Global Journal of Quantitative Science

Vol. 2. No.1. March 2015 Issue. Pp.7-19

Human Resource Disclosure in Annual Report of the Listed Banking Companies

in Bangladesh
1 2
Md. Hafij Ullah , Md. Tanvirul Karim

Abstract
Human resources are one of the most important factors without which a business concern is impossible
to conduct and it is a vital factor especially in case of service oriented business. The present study aimed
at exploring the human resource reporting practices in annual reports of banking sector of Bangladesh.
The study used content analysis approach to determine the level of human resource disclosure in annual
reports of the banking companies in Bangladesh. The study examined the effect of bank characteristics
on human resource disclosure level the listed banking companies in Bangladesh. The result of the study
shows that on an average banking companies disclose 59% of the expected human resource disclosure
and there is no significant relationship between bank characteristics and human resource disclosure.

Key Words: Human Resource, Disclosure, Annual report, Content Analysis, Bank, and Bangladesh.

Introduction
Human Resource (HR) refers to core competence, knowledge creation and innovation—creating value
over and above physical and financial resources (Swart 2006). According to resource-based as well as
the knowledge-based theory, success of contemporary organizations is no longer attributable exclusively
to material capital but rather to intangible assets such as human capital (Argyris 1992; Barney 1991;
Pedrini 2007) and therefore, human capital is considered as the core driving force for sustainable
competitive advantage (Huselid 1995; Wright, McMahan & McWilliams 1994 and Absar, Orazalin &
Mahmood 2012). With the same physical capital, only because of efficient human resource team a
company makes all the difference (Archel 1995).

In this modern age, human resources are considered as the key element of the organizations which can
achieve their goals only by effective & efficient use of their human resources. The economy of old
industrial era was based on manufacturing and relied heavily on tangible assets as determinants of value
but in contrast, the present-day economy is based on knowledge and information for their survival and
profit (Flamholtz & Main 1999). Because of transformation of manufacturing organizations to service
oriented business, the importance of human resources was emphasized more. In 21st century being
globalization of business and service, human forces are becoming more important for the success of a
concern. Every business concern requires physical assets as well as human resources for its success.
Without valuable efforts of human resources, physical assets like building, plants, machines, offices,
computes are unproductive (Singh 2009).

Human Resource accounting is not a new issue but accountants have recognized the value of human
assets for at least 70 years ago. In 1960s, Rensis Likert began the true human resource accounting
research (Bowers 1973). The main objective of HRA is to facilitate the effective and efficient management
of human resources (Porwal 1993). According to Sveiby (1997), human capital and structural capital
concept are similar to other assets. As HR generates future revenues and therefore, human resources
should be considered as asset. As like as other assets, HR also should be reported in balance sheet
along with the physical assets (Sen 2008). But it is very tough to quantify the expertise, knowledge and
competence of human resource as these matters are not physical assets of an organization. Moreover,
the monetary value assumption of accounting does not allow reporting the value of employees in the
financial statements of the organization because the value of HR is difficult to measure in monetary
terms. As a result, though companies all over the world are showing their expenses related to human
resources in the financial statements but they are not being able to show the expertise of their ‘Human
Capital’ and how these resources are utilized, in the financial statements (Mamun 2009). Therefore,
stakeholders are being deprived of getting valuable information about the human resources of their
organization (Hossain, Khan & Yasmin 2004).

In the developed countries, it is very common mater that companies have formal HR disclosure practices
in their annual report. But, in the developing countries like Bangladesh, HR disclosure aspect is very new
concept and it is still in artless stage. Though this is not compulsory to disclose HR information in annual

1
Md. Hafij Ullah, Macquarie University, Sydney, Australia and International Islamic University
Chittagong, Bangladesh, Email: hafij_1980@yahoo.com
2
Md. Tanvirul Karim, A Salam & Co., Bangladesh, E-Mail: tansuka@gmail.com
Ullah, M. H. & Karim, M. T. Human Resource Disclosure …Listed Banking Companies, March, 2015, Page 8

report for the companies in Bangladesh, but they are making some HR disclosure voluntarily (Hossain,
Khan & Yasmin 2004). There has been a dearth of research on HR disclosure in the context of emerging
economies (Khan & Khan 2010). As the human resource has been considered as strategic capital, its
accounting and reporting aspects are becoming decisive for the organizational success. So far our
knowledge concern, no rigorous research work has been done on human resource reporting in annual
report of banking sector in Bangladesh. Hence, this study is an attempt to find the pattern and extent of
HR disclosure in the listed banking companies in Bangladesh and to justify the effect of bank
characteristics on the extent of HR disclosure.

The remainder of the paper is organized as follows: The next section reviews the literature relating to
human resource disclosure including the results of the empirical studies. Section three delineates the
objectives of the study. Section four provides details of the research method followed by section five
dealing with findings and analysis of the study. The last section discusses the practical implications of the
study, direction to further study, limitations and conclusion of the study.

Literature Review
Decision makers such as investors and creditors throughout the world make their decisions based on
financial and non-financial information and many corporate entities have been involved in the creation,
measurement and reporting of human capital along with financial information in the past decades
(Creelman 2006; Flamholtz & Main 1999; Stittle 2004). HC reporting had been found to be supportive for
stakeholders in taking right investment decisions in the era of knowledge based economy and hence,
organizations take serious attempt to disclose their HR information to insiders and outsider decision
makers (Sen 2008; Mamun 2009; Hossain, Khan & Yasmin 2004). HC reporting may benefit the
organizations through attracting and retaining best talents, and enjoying competitive advantage (Adams
2004; King 2002). As a result, the external financial reporting aspects of HR can play significant role to
facilitate the proper utilization of human resources in an organization (Mamun 2009). But due to
difficulties in measuring the monetary value, HR is not reported in the traditional financial statements of
the organizations (Roslender & Dyson 1992). Therefore, voluntary reporting through annual reports is the
ultimate way to inform the stakeholders about the value and practices of HR. The lack of quantitative HR
disclosure may be due to having no single agreed way to measure the information and that only a few
people in companies have enough knowledge to quantify such data (Abeysekera 2004; Goh & Lim 2004).
While there has been some increase in the extent of human capital disclosure (Oliveras et al. 2004;
Vandemaele, Vergauwen & Smits 2005; Williams 2001; Abeysekera & Guthrie 2005), the level and
nature of disclosure is still limited and narrative rather than quantified or financial.

