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Chapter 1

IR and capital

 Recognises six types of capital to be managed to deliver long-term value
creation.

1 Financial, e.g. shares and cash

The ones an organisation
most commonly reports on

2 Manufactured, e.g. machines,
buildings, tools

3 Intellectual, e.g. employee
knowledge

4 Human, e.g. employee skills and IR also considers the
motivation activities of humans

5 Social and relationship, e.g.
partnerships with trade unions and
the community

IR also considers the
6 Natural, e.g. renewable and non-
renewable material resources environment in which other
capitals sit

 In terms of performance measurement:

KPIs can be set for the six capitals. For example:
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– financial: ROCE or EVA

– manufactured: investment in non-current assets

– intellectual: turnover of skilled staff

– human: sickness rates
– social and relationship: staff satisfaction surveys focusing on
confidence in leadership

– natural: energy consumption and efficiency

KPIs can be developed to show how they connect leading to better
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integration of different parts of the organisation.

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