Determinants of corporate compliance with modern slavery reporting

Abstract

Purpose This paper aims to investigate the determinants of corporate compliance with the transparency in supply chains provision of the UK Modern Slavery Act. While recent scholarship has described what firms are doing to comply with this Act, no attempt has been made to explain their behaviour. Design/methodology/approach A predictive model of corporate compliance with modern slavery reporting is tested using secondary data from Financial Times Stock Exchange 350 firms. The model is informed by institutional theory and, in particular, by Oliver’s (1991) insights into the conditions under, which firms respond to institutional pressures. Findings Compliance with modern slavery reporting is found to be significantly related to firm size, prior social responsibility commitment, network involvement, industry and headquarter base (UK versus non-UK). Other predictors such as media exposure, shareholder concentration and profitability are found to be non-significant. Research limitations/implications The focus is on the 350 largest publicly listed companies in the UK. The stances that firms outside of this cohort are taking on modern slavery reporting still need to be investigated. Practical implications Compliance with the UK Modern Slavery Act varies by industry. Regulators should consider this as a part of risk profiling strategies and follow-up inspection of firms. Originality/value This paper provides the first theoretically grounded examination of the organisational and environmental factors that determine corporate compliance with modern slavery reporting.

Transparency in Supply Chains (TISC): Assessing and Improving the Quality of Modern Slavery Statements

“…Studies of business responses to modern slavery TISC legislation are now emerging, through studies of retailers' reporting responses to the Californian act (Birkey et al, 2018), FTSE350 firms in the UK (Flynn, 2020;Flynn & Walker, 2021), fashion sector firms in the UK (Benstead et al, 2018;Stevenson & Cole, 2018;Voss et al, 2019), the UK food and tobacco sector (Monciardini et al, 2021), and ASX100 firms in Australia (Christ et al, 2019).…”

“…Stevenson & Cole, 2018;Voss et al, 2019), or on assessing headline correspondence with reporting guidance (e.g. Christ et al, 2019;Flynn, 2020). Most studies also include an assessment of statutory conformance because, despite the relative lax requirements, many firms still are non-compliant.…”

“…Flynn and Walker (2021) observe that 43 of the UK's FTSE350 firms had not published a report at all, whilst Voss et al (2019) find even lower publication rates in the fashion sector, with non-conformance noted in 40% of firms that did publish a statement. The extent to which published statements reflect government guidance has so far been assessed only at a headline level, through searches for indicator phrases that suggest each element prescribed by the Section 54 guidance is covered to any extent (Flynn, 2020), or sentence counts for reporting themes (Christ et al, 2019). There is an attendant risk with such assessments that correspondence with guidance may be overstated where even superficial statements are detected and included in summary data.…”

Change in Rhetoric but not in Action? Framing of the Ethical Issue of Modern Slavery in a UK Sector at High Risk of Labor Exploitation

“…The introduction of legislation around the world requiring certain commercial organizations to report on modern slavery (LeBaron & Rühmkorf, 2017 ; Sinclair & Nolan, 2020 ) has driven empirical research on the required disclosure and compliance (e.g., Christ et al, 2019 ; Flynn, 2020 ; Monciardini et al, 2021 ; Rogerson et al, 2020 ; Schaper & Pollach, 2021 ). In parallel, research interest in how specific groups of business and non-business actors frame modern slavery has grown.…”

“…The legal obligation of businesses to report on their policies and measures to tackle modern slavery has spurred research on compliance (e.g., Christ et al, 2019 ; Flynn, 2020 ; Monciardini et al, 2021 ; Rogerson et al, 2020 ; Schaper & Pollach, 2021 ). Beyond corporate reporting, increasing interest has emerged on the strategic use of modern slavery frames, through the study of discourse and narratives.…”