Modern Slavery Disclosure Best Practice

Global events, such as the war in Ukraine have increased the risks associated with modern slavery resulting in this gaining increased traction in the political and legislative arena. Further enhancements to the current regulation have therefore been announced but are yet to become live.

For business there is not only the risk of non-compliance with regulation but also a clear reputational risk attached to being associated with modern slavery either within our own entity or that of a supplier.

To support businesses in providing transparent information around modern slavery risk management we have set out below some best practise pointers for putting together the Modern Slavery Statement / disclosures in financial statements. This is currently a mandatory requirement for all businesses with a turnover of £36 million or more. A summary of the regulation can be found here.

Best practice

Whether an entity prepares a modern slavery statement or discloses the required information in their financial statements, it is important that this gives users of the information, all of the detail that they need in order to make informed decisions.

The information should be clear, understandable, and presented in a logical manner. If disclosure is not by way of a specific standalone statement, but instead through the financial statements, this will need to be very clearly referenced to ensure that users can find all the information relating to modern slavery risk without it being so fragmented that it does not make sense in the context of the regulation.

Users want to be able to understand the modern slavery concerns which may impact a business throughout its organisational structure as well as through their operational and supply chains. A key consideration would be human right’s issues not only within our own work force but also that of our suppliers? If you are within the scope of the modern slavery act requirements then questions should be asked around the application of the modern slavery act, at the point at which you engage with any supplier.

This risk assessment should then be progressed to provide the detail of how the policies and procedures in place are actively managing the modern slavery risks in the areas above and how they are actually applied and operating in practice. The extension of this would be to then set out the measurement mechanisms which are in place and how this is then tracked.

All of the above is rather backwards looking. What would make the information more relevant would be consideration of future and emerging risks and how these will make their way in to the longer-term strategy of the entity.

Collaborate to achieve

If you would like to discuss your modern slavery act disclosures and compliance in more detail please reach out to your usual Albert Goodman contact or Sophie Parkhouse direct.