Procter & Gamble (NYSE:PG) serves four billion of the world's seven billion consumers with products comprising one of the strongest portfolios of trusted, quality, leadership brands. The have consistently scored in the top tenth percentile of the Steel City Re Corporate Reputation Index. The Financial Times’ Newssift sentiment metric reports that of the 218 news stories mentioning P&G’s reputation this past year, favorable stories outweigh unfavorable by a ratio of 8:1.

Brands are material to the Company. According to the 2009 annual report,

P&G is the brand-building leader of our industry. We’ve built the strongest portfolio of brands in the industry with 23 billion-dollar brands and 20 half-billion-dollar brands. These 43 brands account for 85% of sales and more than 90% of profit. Twelve of the billion-dollar brands are the #1 global market share leaders of their categories. The majority of the balance are #2. As a group, P&G’s billion-dollar brands have grown sales at an average rate of 11% per year for the entire decade.

In view of the above, and with a price to book ratio of 2.7, the lion’s share of the Company’s value comprises superiorly managed intangible assets. We felt therefore it would be instructive to see how this Company discloses its financial risks. In this basic analysis, we looked at the boilerplate blue sky Forward Looking Statement that trails any financial announcement in compliance with the Private Securities Litigation Reform Act of 1995. In our analysis, we looked at the 15 enumerated items that represent “certain factors that could cause actual results to differ materially from those anticipated” by the financial announcement, and we analyzed each to determine if the risk involved a physical asset or an intangible asset (business process).

This is what we found. Of the 15 enumerated risks, 14 centered on intangible asset management. The lone physical asset risk was the Company’s IT system. Among the 14 business process risks, we found three references each to the business processes of sales, marketing and supply chain management. We found two references each to innovation, intellectual property, finance processes, and business processes in general. Last, we found one reference each to brand management, human resource management, and geopolitical risk management. Reputation risk is specifically noted. Interestingly, and consistent with our observation that only risk managers look at the world from a risk perspective, is that the descriptive language of the risks comprised neutral-to-positive managerial verbs rather than disastrous end-state nouns.

From the above, it appears that even in risk management, a superior intangible asset manager such as P&G focuses on executing the business processes that are central to its enterprise value. And given their a 170 year history, perhaps this is their intangible secret to longevity?