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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.

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Gamerschlag, R., Moeller, K. The Positive Effects of Human Capital Reporting. Corp Reputation Rev 14, 145–155 (2011). https://doi.org/10.1057/crr.2011.11

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Keywords

  • disclosure
  • human capital reporting
  • human capital management
  • intangibles
  • management accounting