Signing off on modern slavery statements - Herbert Smith ...
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ORGANISATION
Signing off on
modern slavery
statements
With the Modern Slavery Act 2018 Who is required to report under the Modern Slavery
(Cth) (Act) applying for Australian Act 2018 (Cth)?
companies’ first financial year Under the Act, ‘Australian entities’ and ‘entities carrying on
business in Australia’ with consolidated revenue of at least
commencing after 1 January 2019, $100 million are required to prepare and submit a modern
many businesses are currently slavery statement.
in the process of preparing and ‘Australian entities’ is defined to include companies, trusts
submitting their inaugural modern and corporate limited partnerships which are resident in
Australia for tax purposes, as well as other partnerships and
slavery statement. entities (whether incorporated or not) that are formed in
Under the Act, modern slavery statements Australia or centrally managed or controlled from here. This
are required to be approved by the board and means that the Act applies to a wide range of entity types,
signed by a director. While this approval is including companies, superannuation funds, not-for-profit
often straightforward for companies reporting entities and charities. The Act also allows entities that are not
on a standalone basis, in the context of larger legally required to report to voluntarily prepare a statement.
corporate groups the complexity and risks for In this director tool, we focus on ‘companies’ which are
boards are significantly higher. reporting entities, but in most cases the observations will
This director tool is intended to step directors similarly apply to trusts and partnerships.
through key considerations and areas of potential
risk that they should ensure are addressed before The tool has been prepared jointly by the Australian Institute
signing off on modern slavery statements for of Company Directors (AICD) and Herbert Smith Freehills’ ESG,
corporate groups. It provides an overview of Sustainability and Responsible Business practice1, drawing on
the role of the board under the Act, highlights learnings from the UK modern slavery reporting regime and the
notable areas of complexity when reporting for first wave of Australian modern slavery reporting during 2020.
corporate groups, sets out significant areas of risk This guide should also be read in conjunction with the AICD’s
for the board, and concludes with better practice modern slavery risk tool for members, Modern slavery risk
observations for reporting under the Act. oversight.2
1
Herbert Smith Freehills, 2020, ESG, Sustainability And Responsible Business: Building a resilient future, [website], https://www.herbertsmithfreehills.com/our-expertise/services/esg-
sustainability-and-responsible-business, (accessed 24 November 2020).
2
Australian Institute of Company Directors, 2020, Modern slavery risk oversight, Director Tool, https://aicd.companydirectors.com.au/-/media/cd2/resources/director-resources/director-
tools/2019/pdf/modern-slavery/07236-5-modern-slavery-oct-19-a4-web.ashx, (accessed 24 November 2020).
DIRECTOR TOOLS: ORGANISATION For more information visit aicd.com.au 1S I G N I N G O F F O N M O D E R N S L AV E RY S TAT E M E N T S
The board’s responsibility for For most large corporate groups
What is the status of the NSW modern slavery reporting with centralised management
Modern Slavery 2018 Act? and governance, the parent
Under the Act, reporting entities are
The NSW Modern Slavery Act 2018 company’s board will approve the
required to annually prepare and
(NSW Act) is currently on hold. statement on behalf of all the
submit a modern slavery statement to
The NSW Government has the Minister for Home Affairs within reporting entities within the group,
committed to harmonising six months of the end of their financial with the chair or managing director
the NSW Act with the year. Where there is more than one signing the statement once approved.
Commonwealth Act, though with reporting entity in a corporate group,
the NSW Government view that the group may prepare one or more
the reporting threshold should Department of Home Affairs’
joint statements covering the relevant guidance materials and register
be $50 million consolidated reporting entities.
revenue (rather than the $100 The Department of Home
million requirement under the The board has principal responsibility Affairs has published a range
Commonwealth Act). for modern slavery reporting of guidance material, including
under the Act, given its role in a comprehensive note titled
The NSW Government has approving and signing modern Guidance for Reporting
also stated that the NSW Act slavery statements. Entities, a fact sheet on good
should commence on or before 1 practice trends and areas for
January 2021. Approving and signing statements improvement identified from
It is unclear whether the With respect to individual statements, modern slavery statements that
Commonwealth will have the the board of the reporting entity must have already been submitted,
appetite for adopting a lower approve the statement and a director and supplementary guidance on
threshold for reporting, and how must sign it under the Act. With the consultation requirements.
long the NSW-Commonwealth respect to joint statements, there
While non-binding, these
discussions are likely to take. It is are three ways under the Act for the
materials will be used as
unclear if and when the NSW Act statement to be approved and signed:
yardsticks for assessing modern
will commence. slavery statements going forward.
