A comparative analysis of human capital information opaqueness in South Korea and the UK

Hyoung, Lim Joo; Mali, Dafydd

Abstract

Design/methodology/approach Using 2018 as a sample period, content analysis is used to evaluate the annual reports of the 25 largest British and 25 largest Korean firms to demonstrate the propensity of British/Korean firms to disclose human capital information as numerical and textual data. Purpose Human capital is considered by many to be a firm's most important asset. However, because no international human capital reporting framework exists, firms can decide to include/exclude human capital details on annual reports. Based on legitimacy theory, firms that disclose high levels of human capital information can be considered congruent with the expectations of society. However, firms can also choose to include human capital information on annual reports for symbolic purposes as an image management strategy. Findings We report that South Korean firms provide high levels of human capital information using narrative and numerical data, including value added human capital elements included on Integrated Reports. British firms on the other hand tend to use primarily positive narrative and limited numerical human capital data to present human capital information. Originality/value The results imply South Korean firms provide robust human capital information on annual reports as a legitimacy strategy. On the other hand, the UK's human capital reporting requirement can be considered as a form of image management. The results therefore have important policy implications for legislators, labour unions and firm stakeholders with incentives to enhance human capital information transparency.

Citation

Hyoung, L. J., & Mali, D. (2022). A comparative analysis of human capital information opaqueness in South Korea and the UK. Journal of Intellectual Capital, 23(6), 1296-1327. https://doi.org/10.1108/JIC-01-2021-0002

• Journal Article Type: Article
• Acceptance Date: Jul 29, 2021
• Online Publication Date: Aug 18, 2021
• Publication Date: Sep 27, 2022
• Deposit Date: Nov 1, 2021
• Publicly Available Date: Nov 18, 2021
• Journal: Journal of Intellectual Capital
• Print ISSN: 1469-1930
• Electronic ISSN: 1758-7468
• Publisher: Emerald
• Peer Reviewed: Peer Reviewed
• Volume: 23
• Issue: 6
• Pages: 1296-1327
• DOI: https://doi.org/10.1108/JIC-01-2021-0002
• Keywords: annual reports; human capital; legitimacy theory; UK; South Korea; accounting policy
• Public URL: https://nottingham-repository.worktribe.com/output/6605160
• Publisher URL: https://www.emerald.com/insight/content/doi/10.1108/JIC-01-2021-0002/full/html