Business and the Modern Slavery Act: a game of snakes and ladders?
Who has not played a game of snakes and ladders? The rules are simple - throw the dice, move the counter to reflect the number shown on the dice, go up the ladders and down the snakes. The first person to reach the highest square (number 100) wins. But only if you land on the actual square. If you roll too 'high' the piece 'bounces' off and rolls back.
The equipment is quite simple too, a board, a dice and a counter. Its about pure luck. The exact opposite to chess. A bit more strategy can be exercised in monopoly and a bit more skill in a game of poker.
We have (over a series of blogs) been exploring the impact of legislation on the behaviour of business in the context of disclosure requirements. In our first blog we discussed why legal compliance is not enough, we then looked how compliance with the Modern Slavery Act is a matter of Trivial Pursuit.
So next up, let’s consider the game of snakes and ladders in the context of business behaviour and their response to the Modern Slavery Act.
The Modern Slavery Act (MSA) came into force in the UK last year. Companies with a year end on or after 31 March 2016 that meet the threshold requirement of a turnover of £36m and that provide goods and services in the UK, have to publish a slavery and human trafficking statement. This statement needs to set out the steps the company is or is not taking to tackle slavery in their organisation and supply chains.
Simple? Not quite
Understanding the object of the game is the first requirement to play a game of snakes and ladders. For many companies the object of the MSA will be publishing a statement. For the management ‘board’ of many companies this will be the equivalent of reaching the number 100 on the snakes and ladders board. The winning number! Snake number one. Move back on the board.
The real requirement of the transparency in supply chains provision (TISC clause) in the MSA is to tackle modern slavery in organisations and supply chains, particularly as the number of people enslaved globally today is over 45 million. Business has a key role to play in creating change. Companies that are oblivious to the real object of the MSA are likely to find themselves at some point slithering down a snake.
Any board game requires that the rules of the game are met. Cheating gets you disqualified. Under the provisions of the MSA one of the requirements is that the statements are approved by a board of directors and signed by a director.
The vast majority of statements that we and others have scrutinised don’t come close to meeting the requirements of the Act. Does this failure merit going down a snake? Some would argue for disqualification. But here the rules of the MSA are not that robust. There is no personal liability for directors. Only the threat of a civil injunction. It seems like someone might get lucky and stay in the game on this point. Snake number two.
And for those afraid of rolling the dice and ‘bouncing’ off 100 we see a more cagey approach by many companies to publishing their statements. The ‘wait and see’ what their competitors are doing is prevalent or simply copying and pasting what others in their sector are doing is another approach being adopted. Snake number three.
A bit of luck needed here! This approach demonstrates no leadership or commitment to underlying spirit of the Act. Directors making these decisions might ask themselves, as Josh Stones song says ‘What's the name of the game that we are playing?’ And stakeholders may think ‘but whenever I think that we are winning we roll the dice take a slide right back to the one from 99’. Snake number four.
Climbing up the ladder
Companies that are taking the lead and building their statements on concrete policies and procedures should move up the board as they climb the ladders that represent leadership, transparency and going beyond compliance to develop best practice. There are 8 ladders on the game board and under the MSA there are at least eight things that an organisation or its management board can do to help get it to the goal of winning. These are: -
1) Meet the requirements of the law and develop a commercial best practice approach
2) Understand where your gaps are
3) Create robust statement with policies and procedures to underpin the statement
4) Develop a due diligence process
5) Train your key stakeholders!
6) Be transparent about how you are looking to improve
7) See tackling these issues as an opportunity
8) Take it one step at a time
Who can play?
Choosing an opponent in the game of snakes and ladders is likely to come down to someone that you know well. There are plenty of opponents and indeed collaborates who can participate in the development of a company’s statement for the MSA. The key is playing with someone that understands the rules.
Of course the public sector has not been invited to play. Well not yet anyway. The impact of a proposed Private Members Bill (currently passing through Parliament) to include the public sector into the scope of the MSA could have an enormous (and positive) impact on the long term vision of creating change. And increase the pool of participants.
Are there other rules?
Looking at the number of snakes and ladders that the board should avoid or embrace there still appears to be a long way to go in meeting the requirements of the MSA.
The problem, it would seem, with the current approach to modern slavery by business is that it pretty much appears in the majority of instances to be a ‘board game’ of playing with words and nuances, creating statements and policies backed up with little commitment. Anything gained in the innovation of getting this Act passed is slithered away (as if landing on a snake) where the disclosure requirement is treated as a mere marketing exercise. This was always the danger, given the approach taken by the Government to the provisions of the MSA to exclude personal liability for directors and include very weak enforcement provisions.
That is not to say that there are some ‘boards’ that are taking the ‘game of disclosure’ seriously and that are prepared to even add in some variant rules to the standard ones in the game.
Like using the ‘faster victory rule’. This rule in a game of snakes and ladders introduces the opportunity for those lagging behind to catch up. They have made it to the top square but instead of seeing the game as finished, they have allowed for others to catch up. Some of the more responsible brands have climbed the ladder and as they gain ground are starting to get more of their suppliers and stakeholders on board. A rule for victory in transparency and leadership.
The leading companies will also have added a little bit of strategy. In some games of snakes and ladders players can be given two game pieces each with the same colour. When the dice roles only one of the two pieces are moved but to win the player needs both pieces of the last square to win. Companies that have viewed tackling the proposed steps in the MSA and that are looking to establish how they can meet and disclose on these criteria are effectively using more than one piece. Strategic, fearless leadership is key to creating long term change.
What kind of game does your company play? Is it slithering down the snakes or clambering up the ladders? Is it doing a bit of both?Colleen Theron, CLT envirolaw