• By each reporting entity - with
this approach, the board of each These guidance materials can be
reporting entity would approve found here.3
AICD director tool: Modern the statement and a director from
slavery risk oversight The Department’s online register
each board would sign;
for modern slavery statements
In October 2019, the AICD can be found here.4 The
• By a 'higher entity' (for example,
published a tool for its members website houses modern slavery
the parent company’s board) -
on modern slavery risk oversight, statements provided by entities
with this approach, the board
summarising the legislative reporting under the Act.
of a reporting entity which is in
framework for directors and
a position, directly or indirectly,
providing practical guidance to
to influence or control the other
assist directors in their oversight
reporting entities would approve
role of modern slavery risks
the statement on their behalf and
in their operations and supply
have one of its directors sign; and
chains. The tool can be accessed
on the AICD’s website here. • Where the above two approaches
are impracticable, by any reporting
entity covered by the statement -
this approach would be unusual, but
in such a circumstance the board of
any of the reporting entities named
in the statement could approve
the statement on behalf of all the
reporting entities and have one of
its directors sign.
3
Australian Government Department of Home Affairs, 2020, Modern slavery, [website], https://www.homeaffairs.gov.au/about-us/our-portfolios/criminal-justice/people-smuggling-human-
trafficking/modern-slavery, (accessed 8 December 2020).
4
Australian Government Department of Home Affairs, 2020, Online Register for Modern Slavery Statements, [website], https://modernslaveryregister.gov.au/, (accessed 8 December 2020)
DIRECTOR TOOLS: ORGANISATION For more information visit aicd.com.au 2S I G N I N G O F F O N M O D E R N S L AV E RY S TAT E M E N T S
Who should sign the statement? What are the requirements of the Modern Slavery Act 2018 (Cth)?
In practice, the entire board will The Act imposes an obligation on relevant reporting entities to prepare
typically approve the statement and submit a modern slavery statement which must:
prior to it being signed, which
• identify the reporting entity;
reduces the significance of
the person who is signing • describe the structure, operations and supply chains of the reporting entity;
the statement from a risk
• describe the risks of modern slavery practices in the operations
perspective (as they will have
and supply chains of the reporting entity (and any entities that the
the endorsement of the board in
reporting entity owns or controls);
doing so).
• describe the actions taken by the reporting entity (and any entity that
Currently there are different
the reporting entity owns or controls), to assess and address those
organisational approaches to
risks, including due diligence and remediation processes;
this. Some want the chair to
sign to signify the importance of • describe how the reporting entity assesses the effectiveness of the
the issue and the organisation’s actions it takes to assess and address its modern slavery risks;
commitment to preventing • describe the process of consultation with any entities that the
modern slavery. Others want reporting entity owns or controls and, for joint statements, the entity
the managing director to sign giving the statement; and
given they are accountable for
implementation of the group’s • include any other information that the reporting entity, or the entity
modern slavery risk management giving the statement, considers relevant.
program and overseeing the
preparation of the statement. Consequences of getting it wrong
At present there are no penalties for non-compliance with the Act (see below,
Ensuring representations are accurate What happens if the modern slavery statement is non-compliant?)
In approving and publishing the
However, the consequences of inaccurate or misleading disclosure extend
modern slavery statement, the board
well beyond the Act and may include:
makes public representations about the
group’s approach to risk management Regulatory • Breach of directors’ duties – for example, failure to exercise
for modern slavery issues. action skill, care and diligence by appropriately managing and
disclosing modern slavery risks.
