The CIPD wishes to commission research exploring human capital reporting by FTSE 100 organisations, with a view to understanding the extent to which human capital measures are used to report risk and opportunity regarding human capital. The CIPD invites tenders from academic institutions and private research organisations. As well as having a rigorous approach to research, we welcome innovative suggestions on how the reporting of human capital data in company reports can be measured and communicated, and what a framework for understanding human capital risk might look like.

To explore the extent to which human capital information is communicated through annual reports; and to demonstrate how annual reports communicate risks and opportunities related to human capital/the workforce. 

In 2013 the UK Government passed new regulation comprehensively re-drafting the requirements for narrative reporting. The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 require all UK companies (except small firms) to produce a strategic report as part of their annual reporting obligations. Compliance with the new requirements came into effect on a rolling basis, triggered when an organisation’s financial year ended on or after 30 September 2013. Quoted companies have further obligations and must provide specific information on the company’s strategy, business model, human rights and gender diversity. Of relevance to the human capital dimension, this includes reporting on ‘the company’s employees’. The Financial Reporting Council has provided companies with new guidance (Guidance on the Strategic Report, June 2014) to complete their strategic reports. This replaces the Operating and Financial Review (OFR) guidance from the ASB from 2006.

The Regulations are fairly light-touch and flexible by design and leave it to companies disclosing to determine which information is of material value to external stakeholders. As such, there is no guidance on the reporting of skills and training. Publicly quotes companies, which must report on ‘the company’s employees’, are only required to give an account of the broader position, performance or development of the business.  

Various frameworks exist to help organisations to report effectively, perhaps the best-known of which is the Integrated Reporting Framework (IR Framework), developed by the International Integrated Reporting Council. The integrated reporting framework is positioned as a methodology for reporting various types of data in a coherent way which describes the broad factors that may impact on the value of the organisation over the longer term. While the methodology has gained much interest from the business profession, uptake in the preparation of reports in accordance with the IR Framework is relatively low. As such, there is still much that may be done to improve the quality of corporate reports, particularly with regard to how they report on intangible workforce issues to various stakeholders. 

Previous research by the CIPD has looked closely at the issue of reporting people data. Most recently, the 2016 publication Reporting Human Capital: Illustrating your company’s true value assessed the extent to which FTSE 100 organisations report people issues in their annual reports. Through a complementary media analysis it investigated whether or not human capital reports may be considered to be transparent regarding workforce issues. This work found that while the quantity of human capital information being communicated through corporate reports increased between 2013 and 2015, the quality of data being shared varied considerably. The lack of transparent reporting also meant that certain workforce risks which were in the public domain were not adequately covered in corporate reports. As such, the utility and value of such disclosures for declaring the materiality of human capital can be questioned.

This work is designed as a follow-on to Reporting Human Capital: Illustrating your company’s true value, and is designed with the following two themes in mind:

  1. the broader quality and standard of human capital reporting through narrative reports; and

  2. reporting on human capital/workforce risk under UK governance reporting guidelines; in particular, issues which arise from people risk, for example ‘toxic cultures’,  poor leadership and management behaviours or insider threat.

For the purposes of this research we define human capital as the knowledge, skills and capabilities of the workforce (see Human capital analytics and reporting: exploring theory and evidence)

Theme 1: Understanding the quality and quantity of human capital data disclosed

As previous research has highlighted, there are issues regarding the quality of human capital data being disclosed through corporate reports. A particular issue with reporting is the lack of standard language or definitions which prevent reports from accurately describing human capital information to external stakeholders. 

Theme 1 is defined by two research questions:

  • Which human capital information is disclosed in FTSE 100 corporate reports to describe the organisation’s human capital quality and quantity? 

  • How has the reporting of human capital information changed in 2015/2016 disclosures, compared to previous years (time horizon to be discussed)? 

Theme 2: Disclosing human capital risk and opportunity: how do corporate reports frame workforce risk through corporate reporting? 