In 1973, the Committee on Human Resource Accounting of American Accounting Association defined
HRA as ‘the process of identifying and measuring data about human resources and communicating this
information to interested parties’ (AAA 1973). It provides information about human resource costs and
values, serves to facilitate to decision making, and motivates decision makers to adopt a human resource
perspective (Sackman, Flamholtz & Bullen 1989). Companies through-out the world now have realized
that HR practices and HR disclosure to the stakeholders have significant impact on their performance
(Absar, Nimalathasan & Jilani 2010; Delaney & Huselid 1996; Sing 2004; Wright & McMahan, 1992;
Youndt et al. 1996). The study of Watson Wyatt (2001) on Human Capital Index shows that superior
human resource practices are not only correlated with improved financial returns, they are, in fact, a
leading indicator of increased shareholder value. Substantial benefits might be gained from better
information about HR (Sackman, Flamholtz & Bullen 1989). According to Guthrie (2001), this information
might allow resources to be allocated more effectively within organizations and may further enable gaps
in skills and abilities to be more easily identified. It might also facilitate the provision of more
comprehensive information to investors or potential investors (Flamholtz & Main 1999).

Absar, Orazalin & Mahmood (2012) conducted a cross-national study in banking sector of Bangladesh
and Kazakhstan and found that all the surveyed banks in Bangladesh make HC reporting in their annual
reports while only 27 (69.23%) banks out of 39 provide HC disclosures in Kazakhstan indicating that
contemporary Bangladeshi banks attach more importance to reporting HC information. They expressed
that none of the surveyed banks in Bangladesh and Kazakhstan mentioned the monetary form of HC
disclosure. They also found that all the surveyed Bangladeshi banks have made qualitative disclosures,
only 71.79% of Kazakhstani banks have made that and only 5 banks (18.51%) in Bangladesh and 20
banks (51.28%) in Kazakhstan have offered separate section on HC disclosures in their annual reports
respectively. Regarding the location of HR disclosure, they found that most of the Bangladeshi banks
(74.07%) disclose their HC information mainly in their director's and chairperson's reports whereas only 8
banks (20.51%) in Kazakhstan reported HC in those reports. Khan & Khan (2010) in their study on HC
disclosure practices of 32 top manufacturing and service sector companies listed on the Dhaka Stock
Exchange (DSE) found that HR reporting practices of top Bangladeshi companies were not as low as
expected. They found training, number of employees, career development, and recruitment policies as
the most commonly reported HR items. Chan & Burgess (2010) in their study on HRM practices reporting
of 27 largest companies of Hong Kong found that training and development was the most reported item in
Ullah, M. H. & Karim, M. T. Human Resource Disclosure …Listed Banking Companies, March, 2015, Page 9

companies' annual reports and websites. They also found that HRM metrics did not get any mentionable
presence in the reporting. Mamun (2009) found that companies under study on an average disclose 25%
of the total HR items and 60% of the total disclosed human resource accounting information is reported in
notes of annual report and 19.56% is reported in the Directors’ report. Around 9% HR information is
reported in formal way in profit and loss account whereas 6% is disclosed in more informal way in
Chairman’s report. Mamun (2009) also found that there is significant difference between financial and
non-financial sector average HRADI and there is a significant and positive relationship between company
size and profitability but negative relationship with age and level of human resource accounting
disclosure.

Huang, Abidin & Jusoff (2008) conducted a study on external reporting of HR of 98 companies enlisted in
Bursa Malaysia and the annual reports of these top companies were reviewed based on the list of 20
human capital items. The results indicated that the disclosure practices of Malaysian top companies are
low compared to the total list of items and a total of 36 companies disclosed information on training and
31 companies reported on the development of their staff indicating that descriptive information on training
and human resource development was found to be the most disclosed in that study and most companies
reported the training programs or activities in the annual reports. They also found that disclosure of
human capital information is mainly qualitative in nature except for staff costs which are expensed in the
income statements and more than 60% of the companies disclosed HR-related information in the
Chairman’s Statement with the main theme of thanking the employees for their contribution. Another
similar research was conducted in Bangladesh by Imam (2000) and found that one-third companies
provided information related to health, safety and training in qualitative form and only two companies
under study provided information on the selection of employees. Hossain, Khan & Yasmin (2004)
analyzed the nature of voluntary disclosures about human resource in the annual reports of 40
Bangladeshi companies and found that 10 out of 40 surveyed companies recognized HR as their key
resource. Besides, they found training as the most commonly disclosed HR item and disclosure on
number of employees and recruitment policy was also made by 7 and 5 companies respectively. Olsson
(2001) examined the annual reports of the 18 largest Swedish companies of 1998 and found that none of
the 18 companies reported more than 7% on HC information (as a proportion of total information) in their
annual reports. Subbarao & Zeghal (1997) performed a comparative study on HR reporting practices of
six countries such as the USA, Canada, Germany, the UK, Japan and South Korea. The authors
analyzed 120 annual reports of the listed manufacturing and financial service sectors firms, 20 samples
from each country with 10 from the manufacturing sector and 10 from the financial services. They found
that the value-added by human capital to a company was the least frequently disclosed item and
employees featured for special contributions, and the directors' committee of human resources ranked
first and second by word count, but 15th and 18th, respectively, by frequency of disclosure. They also
uncovered that benefits and pensions were the most frequently disclosed information, which was due to
statutory requirements in most of the surveyed countries.

The main objective of the study is to evaluate the human resource disclosure practices in the annual
report of the listed banking companies in Bangladesh. The specific objectives are set for the study: are to
know HR disclosure practices in annual report of the listed banking companies, to know the extent of HR
information reported in annual report of banking companies and to justify the influence of bank
characteristics on the extent of HR disclosure in banking companies in Bangladesh.