This reflects that the modern
slavery statement includes detailed Consumer • Consumer claims – for example, Australian Competition and
information regarding reporting action Consumer Commission (ACCC) complaints for misleading
entities’ structure, operations and statements about ethical sourcing.
supply chain, areas of modern • Consumer class actions – for example, in the US, consumer
slavery risk, and details of what they class action claims have been brought against chocolate
do to manage those risks in practice. manufacturers over representations made regarding their
supply chain practices.
Inaccurate or misleading disclosure
may be used as a ‘hook’ by activists Shareholder • Requisitioned resolutions – for example, resolutions
and consumers when seeking to action requisitioned at the company’s AGM, seeking a review of the
company’s supply chain practices or greater union involvement.
hold companies to account on social
issues or by shareholders alleging • Shareholder class action – for example, a class action claiming
losses resulting from undisclosed breach of continuous disclosure laws following a share price
drop precipitated by modern slavery issues impacting the
modern slavery risk. It could also
business and its reputation.
be pursued by the regulators in the
context of significant breakdowns of
Boards should keep in mind that, in Australia as in many other jurisdictions,
risk management processes.
modern slavery refers to a range of serious criminal conduct. Being aware
of and addressing modern slavery risks are therefore not only required as
part of a compliance exercise, but should be viewed as critical steps to help
prevent an entity from being unwittingly involved in criminal activity.
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Modern slavery reporting for Ensuring accurate disclosure
What happens if the corporate groups In order to effectively report on a
modern slavery statement is
In the context of a large corporate joint basis, it is important that the
non-compliant?
group, ensuring that all relevant practices, risks and policies disclosed
At present, there are no penalties reporting entities are appropriately in the statement are applicable
for non-compliance with the Act, covered by the joint statement can and accurate across the breadth of
with the key driver for compliant be complex. It is important that all the group.
disclosure being the public aspects of the business are carefully
nature of the disclosure and While large corporate groups may be
considered to ensure the accuracy
potential reputational impacts. centrally managed, there may still
of disclosure on risks and risk
be scope for significantly divergent
The Department of Home Affairs management processes.
practices or risks across the business.
samples statements which are In most cases, it will be possible to
Determining reporting entities
submitted through the Federal concisely explain such differences
Government’s online modern Unlike the UK's modern slavery
within the joint statement. However,
slavery registry. Where there are reporting regime, under the Act it is
in some cases, it may be more
compliance issues with respect to not sufficient for corporate groups
appropriate for different divisions
the statement, the Department to report at head company level on
to report individually or in different
may write to the reporting behalf of the group.
‘groupings’ to ensure accuracy and
entity to provide feedback and quality of the disclosure in
The way the Act operates, each
information on submitting the statement.
‘Australian entity’ or entity ‘carrying
a revised statement (if the
on business within Australia’ which
reporting entity wishes to do so) Similarly, where specific business
meets the relevant thresholds for
or improving the statement for divisions have been recently acquired
reporting (notably, those which have
future years. and are in the process of integration
$100 million in consolidated revenue)
into the broader group, this should
The Minister also has the power will need either to prepare its own
be specifically noted and explained
to make formal requests under statement or jointly report with
to ensure that representations
the Act seeking explanations of other reporting entities in the group.
are not being made that risks are
non-compliance or requesting Accordingly, when preparing a joint
managed in a particular way, when
remedial action by reporting statement, the statement will need
in practice that may not be case.
entities. If these requests are not to address the mandatory criteria in
complied with, the Minister has the Act for each reporting entity, at
the power to ‘name and shame’ least holistically. Common traps for joint modern
the non-compliant reporting slavery statements include:
In the context of the mandatory
entity through the online register • not naming all reporting entities;
requirement under the Act to
or by other means. Although
identify the reporting entity/entities • not explaining differences in
these powers are provided by
covered by the statement, corporate practices and policies between
the Act, the Minister has not
groups will need to conduct financial business divisions;
yet confirmed their intended
analysis to determine which group
enforcement approach and • omitting risk exposures which
companies are ‘reporting entities’
whether they will exercise them are present in only part of the
under the Act and specifically name
during this first wave of reporting. group; and
them in the statement (for example,
The Act requires the Minister to in the body of the statement or a
• failing to explain the extent to
undertake a three-year review schedule or footnote).
which newly acquired businesses
of the Act, which will consider have been integrated into group
whether the introduction of processes and policies.
additional measures to improve
compliance, including civil
penalties, would be necessary
or desirable.
