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HC disclosure
Human capital disclosure practices
practices of top Bangladeshi
companies
329
Md Habib-Uz-Zaman Khan
Department of Business Administration, East West University, Dhaka,
Bangladesh and
Department of Accounting and Finance, Macquarie University, Sydney,
Australia, and
Md Rashidozzaman Khan
Dhaka Commerce College, Dhaka, Bangladesh
Abstract
Purpose – The purpose of this paper is to examine the extent of human capital (HC) reporting in
leading Bangladeshi firms using the HC reporting framework, thereby making a contribution to the
body of knowledge in the area of HC reporting practice in a developing country context.
Design/methodology/approach – Using the technique of content analysis, three years of annual
reports of 32 leading manufacturing and service sector companies listed on the Dhaka Stock Exchange
(DSE), selected on the basis of the market capitalization, were examined to identify any HC reporting
trends.
Findings – The findings reveal that the HC reporting practices of leading Bangladeshi firms are not as
low as projected in relation to the total list of items reported. The most commonly disclosed HC items are
information on employee training, number of employees, career development and opportunities that firms
provide, and employee recruitment policies. Moreover, as a result of a degree of intervention on the part of
some Bangladeshi regulators, the extent of reporting has increased during 2009/2010.
Research limitations/implications – The principal limitations of the study are that it is based on
a small non-random sample of firms taken from a single country and drawing solely annual reporting
information.
Originality/value – This is the first paper that documents HC-related disclosures in the context of a
transitional economy such as Bangladesh using multi year-data. The study contributes to the HC
literature by providing empirical evidence of the status of HC reporting in a developing country
context.
Keywords Human capital, Intellectual capital, Financial reporting, Bangladesh, Developing countries
Paper type Research paper
Introduction
Human capital (HC) reporting has received considerable academic and practitioner
attention across the globe during the past decade and a half (Stewart, 1994; Abeysekera
and Guthrie, 2004; Bassi et al., 2000). There has been an increasing consciousness that
workforces are considered not only as a vital resource for a business but also a key basis of Journal of Human Resource Costing &
competitive advantage in today’s changing business environment. As a result, substantial Accounting
Vol. 14 No. 4, 2010
investments towards upgrading stocks of HC are evident among firms that believe human pp. 329-349
resources are their most valuable assets. Studies argue that skilled employees, employees’ q Emerald Group Publishing Limited
1401-338X
knowledge and spirit, leadership quality, etc. facilitate the improvement of company DOI 10.1108/14013381011105984
JHRCA performance (Stewart, 1994; Bozzolan et al., 2003; Bontis, 2003). Similarly, Bontis et al.
14,4 (2001) opined that HC representing the collective knowledge stock of an organization
provides a sound base for enjoying competitive advantages over others.
Nevertheless, HC information has traditionally only been reported internally by
organizations. This is because there have been no disclosure related standards by which
such information might be reported in their annual reports. In today’s knowledge based
330 economy, researchers endeavor to identify means of viewing corporate performance more
comprehensively, including establishing a common framework for describing and
representing intangibles in a reliable manner (Brooking, 1996; Low et al., 1999; Stewart,
1994; Petrash, 1996). Abeysekera and Guthrie (2004) argue that the need for firms to be
able to effectively manage, measure, and report on intangible assets has been reinforced
with the development of a number of measurement instruments. Prior research studies
(Buckowitz and Petrash, 1997; Flamholtz and Main, 1999; Stittle, 2004; Creelman, 2006)
evidence that different firms such as the Skandia Group, the Canadian Imperial Bank of
Commerce, Hughes Space and Communications, Dow Chemicals, Buckman Laboratories
International, and Telia have incorporated the measurement of HC (among other
intellectual capital (IC) measurements) into their both types of internal and external reports
and strategic management issues in the past decades.
