The perspective of top management towards human capital measurement and disclosure in the Zimbabwean mining sector

Abstract

Purpose: This study is set out to establish the perceptions of the Zimbabwean top management concerning the measurement and disclosure of human capital in the financial statements of listed mining companies. This study has been prompted by the fact that despite companies considering human capital as an important resource that drives value, and competitiveness and contributes to a company’s economic growth, its value remains not properly accounted for in the financial statements. This implies that human capital is not being accorded the importance it deserves in the financial statements. Methodology: This study adopted a qualitative research approach. Qualitative data were collected using semi-structured interview guides from the six largest Zimbabwean-based mining companies. The collected qualitative data was analysed through the thematic analysis process and the results established four main themes. Findings: Obtained results reveal that top management agreed that top management is of the view that human capital has a strong relationship with the value of a company and its financial performance. They also indicated that the value of a company, its competitiveness, and economic growth is largely dependent on employee competencies (skills and expertise). Recommendations: After a synthesis of results, this study suggests a context-based framework offering human capital metrics for enhancing its measurement and disclosure practices. This will help to provide a better valuation of human capital in the financial statements and also various stakeholders will be able to derive useful information for decision-making. Managerial Implications: The study gives more insight into the major roles played by the phenomenon in the achievement of companies’ strategic objectives which include value creation among others. Furthermore, it provides a better internal understanding from top management on how the companies gain competitive advantage and economic growth in the era of the fourth industrial revolution through utilisation of human capital. From the aforementioned, chances are high that the human capital reporting by the mining companies in Zimbabwe will be enhanced forthwith.