Monetary value of human capital disclosure for predicting future business earnings

Abstract

Orientation: Human capital (HC) is a key dimension of intellectual capital (IC) that creates shareholder value when integrated with structural capital (SC) and relational capital (RC). The disclosure of HC reveals how the human resource (HR) practices support business growth.Research purpose: The primary focus of this study was to investigate the extent of how human capital disclosure (HCD) could predict organisational performance (expected future earnings) of the Johannesburg Stock Exchange (JSE)-listed companies.Motivation for the study: Human capital disclosure reduces information asymmetry, predicts future business performance and improves the investors’ buy-sell-hold decisions.Research approach/design and method: A causal, comparative design was applied quantitatively in a cross-sectional survey of 150 top- and low-performing JSE-listed companies sampled based on their market capitalisation. A self-constructed disclosure index with a seven-point scoring system was developed to examine the extent of disclosure across 81 items. Subsequently, multiple regression analysis was computed to test the relationship between the dependent and independent variables.Main findings: Human capital disclosure was associated with both the market capitalisation and book value. Overall, no mediation of human resource risk disclosure (HRRD) against organisational performance was found. Lastly, information disclosed on gender diversity yielded the interaction effect with both structural capital disclosure (SCD) and relational capital disclosure (RCD) but not with HCD.Practical/managerial implications: Human capital disclosure identifies key HR practices that drive organisational performance and create shareholder value. This information can potentially improve benchmarking and support investor decision-making.Contribution/value-add: The study provides a novel contribution to IC theory by demonstrating how HCD can be used to identify HR practices that leverage the monetary value of HC for business improvement.

Nexus between Monetary Freedom, Political Stability and Exchange Rate with Sustainable Stock Market Development in Pakistan: A Comparative Analysis by ARDL and NARDL

“…At the same time, if the prices are handled under synchronized control, this will help to maintain a stable monetary mechanism in the country (Ali et al, 2023;Chen and Chiang, 2020). With reference to economic freedom, the price control tools, sometimes, become a threat to make co-operative orientation and to avoid competitive orientation among all the respective stakeholders (Emara & El Said, 2021;Grigolashvili, 2019;Magau, Roodt, & Van Zyl, 2021;Sugimoto & Matsuki, 2019).…”

Pengaruh Ukuran Perusahaan, Ukuran Dewan Komisaris, Dan Pengungkapan Modal Manusia Terhadap Kinerja Perusahaan di Indonesia

“…Selain itu, informasi ini juga berguna bagi karyawan internal perusahaan sehingga meningkatkan operasional perusahaan itu sendiri. Magau et al, (2021), juga memberikan hasil yang sama, bahwa pengungkapan informasi modal manusia dapat meningkatkan nilai buku perusahaan dikarenakan modal manusia dianggap sebagai penggerak kinerja perusahaan dan penciptaan nilai bagi pemegang saham. Sehingga dapat diduga bahwa: H3 : pengungkapan human capital berpengaruh positif terhadap kinerja perusahaan yang diproksikan dengan PBV.…”

“…Pengungkapan modal manusia memberikan informasi informatif dan relevan bagi para pengambil keputusan, khusunya bagi investor. Penelitian oleh (Magau, Roodt, & Zyl, 2021) juga menunjukkan bahwa pengungkapan modal manusia berpengaruh signifikan terhadap kinerja perusahaan dikarenakan manusia di dalam sebuah perusahaan adalah aset penggerak operasi bisnis perusahaan, sehingga modal manusia menjadi salah satu faktor penting penciptaan kinerja perusahaan.…”

A measurement scale for assessing intellectual capital disclosure

“…HCD regarding plans to maximise the value of people's embodied assets is useful for predicting future business returns (Magau, Roodt, & Van Zyl, 2021). Disclosed information on the implementation of key human resource (HR) practices such as workforce planning, recruitment, selection, development, performance and rewards can signal the companies' utilisation of HC for creating shareholder value (Adams et al, 2013;Motokawa, 2015;O'Donnell, Kramar, & Dyball, 2012).…”