Skip to main content
SpringerLink
Log in

Corporate governance characteristics, financial characteristics and HR practices disclosures: an Indian scenario

International Journal of Disclosure and Governance Aims and scope Submit manuscript

Cite this article

Abstract

Many Indian firms are proactively adopting and disclosing newer human resources (HR) practices to attract and retain best HR for the success of their business operations. The research questions of this study are: (a) Have human resources practices disclosures (HRPD) of Indian listed firms evolved over time? (b) What newer HR practices are being adopted and disclosed by Indian listed firms? (c) What are firm-level drivers of HRPD of Indian listed firms? Initially, through content analysis of HRPD of 160 listed non-financial Indian firms, this study developed a 35-itemed comprehensive HRPD index (HRPDI). It was found that Indian firms’ HRPD have indeed evolved over time. Further, the regression analysis results depicted that firms that are larger, older, have effective audit committees and the big four as external auditors tend to have higher levels of HRPD. The regression analysis also revealed a surprising result that Indian firms with higher external financing needs tend to have lower level of HRPD. The authors explained the above surprising result in terms of inherent conflict of interests between the firm’s finance department and the HR department. While the firm’s HR department views expenses incurred to adopt and disclose HR practices as the necessary investment to attract and retain best HR for the organization, the finance department views such expenses as discretionary costs, which must be curtailed when needed. Therefore, firms in need of external financing would try to minimize their expenses by curtailing on adoption and disclosure of HR practices.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Abeysekera, I., and J. Guthrie. 2004. Human capital reporting in a developing nation. The British Accounting Review 36 (3): 251–268.

    Article  Google Scholar 

  • Abeysekera, I., and J. Guthrie. 2005. An empirical investigation of annual reporting trends of intellectual capital in Sri Lanka. Critical Perspectives on Accounting 16 (3): 151–163.

    Article  Google Scholar 

  • Adila, A., and I.F.S. Wahyuningrum. 2021. The determinants of human resource disclosures in ASEAN. Accounting Analysis Journal 10 (1): 55–61.

    Article  Google Scholar 

  • Al Mamun, S.A. 2009. Human resource accounting (HRA) disclosure of Bangladeshi companies and its association with corporate characteristics. BRAC University Journal 1 (1): 35–43.

    Google Scholar 

  • Alam, I., and S.K. Deb. 2010. Human Resource Accounting Disclosure (HRAD) in Bangladesh: Multifactor Regression Analysis-A Decisive Tool of Quality Assessment. The Cost and Management 38 (3): 9–13.

    Google Scholar 

  • Anand, A., F. Milne and L. D. Purda. 2006. Voluntary adoption of corporate governance mechanisms. Available at SSRN 921450.

  • Bauwhede, H.V., and M. Willekens. 2008. Disclosure on corporate governance in the European Union. Corporate Governance: An International Review 16 (2): 101–115.

    Article  Google Scholar 

  • Ben-Amar, W., and A. Boujenoui. 2006. Factors Explaining Corporate Governance Disclosure Quality: Canadian Evidence. Working Paper, School of Management University of Ottawa, Canada.

  • Bergamini, I., and S. Zambon. 2002. A Scoring Methodology for Ranking Company Disclosure on Intangibles. EU PRISM Research Project, WP, 4.

  • Bhojraj, S., and P. Sengupta. 2003. Effect of corporate governance on bond ratings and yields: The role of institutional investors and outside directors. The Journal of Business 76 (3): 455–475.

    Article  Google Scholar 

  • Bozzolan, S., F. Favotto, and F. Ricceri. 2003. Italian annual intellectual capital disclosure: An empirical analysis. Journal of Intellectual Capital 4 (4): 543–558.

    Article  Google Scholar 

  • Branco, M.C., C. Delgado, M. Sá, and C. Sousa. 2010. An analysis of intellectual capital disclosure by Portuguese companies. EuroMed Journal of Business 5 (3): 258–278.

    Article  Google Scholar 

  • Brennan, N. 2001. Reporting intellectual capital in annual reports: Evidence from Ireland. Accounting, Auditing & Accountability Journal 14 (4): 423–436.

    Article  Google Scholar 

  • Bowrin, A.R. 2018. Human resources disclosures by African and Caribbean companies. Journal of Accounting in Emerging Economies 8 (2): 244–278.

    Article  Google Scholar 

  • Bulut, S.F., A.Ö. Çalışkan, and E. Esen. 2020. Human resource disclosures in corporate annual reports of Insurance companies: A case of developing country. Sustainability 12 (8): 3452.

    Article  Google Scholar 

  • Cerf, A.R. 1961. Corporate Reporting and Investment Decisions. Berkeley, CA: University of California Press.

    Google Scholar 

  • Cameron, A.C., and P.K. Trivedi. 1998. Regression analysis of count data. Cambridge: Cambridge University Press.

    Book  Google Scholar 

  • Durnev, A., and E. Kim. 2005. To steal or not to steal: Firm attributes, legal environment, and valuation. The Journal of Finance 60 (3): 1461–1493.

    Article  Google Scholar 

  • Garg, M.C., and S. Kumar. 2019. The relationship between human resource disclosure and company characteristics: A study on Indian companies. IUP Journal of Applied Finance 25 (4): 28–47.

    Google Scholar 

  • Goh, P., and K. Pheng Lim. 2004. Disclosing intellectual capital in company annual reports: Evidence from Malaysia. Journal of Intellectual Capital 5 (3): 500–510.

    Article  Google Scholar 

  • Guthrie, J., and R. Petty. 2000. Intellectual capital: Australian annual reporting practices. Journal of Intellectual Capital 1 (3): 241–251.

