1. E XPLORING V ALUE C REATION THROUGH I NTANGIBLES : MANAGERS ' DECISIONS VS INVESTORS ' EXPECTATIONS

2. Outlines of the Problems in Corporate Governance Lazonick W & O'Sullivan M. (2000) Maximizing shareholder value: a new ideology forcorporate governance. Economy and Society Charreaux G, Desbrières Ph. (2001) Corporate Governance: Stakeholder Value Versus Shareholder Value. Journal of Management and Governance Porter M. & Kramer M. (2011) How to reinvent capitalism—and unleash a wave of innovation and growth. Harvard Business Review

3. Roots of the problem of Corporate governance Managers make strategic decisions – investments Managers aim at creating value for shareholders (existing and potential) Shareholders invest in companies with high capability to grow (succeed) Shareholders recognize signals set by managers The more information asymmetry the less convergence between managers’ and investors’ goals

4. Intangibles’ disclosure Investments associated with the intangibles are exacerbated by the traditional reporting of companies’ performance (JE Grojer, U Johanson, 1999; Orens et al.,2009 and Vergauwen et al., 2007)

5. Research Framework: Value creation EVA & MVA Economic profit (or EVA) is an indicator of companies performance which shows if a particular company succeeds covering alternative costs for investors Market value added is an outcome of investors estimations (expectations) regarding companies’ future – investment attractiveness Value Creation as a management goal to meet requirements of investors Investors are looking for companies with positive (or increasing) EVA and providing a growth of MVA

6. Research Framework: Specifying value creation process Investment decisions made by companies’ managers: to invest in resources which provide competitive advantages to disclose intangibles to make a company attractive for investors input Companies resources output EVA outcome MVA Positive and increasing EVA is a goal of managers is a signal for investors to buy Shows that companies value drivers were recognized by investors

7. The idea of the research Discover intangibles’ factors that drive EVA and MVA EVA is directly influenced by managers’ decisions; MVA is strongly associated with the expectations of the investors Assuming that if managers would voluntary disclose intangibles in a proper way: Managers and investors goals would be aligned

8. Research Framework: Value Drivers of EVA &MVA EVA is associated with companies’ intangibles which provide competitive advantages the quality of human resources, social capital the efficiency of relations with companies customers, suppliers, partners, investors innovative activitiesinternal business processes MVA is associated with companies’ intangibles which are treated by investors as growth enhancers top-management qualification and expertise marketing network, contracts, brands, reputation intellectual property, new products quality management system Human Capital Relational Capital Structural Capital

9. Research Framework: EVA concept NOPATCapital ChargeEVA Invested Capital ROICWACC ROIC industry WACC – alternative costs of invested capital

10. Market Value (Equity + Debt) Invested Capital Market Value Added EVA1 EVA2 EVA3 MVA MVIC Research Framework: MVA concept

11. Few empirical evidences On database of 5 European countries during 2004-2011 Structural equation model

12. The Hypotheses Factors of competitive advantages and investment attractiveness Investments associated with Human capital makes a company both competitive and investment attractive Customer loyalty provides a company with sustainable advantages on markets and is recognized by its investors Innovative behavior is one of the key value drivers and should be disclosed for investors Internal processes of a company is highly important for creating its competitive advantages but are not pivot for value creation on the financial market Networks of a company enable stable growth both on real and financial markets

13. Methodology Number of employee Knowledge management Productivity Corporate university HC Structural Equation Modeling Each IC construct is described by a number indicators Relations between IC, EVA and MVA are simultaneously estimated

14. Results Sig. positive Sig. negative Not sig