Although numerous studies have explored the HC reporting practices of firms in
both developed and developing countries (Olsson, 2001; Subbarao and Zeghal, 1997;
Abeysekera and Guthrie, 2004; Ax and Marton, 2008; Huang et al., 2008, for a review),
evidence on HC reporting in Bangladesh has been scarce. The case of Bangladesh as
considered in the current research thus offers a valuable opportunity to address this
situation. There are various motivational rationales for why the country Bangladesh
and its firms are considered perfect as a research site. First, recent trends in accounting
research illustrates that the profession has identified the inevitability of HC for
strategic positioning by means of imparting information to improve the company’s
competitive advantage (Turner, 1996; Roslender, 1997; Roslender and Dyson, 1992;
Bassi et al., 2000). Decision makers in Bangladeshi firms now focus on reshaping
organizational control systems, put new thought into both customer and employee
satisfaction in the pursuit of competitive advantages (Ali et al., 2008; Basir et al., 2001).
They could thus initiate reporting more information on these valuable resources.
Similarly, Basir et al. (2001) pointed out that the measuring and reporting of HC
information in firms would be an excellent medium to make decision makers more
responsible and transparent to the all stakeholders.
The emergence of the better informed consumer compels firms to respond to market
pressures beyond the actual product being produced (e.g. working conditions,
environmental protection, and production methods), which has led to pressure for
disclosure on human resource in some cases. Moreover, Mazumder (2005) observes that
Bangladeshi companies have begun to voluntary report information such as on social and
environmental issues and other supplementary financial reporting and statements in the
recent times. In addition, Chowdhury (2000) explains that future financial reporting in
Bangladesh is on the verge of being strongly controlled by the Securities and Exchange
Commission’s (SEC) guidelines with a guideline note[1], which might mandate public
companies to fully report all the essential information to the shareholders. At the same
time, the shifts of tasks between the private and the public spheres has made firms more
and more dedicated to embrace their social responsibilities. Further, the decentralised
and individualised bargaining pattern contributes to the mobility of skilled workforces, HC disclosure
thus intensifying the need for policies to retain the workforce. Overall, it is reasonable to
believe that Bangladeshi enterprises show a gradually growing interest in reporting tools
practices
on HC in their annual reports.
The purposes of this paper are twofold. First, the study specifically looks at the
extent of disclosure of HC items in the annual reports of a sample Bangladeshi
companies. Then, to investigate whether HC-related information has changed over 331
time. Specifically, the study responds to the following two research questions:
RQ1. What is the extent of HC information disclosed in annual reports of the top
Bangladeshi companies?
RQ2. Is there any changing trend of HC disclosure across the three years period?
Following this introduction, the paper is organized in the following sequences. The
second section provides a brief review of Bangladesh and a summary of HC/IC
reporting research conducted in this context. This is followed by a brief review of
the HC reporting literature, focusing on the importance of HC reporting practices of the
firm. The fourth section describes the research method employed to collect and analyse
disclosures in the sample of annual reports. The empirical findings of the study are
presented in the fifth section, while the next section offers a number of concluding
remarks along with the implication and limitation of the study.
Literature review
HC reporting has been considered as a process by which the identification and
measurement of workforce related excellence are captured and communicated to
interested stakeholders group. HC reporting did not attain an extensive acceptance in
academic research until the middle of the last century, as a result of the identification of
HC as one of the components of IC three dimensions, together with organizational
capital and customer capital. While various terminology in relation to HC have been
used in the literature, for example, “human assets” (Likert, 1967), “human resources” HC disclosure
(Brummet et al., 1968; Heckmian and Jones, 1967), “cultural capital” (Thompson, 1998), practices
“worth of employees” (Roslender and Dyson, 1992), and HC (Liebowitz and Wright,
1999), HC in its simplest sense implies the knowledge intensity of a workforce.
Abeysekera and Guthrie (2004, p. 255) define HC as:
[A] combination of factors possessed by individuals and the collective workforce of a firm
which also encompass knowledge, skills and technical ability; personal traits such as 333
intelligence, energy, attitude, reliability, commitment; ability to learn, including aptitude,
imagination and creativity; desire to share information, participate in a team and focus on the
goals of the organization.
