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Dave Bookbinder, Valuation Expert, Joins EEA Executive Action Committee

A recognized company valuation expert and passionate advocate for accounting for human capital in business management joins the Enterprise Engagement Alliance’s Executive Committee for Accounting and Metrics on a volunteer basis to help oversee development of an outreach effort and EEA curriculum program tailored for chief financial officers. 
Dave Bookbinder has joined the Enterprise Engagement Alliance at as an author and expert on human capital analytics, valuation, and accounting practices. He serves the EEA in a voluntary advisory role to help the Enterprise Engagement Alliance continually update its Enterprise Engagement curriculum, which is designed to provide academics and management organizations of any size or type a strategic approach to achieving organizational goals by fostering the proactive involvement of all stakeholders. These include customers, employees, distribution and supply chain partners, communities, volunteers and donors, constituents, or anyone of value to an enterprise, including shareholdersm or anyone value to an enterprise, including shareholders. 
Bookbinder’s role is to help address the growing need for CFOs to become involved in human capital management, metrics, and ROI measurement. See ESM: News Analysis: Will CFOs Take Charge of Human Capital Metrics
Dave Bookbinder is a Senior Director at CFGI, a leading accounting advisory company, as well as author of The New ROI: Return on Individuals, recently featured in an ESM article: New Books Focus on Gratitude, Culture and People ROI.  While he uses his authorship and volunteer activities to create opportunities and credibility for his company and its valuation practice, he admits that the subject has become a personal passion. “I realize that it’s probably not possible (yet) to embed a new metric that places a legally defensible valuation factor on human capital for accounting purposes beyond today’s established norms, but I do believe that metrics can help organizations in their mergers and acquisition activities establish a valuation weighted for the level of engagement that will help determine the risk and reliability of the actual valuation,” he points out. “I also believe that management and boards can use this information to better evaluate the success of organizational strategies and identify potential risks, as period-to-period changes in revenues, profits, and costs per employee, or sales costs, can be indicative of either effective or ineffective investments in people practices.” 

Return on Individuals 

His human capital valuation process, explained in his book, highlights the correlation of workforce engagement and performance on business enterprise value. He says that the holy grail of employee engagement is when people go “above and beyond” – giving discretionary effort. “This is what drives innovation, morale and trust within companies. Do it wrong, and companies will incur the high cost of disengagement and employee turnover. Companies that do it right by investing in their people out-perform their peers on just about every key performance benchmark including turnover, productivity and profitability. These companies harness discretionary effort by creating a corporate culture where people feel safe and valued. They create brand evangelists and their people tell their friends about how great it is to work there. This allows these companies to attract and retain the best talent. It all begins with setting a clear intention to overhaul the organization’s culture.”
In his voluntary role for the EEA, Bookbinder will organize an outreach effort with CFOs, starting with an EEA Zoom show, Sept. 10 at 1 pm ET: CFO’s and the New Human Capital Mandate. In addition, he will help develop an EEA certification program specifically designed for CFOs. The curriculum, first launched in 2008, now includes two books: Enterprise Engagement: The Roadmap 5th Edition, and Enterprise Engagement for CEOs, an abbreviated version of the textbook. The EEA produces the world’s only learning and certification program on Enterprise Engagement, including about 30 courses/chapters on all areas of engagement and how they inter-relate. Click here for free course syllabus. 
Bookbinder will also oversee a CFO membership category as well as certification program for CFOs updated to include information provided by Bookbinder related to human capital valuation methodologies useful for more effective performance management. 

Pandemic Puts a New Light on Human Capital 

“The pandemic, along with the growing realization that human capital is, in fact, the last frontier for performance improvement at most organizations, has forced CEOs and CFOs to recognize that they are often spending a significant portion of their annual operating funds on people with almost no strategic management and metrics process to track how they are doing.” Most companies, he adds, use no clear scorecard for ongoing people management and performance improvement related to human capital management, return on investment, productivity, quality, or retention, let alone a process for measuring the return on investment of tactical investments in rewards, recognition, incentives, training, motivational speakers, etc., he adds. 
“By understanding key metrics such as the revenues and profit per employee, customer, or distribution partner; the return on investment on human capital; the value-impact of human capital, as well as critical data around diversity and inclusion, can help evaluate the overall effectiveness of the investment made on people, and is the first step toward more effective ROI measurement,” he notes. 
The challenge, he says, is that CFOs, let alone CEOs, receive almost no training in the essential elements of a human capital framework, meaningful metrics, the processes commonly used to increase engagement, and methods of measuring them. “There is tremendous opportunity for new efficiencies, cost-savings, and even better experiences by applying a strategic, systematic and proactive process that aligns activities rather than the ad hoc, reactive, and rarely measured processes used by most companies today. I have seen tremendous waste in many companies over the years, or certainly many expenditures that had no clear justification.” 
CFOs, he believes, must have a general knowledge of most human capital practices, not just with employees, but all stakeholders, customers, distribution and supply chain partners, or any stakeholder for that matter. “There is no way that a CFO can understand all the nuances of how to dynamically engage and equip all stakeholders; they must rely on having talented CMOs, CHROs, and other management who understand the benefits of a stakeholder approach.” The new CFO, he believes, can benefit by having a solid knowledge of common and sensible processes similar to those used in quality management or manufacturing to better gauge the alignment, efficiency, overall experience, and results of people initiatives, whether they involve external or internal marketing and performance improvement. The EEA curriculum has done an outstanding job of providing a digestible and highly relevant framework for the financial community to identify opportunities for improvement and to help marketing and HR teams make better decisions aligned with organizational goals using more measurable processes.”
He concludes, “I look forward to helping the C-Suite fully profit from these common-sense metrics and principles that they can begin applying today to improve their organizations’ performance.”   
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