Large companies will not be legally required to include meaningful people information in annual reports, after the government ignored calls from HR and business experts to strengthen new company reporting laws.
The draft Operating and Financial Review (OFR) regulations were criticised for largely ignoring the recommendations of the government-funded Accounting for People taskforce, which concluded that staff issues should be central to company reports.
The Accounting Standards Board (ASB) regulations, which give legal effect to the OFRs, state that staff is one of nine areas requiring reporting only “to the extent necessary” in directors’ eyes and that staff information may be included “depending on the nature of the business”.
But despite a Personnel Today petition of more than 400 HR professionals calling for more meaningful people data, backed by a number of groups including the Chartered Institute of Personnel and Development and the Chartered Management Institute, the government did not make any changes to the draft, and it became law last Friday.
In a letter to Personnel Today, Patricia Hewitt, the trade and industry secretary, wrote: “There will always be differences of opinion about what specific requirements should be in a document like the OFR, but I believe we have struck the right balance in the information we are requiring to be included.
“We have deliberately taken a light-touch approach, preferring principles over rules.”
Because companies will be able to get away with reporting the bare minimum of people information, some experts fear the HR profession risks being completely sidelined.
However, others in the profession insist it is up to practitioners to prove the value of HR to their organisations.
Vic Hartley, associate fellow at the Institute for Employment Studies, said: “The government has no place in this. It is something that is in our space, and if we don’t get grip of it, our accounting colleagues will be the people who prepare the human capital report in the OFR while we stand around wringing our hands.”