HCM Skinny-Investors to SEC: Mandate People Disclosures

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This is a really interesting article discussing why it makes sense for public organizations to be required to disclose information around their human capital. It seems like a no brainer; it’s fairly obvious that employees are the most important part of an organization. On top of that, there is a direct correlation between strong human capital management practices and company performance. Investors need to be given HCM information so they have all data necessary to make proper decisions.

 Where’s the problem? From what I can tell, it would be really hard to standardize the metrics used to measure an organization’s effectiveness around their ‘people management’ practices. People data is great, but it’s only useful if you have the proper information to compare. Every metric would need a different ‘grade’ based off of industry, location, size, etc…There are companies who have this data, but it’s not available to the general public.

 In the meantime, what’s important is companies need to take a strategic approach when it comes to managing and evaluating their human capital so that it can maximize the organization’s opportunity.  Regardless of industry, location, size; the industry leader (almost) always has the best ‘people management’ practices.

 

Top quote from article:

 A company that treats human capital as a vital asset, instead of a cost to be minimized, is not just a good corporate citizen – it is a good investment. – Tim Goodman, Director at Hermes Equity Ownership Services.

 

To read the full article, visit:

http://ww2.cfo.com/people/2017/07/investors-to-sec-mandate-people-disclosures-human-capital/