Disclosure of information about employees in the Directors’ report of UK published financial statements: substantive or symbolic?

Abstract

The evolution of reporting about employees in the 20 th century culminated in the mandatory disclosures of the Companies Act (1985). This paper reports upon a study of the employee reporting practices of FTSE 100 companies that was carried out by examining the year 2000 annual report and accounts.The analysis whilst noting a wide range of practice among these companies, finds that their annual reports indicate an apparent disregard for the statutory disclosures. Even where such disclosures are made, they often appear to lack any conviction, adhering only to threshold compliance.

A typology for exploring the quality of explanations for non-compliance with UK corporate governance regulations

“…A copied/boilerplate explanation represents someone else's thinking and may not reflect the individual company circumstances. Thus the disclosure will be symbolic rather than substantive (Day & Woodward, 2004). In addition, copied/boilerplate explanations may violate the fundamental qualitative characteristics of relevance and faithful representation (IASB, 2010).…”

“…A specific explanation is best because it is most closely tailored to the company; (2) General explanation: One which could apply to a number of companies and does not attempt to address the specific circumstances relevant to the company in question. This type of explanation is likely to be more symbolic than substantive (Day & Woodward, 2004); (3) Inadequate explanation: One where the part of the Code not complied with is identified but does not detail exactly why the non-compliance occurred. Explanations which are missing are also coded to the category.…”

“…Day and Woodward (2004) distinguish between substantive and symbolic disclosure, finding the majority to be merely symbolic. Akkermans et al (2007Akkermans et al ( , p. 1113 report that many companies only provide "generally applicable arguments."…”

Social and environmental accounting as symbolic and substantive means of legitimation: The case of HIV/AIDS reporting in South Africa

“…Specifically, we contend that Ashforth and Gibbs' (1990) notions of symbolic and substantive management and the dynamic legitimacy framework developed by Suchman (1995) can be combined to interpret longitudinal changes in corporate social reporting. Symbolic versus substantive characterisations of SEA practices have been previously related to legitimacy theory (Ashforth & Gibbs, 1990;Suchman, 1995;Day & Woodward, 2004;De Villiers & Van Staden, 2006;Cahan & Van Stadan, 2009), but very few empirical studies have explicitly adopted Ashford and Gibbs ' (1990) conceptualisations. Furthermore, there is continued criticism that legitimacy theory is often 'fuzzy' and does not sufficiently inform one's understanding of the motivations underlying the nature and patterns of corporate SEA practices (Mobus, 2005;Parker, 2005;Tilling & Tilt, 2010;Hooks & Van Staden, 2011).…”

Voluntary employee reporting by the wholesale and retail companies listed on the Johannesburg Stock Exchange

“…In addition, industrial relations data on training and equal opportunities also rose. Day and Woodward (2004) examine the employee reporting practices of UK FTSE 100 companies in year 2000. The purpose of their study was to identify the degree of compliance with the Companies Act 1985, as amended 1989, requirement to disclose information about employees within the directors' report, which forms part of the audited financial statements required for all UK Limited Liability companies.…”