Intellectual Capital Reporting: Utilising an Inside-Out Perspective to Examine Value Creation Capacity

Intellectual Capital Reporting (ICR) is located high on the agenda of government, concerned with the establishment of guidelines and positioning their nation-states as 'knowledgeeconomies' on the global landscape. Voluntary guidelines have been established in certain jurisdictions while others have mandated ICR. In contrast to this burgeoning focus on ICR, evidence from the field of practice suggests little take-up, raising concerns about the management of IC. However, examinations of ICR practices have focused predominantly on evaluating the type and level of IC disclosures in annual reports. In contrast to these studies, this paper sought to evaluate ICR practices as enabling a narrative on the value creation capacity of the firm, and employed an inside-out perspective to do so. As such, it examined the extent and type of NSW Lands' ICR practices as evidenced in its annual reports, and evaluated this against a broader context of strategic management challenges and initiatives to sustain value creation as obtained through semi-structured interviews with organisational personnel. At NSW Lands, there was no means within the annual report to locate ICR to a wider strategic context. A number of management challenges were considered to have significant impacts on NSW Lands' future, and were seen as requiring organisational attention to maintain, renew and enhance IC resources and knowledge activities. However, these received limited or no mention in its annual reports. Thus, ICR did little to reveal the value creation capacity of the organisation. This raises significant implications for policymakers, the broader public sector and researchers in the area.

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