Human resources governance and human capital management disclosure following the SEC mandate

When do board-level governance mechanisms enhance human capital management (HCM) disclosure? Drawing on the concept of governance complementarity, we argue that individual human resources (HR) governance mechanisms, i.e., committee with HR oversight mandate and board-level HR expertise, lack sufficient organizational capacity to improve HCM disclosure on their own; rather, they become effective when configured together. Using a measure of HCM disclosure transparency that integrates readability, numerical intensity, and specificity for S&P 500 firms following the SEC's, 2020 mandate, we find that neither mechanism individually is associated with greater transparency, but their joint presence relates positively with HCM transparency. Partitioning the sample indicates that this relation reflects internal capabilities rather than external incentives to disclose transparently. A falsification test confirms this relationship is specific to HCM disclosure and does not extend to non-HCM portions of Item 1 in 10-K filings. More transparent HCM disclosure is related to better labor market outcomes. This study contributes to the governance literature by highlighting the importance of calibrating governance mechanism bundles for effective governance. From a regulatory perspective, this study informs policy discussions about the board's role in overseeing HCM.