Concerning Evidence About the Availability of Labour Force Information Within Financial Reports: Investigating Human Capital Reporting Over Time

No policy requires firms to disclose workforce-level human capital (HC) information on financial reports. We are therefore motivated to capture whether HC (and workforce-related information) reporting quality has changed in 2021 relative to 2011, for the top 25 FTSE-indexed firms. Using a content analysis approach, empirical tests are conducted to determine the extent ethnicity, gender, diversity and inclusion (IEGD) disclosure quality has improved, relative to other important HC disclosures. Empirical results show that HC reporting quality remains low in the United Kingdom. However, reporting quality differs based on HC characteristics. The quality (and quantity) of IEGD disclosures increases. However, other important HC and workforce variables such as well-being, mental health, performance, training and disability do not. Empirical results suggest that HC reporting quality/quantity is dynamic. Contrary to previous studies that surmise British firms disclose diversity/equality information as a superficial branding strategy, our results show that top 25 FTSE indexed firms disclose higher quality IEGD information, consistent with legitimacy theory. However, because some important equality HC and workforce variables are shown to provide relatively lower quality disclosures, the study identifies potential policymaking oversights, provides insights to management about strategies to enhance HC reporting quality and speaks to how potential legislative oversights can negatively impact British society.