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Understanding ‘operations’ Minimising potential areas of risk
and ‘supply chain’ Charitable foundations and giving in modern slavery reporting
The meaning of ‘supply chain’ is In many corporate groups, Key risk exposures for companies
relatively well understood and reporting entities’ operations may and boards with respect to modern
comprises the goods and services include charitable foundations slavery statements include:
procured by the business, and or significant giving programs. In
these cases, specific consideration • omission or understatement of
the various tiers of inputs which
should be given to whether there material risk areas;
comprise those goods and services.
are unique risk exposures related
• statements which are untrue /
What is not as commonly understood to those activities.
exaggerated; and
is the scope of reporting entities’
‘operations’ under the Act, which Particular risk areas may relate
• aspirational commitments which
comprises the activities of the to development projects funded
are not delivered in practice.
business. While some aspects of by the foundation in jurisdictions
a business’ operations are easily which are higher risk for modern In most cases, the risk of misleading
identifiable, such as its offices, slavery or involvement with disclosure can be managed by
manufacturing and workers, the orphanages, which can carry having an effective drafting process,
Department of Home Affairs higher risks of human trafficking. correct framing of information and
has explained in guidance that the robust ‘testing’ of information
operational activities also include prior to disclosure.
Considering joint ventures
financing and investing (including
Careful thought needs to be given to Strong consultation across the group
investments in non-managed and
the inclusion of joint ventures (JV) Broad input from across the business
non-operated joint ventures).
in the scope of joint modern will help mitigate key risk exposures
The level of detail expected to be slavery statements. for companies and boards by ensuring
disclosed in relation to investing and a more comprehensive consideration
Where they are ‘operated’ JVs with
financing activities is, necessarily, of the business’ operations and
identical risks and risk management
high level, with risk exposures supply chains, as well as potential
processes to the broader group, then
expressed at a thematic level rather differences in risk profiles or risk
including JVs in the group’s modern
than in detail. However, the more management practices.
slavery statement may make sense.
significant a particular investment or
Where that is not the case, it may be It will also assist the company in
financing activity is, the more detail
preferable for them to self-report. satisfying the requirement for
that should be provided – such that
the statement provides a fulsome Importantly, the Act does not consultation under the Act, which
overview of the business’ key risks prescribe particular ownership necessitates:
exposures and processes. requirements in order for entities • consultation between reporting
to report jointly. Accordingly, two entities; and
To the extent that the business’
entities can report jointly under the
financing and investing diligence
Act provided the statement sensibly • consultation between each
processes seek to address and
covers all aspects of the content reporting entity and its owned or
manage modern slavery risks, this
requirements for each of the entities controlled entities,
should also be called out.
and they consult with each other
in relation to the statement, to
in preparing it.
ensure it appropriately captures the
mandatory reporting criteria.
In the context of a centrally managed
group structure, detail should
be included on the consultation
undertaken by the working groups
preparing the statement and the
review process undertaken by the
management team, culminating in
the relevant board approvals.
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Legal risk associated with aspirational or forward- For example, the inclusion of a case study on a reporting
looking statements entity’s incident response could form an evidence
Under the Act, reporting entities are only required to roadmap for potential claimants in litigation or, for ASX-
report in respect of the previous financial year. That said, listed entities, may invite scrutiny of whether a matter
Australian Border Force considers it to be good practice should have been disclosed immediately to the market as
for modern slavery statements to ‘commit to continuous part of the company’s continuous disclosure obligations.
improvement and explain how the reporting entity will Detailed disclosure may also lead shareholder activists
refine its response in future years’. to ask questions about the company’s response to
incidents, such as whether the incident was reported to
These types of statements about commitments and police (which in some jurisdictions is not recommended
future work plans need careful consideration and should by human rights NGOs) and, if not, about the
only be included where the board is confident about the justifications for not reporting it. Disclosures may also
achievability of the relevant actions. Reporting entities create a risk of retaliation against whistleblowers,
are not expected to commit to aspirational goals or human rights defenders or the original victims of the
future commitments which they may not be able to incident in question.
