Corporate modern slavery and worker rights reporting: What does corporate board? Evidence from emerging economy Open Access

In recent years, labor exploitation has increased in businesses due to non-compliance with social standards in operations and supply chain management (Schaper and Pollach, 2021). The Global Slavery Index (2018) reports that more than 40 million people have suffered from various forms of slavery, encompassing forced labor, child labor, debt slavery, human trafficking, human rights violations, wage discrimination, abuse, violence, precarious working conditions, and threats to occupational health and safety (Kaur and Lodhia, 2019; Majumdar et al., 2020; Christ et al., 2020). Contrary to previous estimations indicating 2.5 million annual victims of forced labor (Schaper and Pollach, 2021, p. 1), the magnitude of the issue has prompted heightened scholarly attention, particularly within the accounting literature (Christ and Burritt, 2021; Islam and Van Staden, 2021; Christ et al., 2019). Globally, developing economies, particularly Asian countries, exhibit elevated modern slavery risks and vulnerabilities in worker rights. India, ranking highest in global modern slavery risk, is followed by China, Pakistan and Bangladesh. This susceptibility raises a pivotal inquiry: What role does the governance board, as the apex decision-making body, play in mitigating corporate modern slavery risk and worker rights vulnerabilities in these nations? Despite the critical nature of the issue, limited research has been conducted within the corporate arena regarding modern slavery and worker rights reporting (MSWRR). Addressing this gap, our study aims to investigate the extent of corporate reporting on MSWRR and assess the role played by corporate boards in emerging economies.

The new paradigm of businesses such as outsourcing and subcontracting with specific timeframes to deliver the products is accelerated because of the globally increased demand for everyday products, including chocolates, garments, electronics etc (Christ et al., 2019). The exaggeration of global demand consumes more labor and stimulates modern slavery risk in the corporate arena (Christ et al., 2019; Rogerson et al., 2020). It is more crucial that the three South Asian countries enjoy the benefits of cheap labor forces; therefore, they can maintain the significant supply chain for ready-made goods in the USA, UK and Europe, therefore, corporations of these countries opportunistically can offer ready-made goods with competitive prices. Prior studies note that modern slavery and worker rights vulnerabilities have increased due to the intentions of the suppliers to use cheap labor to keep the price competitive, weak human rights due diligence (HRDD), poverty, lack of better enforcement of labor protection rules and regulations (Cole and Shirgholami, 2022), restrictive mobility regimes (LeBaron and Rühmkorf, 2017) and significant power asymmetry between corporations and workers in developing economies (Sinkovics et al., 2016).

Of grave concern is who will exert pressure on corporations to reduce modern slavery risk and improve worker rights? A study by Christ et al. (2019) argues that the required actions from governments, buyer associations, professional institutions and institutional stakeholders are more crucial in combating modern slavery risk. In Bangladesh, the buyer associations and their consortium, “Accord and Alliance,” are playing the surrogate stakeholders’ role in ensuring workers’ safety and security issues (Sinkovics et al., 2016). Moreover, regulatory and institutional frameworks, labor policy instruments, Modern Slavery Act in buyers’ countries and non-governmental organizations (NGO)-led organizations are pressurizing South Asian corporations to be more accountable to modern slavery risk and worker rights. However, a crucial point is raised at the policy-making level: How do corporations realize and strategize surrogate stakeholders’ pressures in their operations? Prior study by Suárez-Rico et al. (2019) documents that the role of corporate governance mechanisms is worthwhile to incorporate strategies and improve corporate ethical behavior conducive to reducing modern slavery risk and improving worker rights.

Although the various mechanisms of corporate governance are explored by prior studies for promoting corporate social responsibility disclosure, a recent study by Flynn and Walker (2021) recognizes that the diversified board has a substantial appeal to contribute to the decision-making process by integrating modern slavery risks as corporate agendas. As a diversified board represents various groups of people with professional integrity and experiences, they have broader visions that support the decision-making process to incorporate long-term benefit-oriented objectives like minimizing the modern slavery risk and improving worker benefits (Correa-Garcia et al., 2020). Besides, the different scales of expertise of a diversified board fill the gap of required knowledge, which ensures stakeholder interest-oriented value-relevance decisions (Fuente et al., 2017). For instance, board members with more social engagement have a propensity to realize the socio-economic reality and to recognize the consequences of poverty, discrimination, human rights, and significant power asymmetry. Hence, they can demonstrate positivism towards social reality and utilize their social capital to influence the board (Hillman et al., 2008) to reduce modern slavery risk and improve worker rights.

