The proposed Operating and Financial Review (OFR) guidelines are a missed opportunity for UK productivity and the investment community, according to the Chartered Institute of Personnel and Development (CIPD).
In its response to the Accounting Standards Board (ASB) consultation, the CIPD said an opportunity to improve UK productivity and competitiveness and to enhance the quality of information available to investors is in danger of being missed.
Employee information has been all but ignored in the draft OFR regulations, which say public companies must produce a forward-looking analysis of their business.
Personnel Today’s petition to include meaningful HR data in company reports has generated a huge response, with more than 400 readers signed up.
The signatures will be presented today to the Department of Trade and Industry by Personnel Today’s acting deputy editor Martin Couzins.
Angela Baron, CIPD organisation and resourcing adviser, said in a modern, knowledge-based economy people are often the most valuable and important form of capital an organisation needs if improved long-term performance is to be delivered.
“The ASB has failed to reflect the secretary of state’s [Patricia Hewitt’s] intention to embed in law the concept of enlightened shareholder value,” she said.
“If companies are not required to report on human capital, investors will lack one of the most important sources of information to guide their investment decisions, and the country as a whole will lose out.
“In our view, these standards will do little to encourage businesses to develop their understanding of the most valuable, flexible, and in many cases largest pool of capital available to them,” Baron said.
“The result will be a country where we continue to place more value on tangible resources such as property or technology, which decreasingly provide any form of differential competitive advantage, than on human capital, which has been shown to be one of the single most important determinators of productivity and profitability.”