achieve in practice. A key area of litigation arising in
the US relates to company disclosures regarding ethical Whether disclosure regarding potential modern slavery
sourcing practices which are alleged not to have been issues or incidents is or is not included in the statement
followed (or are improbable) in practice. will be highly fact-dependent and guided by the
board’s approach to transparency and reputational
Similar risks can arise with respect to forward-looking risk management.
statements by listed groups, particularly with respect
to risks likely to affect the group in the future (or the But, at a minimum, it will be important for board
group’s management of those risks in future). Under the members to turn their minds to the issue and test
Corporations Act 2001 (Cth), when a person makes a the extent to which these other legal risks have been
representation to the market about a future matter and properly considered and acted on.
the person does not have reasonable grounds for it, the
Verifying information for disclosure
representation is automatically deemed to be misleading
by law if it ultimately proves to be inaccurate (even if In the context of the requirement for board approval of
they genuinely believed it at the time). modern slavery statements, directors will necessarily be
keen to understand what verification-type process has
Where directors fail to correctly distinguish between been undertaken in respect of the information in the
expectation and fact, or fail to properly explain the modern slavery statement.
assumptions underlying the company’s analysis, they
may be exposed to claims for misleading disclosure if While ‘prospectus-style’ verification is clearly not
events unfold differently to how they were anticipated. expected, listed companies in particular should be
giving thought to whether they will confirm the modern
Disclosing potential modern slavery incidents slavery statement is in line with their usual process for
The disclosure of actual or potential modern slavery verifying the integrity of corporate reports according to
identified in the reporting entity’s operations and supply Recommendation 4.3 of the ASX Corporate Governance
chain is not required by the Act, which instead focuses Council’s (Council) Corporate Governance Principles and
on the disclosure of risk areas and actions taken to Recommendations.5 It is not necessarily expected that
manage those risks. companies will get formal audit sign off or third-party
assurance given the nature of the process. However,
There are, however, a number of reasons why reporting internal verification (such as internal audit) can be a
entities may wish to include this information in their useful risk mitigation tool.
modern slavery statement, including the need to meet
stakeholder expectations for transparent disclosure and The modern slavery statement is not clearly a “periodic
proactively manage potential reputational risks. corporate report” within the definition provided by the
Council. However, the spirit of the recommendation
Any disclosure of potential modern slavery incidents is to cast the net broadly to capture different types of
in the modern slavery statement needs to be carefully periodic ESG-type reporting with its recommendation.
considered from a legal perspective. The drivers for In any event, following a system of informal cascading
greater transparency regarding identified issues will need reviews prior to approval would be an appropriate risk
to be weighed against the potential legal risks which may mitigation step given the nature of the disclosures in the
flow from voluntarily including this information. statement and the risks to which they relate.
5
ASX Corporate Governance Council, 2019, Corporate Governance Principles and Recommendations, 4th edition, February, p 20, https://www.asx.com.au/documents/asx-compliance/cgc-
principles-and-recommendations-fourth-edn.pdf, (accessed 24 November 2020).
DIRECTOR TOOLS: ORGANISATION For more information visit aicd.com.au 6S I G N I N G O F F O N M O D E R N S L AV E RY S TAT E M E N T S
Better practice modern slavery reporting Linkages to governance and risk
management processes
Building the right team
Good quality joint statements will explain how the
While there may be a tendency within some businesses to regard
corporate group governs and manages modern
modern slavery as a procurement item, the requirement to report
slavery risks by reference to its governance
on risk under the Act, along with the technical nature of the
structure and risk management system. For
disclosures, means that a cross-disciplinary approach is preferable.
example, what is the process for different business
Key contributors to preparing the modern slavery statement divisions to report emerging risk issues? How
may include: do they get channelled up to management and
the board? What happens if a group company
Team or For input on… identifies a red flag for modern slavery risk? Is
function there a formal process, who manages it and how
is it overseen?
