The Positive Effects of Human Capital Reporting
Abstract:In our knowledge-based economy, successful companies’ most important assets are intangible – such as their human capital. However, few companies provide their stakeholders with detailed information about this resource, as they do not adequately assess the value of such reporting. Nevertheless, against the background of the corporate social responsibility discussion, providing human capital information is becoming increasingly important as a key driver of corporate reputation. Human capital reporting (HCR) can also be regarded as an instrument that may affect company financial performance and ultimately increase shareholder value. Against this background, we develop a theoretical model that illustrates the transformation of the intangible factors of HCR into tangible outcomes. Consequently, the model considers the various cause-and-effect relationships between HCR and company financial performance. As with a strategy map, three dimensions with a specific number of different intangible factors should be taken into consideration. Ultimately, the model reveals the benefits of HCR.
Document Type: Research Article
Affiliations: 1: Chair of Management Accounting and Control, Faculty of Economic Sciences, University of Goettingen, Germany 2: Professor for Performance Management/Controlling, Institute of Accounting, Control and Auditing, University of St. Gallen, Swizerland
Publication date: 2011-01-01