Researchers argue that HC is one of the most important resources on which companies
rely to improve their effectiveness and efficiency in the pursuit of a competitive
advantage (de Pablos, 2003; Nielsen et al., 2006). Similarly, Roos et al. (1998) argue that
employees generate IC through their competence, attitude, and intellectual ability.
Hudsson (1993) suggests HC as a combination of: genetic inheritance, education,
experience, and attitudes about life and business. Guthrie (2001) suggests that HC
information might allow organizations to allocate resources more effectively and may
simply permit the identification of gaps in skills and abilities. Although several
researchers claim that better information about HR might produce considerable
benefits, which might further assist the provision of more complete information to
investors or potential investors (McGregor et al., 2004; Flamholtz and Main, 1999;
Royal and O’Donnell, 2005, 2008), Wyatt’s (2001) study of HC actually found that more
human resource practices are not only associated with superior financial returns, they
are also a principal sign of superior shareholder value.
On the other hand, despite research studies documenting the expansion of an interest in
HC issues (Grojer and Johanson, 1996; Nasseri, 2001; Roos, 1998; Bassi et al., 2000),
researchers express concern about the low level of improvements with regards to its
external reporting. Researchers have noted that HC has failed to develop practical
applications, in some part because of its inherent valuation and measurement problems
and thus the growth of interest in reporting in other forms (Roslender and Dyson, 1992;
McGregor et al., 2004). Existing international accounting standards (IASs) do not permit
the recording of HC as an asset on balance sheet, even as a line item within the framework
of intangible assets, within the range of IAS 38. As a result, organizations’ investments in
HC continue to be viewed as, and accounted for, as an expense in the income statement.
Prior studies suggest a number of reasons why some enterprises are happy to
incorporate some voluntary HC reporting in their annual reports. de Pablos (2002)
argues that IC information, of which HC is a key element, enables firms to create an
image of its hidden value. Other researchers suggest that HC reporting facilitates
communicating a link between HC and the performance of the firm stakeholders
(Rodwell, 2000; Miller et al., 1999; Abeysekera and Guthrie, 2004). Roslender and
Fincham (2001) argue that HC disclosure encourages a significant focus of attention on
the involvement of stakeholders in the broader context of the firm. Grover and
Davenport (2001) also presents an interesting argument in this regards. Grover
illustrates that the addition of HC information in annual reports could change the
prevailing social order within firms. Petty and Guthrie (2000) suggest that HC
reporting guides some firms to mimic the “best practice” of other firms. Elias (1972)
found that information on human resources influenced users’ decisions concerning
JHRCA investment in common stock. Consequently, research argues that the inclusion of
14,4 information on HC offers much better forecasts of net income, as the values of human
resources have some influence the decisions of certified public accountants or other
accountants (Flamholtz, 1976; Schwan, 1976). Thus, it is suggested that accounting
professionals should account for this core value driver, as a strategically relevant asset
in their reporting mechanism in order to bolster the relevance of financial reporting and
334 to accommodate users’ changing needs for information.
Empirical research on HC reporting recognizes that although no significant interest in
HC reporting was evident in the other parts of the world, the application of HC valuation
and reporting has been initiated in Europe at the beginning of 1990. For example, some
Swedish organizations developed their own human resource income statements during
1990s. The study conducted by Lundberg and Wiklund (1994) in Swedish companies
revealed that 70 per cent of the personnel managers with more than two hundred
employees confirmed their use of HC reporting to some extent. Grojer and Johanson
(1998) concluded that many Swedish organizations use HC reporting, informed by a
management control perspective, to a large-scale. Stewart (1994) opined that some
companies, particularly in Scandinavia, have published IC reports as a mechanism to
show the value of their IC as part of managing these valuable assets. Subsequently,
different companies around the world have begun disclosing IC, including the intangible
assets of skill and knowledge in their financial reports. Subbarao and Zeghal (1997)
analysed the annual reports of a sample of publicly traded corporations in six developed
countries within five broad categories of HC such as information on training; information
related to the contribution of human resources to increasing the value of the corporation
(value-added); diversity of the workforce as a responsible corporation (equity issues);
information about relations with employees (employee relations); and compensation of
executives and employees (compensation). They found that the value-added by human
resources to a corporation was the least frequently disclosed item while benefits and
pensions were the most frequently disclosed information. On the other hand, a research
study of sample of 10,000 Canadian firms carried out by Bontis (2003) found that there is
no evidence that IC disclosure has acquired any traction for Canadian firms and only a
small percentage of Canadian firms even used the term in their annual reports.
