Human Capital Disclosures

Abstract

This paper examines the evolution of human capital (HC) disclosures by U.S. public firms from 2017 to 2024. Using data from 10-K filings, sustainability reports, and EEO-1 disclosures, we document a significant increase in HC disclosures, particularly related to diversity, equity, and inclusion (DEI) and turnover. This increase is concentrated in the 10-K around a 2020 regulatory change requiring increased HC disclosure. However, disclosure remains highly heterogeneous across firms and topics, with limited standardization despite the regulatory mandate. Firms are more likely to disclose metrics in 10-Ks when they previously disclosed related information voluntarily, suggesting topic-specific cost-benefit considerations. We also document that disclosure frictions such as the cost of data collection, stakeholder polarization, and metric related firm performance, contribute to selective disclosure practices. Interviews with corporate insiders confirm these mechanisms and highlight the role of discretion in shaping disclosure strategies. Our findings suggest that principles-based regulation alone may be insufficient to achieve comparability.

Keywords: Human Capital, Voluntary Disclosure, Mandatory Disclosure; Regulation S-K, Regulation S-K