EEA Show With Irrational Capital Leaders: Are Employees an Asset or a Liability?

This upcoming YouTube show on Oct. 2 at 1 pm ET will help answer that question with a founder and partner at Irrational Capital, an investment research and strategy development firm focused on research, innovation, and proprietary investing based on what it calls the Human Capital Factor (HCF).

Program Overview
The Human Capital Factor and Related Products

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It’s a platitude in business that employees are an organization’s No. 1 asset, but are they? Unless a company is sold to another firm, employees do not appear as an asset but rather as a liability on balance sheets. In addition, for years, investors have often reacted negatively when companies like Costco increase wages for fear of experiencing lower profits downstream. (See ESM: How to Spotlight Dark Matter in Accounting.)

David van Adelsberg, Co-Founder, Managing Partner, and Bart Houlahan, Partner at Pennsylvania-based Irrational Capital, will join the Enterprise Engagement Alliance Founder Bruce Bolger in a live Zoom show at 1 pm on Oct. 2. The show will be available on the EEA Purpose Leadership and Stakeholder Management YouTube channel the following week.

Click here to register for the live session.

Program Overview

Irrational Capital was founded in 2017 by Van Adelsberg and Dan Ariely, Professor of behavioral Economics at Duke University, Fuqua School of Business, Center for Cognitive Neuroscience, Department of Economics, School of Medicine. Houlahan, Co-Founder of B Lab, joined Irrational Capital last year. Webinar topics include:

What motivated the founders to form the company.
An overview of the company’s Human Capital Factor and metrics used.
What correlation have they demonstrated between the HCF and financial results, and why.
What would they say are the most important aspects of human capital management in determining more positive outcomes.
Why aren’t other stakeholders included in the metrics—customers, distribution and supply chain partners, and communities?
Since a strategic approach to human capital management is taught almost nowhere in schools, and the leadership paradigm remains largely shareholder focused in the US, what will have to change for more organizations to treat people as an asset rather than as a liability?

The Human Capital Factor and Related Products

Irrational Capital is an investment research and strategy development firm that developed and continuously researches what it calls an innovative, proprietary investing factor: the Human Capital Factor. The company reportedly works with asset manager partners to develop investment strategies utilizing its Human Capital Factor to provide investors an effective way to generate consistent, uncorrelated returns by investing in companies with the most positive work cultures. In doing so, it says it uncovers and makes accessible the “capital” in “human capital”.

The company’s products include:

The Canadian Imperial Bank of Commerce (CIBC) Human Capital Index. The index consists of a modified market-capitalization-weighted portfolio of equity securities of US companies that possess strong human capital, based on the work of Professor Dan Ariely and Irrational Capital’s research in behavioral science and human capital.

Three Exchange-Traded Funds. The index is used to manage three ETFs marketed by Harbor Capital. See this recent EEA YouTube show featuring Kristof Gleich, President of Harbor Capital.

Harbor Human Capital Factor US Large Cap ETF* (ticker: HAPI). Access the link between strong corporate culture and potential equity value, the company says.
Harbor Human Capital Factor Unconstrained ETF* (ticker: HAPY). Access a data-driven strategy that seeks to capture the link between strong corporate culture and equity value.
Harbor Human Capital Factor US Small Cap ETF* (ticker: HAPS). Linking strong corporate culture and potential equity value in the small cap arena.

The Human Capital Factor® Ratings Report. This product consists of ratings and assessments across multiple dimensions and levels, according to the company. “Using existing employee engagement data or a proven data collection tool, companies provide a statistically significant cross section of employee sentiment data across the seven HCF dimensions. Results are then benchmarked against a proprietary database of more than 4,000 public companies and broken down by department and gender, with analyses by industry, size, seniority, and geography. The report provides internal comparisons, as well as overall decile performance across the seven dimensions.”

Irrational Capital claims to be “the first to uncover and quantify a clear correlation between corporate culture and future equity appreciation. Through our Human Capital Factor Investment Ratings, companies can now benchmark their own Human Capital Factor against 4,000 publicly traded companies.”

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1. Professional Education on Stakeholder Management and Total Rewards

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EEA YouTube Channel with over three dozen how-to and insight videos and growing with nearly 100 expert guests.

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Association of National Advertisers Brand Engagement 360 Knowledge Center to educate brands and agencies.