Although IC has a very strong impact on the drivers of future earnings, it has been
suggested that HC is largely ignored in financial reporting. In a survey of 18 of the
largest Swedish companies, Olsson (2001) found that none devoted more than 7 per cent
of their reporting to HC information (as a proportion of total information) in their
annual reports in 1998. Furthermore, the reported information was found to be highly
deficient either in terms of quality or the extent of disclosure. According to Harrison
and Sullivan (2000), there was a dozen companies around the world engaged in the
active extraction of profits from their IC by 1994. Nevertheless, no IC statements have
been published by companies in Asian context except for in India (de Pablos, 2003).
Besides, with regards to HC reporting there has been very limited research study in the
context of developing countries. For example, in their study of 30 leading firms in
Sri Lanka, Abeysekera and Guthrie (2004) found that items such as employee relations
and employee measurements were most frequently disclosed, whilst equity issues and
workplace safety were least disclosed by firms. In a further more recent research study
to explore motivations behind HC reporting, Abeysekera (2008) found that firms use
disclosure to combat tension between firms and their constituents in the interest of
greater capital accumulation. In the context of Bangladesh, it has been observed that HC disclosure
some companies did disclose a number of forms of HC information such as key practices
workforce and training information in their annual reports (Ali et al., 2008; Hossain
et al., 2004) in the recent past. Beyond this, Alam (1997) observed that companies could
disclosure HC-related information in the form of notes even if it is not accounted in the
conventional financial statements. As successful HC management is an important
strategy to companies, it is expected that companies will increasingly seek to 335
voluntarily convey this sort of information to their stakeholders in their annual reports.
Research design
Collection of data and sample size
The data collected for the purpose of the study involves the examination of annual
reports for 32 leading Bangladeshi manufacturing and service sector enterprises listed
on the Dhaka Stock Exchange (DSE) three years: 2007-2008, 2008-2009, and 2009-2010
(a list of firms surveyed from different sectors have been attached in Appendix
Table AI). These companies were chosen because of their investor focus and legislative
obligations. For the purpose of the study, top firms were selected on the basis of the
highest three years’ market capitalization published in the annual review of DSE dated
on 21 September 2008. The year 2009-2010 was considered in this study for two
reasons. First, it was the latest year when the study is conducted. Second, at the end of
2008, there was some encouragement and incentives from regulators for Bangladeshi
firms to become involved in and report community and employees information.
For example, the Central Bank of Bangladesh instructs and encourages commercial
banks to involve and report social information as part of management efficiency, while
the National Board of Revenue offers tax incentives for social activities and employees
welfare (Khan et al., 2009; Khan, 2010). As a result of these actions by two regulators in
Bangladesh, an opportunity is afforded to observe any changes in HC-related
information in the annual reports of companies.
The annual reports of the firms selected were examined subsequent to downloading
from the respective companies’ official web site. The official web addresses of all
sample firms were collected from the “companies profile section” maintained by DSE.