Finance … which entities in the corporate group meet
the criteria for reporting under the Act. Similarly, corporate groups should also disclose
and explain how their management of modern
Procurement … a description of the business’ supply chains, slavery risks works alongside their other
goods and services procured, and processes processes for whistleblowing, internal/external
for supplier diligence, on-boarding and investigations, anti-bribery, corruption, financial
management. crime prevention and procurement.
Risk … analysis on potential areas of risk with
Consider broader reputational risks
respect to modern slavery practices.
The modern slavery statement is required to
Sustainability … anti-modern slavery practices adopted disclose modern slavery risk areas in reporting
by the group and, in many cases, leading entities’ operations and supply chains under the
preparation of the modern slavery statement. Act. However, better practice is for the company
… a description of the business’ governance to consider, and the statement to disclose,
Company
systems for overseeing and managing modern broader reputational risks as well.
Secretariat
slavery risks. This may take the form of the business disclosing
… working conditions of employees and its processes for identifying and escalating
Human
contractors, training programs provided to modern slavery concerns with respect to its
Resources
manage modern slavery risk, and other steps to customer base (for example, financial services
build a culture that places high priority on modern businesses which may become aware of
slavery and other human rights abuse risks. patterns of behaviour which indicate possible
slavery conditions).
Legal … areas of litigious or other legal risk exposure
and ensuring compliance with the Act. It may also involve considering the extent to
which the group could be linked to modern slavery
Corporate … engagement with stakeholders and the practices through its business partnerships and
Affairs community to understand expectations and affiliations, including joint marketing initiatives
manage reputational risk exposure. or co-investment in ventures alongside other
entities. While the scope of the Act is limited
Where the statement is prepared by siloed teams, there is a to operations and supply chains, the breadth
greater risk that it will not accurately reflect the practices of the group’s activities may create
and policies applied by the relevant reporting entities or reputational risks extending beyond its own
appropriately disclose the modern slavery risks present in their activities and procurement.
operations and supply chains.
Moreover, there is also a risk that the modern slavery statement
will not have the same level of legal scrutiny and oversight as
other types of corporate reporting – or be adequately tested to
ensure the grounds on which statements are being made are
defensible and robust.
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Questions to ask management before signing
Board considerations for better practice off on a modern slavery statement
modern slavery statements
Reporting for corporate groups
• In approving a joint modern slavery
statement, the board is making • Determining reporting entities
representations about the practices, - Has analysis been undertaken to accurately
risks and policies which apply across the identify all reporting entities within the
corporate group. corporate group?
• Particular areas of risk arise where the - Will each reporting entity be preparing a
statement omits particular risks or standalone modern slavery statement, or will
discloses practices or policies, which are not they be covered by one or more joint statements?
consistently applied across the business.
• Ensuring accurate disclosure
• Where specific aspects of the business
are subject to different risks, these should - If a joint statement is being prepared, does
be specifically identified to ensure that it accurately reflect the modern slavery risks
all relevant risks are being disclosed and and actions of all of the reporting entities?
that the joint statement addresses the
- Are there differences in practice between
mandatory criteria for each reporting entity.
business divisions or geographies that need to
• Where practices and policies do not apply be reflected in the statement?
in relation to certain parts of the business,
- If a business division has been recently
these should also be specifically identified.
acquired, has it been integrated into the
Similarly, where diligence processes are only
corporate group? If not, does the modern
followed for part of the supply chain, this
slavery statement explain this?
should be noted.
• Understanding operations and supply chain
• The modern slavery statement should be
backward-looking and address activities in - Does the description of the reporting entities’
the relevant financial year being reported supply chains consider both direct suppliers
on. Great care needs to be taken of goods and suppliers of services, as well as
with any forward-looking or aspirational deeper-level suppliers?
disclosure made by the reporting entity from
a legal liability perspective. - Does the modern slavery statement adequately
capture less obvious parts of the reporting
• A working group comprised of different entities’ operations (for example, financial
functional and business leads should lending and investments, non-operated joint
be convened, to ensure modern slavery ventures, leasing activities, research and
statements accurately reflect the practices, development, and charitable activities)?
risks and policies across the entire group.