Besides, board members’ political diversity and connectivity have been discussed broadly in accounting literature. Because politically connected board members are regarded as strategic resources that create mobility in resource maximization and confirm corporate long-term survivability. In addition, they can effectively address stakeholders' demands, compliances and litigation costs, and inspire other board members to support decision-making that is consistent with stakeholders’ expectations (Qian and Chen, 2021). But another aspect is more crucial in South Asian businesses, i.e. ownership concentration, family business practices; therefore, often a corporate board is formed with more family members. Consequently, sometimes good governance attributes are found to be nonapparent in the corporate governance mechanisms. Because corporate boards with more family members emphasize more on resource maximization for their self-interest rather than contributing to social issues like workers' rights and privileges (Oh et al., 2019). A family-concentrated board enjoys more power, interrupts the magnificence of the beauty of governance and influences decision-making to give more concentration on profit maximization (Muttakin and Subramaniam, 2015).

Moreover, prior research also highlights the role of the audit committee in the organization. A prior study argues that when corporations have diligent audit committee, they disseminate more social and workers’ rights issues (Raimo et al., 2021). Prior literature also claims that the audit committee is more essential in corporate business practices to legitimize corporate functions to stakeholders (Pucheta-Martínez et al., 2021). The significant function of the audit committee underlines monitoring, supervising and reporting; therefore, it enhances the strength of corporate governance (Bravo and Reguera-Alvarado, 2019), ensures better informed corporate governance about any discrepancies and provides guidelines on how corporations can satisfy the stakeholders and overcome the legitimacy crisis ^[1] (Habbash, 2016; Appuhami and Tashakor, 2017). Prior studies explore the relationship between various corporate governance factors and corporate social responsibility reporting (Haque, 2017; Houqe and Khan, 2023; Oyewo, 2023; Tanthanongsakkun et al., 2023; Mehedi et al., 2024a). A recent study by Albitar et al. (2025) finds that governance quality negatively moderates the relationship between modern slavery disclosure (MSD) and corporate financial performance. The authors suggest that while both governance quality and MSD independently improve firm value, their interaction appears to produce a diminishing effect, ultimately exerting a negative influence on financial performance. However, the role of a corporate board characterized by family dominance behavior, monitoring and supervising capacity and social and intangible capital on board under an inclusive approach through the stakeholder theory is somewhat unanswered in the social reporting literature in developing economies. In addition, corporate MSWRR is a very emerging issue in developing economies, and as far as knowledge goes, it is the first attempt in South Asian countries. Our study fulfils this gap by investigating the extent of corporate MSWRR and the role of corporate governance mechanisms, including directors with social engagement, directors with political connections, family-concentrated boards and audit committees, in improving corporate MSWRR practices through the stakeholder theory.

Our study contributes to social reporting literature in the following ways. We explore stakeholder theory to investigate corporate MSWRR, as surrogate stakeholders have significant influence on corporate decision-making in South Asian countries (Caruana et al., 2021). The powerful stakeholder is an essential factor in supply-chain management; hence, pressures from stakeholders can alter corporate motives and provide incentives to disclose corporate social responsibility (CSR) information in developing economies (Rashid et al., 2020). Furthermore, while Albitar et al. (2025) explore the interactive effect of governance quality and MSD on firm financial performance within the UK context, our study extends this line of research by investigating the relationship between specific corporate governance mechanisms and the reporting of modern slavery and worker rights in the context of a developing economy, offering a more nuanced perspective on how particular aspects of corporate governance—namely, directors’ social engagement, political connections, family-concentrated boards and audit committee characteristics—affect the reporting of modern slavery and worker rights issues. Unlike developed economies, South Asian countries face distinctive institutional and socio-political challenges, including weaker regulatory enforcement and entrenched elite networks, which may influence both governance practices and corporate transparency. Our study finding indicates that there is a positive and significant association between directors with social engagement and corporate MSWRR. Our study findings shift policy-maker attention to directors with social engagement, which ensures social capital on the board that would take quality decisions towards corporate MSWRR issues (Nicholson et al., 2004; Kim and Cannella, 2008; Reguera-Alvarado and Bravo-Urquiza, 2022).