Methodology of the Study

This section presents the research methodology of the study. This section describes sample selection
procedures, selection of period, sources of data, content analysis, development of HR disclosure index
and technique used for content analysis. The methodology followed in this paper is almost similar to Ullah
& Yakub (2013) and Ullah & Rahman (2013).

Sample Selection
The study was conducted on the listed banking companies in Bangladesh. The banking sector was
purposively selected as human resources and the information regarding HR are vital in case of service
oriented business. The study took all the 30 listed banking companies enlisted in Dhaka Stock Exchange
(DSE) as the sample, that is, 100% population was considered for the study.

Selection of Period
The study was conducted in 2012. To make the study contemporary and up to date, the data should be of
latest and current year. Therefore, 30 annual reports of the 30 sample banking companies of 2011 were
collected since the annual report of 2011 was the latest report in 2012.

Data Sources
The present study was conducted on the basis of secondary data. The secondary data were collected
from annual reports of the selected sample banking companies, research papers, etc. Annual report, the
key communication tool of a company (Lang & Lundholm 1993), is chosen as the reliable source of data
Ullah, M. H. & Karim, M. T. Human Resource Disclosure …Listed Banking Companies, March, 2015, Page 10

for the study since it is widely available (Hooks, Coy & Davey 2002) and it communicates companies'
overall image to the stakeholders (Cameron & Guthrie 1993; Guthrie & Petty 2000; Niemark 1995).
Maximum annual reports were collected from the websites of the respective banking companies and
remaining annual reports, which were not possible to collect from the websites, were collected from DSE.
Research papers were also collected from websites.

Content Analysis
Content analysis approach was applied in analyzing the annual reports of the listed banking companies to
attain the objectives of the study. Content analysis is the most widely used method of research in Human
Capital, Intellectual Capital, and CSR disclosure (Guthrie et al. 2004). Earlier studies on HR disclosure in
developed and developing countries also used annual reports as the main source of data (Absar,
Orazalin & Mahmood 2012; Khan & Khan 2010; Murthy & Abeysekera 2007; Olsson 2001; Subbarao &
Zeghal 1997). The study selected 80 expected human resource disclosure items. (list of items provided
in Appendix-3) classified into 8 categories—such as HR policy items (11), Basic HR items (13), HR
financial items (20), HR importance to organization items (4), Health and Safety items (6), HR
development items (8), HR relationship and culture items (13), and HR others items (5). The selected 80
items were collected from IAS-19 of employee benefit, annual report of different companies and research
papers namely Hossain (2008); Shirley et al. (2009); Hossain, Khan & Yasmin (2004); Mamun (2009);
Alam & Deb (2010); Li, Pike & Haniffa (2006); Islam & Deegan (2010); Agca & Onder (2007) and others.

Development of HR Disclosure Index

In case of developing HR disclosure index, both weighted disclosure index and un-weighted disclosure
index are used by the researchers. In the study of Ullah (2013); Ahmed (2009); Hossain (2001); Wallace,
Naser & Mora (1994); Cook (1991 & 1992); Karim (1995); Hossain, Tan & Adams (1994) and Ahmed &
Nicholls (1994) adopted a dichotomous procedure in which an item scores ‘1’, if disclosed and ‘0’ if not
disclosed. Coomba & Tayib (1998) stated that the use of weighted and un-weighted scores for the items
disclosed in the corporate annual reports and calculation can make little or no difference to the findings.
Therefore, this study used this un-weighted disclosure index approach. So, the un-weighted disclosure
method measures the total disclosure (TD) score of a selected company as per the suggestion of Cooke
(1992) as follows:
n
TD = ∑ di
i =1
Where,
d = 1 if item di is disclosed
0 = if the item is not disclosed
n = number of items
However, the main theme of the un-weighted disclosure index is that all items of the disclosed information
in the index are considered equally crucial to the average users.

Techniques Used for Data Analysis

There techniques used for analyzing data include average, standard deviation, co-efficient of variation,
percentage and correlation etc. SPSS software version 19 was used to analyze the data.

Model and Hypotheses Development

In order to examine the influence of bank characteristics on the extent of HR disclosure, the following
Ordinary Least Square (OLS) regression model was fitted to the data:
UDI = α +β1 Log_TA +β2 Log_TR +β3 NOB +β4 NOE+ β5 AGE + β6 ROA +β7 EPS + β8Log_HRCost + β9 CAR + ei
Where, UDI = Un-weighted Human Resource Disclosure Index
α = Inception of the regression line βi = Coefficient (Slope of the regression line)
ei = standard sample error

Size: The disclosure studies of Cooke (1991) and Ahmed & Nichollas (1994) suggest that there is a
significant relationship between firm size and the extent of voluntary disclosure. Ullah (2013); Hossain
(2010); Silva & Christensen (2004); Spiegel & Yamori (2004) and Ismail (2002) found a positive
relationship between size and the level of disclosure, while McNally, Lee & Haseldine (1982) concluded
that size is a dominant corporate characteristic in establishing the leaders in voluntary disclosure practice.
Size of the organizations can be measured on the basis of different measures. The present study
measured size of the banks based on total assets (TA), total revenue (TR), number of branches (NOB)
and number of employees (NOE). The hypothesis taken here is given as below:
H1: There is no significant association between size of the companies [measured by total assets (TA),
total revenue (TR), number of branches (NOB) and number of employees (NOE)] and the extent of HR
disclosure.
Ullah, M. H. & Karim, M. T. Human Resource Disclosure …Listed Banking Companies, March, 2015, Page 11

Age: It is argued that older, well-established companies are likely to disclose more than newly
established companies. The extent of a company’s disclosure may be influenced by its age (Owusu-
Ansah 1998; Kakani et al. 2001 and Akhtaruddin 2005). The hypothesis taken here is given as below:
H2: There is no significant association between Age and the extent of human resource disclosure.

Profitability: The previous studies of Singhvi & Desai (1971); Wallace (1987); Raffournier (1995);
Wallace & Naser (1995); Inchausti (1997); Owusu-Ansah (1998); Hossain (1998) identified that
profitability is capable of influencing the level of corporate information disclosure. The hypothesis taken
here is given as below:
H3: There is no significant association between Profitability (measured by ROA and EPS) and the extent
of human resource disclosure.

