Human capital, value creation and disclosure

Vivien Beattie (Accounting and Finance, Business School, University of Glasgow, Glasgow, UK)
Sarah Jane Smith (Division of Accounting and Finance, Stirling Management School, University of Stirling, Stirling, UK)

Journal of Human Resource Costing & Accounting

ISSN: 1401-338X

Publication date: 2 November 2010



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.


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.


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.


This paper contributes to the understanding of HC and its disclosure by comprehensively investigating such issues for a large sample of UK companies.



Beattie, V. and Smith, S. (2010), "Human capital, value creation and disclosure", Journal of Human Resource Costing & Accounting, Vol. 14 No. 4, pp. 262-285.

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Copyright © 2010, Emerald Group Publishing Limited

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