Moreover, the study contributes novel insights to the social reporting literature by explaining the significance of social capital on corporate boards, incorporating considerations of networking capacity, directors’ interlocking and a bundle of intangible resources (knowledge, skills and experience) that collectively embody the social capital perspective for enhancing board effectiveness (Kim and Cannella, 2008; Reguera-Alvarado and Bravo-Urquiza, 2022). Additionally, our study draws attention to the positive role played by directors with political connections, thereby contributing to the literature by confirming their positive impact on improving corporate social orientation, enhancing allocation to CSR activities and elevating CSR performance due to heightened stakeholder pressures in decision-making (de Andres et al., 2023; Li and Guo, 2022).

Furthermore, the research expands the existing literature by addressing the negative role of family-concentrated boards in corporate MSWRR through the normative lens of stakeholder theory. Prior studies suggest that firms with strong family involvement tend to diminish CSR engagement, fortify family interests and exhibit negative associations with environmental, social and governance (ESG) performance (Oh et al., 2019; Rees and Rodionova, 2015). This negative role, analyzed through the stakeholder theory, contributes to an ongoing discourse in literature.

Additionally, the study establishes a positive and significant association between the audit committee and corporate MSWRR through the stakeholder theory. This diverges from previous research that predominantly explored the role of audit committee attributes through an agency theory perspective, primarily focusing on investors’ needs (Raimo et al., 2021). Our findings redirect attention to the broader role of the audit committee, emphasizing its functions in monitoring, supervising and reporting, guided by normative pressures to satisfy stakeholders and overcome the controlling mechanisms of managerial affairs, thereby mitigating information asymmetry.

Finally, the robustness of our findings, validated through a two-step system generalized method of moments (GMM), substantiates the significant contribution of this study to the corporate governance and MSWRR literature in developing economies, and more broadly, on a global scale.

The remainder of this research is designed as follows: The following section discusses stakeholder pressure, followed by theoretical background and hypothesis development. The research method is explained in the fifth section, while section six covers empirical analysis. The last section underlines the conclusion.

The buyer association is the most powerful stakeholder for influencing textile industries in South Asian countries. Even prevailing regulatory and institutional frameworks in developing economies are guided by the foreign buyer associations, donor agencies and human rights organizations (Mehedi and Jalaludin, 2020, p. 315). Several North American apparel companies, retailers and brands like Walmart, Gap, Target and VF Corporation joined together to form an Alliance in 2013, which pressurizes Bangladeshi textile industries to ensure workers’ safety and security through standards and inspections, remediation, worker empowerment, training and capacity building (Leitheiser, 2019). In addition, Accord, an independent, legally binding agreement among European brands and retailers, IndustriAll Global Union and Uni Global Union, and eight of their Bangladesh-affiliated unions, was initiated in 2013 to inspect factories, health and safety measures of garment workers, monitoring remediation, training on fire and building safety, and financial support and funding in Bangladesh (Clean Clothes Campaign [CCC], 2013).

Modern slavery is considered a veiled crime that violates fundamental human rights. Therefore, some countries have already attempted to tackle modern slavery by enacting acts. The Modern Slavery Act in buyers’ countries play a strong surrogate stakeholder role in generating pressures on textile industries in developing countries that maintain the largest supply chains. So, they are obliged by the buyer associations to follow the specified requirements of the modern slavery Acts. For instance, the California Transparency in Supply Chains Act in 2010 focuses on modern slavery in business operations and the accountability of retail sellers and buyers to identify and eradicate modern slavery risks (Christ et al., 2019). Whereas the UK Modern Slavery Act-2015 directly set out the liability of corporations to publish an anti-slavery and human trafficking statement in their operation or supply chains (Mai et al., 2023; Gadd and Broad, 2018).

