New Year’s Resolutions

happy new year

For major businesses, to be precise those with turnover of over £36 million, there will be a new, new year’s resolution in 2016. By April they will have to produce a ‘Slavery and Human Trafficking Statement’. The statement must set out what steps they have taken during the financial year to ensure that modern slavery is not occurring in their supply chains or in their own organization. This has to be good news. All agree that this evil must be challenged, and that a key part of that has to be to shine a clear light on business practice, precisely because global business is the context within which this happens. The International Labour Organization estimates annual related profits of over $15 billion.

Modern Slavery ActHowever, not everybody believes that the Modern Slavery Act 2015 goers far enough (see this Huffington Post article for further details). All it requires is that a statement be made, one which might say that the firm has not taken any steps to combat modern slavery. The only ‘teeth’ the Act has is the provision for the Secretary of State to pursue legal means requiring the organization to provide a statement. If the organization fails to comply with an injunction demanding this, for instance, it will be in contempt of a court order, punishable by an unlimited fine. It will be for consumers, investors and Non-Governmental Organizations to engage and/or apply pressure to encourage a firm to actually do something about modern slavery in its supply chains.  Not surprisingly when a similar approach was tried in the California Transparency in Supply Chains Act, there was little attempt to engage the issue.

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Betty’s Tea Room, Harrogate

The Act raises huge questions about governance and responsibility. The best examples of governance, such as Unilever, go way beyond a focus on modern slavery, taking in human rights as a whole. And we only need to go as far as Taylors of Harrogate to see a great example of smaller firm engaging its supply chain in a responsible and creative fashion.

But how one can regulate such ethical practice? The Act equates regulation with coercion, with the implication that you cannot regulate good practice. People and organizations have to take their own responsibility for that, the argument goes. Hence, the strategy for the Act is to seek transparency and then to hold practice up for public response. The assumption is that concern for reputation will motivate the businesses in question. But how can that be effective without more teeth, such as the requirement of an independent audit, or governance process which opens itself to external perspectives and expertise (beautifully set out by Unilever)?

Just how the practice of governance should be regulated will be a hot topic throughout this year and the Centre has a series of lectures and public events which will focus on this. Dean Fathers and David Welbourne our two new visiting professors, will be looking at the tensions of governance in the National Health Service and beyond. How can we hold together care and constraint (financial), creativity and consistency (of practice across the piece)? Robert Chia from Glasgow University, one the leading thinkers on critical management, will then look at how we can develop cultures which enable critical challenge. In all this the questions about the nature of regulation remain. Just what kind of regulation can enable the development of moral responsibility, focused in autonomy, not moral automatons? We are planning to hold a symposium on just this topic at the Academy of Management Conference in August.

Rev. Dr. Simon Robinson

Director of Centre for Governance, Leadership and Global Responsibility

 

Heads Up:

We will be sending out invites in the next fortnight for the next academic year’s speakers. Please let Becky know of any thoughts on who you would like to hear.

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