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Information Disclosure as Emotional Sensibility: Managing Uncertainty through Confidence in Global Labour Practices

Political Psychology
Public Policy
Regulation
Tereza Capelos
University of Birmingham
Tereza Capelos
University of Birmingham
Colin Provost
University College London

Abstract

In this paper, we examine how multinational corporations present their global labour practices to their stakeholders in ways that inspire confidence as a strategy for managing uncertainty in global supply chains. We introduce the concept of emotional sensitivity for companies that engage in strategies that take into account the emotional impact of their actions. We investigate empirically the attempts of multinational corporations with variable reputations on efficacy and moral reliability to inspire confidence though a systematic analysis of their statements regarding global labour practices under the UK Modern Slavery Act. We coded 280 company statements, examining each statement for content covering a number of different actions that companies can take to mitigate labour abuse in their supply chains. Utilising Environmental Social Governance (ESG) scores from Thomson Reuters as proxies for the reputational components of efficacy and moral reliability, we examine the effect of these company characteristics upon the quantity and quality of their statements and find that companies with reputations for moral reliability tend to produce statements that are more complete and address a broader range of difficult labour issues in supply chains. On its own efficacy reputation does not produce a strong impact upon the content or quality of the statements.