Another significant phase taken by Australia passed the Commonwealth Modern Slavery Act 2018, which aims to control the clandestine nature of modern slavery locally and globally. The appeal of this Act has obliged corporations to prepare annual statements of modern slavery risks in their operations and supply chains, taking actions like generating a solid supply chain transparency scheme and anti-slavery commissioner (Barker, 2018, p. 3). While Canada has completed the first step to enact the Modern Slavery Act, directing MSD in the supply chain of Canada’s companies (Farrel and Gilbert, 2020). Besides, the International Labor Organization (ILO) offers conventions towards protecting labor rights, which are legally binding international treaties, and the member states, India, Bangladesh and Pakistan, ratify the offered treaties. This organization is also playing the role of institutional stakeholders in confirming minimum age for child labor, equal remuneration and opportunities for all genders, maternity protection, hygienic working environments and the formation of trade unions (Compendium of International Labour Convention and Recommendation [CILCR], 2015).

Moreover, various policy instruments such as Labor Policy 2012, Labor Rule 2015, National Occupational Health and Safety Rule 2013, National Child Labor Elimination Policy 2010 in Bangladesh, occupational safety, health and working conditions code 2020 in India also guide the protection of labor rights and welfare and tackle the modern slavery risk in the supply chains (Alliance for Bangladesh Work Safety [ABWS], 2018; CCC, 2013; Islam and Rakib, 2019). Along with the policy instruments, some NGO-led organizations such as the Bangladesh Center for Workers Solidarity, the Awaj Foundation, Labor Behind the Label (a UK-based not-for-profit cooperative organization), Cividep India, Nirmana, Red Carpet Green Dress [RCGD], Society for Labor and Development, Pakistan Workers Confederation, All Pakistan Trade Union Federation are leading their programs to confirm garments worker rights and their welfare (RCGD, 2020; Helping Garment Workers in Bangladesh[HGWB], 2020; Fighting for Justice and Equity [FFJE], 2021). Besides, SDG 8.7 focuses on eradicating forced labor, child labor, modern slavery and human trafficking, and SDG 8.8 indicates the protection of labor rights and a safe and secure working environment that imposes a responsible role on corporations to protect labor rights and demonstrate their accountability to stakeholders (United Nations [UN], 2015).

The current study proposes stakeholder theory, developed by Freeman (1984) and expanded by Donaldson and Preston (1995), highlights corporate accountability to a broad range of stakeholders. Their framework emphasizes ethical, strategic and empirical reasons for stakeholder engagement. This perspective is particularly useful for examining corporate responses to issues like worker rights and modern slavery, especially in emerging economies with varying institutional pressures. The word “stakeholder” was first introduced in an internal memorandum at the Stanford Research Institute in 1963 (Parmar et al., 2010). The importance of stakeholders is recognized by scholars and practitioners to deal with the problems involved in management fields. The relationship between stakeholders and corporations is recognized by identifying the significant role of stakeholders in shaping corporate behavior consistent with stakeholder interests (Thijssens et al., 2015). The stakeholder theory supports redefining corporate purposes and coordinates between corporate objectives and stakeholder interests (Donaldson and Preston, 1995). Considering the relationship between stakeholder and organization, stakeholder theory is widely used in the accounting literature, particularly in ensuring corporate accountability and transparency (Chiu and Wang, 2015). It is crucially acknowledged that the great challenge of corporations is to manage and negotiate with a diverse group of stakeholders when they face a legitimacy crisis. The stakeholder theory suggests that the management of corporations is responsible for identifying the powerful stakeholder groups and finding out the way to meticulously resolve the problems associated with stakeholders’ demand (Friedman and Miles, 2002; Mehedi et al., 2024b). In a developing economy context, the surrogate stakeholders or powerful stakeholders, such as buyer associations, governmental units, Modern Slavery Acts in buyers’ countries, policy instruments of various national and international organizations and institutional stakeholders, have a significant impact on changing corporate strategies pertinent to the CSR disclosure in developing economies (Sinkovics et al., 2016). Prior studies also evidence that stockholders, creditors, employees, customers, suppliers, public interest groups and governmental bodies (Roberts, 1992, p. 597) have substantial influences on the corporate functions. The various groups of stakeholders affect corporate decision-making; similarly, they are affected by the corporate decisions towards corporate resource maximization strategies and profit-seeking operations (Freeman, 1984). It is underlying that corporations have inherent roles in society in which stakeholder theory predicts and explains the role of corporations and defines how corporate management should behave with the various groups of stakeholders (Roberts, 1992).

