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In this paper, the work of the 2003 UK Task Force on Human Capital Management is reviewed. This initiative emerged from a broader Department of Trade and Industry interest in the better usage of human labour and potential, and focuses on the current practice and future possibilities for human capital management in the UK. We emphasise an “accounting influence” present throughout the work of the Task Force, and a predilection for dealing with human capital measurement and reporting within the planned expansion of the Operating and Financial Review. However, we argue that the report has been narrow in its appreciation of interest in the cognate field of intangibles and intellectual capital. It fails to recognise the accountancy discipline’s difficulties in reporting in these areas, as well as being possibly premature in delegating responsibility for human capital reporting to the Operating and Financial Review.

Human capital is considered by many to be a firm's most important asset. However, because no international human capital reporting framework exists, firms can decide to include/exclude human capital details on annual reports. Based on legitimacy theory, firms that disclose high levels of human capital information can be considered congruent with the expectations of society. However, firms can also choose to include human capital information on annual reports for symbolic purposes as an image management strategy.

Using 2018 as a sample period, content analysis is used to evaluate the annual reports of the 25 largest British and 25 largest Korean firms to demonstrate the propensity of British/Korean firms to disclose human capital information as numerical and textual data.

The authors report that South Korean firms provide high levels of human capital information using narrative and numerical data, including value added human capital elements included on integrated reports. British firms on the other hand tend to use primarily positive narrative and limited numerical human capital data to present human capital information.

The results imply South Korean firms provide robust human capital information on annual reports as a legitimacy strategy. On the other hand, the UK's human capital reporting requirement can be considered as a form of image management. The results therefore have important policy implications for legislators, labour unions and firm stakeholders with incentives to enhance human capital information transparency.

The purpose of this paper is to discuss a framework of accounting theoretical bases that could promote research into little understood areas of human capital accounting.

The possible forces that hinder greater disclosure of human capital‐based information are analyzed by reviewing several theoretical viewpoints that offer a framework of different possible reasons for the low frequency of human capital‐based disclosures.

The paper explores several possible reasons for the reluctance of firms to disclose greater amounts of human capital‐based information, from the perspective of relevant theoretical bases. The predominant reasons may differ in different circumstances, industries and environments.

The paper explores theoretical bases that explain the barriers to widespread reporting of human capital‐based information. The theoretical bases discussed are not empirically validated.

The validation of the theoretical bases explored in this study, and the possible uncovering of new bases in the future through empirical studies, will enable academics, policy makers and accounting standard setters to better understand the reasons for the limited disclosures of human capital‐based information by listed firms to capital markets. This will help in the promulgation of widely accepted accounting standards for the disclosure of human capital‐based information, which address and overcome the forces that currently hinder the reporting of human capital‐based information.

This is the first paper that explores a framework of several pertinent theoretical viewpoints that specifically address the non‐disclosures of human capital‐based information to capital markets.

It is commonly acknowledged that “what gets measured gets done”. There is some debate on how to include human capital on the balance sheet, but it is arguably more important that investors become aware of how human capital contributes to the success of a business. This is an exploratory study into the reporting of human capital. Annual reports from 20 companies in three different industries were examined for two years to document the human capital reporting that is done. The data were categorised into functional areas, and linkages were constructed with strategic frameworks as well as with operational results. The results showed little evidence that managements report on human capital in a manner suggesting it is an area of strategic importance. A review of the lessons learned from this exploration provides strong guidance for future research.

Purpose – Institutional investors need to move beyond first- and second-generation interpretations of Corporate Social Responsibility (CSR) and Socially Responsible Investment (SRI) (based on negative filters), and also beyond third and fourth generations (based on positive and integrated filters), which are more sophisticated but still limited, and toward a fifth generation of SRI and CSR. A fifth-generation model systematically incorporates critical intangibles, such as human capital analysis, into the Environmental, Social, and Governance (ESG) investment process.

Methodology – This chapter incorporates a literature review and draws on a range of qualitative research and case studies on the current and potential role of regulators to regulate nontraditional measures of value.

Findings – The power of institutional investors is currently based on incomplete information from listed companies on how they create value, yet it rests on superior knowledge and insight into the workings of the companies in which they invest, and is only as strong as the quality of the information it uses to make investment decisions on behalf of clients.

Research implications – More research on the role of human capital analysis, and its regulatory consequences, is required.

