WASHINGTON: A Securities and Exchange Commission (SEC) task force
has recommended companies give investors more information on intangible
assets, which will include brands, consumer loyalty and business
The implication for IR strategy is clear: it could introduce a whole new
reporting paradigm. The study does not suggest such reporting should be
mandatory, but market pressure could make it impossible for competitive
companies to avoid doing so.
A company's PR strategy may also be put under greater scrutiny if it is
considered an intangible asset.
"To the extent that a company has a really effective PR effort, and you
could show that it is not only effective but that it lasts over a long
period of time and has created some kind of competitive advantage, then
it might be considered an intangible asset," said Jeffrey Garden, dean
of the Yale School of Management and the task force chairman.
Louis Thompson, president and CEO of NIRI, said reporting intangibles
has been discussed since the mid-1990s. The restriction on face-to-face
discussions with analysts as a result of Reg. FD may offer an easy way
to transition to reporting intangibles.
"If you are worried about what you can say, then talk about these
factors," he said. "Even though the sell side hasn't figured out they
are important, the institutional investors do look at them," he added.