Human Resource Cost: The cost for human resources include salaries, remunerations, contribution to
provident fund, different allowances, cost for training, entertainment and traveling, etc. The organizations
which are incurring more costs for HR are also expected to disclose more information regarding HR in the
annual reports to improve their images to HR and also to the society at large. The hypothesis taken here
is given as below:
H4: There is no significant association between Human Resource Cost and the extent of human resource
disclosure.

Capital Adequacy Ratio (CAR): Higher capital adequacy ratio indicates better position of the banks.
Therefore, banking companies having high Capital Adequacy Ratio (CAR) may report more information in
their annual report than the banks with low Capital Adequacy Ratio (CAR). The study of Ahmed (2009)
and Ullah (2013) also used CAR as an independent variable. The hypothesis taken here is given as
below:
H5: There is no significant association between Capital Adequacy Ratio (CAR) and the extent of human
resource disclosure.

Findings and Analysis

This part focuses on the ways of HR disclosure, location of disclosure and measurement and analysis of
the extent of HR disclosure made in the annual report of listed banking companies in Bangladesh.

Ways of HR Disclosure
The data in Table No.1 reveals that the banking companies in Bangladesh disclosed information relating
to human resource using text, chart, graph, and picture. In analyzing the contents, it is observed that on
an average banking companies used 945.40 words, maximum 3,288 words and minimum 301 words; on
an average 76.17 sentences, maximum 203 sentences and minimum 8 sentences in disclosing HR
information in annual report in 2011. Maximum 46.67% of the sample banks used 500-1,000 words
(Appendix-5) and more specifically, Prime Bank Ltd. used the highest number of words and Dhaka Bank
Ltd. used the highest number of sentences in this regard (Appendix-6).

Table No. 1: Words, Sentences, Graphs, Charts & Pictures used for human resource disclosure
Word Sentence Chart Graph Picture
Mean 945.40 76.17 2.43 2.20 1.30
Std. Deviation 642.02 56.20 3.09 2.01 2.00
Co. Var. 67.91 73.79 127.10 91.22 154.04
Minimum 301.00 8.00 .00 .00 .00
Maximum 3288.00 203.00 13.00 8.00 7.00
Source: Developed by Authors based on analysis of annual report

On an average banking companies used 2.43 charts and maximum 13 charts in HR disclosure in annual
report but 7 (23.33%) sample banks used no charts and maximum 9 (30%) banks used only one chart.
More specifically, Trust Bank Ltd. used maximum 13 charts in this regard. The sample banks on an
average used 2.20 graphs, maximum 8 graphs and on average 1.30 pictures, maximum 7 pictures in HR
disclosure in their annual report. It is also observed that 7 (23.33%) sample banks used no graph and 17
(56.67%) banks used no picture in HR disclosure and maximum 8 (26.67%) banks used 2 graphs and 5
(16.67%) banks used only 1 picture (Appendix-5). Specifically, Prime Bank Ltd. used maximum 8 graphs
and Jamuna Bank Ltd. used maximum 7 pictures in this regard (Appendix-6).

Location of HR Disclosure
The analysis of the location of disclosing human resource information in annual report of the banking
companies in Bangladesh, it is found that a banking company discloses information regarding human
resources in different locations or parts of the annual report. Table-2 shows that all (100%) the banking
companies disclosed HR information, which is, especially financial information regarding human
resources in income statement and notes to the financial statements. The banking companies also used
 Ullah, M. H. & Karim, M. T. Human Resource Disclosure …Listed Banking Companies, March, 2015, Page 12

other important parts of the annual report like Chairman’s Address (46.67%), Managing Directors’
Address (50%) and Board of Directors’ report (80%). Though 46.67% of the sample banks used other
areas for HR information disclosure but no bank disclosed any information regarding human resources in
the balance sheet.

Table No: 2 showing the locations of HR disclosure in annual reports of the sample banks
Location No. of Banks Percentage
Chairman’s Address 14 46.67%
Board of Directors’ Report 24 80.00%
Income Statement 30 100.00%
Balance Sheet 00 00%
Notes to the Financial Statement 30 100.00%
Managing Director’s Address 15 50.00%
Corporate Information 8 26.67%
Others 14 46.67%
Source: Developed by Authors based on analysis of annual report

Heading-wise HR Disclosure
Total human resource disclosure in annual report was classified into eight different categories for better
analysis and number of items selected under each category is not equal. As the number of items under
HR-financial is the maximum 20 items, therefore, it is observed that banking companies in Bangladesh
disclosed maximum information considered under this area (Appendix-1), but in terms of percentage, HR-
financial items is not in the highest position. Table-3 shows that on an average banking companies
disclosed 59.25% of the selected HR information where maximum average disclosure was in case of HR-
development (91.25%) followed by HR-policy (68.79%) and minimum average disclosure was in HR-
health and safety areas (19.45%). The maximum among the maximum disclosures is observed in HR-
development (100%) followed by HR-relation and culture (92.31%) and HR-policy (90.91%) items and
minimum among the minimum disclosures is observed in HR-health and safety (0%) and HR-other (0%)
items followed by basic-HR (5.85%) items. Maximum variation is found in case of HR-other items
(SD=20.74) followed by basic-HR items (SD=18.48) and minimum variation is in case of HR-financial
items (SD=9.32).

