Report stresses importance of business' human side

The Chartered Institute of Management Accountants, a professional organization, issued the Chinese edition of a report named "Rebooting Business: Valuing the Human Dimension" in Shanghai on Wednesday in an attempt at improving the management of local companies.

The report said intangible assets and non-financial value have accounted for 80 percent of firms' value in the 21st century, becoming the greatest source of returns for the top 500 companies in the world.

"That's to say that enterprises can't ignore the importance and impetus of non-financial value in achieving this long-term success," said Hu Ruyin, director of the Shanghai Stock Exchange's capital market institute.

Businesses face difficulties in their attempts to measure non-financial value. Those include chief executive officers' pursuit of short-term returns instead of goals that will help to ensure a business develops, he said at a recent forum.

Charles Tilley, chief executive officer of the Chartered Institute of Management Accountants, said businesses find it difficult to plan for the long term both because investors mainly want short-term returns and because the market system places too great an emphasis on financial reporting.

At the forum, Tilley spoke to a group of CEOs, managing directors, chief financial officers and human resources director about a survey conducted by the institute and the American Institute of Certified Public Accountants. It sampled opinions from 280 CEOs hailing from more than 21 countries, asking how they viewed current global difficulties and what the priorities should be in any attempts to deal with them.

The survey was followed by interviews with 17 CEOs, chairmen and other business leaders who together oversee more than 2.1 million jobs and a market capitalization of $1 trillion.

He said three out of every four of the people surveyed said they think it's important to look beyond financial performance. Their overwhelming response was that the human side of business — for example, customer and supplier relationships, talent development and intellectual capital — is becoming increasingly important.

"The need to measure and manage the human dimension, although difficult, will never be greater if companies are to achieve long-term sustainable success,'' he said.