CIPD research has highlighted that human capital information is of use in defining concepts of particular interest when understanding both and risk and opportunity associated with the workforce. While aspects of diversity and pay are reported, data and information referring to people risk issues are more piecemeal and tend to be of lower quality.

This is important as the UK Corporate Governance Code’s section on internal control and risk management states:  

  • The directors should confirm in the annual report that they have carried out a robust assessment of the principal risks facing the company, including those that would threaten its business model, future performance, solvency or liquidity. The directors should describe those risks and explain how they are being managed or mitigated.

  • Taking account of the company’s current position and principal risks, the directors should explain in the annual report how they have assessed the prospects of the company, over what period they have done so and why they consider that period to be appropriate. The directors should state whether they have a reasonable expectation that the company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, drawing attention to any qualifications or assumptions as necessary.

  • The board should monitor the company’s risk management and internal control systems and, at least annually, carry out a review of their effectiveness, and report on that review in the annual report. The monitoring and review should cover all material controls, including financial, operational and compliance controls.

Therefore the research questions are as follows:

  • To what extent do corporate reports include human capital data relating to concepts of people risk and opportunity?
    • To what extent are risks relating to organisational culture, leadership and management and pay/reward identified as principal risks/uncertainties?
  • What is the quality of reporting of human capital data, with regard to people risk and opportunity?

  • Where such risks are identified is there a clear explanation of how these risks are to be managed?
    • Where workforce issues are not identified as principal risks, is there a clear explanation as to why this is not the case as required under the principle of ‘comply or explain’. 


We expect desk-based research, which will explore the main research questions in a robust manner, and qualitative data analysis of literature as well as secondary data, including;

  • development of a framework for assessing the disclosure of (a) human capital information and (b) human capital risk in corporate reports

  • a short literature review of people risk/culture risk in organisations
    • What is known about people risk? How is it conceptualised?
    • What are common measures of people risk? How are they expressed / reported?

  • a content analysis of FTSE 100 companies’ annual reports using the the analytics frame for (a) human capital information and (b) human capital risk.

This project will be managed by Edward Houghton from the CIPD’s research team. The budget for this research is dependent on the proposals submitted, but is expected to be between £15,000 and £20,000 excluding VAT. Please provide a detailed cost breakdown for your suggested approach.

We expect the final output to be a report of 12,000 to 15,000 words, with the suggested title: Disclosing human capital information: a people risk perspective

Copyright to the report will be assigned to the CIPD.

The final research report should: 

  • Include an introduction, methodology, synthesis of relevant literature, findings and recommendations for further research

  • adhere to the CIPD’s house style regarding tone of voice, punctuation, capitalisation, use of numbers and the setting out of references  

  • Include content that can be represented graphically and through illustration. 

Report structure/outline report due: 8 December 2017

Draft report due: 15 January 2018

Final report due: 29 January 2018

Tendering process and timeline

The closing date for submissions is: 17.00 BST on Friday 22 September 2017.

We hope to respond to all tender submissions by Wednesday 27 September and invite a shortlist to discuss the tender w/c 2 October in person at CIPD’s Wimbledon or London Victoria offices, or by conference call if diaries don’t allow a face-to-face meeting. Please confirm in your submission your availability on those dates. The CIPD does not reimburse interview travel costs.
Please confirm the following in your proposal: 
  • name(s) of project researcher(s) and, if more than one, their respective roles (e.g. literature search, writing, workshop facilitating) 
  • If more than one organisation is involved in your bid, please specify with which part of the research project they will be involved. 
  • your area(s) of expertise – a list of publications should be submitted in evidence 
  • an outline of the methodology you intend to use and an indication of which disciplines and literature you envisage drawing upon 
  • your access to academic literature 
  • evidence of writing for practitioner (non-academic) audiences – an example article or report may be included with your submission 
  • detailed breakdown of costs (the CIPD does not cover overhead costs)
  • project timetable, to include a project set-up meeting, progress meetings and delivery of outputs. 
Contact details for submissions and queries: Joanna Ciufo