Table No: 3 Heading-wise HR Disclosure in annual report of the sample bank (Percentage)
HR Basic HR HR Fin HR Health HR HR HR Total
Policy Import Safety Develop Relation Other Disclosure
Mean 68.79% 49.44% 66.00% 53.33% 19.45% 91.25% 60.27% 32.00% 59.25%
Std. Dev. 13.01 18.48 9.32 14.28 10.79 16.46 13.25 20.74 8.61
Co. Var. 18.91 37.38 14.12 26.78 55.48 18.04 21.98 64.81 14.53
Minimum 45.46% 5.85% 45.00% 25.00% 0.00% 37.50% 23.08% 0.00% 47.50%
Maximum 90.91% 84.62% 80.00% 75.00% 50.00% 100% 92.31% 80.00% 78.75%
Source: Developed by Authors based on annual report of the sample banks

From the appendix-4, it is found that maximum 13 (43.33%) of the sample banks disclosed 60%-70% of
HR-policy items; maximum 9 (30%) of the sample banks disclosed 40%-50%, 8 (26.67%) banks
disclosed 30%-40% and 7 (23.335) banks disclosed 50%-60% of basic-HR items; maximum 10 (33.33%)
banks disclosed 60%-70%, 9 (30%) banks disclosed 50%-60% and another 9 (30%) banks disclosed
70%-80% of HR-financial items; maximum 26 (86.67%) of the sample banks disclosed only 10%-20% of
HR-health and safety items; maximum 14 (46.67%) banks disclosed 60%-70% of HR-relation and culture
items; maximum 20 (66.67%) of the sample banks disclosed 30%-50% of HR-importance to organization
items; maximum 22 (73.34%) sample banks disclosed 90%-100% of HR-development items; and finally
12 (40%) of the sample banks disclosed 30%-40% of the HR-other items in their annual report in 2011.

Ranking of the Banking Companies Based on Total HR Disclosure Score

The following table-4 and graph-1 report the overall human resource disclosure position of the banking
companies in Bangladesh in 2011. It is found here that Prime Bank Limited achieved the highest position
by disclosing 63 (78.75%) of the selected HR items in annual report in 2011. Southeast Bank Limited and
Trust Bank Limited secured the second and third position by disclosing 60 (75%) and 59 (73.75%) of the
selected HR items respectively. On the other hand, EXIM Bank Limited and Standard Bank Limited raked
th
the last and 20 position by disclosing only 38 (47.50%) of the selected HR items.
 Ullah, M. H. & Karim, M. T. Human Resource Disclosure …Listed Banking Companies, March, 2015, Page 13

Table: 4 showing the ranking of sample banks based on total human resource disclosure score
Rank Bank Name Percentage Rank Bank Name Percentag
Total Score Total Score
e
1 Prime Bank Ltd 63 78.75 12 Mercantile Bank 46 57.50
2 Southeast Bank Ltd 60 75.00 12 NCC Bank Ltd 46 57.50
3 Trust Bank Ltd 59 73.75 13 Uttara Bank Ltd 45 56.25
4 Shahjalal Bank Ltd 57 71.25 14 Social Islami Ltd 44 55.00
5 Dhaka Bank Ltd 56 70.00 15 Bank Asia Ltd 43 53.75
6 Islami Bank Bd Ltd 55 68.75 15 One Bank Ltd 43 53.75
7 Mutual Trust Bank 52 65.00 15 Pubali Bank Ltd 43 53.75
8 Eastern Bank Ltd 51 63.75 16 AB Bank Ltd 42 52.50
8 Jamuna Bank Ltd 51 63.75 16 IFIC Bank Ltd 42 52.50
9 Premier Bank Ltd 50 62.50 17 Al-Arafah Bank 41 51.25
9 Rupali Bank Ltd 50 62.50 18 BRAC Bank Ltd 40 50.00
10 First security bank 48 60.00 19 City Bank Ltd 39 48.75
10 United Commer. 48 60.00 19 ICB Islami Bank 39 48.75
11 National Bank Ltd 47 58.75 20 EXIM Bank Ltd 38 47.50
12 Dutch-BanglaBank 46 57.50 20 Standard Bank Ltd 38 47.50
Source: Developed by Authors based on total human resource disclosure score

Graph No. 1: showing the total human resource disclosure score of the banking companies
70 63
Total HRDisclosure Score

57 60 59
60 56 55
51 51 52 50 50
46 48 46 47 46 48 45
50 42 41 43 40 42 43 43 44
39 38 39 38
40
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Sample Banks

Source: Developed by Authors based on total HR disclosure score

Comparative Total Human Resource Disclosure

From table-4, it is found that the highest HR disclosure made by Prime Bank Limited was 78.75% and the
lowest disclosure was made by both EXIM Bank Limited and Standard Bank Limited was 47.5%. The
following table-5 reveals that maximum 14 banks, that is, 46.67% of the sample banks disclosed 50%-
60% of the selected human resource items included in the HR disclosure index of this study. No bank
disclosed less than 40% and more than 80% of the selected HR information. Only 4 (13.33%) of the
sample banks disclosed 70%-80% information in their annual report. Among the sample banks, 63.33%
of them disclosed less than 60% and 36.67% of the sample banks disclosed more than 60% of the
selected HR items.

Table: 5 showing comparative total human resource disclosure

Range of total human No. of Banks Percentage of Sample
resource disclosure
Less than 40% 0 00%
40% - 50% 5 16.67%
50% - 60% 14 46.67%
60% - 70% 7 23.33%
70% - 80% 4 13.33%
Total 30 100.00%
Source: Developed by Authors based on total HR disclosure score

If the result of the present study is compared with the previous studies of Imam (2000); Olsson (2001);
Hossain, Khan & Yasmin (2004); Huang, Abidin & Jusoff (2008) and Mamun (2009), it can be said that
the human resource disclosure in banking companies in Bangladesh is in a good position. Finally, as a
voluntary disclosure, the overall human resource disclosure position of the banking companies in
Bangladesh can be regarded to be satisfactory.

Correlation and Regression Analysis

To examine the influence of independent variables, that is, bank characteristics on the extent of
human resource disclosure in annual report, size of the bank (measured by total asset, total revenue,
number of branch, and number of employee), age of the bank, profitability (measured by return on
asset and earnings per share), amount of human resource cost and capital adequacy ratio were
Ullah, M. H. & Karim, M. T. Human Resource Disclosure …Listed Banking Companies, March, 2015, Page 14

taken as independent variables. Correlation matrix presented in Table-6 reports that there is
statistically significant collinearity among the bank characteristics notably human resource cost is
positively correlated with number of branch and number of employee at 1% level signifying that the higher
the number of branch and number of employee, the higher is the human resource cost. But only amount
of total asset have statistically significance influence on the extent of human resource disclosure in
annual report of the banking companies in Bangladesh at 7.9% level of significance. The poor value of
correlation (r = .326) between total asset and the extent of human resource disclosure indicates that total
asset have very poor influence on the extent of human resource disclosure. Human resource
disclosures are not mandatory but voluntary disclosure for the banking companies in Bangladesh and
that may be a reason of having no or very poor relationship between the extent of human resource
disclosure and selected bank characteristics.

