Purpose -The purpose of this paper is to respond to the increasing pressure on financial markets to more systematically value the intangible assets in listed firms. Design/methodology/approach -Using qualitative research techniques on the trading floor of Merrill Lynch Investment Bank in Sydney and Hong Kong, four tools for human capital analysis have been developed by the authors. Findings -These tools provide mechanisms for securities analysts to more systematically analyse the intangible aspects of publicly listed firms on global stock exchanges. Research limitations/implications -Given the complex regulatory requirements on securities analysts in many developed economies, these tools are predicated on analysts using publicly available information. Originality/value -Specifically, the tools use a systems approach and can assist securities analysts to be more systematic in their analysis of management quality of publicly listed companies, as it is manifested in a firm's management systems.

PurposeHow can organisations and their key stakeholders, including the financial markets, benefit from the increased understanding of the role of intangibles in value creation in listed firms? One response is to challenge the finance industry to create innovative investment products based on analysis of intangibles, including human capital (HC), which can act as a lead indicator of future financial performance. This may require qualitative research specialist expertise in finance houses. The purpose of this paper is to address these issues.Design/methodology/approachThe paper uses qualitative data from the trading floor of Merrill Lynch in Sydney and Hong Kong, drawing on participatory action research, by the first author. It also draws on field research interview data with biotechnology executives, using a case study approach, by the second author.FindingsThe findings suggest that finance industry may need to move beyond the use of indices and ethical investment screens to more clearly understand the role of intangibles, such as HC, in value creation.Originality/valueThis paper described the evolution of a set of HC analysis models, and applies them to the biotechnology industry. The results indicate that more qualitative information on listed companies can be analysed and interpreted to make the investment process more transparent to all stakeholders, including securities analysts. This may influence other researchers to extend these approaches to improve the quality of intangibles analysis.

Human capital analysis has implications beyond the field of human resource management. It is also essential to the work of securities analysts. This paper addresses the proposition that securities analysts, their clients, and their industry can benefit from using human capital analysis alongside financial analysis for the purposes of making more transparent investment recommendations. While qualitative research into human capital is currently not being systematically adopted by securities analysts, it can illuminate the working of an organisation in a way that primary financial data on its own cannot achieve. When assessing which organisations are sustainable, a truly complementary approach requires both qualitative human capital analysis and traditional, financial, quantitative analysis. In essence, an integrated approach is needed for the purpose of making more transparent investment recommendations.

Boards are exploring ways to report the value of intangible assets to investors. This paper explores human capital reporting and notes human capital is not reported within or between industry sectors in a standardised way. As a further development in a suite of models, we propose a framework, the Star Model, as a step in the standardisation of interpreting and reporting on human capital to investors. In developing this model, the authors question whether human capital reports should be industry specific, given that the human capital drivers of value vary across industry groups. For the knowledge-intensive biotechnology industry in particular, there may be a case for parallel forms of news flow from Boards to markets: technical news, financial news and human capital news. We conclude that more empirical research into human capital analysis and reporting in other industry sectors will be needed.

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