Practical implications – Regulators need to act within the context of these fifth-generation models in order to create the environment for more transparent investment recommendations.

Originality of chapter – This chapter contributes a qualitative and conceptual perspective to the debate on the role of regulation beyond the global financial crisis.

This chapter gives in “Introduction to the Human Capital Issue” a critical analysis of the standard (economic) Human Capital (HC) theory, with the help of some “traditional” (founding) accounting concepts. From this study, to avoid the accounting and social issues highlighted in “Introduction to the Human Capital Issue,” we present, in “The “Triple Depreciation Line” Model and the Human Capital,” the “Triple Depreciation Line” (TDL) accounting model, developed by Rambaud & Richard (2015b), and we apply it to “HC,” but viewed as genuine accounting capital – a matter of concern – that firms have to protect and maintain.

From a critical review of literature on HC theory, from the origin of this concept to its connection with sustainable development, this chapter provides a conceptual discussion on this notion and on the differences/common points between capital and assets in accounting and economics. Then, it uses a normative accounting model (TDL), initially introduced to extend, in a consistent way, financial accounting to extra-financial issues.

This analysis shows at first that the standard (economic) HC theory is based on a (deliberate) confusion between assets and capital, in line with a standard economic perspective on capital. Therefore, this particular viewpoint implies: an accounting issue for reporting HC, because “traditional” accounting capital and assets are clearly isolated concepts; and a societal issue, because this confusion leads to the idea that HC does not mean that human beings are “capital” (i.e., essential), or have to be maintained, even protected, for themselves. It only means that human beings are mere productive means. The application of the TDL model to an accounting redefinition of HC allows a discussion about some key issues involved in the notion of HC, including the difference between the standard and “accounting” narratives on HC. Finally, this chapter presents some important consequences of this accounting model for HC: the disappearance of the concept of wage and the possibility of reporting repeated (or continuous) use of HC directly in the balance sheet.

This chapter contributes to the literature on HC and in general on capital and assets, by stressing in particular some confusions and misunderstandings in these concepts. It fosters a cross-disciplinary approach of these issues, through economic, accounting, and sustainability viewpoints. This analysis also participates in the development of the TDL model and the research project associated. It finally proposes another perspective, more sustainable, on HC and HC reporting.

The stakes of HC are important in today’s economics, accounting, and sustainable development. The different conceptualizations of HC, and the narratives behind it, may have deep social and corporate implications. In this context, this analysis provides a conceptual, and practicable, framework to develop a more sustainable concept of HC and to enhance working conditions, internal business relations, integrated reporting. As an outcome of these ideas, this chapter also questions the standard corporate governance models.

This chapter gives an original perspective on HC, and in general on the concept of capital, combining an economic and an accounting analysis. It also develops a new way to report HC, using an innovative integrated accounting model, the TDL model.

This study aims to examine whether the integrated reports prepared in accordance with the King III Code of corporate governance regulation are providing the information intended of an integrated report, i.e. to communicate the “ability of an organisation to create and sustain value”. Second, it explains the behaviour of companies listed on the Johannesburg Stock Exchange (JSE) when responding to the regulation to publish an integrated report. The King III Code of corporate governance requires companies listed on the JSE to prepare annually an integrated report or provide reasons for not doing so.

This paper uses legitimacy theory to formulate two alternative propositions on how JSE-listed companies may disclose information relating to a number of capitals, as described by the International Integrated Reporting Committee, in response to the King III Code. Annual/integrated reports of the top 25 JSE listed companies for the years 2009/2010 and 2011/2012 are content-analysed for the presence of information on capitals. The change in the extent of disclosure of capitals is analysed using t-tests to test the propositions.

The results show that the introduction of integrated reporting in South Africa has resulted in an increase in the extent of disclosure of human, social and relational, natural and intellectual capital information of the listed companies. The increment in the disclosure of social and relational capital is statistically significantly greater than the increment in the disclosure of other capitals. The findings indicate that JSE-listed companies are adopting a legitimation strategy based on symbolic management when preparing integrated reports.

This study sheds light on the relevance of regulating corporate reporting within a setting where companies are already voluntarily reporting on social, environmental, human, intellectual and natural capital information. Findings have implications for policymakers who have mandated or considering mandating integrated reporting. To the South African policymakers, in particular, this study highlights the need for incorporating, within the listing rules, minimum requirements in relation to the nature and content of an integrated report.

