Corporate Responses To Modern Slavery Risks: An Institutional Theory Perspective

PurposeDrawing on statements made under the transparency in supply chains provision of the UK Modern Slavery Act, this paper aims to examine how firms are responding to modern slavery risks in their supply chains.Design/methodology/approachUsing an institutional theory lens, a content analysis of modern slavery statements by financial times stock exchange (FTSE) firms is carried out. The analysis focusses on sources of modern slavery institutional pressure and changes that firms have made in their structures, policies and practices in response to modern slavery risks.FindingsThree sources of institutional pressure are inferred from modern slavery statements: international human rights accords (coercive), multi-stakeholder initiatives (mimetic) and professional standards (normative). Changes made by firms in direct response to modern slavery include adopting new policies, strengthening contract terms, establishing working/steering groups and creating new key performance indicators. FTSE 100 firms have been more proactive than FTSE 250 firms in making these changes, as have firms in higher risk industries.Originality/valueThe paper shows that institutional theory has validity for explaining corporate responses to modern slavery risks.