    Article  Google Scholar 

  • Healy, P.M., and K.G. Palepu. 2001. Information Asymmetry, Corporate Disclosure, and the Capital Markets: A Review of the Empirical Disclosure Literature. Journal of Accounting and Economics 31: 405–440.

    Article  Google Scholar 

  • Hassan, O and C. Martson. 2010. Disclosure measurement in the empirical accounting literature. A review Article, SSRN Elibrary

  • Hatane, Saarce Elsye, Wijaya, Audrey Tania and William, Andy and Haryanto, Amanda Devi (2018). Factors Affecting Intellectual Capital Disclosures: A Case of Primary Sectors in Thailand. Journal of Economics and Business, 1 (4). pp. 513–523. ISSN 2615–3726

  • Hay, D.A., N.S. Ragab, and W. Hegazy. 2018. The determinants of human capital voluntary disclosures in the lebanese commercial banks. Academy of Accounting and Financial Studies Journal 22 (6): 1–18.

    Google Scholar 

  • Huang, C.C., R. Luther, M. Tayles, and R. Haniffa. 2013. Human capital disclosures in developing countries: Figureheads and value creators. Journal of Applied Accounting Research 14 (2): 180–196.

    Article  Google Scholar 

  • Jensen, M.C., and W.H. Meckling. 1976. Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics 3 (4): 305–360.

    Article  Google Scholar 

  • Jindal, S., and M. Kumar. 2012. The determinants of HC disclosures of Indian firms. Journal of Intellectual Capital 13 (2): 221–247. https://doi.org/10.1108/14691931211225049.

    Article  Google Scholar 

  • Kamath, G. B. 2008. Intellectual capital and corporate performance in Indian pharmaceutical industry. Journal of Intellectual Capital.

  • Kaur, S., V. A. Raman, and M.Singhania, 2016. Impact of corporate characteristics on human resource disclosures. Asian Review of Accounting.

  • Khandekar, A., and A. Sharma. 2005. Managing human resource capabilities for sustainable competitive advantage: An empirical analysis from Indian global organisations. Education+ Training, 47(8–9), 628–639.

  • Leftwich, R. W., Watts, R. L., and J. L. Zimmerman. 1981. Voluntary corporate disclosure: The case of interim reporting. Journal of Accounting Research, 50–77.

  • Meek, G. K., C. B. Roberts and S. . Gray .1995. Factors influencing voluntary annual report disclosures by US, UK and continental European multinational corporations. Journal of International Business Studies, 555–572.

  • Olsson, B. 2001. Annual reporting practices: Information about human resources in corporate annual reports in major Swedish companies. Journal of Human Resource Costing & Accounting 6 (1): 39–52.

    Article  Google Scholar 

  • Onuoha, N.E., G.N. Ofoegbu, R.G. Okafor, and V.A. Onodugo. 2020. Voluntary disclosure of intellectual capital information by deposit money banks in Nigeria. Journal of Intellectual Capital 21 (6): 1035–1052.

    Article  Google Scholar 

  • Pettersson, J., and H. Rylme. 2004. VOLUNTARY DISCLOSURE OF HUMAN CAPITAL An Explorative Study of Voluntary Disclosure Practices in Swedish Annual Reports.

  • Petty, R., and S. Cuganesan. 2005. Voluntary disclosure of intellectual capital by Hong Kong companies: Examining size, industry and growth effects over time. Australian Accounting Review 15 (36): 40–50.

    Article  Google Scholar 

  • Pfeffer, J., and G. R. Salancik. 1978. A resource dependence perspective. In Intercorporate relations. The structural analysis of business. Cambridge: Cambridge University Press.

  • Rouf, D., and M. Abdur. 2011. Corporate characteristics, governance attributes and the extent of voluntary disclosure in Bangladesh. African Journal of Business Management 5 (19): 7836–7845.

    Google Scholar 

  • Samaha, K., K. Dahawy, K. Hussainey, and P. Stapleton. 2012. The extent of corporate governance disclosure and its determinants in a developing market: The case of Egypt. Advances in Accounting 28 (1): 168–178.

    Article  Google Scholar 

  • Singh, S., and M. Kansal. 2011. Voluntary disclosures of intellectual capital. Journal of Intellectual Capital.

  • Tejedo-Romero, F., and Araujo J. F. 2021. The influence of corporate governance characteristics on human capital disclosure: the moderating role of managerial ownership. Journal of Intellectual Capital.

  • Vandemaele, S. N., P.G.M.C. Vergauwen and A. J. Smits. 2005. Intellectual capital disclosure in The Netherlands, Sweden and the UK: A longitudinal and comparative study. Journal of Intellectual capital.

  • Vithana, K., T. Soobaroyen, and C.G. Ntim. 2021. Human resource disclosures in UK corporate annual reports: To what extent do these reflect organisational priorities towards labour? Journal of Business Ethics 169 (3): 475–497.

    Article  Google Scholar 

  • Watts, R., and J. Zimmerman. 1986. Positive Accounting Theory. Edgewood Cliffs, NJ: Prentice-Hall.

    Google Scholar 

  • Yi, A., and H. Davey. 2010. Intellectual capital disclosure in Chinese (mainland) companies. Journal of Intellectual Capital 11 (3): 326–347.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Symbiosis Institute of Business Management, Nagpur, Symbiosis International (Deemed University), Pune, Maharashtra, 441204, India

    Veerma Puri

Authors
  1. Veerma Puri
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Veerma Puri.

Ethics declarations

Conflict of interest

There is no conflict of interest.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and Permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Puri, V. Corporate governance characteristics, financial characteristics and HR practices disclosures: an Indian scenario. Int J Discl Gov 20, 231–247 (2023). https://doi.org/10.1057/s41310-022-00166-0

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/s41310-022-00166-0

Keywords

search

Navigation