However, one annual report of a service company was available only in an incomplete
form (only financial information) on the web. A letter was therefore mailed to the
company secretary requesting a complete annual report document, which was duly
returned. Consequently, all the sample firms’ annual reports were examined in the
current study. As with other studies (Ali et al., 2008; Khan and Ali, 2010), the study made
a thorough investigation of the different sections of the annual reports such as vision,
mission and goal statement, chairman’s message, directors’ section, financial
statements, operational review, and other parts enclosing miscellaneous information
not covered by any section. While companies may exercise other medium of
communication for exhibiting HC reporting such as the internet, newspapers, and other
media, this study concentrates on published annual reports of sample companies.
The selection of annual reports is consistent with many other studies (Abeysekera
and Guthrie, 2004; Guthrie and Parker, 1990; Ax and Marton, 2008, Andrews et al.,
1989; Kirkman and Hope, 1992, for a review). Furthermore, several prior studies have
documented that users of annual reports demand more and more reliable information
relating to key drivers of future company value creation capabilities (Maines et al., 2002;
JHRCA Beattie, 2000; Healy and Palepu, 2001; Abeysekera and Guthrie, 2004). A further reason
for choosing annual reports is that they are considered to be the most widespread and
14,4 accepted document produced by Bangladeshi companies on a regular basis. Belal
(1999, 2000) and Khan et al. (2009) note that annual reports are considered as the major
means through which Bangladeshi firms corporate information are communicated.
Furthermore, our initial investigations revealed that sample firms do not publish any
336 separate HC reports, and as such their HC information would usually be restricted to
their annual reports. Large companies were chosen for the study since such enterprises
normally reveal more information than smaller companies and often exhibit a
substantial eagerness, accompanied by the necessary resources, to include HC-related
disclosures in their annual report (Marston and Shrives, 1991; Hackston and Milne,
1996; Abeysekera and Guthrie, 2005). These 32 top firms represent around 70 per cent
of the market capitalization of the DSE in Bangladesh.
HC framework
The most popular framework for distinguishing the various constituents of IC was
proposed by Brooking (Brooking, 1996; Brooking and Motta, 1996). This framework has
later been expanded by many other researchers (Dzinkowski, 1998, 2000; Guthrie and
Petty, 2000; Edvinsson and Malone, 1997; Roos et al., 1998; Christopher and Siu-Chung
Kong, 1998; Miller et al., 1999). A list of 20 HC items (Table I) was compiled from this
expanded framework with further modification of such items as the establishment of
own training institutes or lists of training and employees participation, thereby
encompassing the set of HC items likely to be disclosed in the Bangladeshi context.
Content analysis
For coding HC disclosures, the content analysis of annual reports method has been
used. According to Guthrie et al. (2003) content analysis is a quantitative technique by
1. Employee training
2. Education
3. Lists of training and employees participation
4. Number of employees
5. Employee compensation plan
6. Employee benefits
7. Employee involvement in the community activities
8. Establishment of own training institute
9. Employees incentives program
10. Employees safety and health
11. Entrepreneurial spirit
12. Rate of staff turnover
13. Employees opportunity for job rotation
14. Employee skill and competence
15. HC statistics (i.e. in terms of profitability per employee, sales per employee
16. Career development and opportunities
17. Intellectual skills of employees
18. Employee value
19. Employees recruitment policies
20. Employee leadership
Table I.
List of HC items used Source: Complied based on a review of the literature
which standardized measurements are applied to metrically defined units. Content HC disclosure
analysis of annual reports has been used widely, and is empirically valid in both CSR practices
and IC research (Gray et al., 1995; Guthrie and Parker, 1990). As an instrument for
collecting data, it engages codifying qualitative and quantitative information into
pre-defined categories so as to derive outlines in the presentation and reporting of
items. Content analysis provides a means of analysing published information
methodically, neutrally and dependably (Krippendorff, 1980; Guthrie and Parker, 1990; 337
Guthrie, 1983). A number of studies has used the content analysis method to examine
voluntary and mandatory annual report IC disclosures in different countries (Guthrie
et al., 2004). In the case of HC disclosures, content analysis captures if a company
discloses an item of HC reporting (e.g. number of employees or entrepreneurial spirit) in
the annual report it awards “1” and, if not, “0” is awarded. The score of each item are
then added to establish the total score for the company.
