Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Human capital, value creation and disclosure

Human capital, value creation and disclosure Purpose – The purpose of this paper is to explore, empirically, the contribution of human capital (HC) to value creation and the external disclosure of HC. The specific aims are to: investigate the relative contribution of HC to the generation of firm value; compare the differences in the perceptions of human resource (HR) directors and finance directors (FDs) in relation to this contribution; examine the relationship between the internal collation and external disclosure of HC information; investigate incentives and disincentives to the external disclosure of HC information; and investigate the most appropriate medium to externally disclose HC information. Design/methodology/approach – A questionnaire survey of (HR) directors of UK listed companies was conducted. Responses are compared to those from FDs obtained from a previous survey on the broader concept of intellectual capital disclosure. In total, 13 follow‐up interviews were conducted. The matched views of the (HR) specialist and the FD are compared for eight case companies. Findings – Employee skills and education, employee commitment, positive employee attitudes and behaviour, and employee motivation are considered to contribute to value creation the most. Information on employee turnover, employee training and development, and workplace safety is frequently collated. There also appears to be attempts to capture information on aspects such as employee satisfaction, motivation, and commitment. Marked differences exist between the extent to which information is internally collated and externally disclosed. External disclosure appears to be a valuable recruitment tool. However, giving away information which may harm competitive advantage is a serious concern. The annual report was considered the most effective written form of communication for disclosing HC externally. Despite some disparity in views, there is evidence to suggest recognition by FDs of the value of human capital and commitment to its external disclosure. Contrary to prior research, evidence from the small matched sample indicates no significant difference in views between the two functional specialists regarding the importance to value creation of four key HC components. Research limitations/implications – A comparison across the full range of HC issues is not possible as the FD IC survey was unable to address HC in as much detail as the HC survey. Originality/value – This paper contributes to the understanding of HC and its disclosure by comprehensively investigating such issues for a large sample of UK companies. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Human Resource Costing & Accounting Emerald Publishing

Human capital, value creation and disclosure

Loading next page...
 
/lp/emerald-publishing/human-capital-value-creation-and-disclosure-eRe7MeTs3k
Publisher
Emerald Publishing
Copyright
Copyright © 2010 Emerald Group Publishing Limited. All rights reserved.
ISSN
1401-338X
DOI
10.1108/14013381011105957
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to explore, empirically, the contribution of human capital (HC) to value creation and the external disclosure of HC. The specific aims are to: investigate the relative contribution of HC to the generation of firm value; compare the differences in the perceptions of human resource (HR) directors and finance directors (FDs) in relation to this contribution; examine the relationship between the internal collation and external disclosure of HC information; investigate incentives and disincentives to the external disclosure of HC information; and investigate the most appropriate medium to externally disclose HC information. Design/methodology/approach – A questionnaire survey of (HR) directors of UK listed companies was conducted. Responses are compared to those from FDs obtained from a previous survey on the broader concept of intellectual capital disclosure. In total, 13 follow‐up interviews were conducted. The matched views of the (HR) specialist and the FD are compared for eight case companies. Findings – Employee skills and education, employee commitment, positive employee attitudes and behaviour, and employee motivation are considered to contribute to value creation the most. Information on employee turnover, employee training and development, and workplace safety is frequently collated. There also appears to be attempts to capture information on aspects such as employee satisfaction, motivation, and commitment. Marked differences exist between the extent to which information is internally collated and externally disclosed. External disclosure appears to be a valuable recruitment tool. However, giving away information which may harm competitive advantage is a serious concern. The annual report was considered the most effective written form of communication for disclosing HC externally. Despite some disparity in views, there is evidence to suggest recognition by FDs of the value of human capital and commitment to its external disclosure. Contrary to prior research, evidence from the small matched sample indicates no significant difference in views between the two functional specialists regarding the importance to value creation of four key HC components. Research limitations/implications – A comparison across the full range of HC issues is not possible as the FD IC survey was unable to address HC in as much detail as the HC survey. Originality/value – This paper contributes to the understanding of HC and its disclosure by comprehensively investigating such issues for a large sample of UK companies.

Journal

Journal of Human Resource Costing & AccountingEmerald Publishing

Published: Nov 2, 2010

Keywords: Human capital; Value added; Disclosure; United Kingdom

References