People Power: How to Predict a Company's Real Value

With service and knowledge-based industries now dominating the Australian economy, even greater emphasis is required on human capital. People – and their management skills – determine a company’s future value and its share price. Yet regulators and analysts remain substantially focused on yesterday’s financial information. In an era of increasing talent scarcity, a company’s bench strength of in terms of leadership, development and performance must be scrutinised, urge Australian School of Business researchers Loretta O’Donnell and Carol Royal. Want to know what that business will be worth tomorrow? Beyond the profit and loss statements lies a telling set of people indicators. But do analysts know what they are looking for?