Table: 6 showing the correlation matrix of total disclosure score and selected bank characteristics
Total_Discl LogHR_Cos
o Log_Asset Log_GR NOB NOE Age ROA EPS t CAR
Total_Disclo 1.000
*
Log_Asset .326 1.000
Log_GR .264 .921*** 1.000
NOB .054 .425** .215 1.000
*** ** ***
NOE .124 .629 .435 .678 1.000
Age -.196 .306 .196 .562*** .581*** 1.000
ROA .181 .680*** .795*** .117 .136 -.046 1.000
*** *** ** ** ***
EPS .106 .581 .575 .446 .396 .268 .588 1.000
LogHR_Cost -.092 .287 .130 .587*** .491*** .355 .115 .162 1.000
CAR .218 .700*** .797*** .157 .165 -.083 .953*** .520*** .124 1.000
***. Correlation is significant at the 0.01 level (2-tailed).
**. Correlation is significant at the 0.05 level (2-tailed).
*. Correlation is significant at the 0.10 level (2-tailed).

Source: Developed by Authors using SPSS Software

The model summary in table-7 reports that the independent variables, that is, selected banks
characteristics explained only 27.30% (R square = .273) of the extent of human resource disclosure
and remaining 72.70% of the extent of human resource disclosure is influenced by some other
independent variables which are not considered in this study. As the value of Durbin-Watson test is
almost 2, therefore, there is no auto-correlation in the regression model.

Table: 7 showing the model summary of the study

R Std. Error of Change Statistics Durbin-
Model R Square the Estimate R Square Change F Change df1 df2 Sig. F Change Watson
1 .523a .273 7.06888 .273 .836 9 20 .593 2.179
a. Predictors: (Constant), CAR, Age, LogHR_Cost, EPS, NOE, NOB, Log_Asset, Log_GR, ROA
b. Dependent Variable: Total_Disclosure
Source: Developed by Authors using SPSS Software

Practical Implications
Among others the major practical implications of this study are: The management and accountants of the
banking companies are expected to comprehend the real human resource disclosure position from this
research and are also expected to be motivated in disclosing more human resource information in their
annual report in improving their image and attracting more promising personnel to their banks. The
researchers in human resource disclosure may usefully use the issues raised in this article for more
comprehensive studies in human resource disclosure. The Government and other regulatory bodies are
expected to realize the real position of human resource disclosure of the banking companies in
Bangladesh which will help them in formulating guidelines and laws in this regard to bring HR disclosure
practices in certain framework and encourage the banking companies in disclosing more information
regarding human resources.

Conclusion
Success of service oriented organizations basically depends on the efficiencies and abilities of their
human resources. Clients, borrowers, investors and other parties relating to the banking companies
evaluate information regarding human resources in choosing a bank and these valuable information
regarding human resources of an organization are very important to the decision makers in the modern
era of knowledge based economy. Therefore, banking companies in Bangladesh report human resource
information in annual report as an integral part. Though the level of human resource disclosure in banking
companies can be said to be satisfactory, but the disclosure framework and the level of disclosure are not
same for all the banks. Therefore, to bring these disclosures into a certain framework and to encourage
more disclosure of information regarding human resource, Government and other regulatory bodies
should formulate relevant provisions which may create a more favorable job environment for human
Ullah, M. H. & Karim, M. T. Human Resource Disclosure …Listed Banking Companies, March, 2015, Page 15

resources in banking companies in Bangladesh. The study has some limitations which are to be
considered in using and interpreting the results of the study. The major limitations of the study include:
the study used secondary data only; it is based on purposively selected listed banking companies of
Bangladesh only and annual reports of one year were used for the study. The study recommends the
following specific HR disclosure areas for conducting further research: Human Resource Disclosure in
Banking Sector: A longitudinal Evaluation. Comparative Human Resource Disclosure: A Cross-Industry
Examination in Bangladesh. Human Resource Disclosure of Multinational and Local Companies
Operating in Bangladesh.

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Appendix # 1Total HR Disclosure Score Classified into 8 Classes

HR Disclosure Classes
HR Policies Basic HR Financial HR Health & HR HR Employee Total
Information Information Importance Safety at Developme Relationship Others
Bank Names
on HR to Work nt & Culture Factor
Organizatio
n
1 ABBANK 7 5 9 3 1 8 8 1 42
2 ALARABANK 7 5 11 2 1 8 5 2 41
3 BANKASIA 7 6 12 3 1 6 7 1 43
4 BRACBANK 5 5 13 2 1 5 8 1 40
5 CITYBANK 6 3 12 2 1 6 9 0 39
6 DHAKABANK 10 9 12 3 3 8 9 2 56
7 DUTCHBANGL 7 6 14 2 1 8 7 1 46
8 EBL 7 9 14 3 1 8 7 2 51
9 EXIMBANK 6 6 11 2 0 7 6 0 38
10 FIRSTSBANK 9 5 16 2 1 8 6 1 48
11 ICBIBANK 7 3 11 2 1 5 8 2 39
12 IFIC 8 4 15 1 1 3 7 3 42
13 ISLAMIBANK 10 9 15 2 1 8 8 2 55
14 JAMUNABANK 7 6 15 2 1 8 10 2 51
15 MERCANBANK 6 6 16 2 1 8 7 0 46
16 MTBL 9 9 13 1 1 8 10 1 52
17 NBL 9 6 13 2 1 5 9 2 47
18 NCCBANK 6 4 15 2 1 8 8 2 46
19 ONEBANKLTD 6 6 13 1 1 8 7 1 43
20 PREMIERBAN 7 8 13 2 1 8 9 2 50
21 PRIMEBANK 8 9 16 3 3 8 12 4 63
22 PUBALIBANK 7 5 13 2 1 8 6 1 43
23 RUPALIBANK 7 6 14 3 1 8 9 2 50
24 SHAHJABANK 10 11 15 2 1 8 8 2 57
25 SIBL 7 5 10 2 1 8 9 2 44
26 SOUTHEASTB 10 10 13 2 3 8 10 4 60
27 STANDBANKL 7 7 12 2 1 6 3 0 38
28 TRUSTBANK 10 11 16 2 1 8 8 3 59
29 UCBL 7 8 12 3 1 8 8 1 48
30 UTTARABANK 8 6 12 2 1 8 7 1 45