This paper provides the first initial evidence on the impact of the introduction of integrated reporting regulation, followed by limited guidance to preparers, on the nature and extent of disclosure of capitals. This study extends the work of Solomon and Maroun (2012) by explaining disclosure practices of South African-listed companies in relation to information on relational, human and intellectual capital.

A change in leadership can signal a shift in corporate strategy to drive future value creation. To help achieve this, a different emphasis may be placed upon the intellectual capital (IC) resources within the organisation. The purpose of this paper is to examine the changes in volume, composition and emphasis of IC disclosure in annual reports mapped against the re-orientation of corporate strategy and associated leadership change.

A longitudinal period of over three decades (1979-2010) is examined. Adopting a case-based approach, Daimler AG is purposively selected for this research having a number of distinct changes in strategy over the period, reflective of leadership change. Using content analysis, annual report IC-related disclosures (structural, relational and human capital) by Daimler AG are examined, by category and more detailed sub-categories, against corporate strategy.

The composition and emphasis of IC disclosures found in the annual reports changes over the longitudinal period and is reflective of the prevailing corporate strategy at that time. There were four identified periods of strategy, each associated with leadership change. The prevalence and qualitative focus of IC disclosures relevant to each period reflects the importance of respective IC components in corporate value creation.

The research is based on annual report IC disclosures within one case company and hence reflect the messages conveyed by that company over the longitudinal period. Additionally, the authors recognise that the annual report is only one source of corporate information, but as a historic record it serves to consistently capture management disclosure over a long-time period. Future research, adopting an econometric approach, could further test the linkages between leadership change, strategic shift and IC-related disclosure.

The research reveals how IC-related disclosure shifts to reflect leadership and strategic change within a case company. Through such disclosure, the authors are able to gain greater insight into how a specific business seeks to create value drawing on the components of IC underpinning corporate strategy.

The research provides new insights into IC disclosure by mapping its content and emphasis against changes in corporate strategy. This has contemporary significance due to the wider disclosure debate concerning strategy and value creation in the annual report, for instance through integrated reporting. Further, the research shows the value of annual reports for longitudinal disclosure research.

This paper aims to examine the patterns of intellectual capital reporting (ICR) of large listed firms in a developing nation, Sri Lanka. The aim of this study is to highlight the differences in ICR practice between developing and developed nations.

The paper begins by examining each of the top 30 firms by market capitalization listed on the Colombo stock exchange in 1998/1999 and 1999/2000. Using the content analysis method, it reviews the annual reports of these firms to determine the types of intellectual capital (IC) items reported in Sri Lanka. It then compares these findings with a similar study undertaken in Australia during the same period.

The findings in this paper highlight the need for a uniform ICR definition and a reporting framework that provides comparative and consistent reporting under the auspices of a regulatory body. ICR differences were identified between Sri Lankan and Australian firms, and it is argued that these differences can be attributed to economic, social and political factors.

This paper highlights important policy issues for Australia, Sri Lanka and other nations. These issues are even more pertinent in the light of the gradual international adoption of the International Financial Reporting Standards (IFRSs), formulated by the International Accounting Standards Board (IASB).

Most papers on intellectual capital reporting have focused on firms in developed countries. This paper offers insights into comparative reporting practices between a developed and a developing country.

The purpose of this paper is to examine the human resources disclosure in Danish Intellectual Capital Statements to determine if these disclosures enhance the comparability of business model performance among companies.

The paper applies the Danish Intellectual Capital Statements Analysis Model to five Danish companies' intellectual capital statements. This analysis reveals the extent to which these companies report human resources in their disclosures. The analysis also reveals how such disclosures can be used to make internal comparisons year‐to‐year as well as to make comparisons among companies. The five companies were analysed systematically using the same methodology.

The paper shows that it is feasible to analyse intellectual capital statements systematically and to compare corporate business models. In addition, the paper shows that intellectual capital statements, which convey company‐specific information on human resources, play a role in corporate value creation.

The paper shows that intellectual capital statements guidelines can be useful in the description of business models and in the analysis of the role of human resources disclosure in corporate value creation.

The contribution of the paper is its use of intellectual capital statements guidelines as a methodology for analysing the role of human resources disclosure in corporate value creation. This methodology has application in the development of the integration of business model measurement performance with traditional corporate financial reporting.