“People Washing” Undermines Corporate Credibility: Here’s How To Fix It

“People-Washing” Undermines Corporate Credibility: Here’s How to Fix It

Despite loud proclamations about the importance of people, most companies continue to fall short in demonstrating the real value of their workforce. Even some of the world’s most admired employers are failing to back their rhetoric with consistent action.

Take Microsoft. The company lists “Respect” and “Integrity” among its core values, emphasizing the importance of individual perspectives and ethical conduct. Yet, earlier this year, it announced 9,000 layoffs, not long after cutting 10,000 jobs in 2023. The precision of these figures suggests they were calculated by financial modeling rather than a meaningful evaluation of human value impact, both for the firm and its stakeholders. Public reactions from affected employees have been swift, with reports of confusion, sadness, frustration, and disillusionment at their treatment echoed across social media platforms.

The unvarnished truth about whether people are authentically seen as valued contributors often emerges from such episodes. This is not just a PR problem. It reflects a systemic failure in how companies understand, manage, and make disclosures on human capital and culture-related issues. People should be valued regardless of whether they work or cease to work for you.

The Disconnection of Human Value

For decades, corporations have claimed that “people are our greatest asset.” Yet their actions, and importantly, their disclosures, tell a different story. Most human capital reporting is made through a branding lens. It generally focuses narrowly on talent acquisition and retention. This HR-centric view means that people disclosures aim to sell the company as a place to work, rather than highlight people as a core driver of value and risk.

Maturity Institute research reveals that annual reports and communications remain devoid of meaningful reporting about how people, culture, and human systems affect value and risk. In the words of Vincent Papa, former director of financial reporting policy at the CFA Institute:

“…there’s a gap between the quality of information that’s provided by companies and the suitability of this information…There’s an information gap.”

Papa’s description is a polite euphemism for the obfuscation that defines much of today’s corporate reporting. Over a decade of initiatives to improve the quality of human capital reporting has resulted in little progress. The International Sustainability Standards Board (ISSB) has recently joined a growing chorus calling for improved people and culture disclosures. But these efforts have always fallen short. By emphasizing headcount, turnover, or demographic statistics, these calls reflect what most companies already disclose. It is also data that provides little insight into how people drive performance, firm value, risk, or reflect the health of corporate culture.

Culture Risk – Elephants in the Room

It’s been nearly 25 years since the failure of Enron and its auditor, Arthur Andersen. The collapse of both firms had very human causes. The decisions and actions of people caused both catastrophic failures. From VW, Purdue Pharma, to Carillion and the UK Post Office, myriad company scandals and failures in the intervening years have highlighted that much human risk is still omitted by companies and missed by investors, auditors, and regulators. Companies fail to report what’s important, and third-party stakeholders fail to spot the red flags.

Consider Barclays, a bank that has been mired in controversies. Since 2010, it has received 33 misconduct fines totalling £575,968,401. The bank now proclaims “The Barclays Way” as its cultural compass, identifying in its reporting of material risks that employee alignment with its values leads to greater engagement and retention. But the link between that data and actual risk mitigation is not made, and remains speculative at best – more “engaged” staff who stay longer can still cause harm. In July 2025, the company received its latest fine, this time for anti-money laundering failures, raising serious questions about whether its cultural health matches its corporate claims.

What Should Change: Five Steps Toward Better People Reporting

If companies are serious about aligning statements with measurable outcomes, human capital reporting must evolve. Here are five principles to guide a shift that companies, investors, and regulators need to consider:

Ask the Right Questions: Stop viewing people and culture as an HR and compliance responsibility. Move beyond the mantra of “attract and retain.” Ask how people create or erode value. Reframe misconduct as a cultural and human system issue, not just a compliance failure.
Stop Reporting Activity, Start Showing Impact: Listing training hours or diversity initiatives is not enough. What were the results? How did those investments affect performance, innovation, and value outcomes?
Measure What Matters: Engagement scores and board diversity statistics offer limited insights. Instead, connect people metrics directly to key performance indicators and outcomes. If your firm improves engagement by 10%, can you link it to business impact? If not, why measure it?
Build Coherent People Indicators: Avoid siloed metrics. Tie together turnover trends, absence data, employee feedback, and performance management to tell a cohesive story about human capital health and organizational performance.
Address the Omissions: What’s not being measured may matter most. How much do employees trust leadership? How is psychological safety fostered? Are knowledge-sharing and innovation systems working? What does performance management data tell us about capabilities and the realisation of human potential?

The Bottom Line: Reporting as a Mirror of Organizational Health

People and culture is often lost in the middle of annual reports or reduced to glossy PR narratives. This is a missed opportunity and may hide serious risks. Investors, regulators, and the public are paying closer attention. They want to understand not just what a company says about what it values, but how it proves it.

Human capital is not a marketing message, but a core driver of strategy, risk, and performance. That means embracing transparency, elevating people metrics to the same level as financial ones, and telling a coherent, evidence-based story of how value is truly created.

Until that becomes the norm, “people-washing” will remain a pervasive and costly stain on corporate credibility.

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