Appendix # 2 Total HR Disclosure Score in Percentages

HR Disclosure Classes

Bank Names HR Basic HR Financial HR Importance Health & HR HR Employee Total

Policies Information Information to Organization Safety at Developme Relationship Others
on HR Work nt & Culture Factor
% % % % % % % % %
1 ABBANK 63.64 38.46 45.00 75.00 16.67 100 61.54 20.00 52.50
2 ALARABANK 63.64 38.46 55.00 50.00 16.67 100 38.46 40.00 51.25
3 BANKASIA 63.64 46.15 60.00 75.00 16.67 75.00 53.89 20.00 53.75
4 BRACBANK 45.46 38.46 65.00 50.00 16.67 62.50 61.54 20.00 50.00
5 CITYBANK 54.55 27.08 60.00 50.00 16.67 75.00 69.23 00.00 48.75
6 DHAKABANK 90.91 69.23 60.00 75.00 50.00 100 69.23 40.00 70.00
7 DUTCHBANGL 63.64 46.15 70.00 50.00 16.67 100 53.89 20.00 57.50
8 EBL 63.64 69.23 70.00 75.00 16.67 100 53.89 40.00 63.75
9 EXIMBANK 54.55 46.15 55.00 50.00 00.00 87.50 46.15 00.00 47.50
10 FIRSTSBANK 81.82 38.46 80.00 50.00 16.67 100 46.15 20.00 60.00
11 ICBIBANK 63.64 27.08 55.00 50.00 16.67 62.50 61.54 40.00 48.75
12 IFIC 72.73 30.77 75.00 25.00 16.67 37.50 53.89 60.00 52.50
13 ISLAMIBANK 90.91 69.23 75.00 50.00 16.67 100 61.54 40.00 68.75
14 JAMUNABANK 63.64 46.15 75.00 50.00 16.67 100 76.92 40.00 63.75
15 MERCANBANK 54.55 46.15 80.00 50.00 16.67 100 53.89 00.00 57.50
16 MTBL 81.82 69.23 65.00 25.00 16.67 100 76.92 20.00 65.00
17 NBL 81.82 46.15 65.00 50.00 16.67 62.50 69.23 40.00 58.75
18 NCCBANK 54.55 30.77 75.00 50.00 16.67 100 61.54 40.00 57.50
19 ONEBANKLTD 54.55 46.15 65.00 25.00 16.67 100 53.89 20.00 53.75
20 PREMIERBAN 63.64 61.54 65.00 50.00 16.67 100 69.23 40.00 62.50
21 PRIMEBANK 72.73 69.23 80.00 75.00 50.00 100 92.31 80.00 78.75
22 PUBALIBANK 63.64 38.46 65.00 50.00 16.67 100 46.15 20.00 53.75
23 RUPALIBANK 63.64 46.15 70.00 75.00 16.67 100 69.23 40.00 62.50
24 SHAHJABANK 90.91 84.62 75.00 50.00 16.67 100 61.54 40.00 71.25
25 SIBL 63.64 38.46 50.00 50.00 16.67 100 69.23 40.00 55.00
26 SOUTHEASTB 90.91 76.92 65.00 50.00 50.00 100 76.92 80.00 75.00
27 STANDBANKL 63.64 05.85 60.00 50.00 16.67 75.00 23.08 00.00 47.50
28 TRUSTBANK 90.91 84.62 80.00 50.00 16.67 100 61.54 60.00 73.75
29 UCBL 63.64 61.54 60.00 75.00 16.67 100 61.54 20.00 60.00
30 UTTARABANK 72.73 46.15 60.00 50.00 16.67 100 53.89 20.00 56.25
Ullah, M. H. & Karim, M. T. Human Resource Disclosure …Listed Banking Companies, March, 2015, Page 19

Appendix # 3 List of expected HR Information Disclosure in Annual Report

HR policies: Basic HR Information:
i) Policy of Compensation i) Statutory (average) number of employees by category
ii) Policy of Reward ii) General Education
iii) Policy of Recruitment iii) Vocational qualification
iv) Policy of communication iv) Work-related Knowledge
v) Policy of training v) Work-related competencies
vi) Policy of Safety vi) Employee age
vii) Policy towards Equal opportunities vii) Employee diversity
viii) Policy towards Racial Equality viii) Employee capabilities
ix) Policy towards Sexual equality ix) Geographical distribution of employees
x) Policy towards Employment of disabled persons x) Categories of employees by sex
xi) Policy related to human resource development xi) Number of employees for 2 or more years
xii) Employment reports
xiii) Special Know how/skills/knowledge
Financial Information on HR: HR importance to organization:
i) Statutory wages (salaries) i) Action with respect to informing employees, consulting employees,
ii) Provident fund encouraging (and engaging in) employee participation and
iii) Employee/Executive compensation communication
iv) Managerial remuneration ii) Performance recognition
v) Pension and social security costs iii) Employee participation in decision marking
vi) Retirement Benefits and gratuity paid iv) Recognizing Human Resource an important resource of the
vii) Increasing employee financial and economic awareness organization
viii) Profit sharing and employee share option plans (ESOPs)
ix) Cost of safety measures HR Development:
x) Awards & rewards for good performance i) Employee career development
xi) Loans and advances to HR ii) Employee productivity
xii) Amount spent on recruitment and selection iii) Training program
xiii) Amount spent in training iv) Employee motivation
xiv) Human Resources Development Fund v) Nature of training
xv) Employees/workers fund vi) Categories of employees trained
xvi) Superannuation fund vii) Number of employees trained
xvii) Provision for employees' benefits viii) Future plan of Human Resource Development
xviii) Employees' fringe benefits; early retirement
xix) Employee life insurance
xx) Medical facilities
Health and safety at work: Employee other Factors:
i) Health and safety at work i) Entrepreneurial spirit of HR
ii) Toxic hazards (e. g.) to employees and the public ii) Employee involvement with community
iii) Any reference to Health and Safety law and/or inspection iii) Separate HRA statement ( HR Value)
iv) Information to employees, training in Health and Safety issues iv) Management succession plan
v) Accidents and injuries v) Welfare information
vi) Data on accidents
HR Relationship & Culture: vi) Job Environment
i) Union activity vii) Industrial Labor Environment/ Industrial Relation
ii) Employee attitudes/behavior viii) Employee teamwork
iii) Employee commitments ix) Cultural function/Entertainment
iv) Employee to employee relationship x) Annual picnic/Traveling
v) Management-employee relationship xi) Sport activities
xii) Punishment to HR
Employee turnover