Content analysis can also be used to count the number of times particular words are
used, for example, “human resources” or the number of pages devoted to “human
resources” issues. Studies indicate that researchers have also considered different units of
measurement as a medium of HC reporting in the content analysis of annual reports. While
the “number of disclosures” and “word count” have been used in the prior studies (Ness
and Mirza, 1991; Zeghal and Ahmed, 1986), other approaches such as “line count”,
“sentences count”, and proportion of pages are also widely adopted in different studies
(Guthrie and Parker, 1989; Trotman and Bradley, 1981; Hackston and Milne, 1996;
Abeysekera and Guthrie, 2005). However, the use of words and/or sentences seems to be
preferred by most researchers. This study considers “word count” as the unit of analysis.
This method of analysis was chosen because it is easily identifiable in annual reports.
Specifically, while “word count” has some limitation and sentences are more easily
identifiable wholes (Carney, 1972), consistent with others, we rely on this method on the
grounds that HC reporting is a new phenomenon in Bangladeshi context and “word count”
would better be suited in this context (Ali et al., 2008; Khan et al., 2010).
In addition, the disclosure of HC information was also measured on a scale of one (1)
to five (5) points with a view to further analysis of data. The disclosure scores designed
for this purpose were as follows:
(1) for non-disclosure;
(2) for a disclosure of 1-100 words;
(3) for a disclosure of 101-150 words;
(4) for a disclosure of 151-200 words; and
(5) for a disclosure of more than 200 words.
Although tables, charts and pictures might also be useful to present HC information
in lieu of text by some companies (Marston and Shrives, 1991), such measures were
not included in the study on account of measurement problems (Wilmshurst and
Frost, 2000; Guthrie et al., 2004). However, the information in relation to the types of HC
items, which was not mandated by the any statutory requirement in Bangladesh, was
collected and analysed for each disclosure item. For each of the items, data were
gathered and recorded in terms of location (where it is located within the annual
reports), type of data (qualitative or numerical), and the number of times it appeared in
the annual report through the use of manual coding.
JHRCA Two reliability issues emerge when using content analysis in examining disclosure
14,4 data from annual reports. Beattie and Thompson (2007) suggest that first, the coding
instrument needs to be reliable concerning well specified decision categories and
decision rules to assist consistent coding decision across time and researchers.
In addition, consistent coding decisions must be exhibited through the use of multiple
coders in the coding process, multiple time periods and addressing and reporting any
338 inconsistencies (Beattie and Thompson, 2007, p. 139). In line with this argument,
coding sheets have been used in the current study to capture the qualitative data, by
means of an HC framework that includes the HC elements. Two researchers and a
research assistant took part in the full coding procedure to produce reliability in the
coding procedure. The procedure of maintaining and recoding in the coding sheet is
similar to others reported in the literature (Khan et al., 2010; Ali and Khan, 2008).
Separate coding was carried out for each year and any discrepancies in coding between
the coders were subsequently lessened in the course of further discussions and
interpretations. Moreover, in order to increase the impartiality and consistency of
coded data, the data recorded in the coding framework was re-checked and reviewed
after a time interval to ensure the objectivity and consistency of coded data.
Finally, to provide greater reliability we relied on alpha (a) value. As suggested by
Krippendorff (2004, p. 245):
When coders agree perfectly, observed disagreement (Do) equals to zero and alpha (a) equals
to one, which indicates perfect reliability. But when observers agree as if chance had
produced the results, Do ¼ De (expected disagreement) and alpha equals to zero, it specifies
the absence of reliability. Further, if alpha equals to zero, data are totally uninformative of
anything outside the process of generating them. Therefore, for reliability considerations,
alpha’s range is 1 $ a $ 0.
This study yields an alpha value that is close to one in both cases; the expected and
observed disagreements between coders are thus considered to make no difference.
words count
frequency and
HC disclosure by
339
Table II.
