Emotional sensibility and corporate performance in supply chain governance: evidence from the UK Modern Slavery Act

What is it about?

Many large companies must comply with anti-slavery laws requiring public statements on how they prevent modern slavery in their supply chains. However, some companies provide detailed disclosures on sensitive ethical issues, while others avoid such topics. This study examines why some companies include emotionally sensitive content while others do not. We find that companies committed to social responsibility are more likely to address emotionally laden issues in their statements. In contrast, companies strong in corporate governance only do so when they also value social responsibility. This reveals that moral reliability matters more than corporate governance when it comes to transparency on emotional disclosure content. Our findings suggest that companies can improve their reputation and public trust by including emotionally aware messaging in their compliance statements. Future research should explore how companies respond to stakeholder feedback and adjust their statements, helping them better manage public expectations and strengthen relationships with stakeholders.

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