- If the reporting entities are involved in
investing and financing activities, is the level
of disclosure in the modern slavery statement
appropriate in the circumstances? Does it take
into account factors such as the significance
and level of risk of those activities and the
group’s level of ownership/control?
• Considering joint ventures
- Do joint ventures (JVs) included in the
statement have any different modern slavery
risks or risk management processes to the
rest of the corporate group?
- Does it make sense to include JVs in the joint
statement or should they individually report?
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Minimising potential areas of risk Better practice
• Strong consultation across the group • Building the right team
- Have the reporting entities consulted with the - Has the modern slavery statement been
entities that they own or control, and each prepared with contribution from different
other, to ensure the disclosure is accurate? parts of the organisation: for example,
Finance, Procurement, Risk, Company
- Has this consultation process been described
Secretariat, Human Resources and Legal?
in the modern slavery statement?
- Did the contributors adequately collaborate
• Legal risk associated with aspirational or
with each other in preparing the modern
forward-looking statements
slavery statement? What were the key points
- Is the group confident it can deliver any future of tension, if any?
commitments made in the statement?
• Linkages to governance and risk management
- Are there reasonable grounds for any processes
forward-looking statements about risks
- Does the modern slavery statement explain
affecting the corporate group (or its
how modern slavery risks are managed
management of those risks)?
through the governance structure and policies
• Disclosing potential modern slavery incidents and risk management system?
- Is the group comfortable disclosing • Considering broader reputational risks
when it has/ has not uncovered modern
- Does the modern slavery statement
slavery incidents?
explain how the reporting entities manage
- Has legal input been obtained on any such the risk of being linked to modern slavery
disclosure or case studies regarding the practices through their customers,
group’s response to modern slavery? partnerships and affiliations?
• Verifying information for disclosure • Market benchmarking
- What process has been undertaken - In preparing our statement, have we
to check the integrity of the modern considered modern slavery statements
slavery statement? from others in our market/industry? How do
we compare?
- What engagement with external
stakeholders has taken place in preparation
of the statement?
DIRECTOR TOOLS: ORGANISATION For more information visit aicd.com.au 9S I G N I N G O F F O N M O D E R N S L AV E RY S TAT E M E N T S About the Author Tim Stutt is the Australian lead for Herbert Smith Freehills’ ESG, Sustainability and Responsible Business practice, a senior member of the firm’s Head Office Advisory Team (HOAT) and a member of the firm’s global Business and Human Rights practice. Tim specialises in corporate governance and has over 10 years’ experience helping large corporations with environmental, social and governance (ESG) matters, particularly with respect to market disclosure, risk management and shareholder engagement/activism. About us The Australian Institute of Company Directors is committed to strengthening society through world-class governance. We aim to be the independent and trusted voice of governance, building the capability of a community of leaders for the benefit of society. Our membership includes directors and senior leaders from business, government and the not-for-profit sectors. For more information t: 1300 739 119 w: aicd.com.au Disclaimer This document is part of a Director Tool series published by the Australian Institute of Company Directors. This series has been designed to provide general background information and as a starting point for undertaking a board-related activity. It is not designed to replace a detailed review of the subject matter. The material in this document does not constitute legal, accounting or other professional advice. While reasonable care has been taken in its preparation, the Australian Institute of Company Directors does not make any express or implied representations or warranties as to the completeness, currency, reliability or accuracy of the material in this document. This document should not be used or relied upon as a substitute for professional advice or as a basis for formulating business decisions. To the extent permitted by law, the Australian Institute of Company Directors excludes all liability for any loss or damage arising out of the use of the material in this document. Any links to third-party websites are provided for convenience only and do not represent endorsement, sponsorship or approval of those third parties, or any products and/or services offered by third parties, or any comment on the accuracy or currency of the information included in third party websites. The opinions of those quoted do not necessarily represent the view of the Australian Institute of Company Directors. © 2021 Australian Institute of Company Directors DIRECTOR TOOLS: ORGANISATION For more information visit aicd.com.au 10
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