JHRCA Guthrie et al. (1999) and Guthrie and Petty (2000) which suggest that “entrepreneurial
14,4 spirit” was the most frequently reported attribute of HC in Australia. The causes of the low
level of reporting on employees’ safety and health are blurred, further research being
required to understand the reasons underlying this low intensity of reporting.
Over the three years examined, it was found that top companies in Bangladesh
demonstrated a significant increase in the categories of HC reporting by words count,
340 as shown in Table II. As noted above, many items are reported by all the sample firms,
with employee training as the most notable HC attribute in the annual reports over the
years in terms of numbers of words. The second most reported item of HC was
information regarding the employee benefits. This could be comprehended as a way of
providing employees with financial and other incentives on their performance and to
create long term bonds with employees for better performance of organizations. In the
analysis, it is pertinent to note that numbers of reported words have increased over the
years for every item; however, the numbers of reported words are significantly higher
in 2009/2010 than those of earlier years. Specifically, during the 2009/2010, more than
1,100 words were reported constituting an increase of 40 per cent compared with the
financial year 2008/2009. This substantial increase in reporting could be interpreted as
demonstrating the influence of Bangladeshi regulators. Previous studies evidenced
that the existence of corporate social disclosure and/or human resource related
reporting practices (if any) within the setting of a developing nation are directly driven
by the international expectations (Islam and Deegan, 2008) or on account of regulatory
requirements and encouragement (Khan et al., 2010). Based on the finding of this study,
we would argue that with the monitoring and encouragement in relation to HC and
other social issues by different regulators of Bangladesh, i.e. the Central Bank and the
Revenue Board, as well as the SEC, it is likely that Bangladeshi firms will start to
disclose more information voluntarily (HC in this case) and may exhibit full employee
related accountabilities in the future.
Consequently, the emerging issue of HC analysis and disclosures appears to be moving
in the general direction, such as looking at the HC component in different nations
(Johanson, 2005). Information with respect to employees’ incentives programmes,
employee value, HC statistics (i.e. in terms of profitability per employee, sales per
employee), employee skill and competence are, however, largely undisclosed in this
sample of company reports (only one bank reports these items). It seems quite strange that
thirty one of the sample firms did not mention these issues, while 20 companies reported
the establishment their own training facilities to reinforce employee excellence in a
continuous way. This is an area that Bangladeshi firms are required to make stronger to
add to the improvement of HC and with the aim of boosting their business image and
accountability to their stakeholders. Overall, Table II reveals that the sample of companies
places strong emphasis on human resource disclosure (employee training, extent of
training, and career opportunities). Nevertheless, further, more systematic HC reporting is
unlikely to occur in the absence of regulatory pressures intended to standardize the
appropriate HC-related disclosure framework.
directors’ report, while three companies further disclosed these in the chairman’s
statement. None attempted to disclose HC information either in “other section” or
separate (dedicated) sections. These results are consistent with Imam (2000) and
(Hossain et al., 2004), who found that none of their sample of companies reported HC
activities in the separate sections of the annual report.
Note
1. The SEC commenced various reform programs for the financial sector in Bangladesh in
association with the International Finance Corporation since 2000. The aims of this reform are to
ensure the stability in the financial market, amend SEC rules and act for more customer
protections, stakeholders, and others minority shareholders-related information. These reforms
require more reporting for listed companies with a view to ensure transparency and good
governance for with special focus on investors and other stakeholders protection (for details see,
Mazumder, 2005; Chowdhury, 2000).
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Appendix
1. Banking 10 31.3
2. IT 1 3.2
3. Pharmaceuticals 5 15.6
4. Cements 2 6.4
5. Food and allied 8 25.0
7. Leather Manufacturing 2 6.4
8. Power and electricity 2 6.4 Table AI.
9. Textile 2 6.4 List of companies
Total 32 100 surveyed by sector
Corresponding author
Md Habib-Uz-Zaman Khan can be contacted at: sumkadu@yahoo.com