Human capital has emerged as an important source of sustainable competitive advantage in the knowledge-based economy. However, due to the dominance of financial and accounting conventions, corporate public reporting is limited in capturing information on human capital. The objective of the present study is to investigate the human capital disclosure phenomenon in the case of Indian firms with specific reference to Nifty 50 companies. Based on the findings of the study, 11 distinct themes related to the human capital disclosure practices of Indian companies have emerged. Amongst those themes, ‘employee compensation and benefit’ is found to be the most reported content of human capital disclosure, followed by ‘training and development’, while ‘work place safety initiative’ is found to be the least reported content of human capital disclosure. The analysis of Human Capital Disclosure Index (HCDI) score of the Nifty companies revealed that computer and software industry has the highest average HCDI score, followed by banks and pharmaceutical industry. The study observed a wide discrepancy in human capital disclosure practices based on the industry-level data. The findings also reveal that ‘employee expense as a proportion of its total operating expense’ has a significant positive impact on HCDI. Also, there is no significant impact of human capital disclosure on the market value of the companies. The implications of the study for practitioners and policy makers are also discussed.

In the knowledge economy, human capital has been realized as an important source of sustainable competitive advantage. Denoted by competencies of individuals and collective workforce of a company (Abeysekera and Guthrie, 2004), disclosure of information on human capital is likely to give various benefits to the corporate organizations (Long-Sheng et al., 2012; Boujelbene and Affes, 2013; and Farooq and Nielsen, 2014). But due to the dominance of financial and accounting conventions, corporate public reporting is limited in capturing information on human capital. Designing an effective human capital measurement framework requires a clear understanding of the human capital disclosure in corporate public reports. Assessment of the nature, extent, determinants, and the consequences of human capital disclosure may provide a useful framework for assessing the present status quo and for designing a frame for the future. However, the available framework for comprehending the human capital disclosure in India is inadequate and demanding (Jindal and Kumar, 2012). The present study aims to explore the human capital disclosure in corporate public reporting. The specific research questions addressed in this study are: (i) What are the contents of the human capital disclosure in Indian companies? (ii) What is the extent of human capital disclosure by the Indian companies? (iii) What are the determinants of human capital disclosure being made by the Indian companies? and (iv) What is the impact of human capital disclosure on the market value of the Indian companies?

Corporate Governance Journal, Human Capital Disclosure Index (HCDI), Training, Development, Work place, Safety Initiative, Knowledge Economy, Voluntary Disclosure, Human Capital, India.