The deck makes two points. The first is that intangible assets now drive most corporate value, with the share cited moving from 17 percent to 87 percent. The second is that boards in Europe tend to be more stakeholder focused than boards in the United States, and that the reason is governance model and culture rather than the quality of the directors.
Key findings
- The cited shift in intangible asset value runs from 17 percent to 87 percent.
- Europe’s tradition is described as a social market approach in which the state, civil society and private enterprise are partners in a working economy.
- The US model is described as shareholder-centric, with the board’s primary goal being to maximize shareholder value.
- In the UK, post-IPO regulation is presented as the mechanism that forces stakeholder value creation, through board structure, ESG and fair employment reporting, and audit sub-committees.
- Capital is described as following the same direction, with financial institutions increasingly investing in companies with high ESG performance.
Where corporate value now sits
The opening claim is that intangible assets drive most value, with the cited range running from 17 percent to 87 percent of market value. The deck points at the Ocean Tomo annual study of intangible asset market value and at McKinsey Global Institute work on intangible capitalism as its sources.
Two governance models
The European position is traced to a social market tradition, where the state, civil society and private enterprise are treated as partners in a well-functioning economy. That tradition puts weight on stakeholder engagement and on creating value for employees, customers, suppliers and the wider community as well as for owners.
The US position is described as its opposite in kind. The board’s primary goal is to maximize shareholder value, which prioritizes shareholders over other stakeholders and, the deck argues, can narrow attention to short term financial results.
Culture is offered as a reinforcing factor rather than a separate one. European companies are described as more long term in orientation, with attention to sustainability and the environment. US culture is described as valuing entrepreneurship, innovation and risk-taking, which can pull toward a shorter horizon on financial performance.
What regulation does after an IPO
The UK is used as the worked example of the governance side. After an IPO, regulatory forces come into action to ensure stakeholder value creation. Board structure is constrained so that not all directors can be shareholding directors. Reporting obligations extend to ESG and to fair employment policies.
Evaluation and audit add a further layer, with sub-committees to the board covering matters such as fair remuneration policy. Alongside the regulation, financial institutions are described as increasingly investing in companies with high ESG performance.
Scope and limitations
The deck itself allows that the European and US contrast is a tendency rather than a rule, noting that there are certainly exceptions and variations. The comparison is offered as explanation, with links to external commentary rather than to original analysis.
Source
This page summarises Intangible assets and boards, by Institute for Real Growth, 2022.