. Critique • Why does legitimacy theory come before the research? – Establishes pre-set ideas and categories before data is collected – Why not stakeholder theory per your (conclusion)? – Why is legitimacy theory only mentioned 3 times and Tilling & Tilt (2010) not mentioned at all after page 12?
  • 24. Critique • Results are descriptive and not much different from the results of early research. • Figure 10 is misleading as it adds to more than 100% (0 and 1 are cumulative and >1 are subsets of 1). • Why mention “Integrated Reporting” at the end of the paper? Why not in the literature review?
  • 25. The way forward? • Current and up to date literature review • Focussed research question • Remove the pedestal from under the ICS or backup the rhetoric • If using ‘legitimacy theory’ explain why better and refer to it in your results, discussion and (conclusion) and not just as a frame for the papers headings