Appendix # 4 Comparative human resource disclosure under different headings

HR Policies Disclosure Basic HR Disclosure
Disclosure (%) Range No. of Banks % Disclosure (%) Range No. of Banks %
40-50 01 03.33 0-30 03 10.00
50-60 05 16.67 30-40 08 26.67
60-70 13 43.33 40-50 09 30.00
70-80 03 10.00 50-70 07 23.33
80-90 03 10.00 70-80 01 03.33
90-100 05 16.67 80-90 02 06.67
Total 30 100 Total 30 100
Disclosure of Financial Information on HR HR Importance to Organization Disclosure
Disclosure (%) Range No. of Banks % Disclosure (%) Range No. of Banks %
40-50 02 06.67 20-30 03 10.00
50-60 09 30.00 30-50 20 66.67
60-70 10 33.33 50-70 00 00
70-80 09 30.00 70-80 07 23.33
Total 30 100 Total 30 100
Health & Safety at Work Disclosure Disclosure on HR Development
Disclosure (%) Range No. of Banks % Disclosure (%) Range No. of Banks %
0-10 01 03.33 30-40 01 03.33
10-20 26 86.67 60-70 03 10.00
20-30 00 00 70-80 03 10.00
30-40 00 00 80-90 01 03.33
40-50 03 10.00 90-100 22 73.34
Total 30 100 Total 30 100
HR Relationship & Culture Disclosure Other Factors on HR Disclosure
Disclosure (%) Range No. of Banks % Disclosure (%) Range No. of Banks %
20-30 01 03.33 0-10 04 13.33
30-40 01 03.33 10-20 10 33.33
40-50 03 10.00 20-30 00 00
50-60 07 23.33 30-40 12 40.00
60-70 14 46.67 40-50 00 00
70-80 03 10.00 50-60 02 06.67
80-90 00 00 60-70 00 00
90-100 01 03.34 70-80 02 06.67
Total 30 100% Total 30 100
Ullah, M. H. & Karim, M. T. Human Resource Disclosure …Listed Banking Companies, March, 2015, Page 20

Appendix # 5 Detailed data on ways of HR disclosure in annual report

Word used Chart used
Range of Word No. of Banks Percentage No. of Chart No. of Banks Percentage
Less than 500 6 20.00% 0 7 23.33%
500-1000 14 46.67% 1 9 30.00%
1000-1500 6 20.00% 2 4 13.33%
1500-2000 2 6.67% 3 3 10.00%
2000-2500 1 3.33% 4 4 13.33%
2500 & above 1 3.33% 7 1 3.33%
Total 30 100.00% 11 1 3.33%
Sentences used 13 1 3.33%
Range of Sentence No. of Banks Percentage Total 30 100.00%
Less than 50 12 40.00% Graph used
50 – 100 10 33.33% No. of Graph No. of Banks Percentage
100 – 150 4 13.33% 0 7 23.33%
150 – 200 2 6.67% 1 5 16.67%
200 and above 2 6.67% 2 8 26.67%
Total 30 100% 3 3 10.00%
Picture used 4 3 10.00%
No. of Picture No. of Banks Percentage 5 2 6.67%
0 17 56.67% 6 1 3.33%
1 5 16.67% 8 1 3.33%
2 1 3.33% Total 30 100.00%
3 1 3.33%
4 4 13.33%
6 1 3.33%
7 1 3.33%
Total 30 100.00%

Appendix # 6 Ways of Disclosure

Name of Bank Ways of HR information Disclosure
Word Sentence Chart Graph Picture
1 ABBANK 463 30 0 0 0
2 ALARABANK 456 50 1 1 0
3 BANKASIA 614 64 3 4 1
4 BRACBANK 1023 80 0 2 0
5 CITYBANK 777 66 0 0 0
6 DHAKABANK 2182 203 4 4 1
7 DUTCHBANGL 689 172 0 0 0
8 EBL 1190 121 2 6 3
9 EXIMBANK 440 8 1 0 1
10 FIRSTSBANK 473 29 1 2 0
11 ICBIBANK 680 39 0 0 4
12 IFIC 737 53 1 2 0
13 ISLAMIBANK 1982 127 3 2 4
14 JAMUNABANK 931 81 1 3 7
15 MERCANBANK 1606 109 11 3 6
16 MTBL 989 64 4 1 0
17 NBL 540 31 1 0 0
18 NCCBANK 540 29 1 4 0
19 ONEBANKLTD 301 20 1 2 1
20 PREMIERBAN 543 31 2 1 4
21 PRIMEBANK 3288 198 2 8 4
22 PUBALIBANK 328 17 2 2 0
23 RUPALIBANK 1330 90 4 2 0
24 SHAHJABANK 1018 74 7 5 0
25 SIBL 572 42 1 1 0
26 SOUTHEASTB 1277 201 0 5 1
27 STANDBANKL 641 39 0 0 0
28 TRUSTBANK 1308 84 13 3 2
29 UCBL 916 100 4 2 0
30 UTTARABANK 528 33 3 1 0