The proposition of stakeholder theory confirms the basic role of stakeholders in influencing corporate governance mechanisms to take strategic actions and policies regarding stakeholders’ interests (Masoud and Vij, 2021). Achieving corporate legitimacy, corporate governance reconciles stakeholders’ interests into the decision-making process (Chan et al., 2021). Through the assumption of stakeholder theory, the role of corporations is wider and substantive; they are responsible for finding out the more impressive and powerful stakeholders’ demand to gain their survivability within the social paradigm (Rashid et al., 2020; Masoud and Vij, 2021). Pressures from various groups of stakeholders on corporate activities improve corporate ability, efficiency, risk antagonistic mobility and value creation capacity that leads to integrated value-relevance dynamism to enhance corporate survivability (Cordeiro and Tewari, 2015). The influence of powerful stakeholder incentives for corporations to follow existing rules and regulations, societal ethical phenomena in their functions that open avenues for corporate governance to integrate stakeholders’ demands and enhance managerial implications for interest groups (Waheed and Zhang, 2020).

The relationship between corporations and stakeholders is a value-based approach that inspires corporations to demonstrate financial and non-financial performance aligned with the broader societal objectives (Sarkar et al., 2021). Therefore, stakeholders should be benefited and secured through the performance-based corporate functions; corporate governance should attempt to adopt proactive strategies to honour the stakeholder value-based approach (Shah et al., 2021). Corporations should have a nexus with the explicit and implicit interests of the various groups of stakeholders, as their success largely depends on the interest of the stakeholders (Elijido-Ten, 2007). It is underlying that the corporate governance mechanism should strategize corporate objectives by including heterogeneous interests of social perspectives demanded by stakeholders (Waheed and Yang, 2019). Prior studies also document that heterogeneous pressures from various groups of stakeholders improve corporate ability to demonstrate better performance in disseminating non-financial information (Duran and Rodrigo, 2018; Buallay et al., 2020).

This study applies stakeholder theory to examine how corporate boards in emerging economies respond to pressures around MSWRR. The theory helps understand how boards manage competing demands from stakeholders—such as investors, NGOs and regulators—in contexts with weak regulatory frameworks. In this setting, where disclosure is both a legal requirement and an ethical obligation, stakeholder theory sheds light on how boards prioritize stakeholder interests and shape labor rights reporting to align with ethical considerations and strategic business goals, ensuring corporate legitimacy and long-term sustainability.

In emerging economies, traditional governance proxies such as board size, board diversity and institutional ownership may not fully capture the complexities influencing MSWRR. While these variables are prevalent in corporate governance and CSR literature, they may not directly address the unique challenges and dynamics present in these contexts. Extant research presents mixed evidence on the influence of board characteristics on sustainability reporting, indicating the necessity for a more nuanced and context-sensitive analysis of governance structures in relation to MSWRR (Correa-Garcia et al., 2020; Jamil et al., 2021; Masud et al., 2018). Our study focuses on variables directly associated with MSWRR, such as political connections, which can influence firms' transparency and ethical practices. Directors with political ties may leverage their influence to navigate regulatory environments and access resources, encouraging firms to adopt more transparent and ethical reporting practices (Ting and Lee, 2024). This proactive engagement can result in enhanced MSWRR as firms seek to align with both legal requirements and ethical expectations.

While traditional governance proxies offer valuable insights, focusing on board characteristics—such as directors' social engagement, political connections, family-concentrated boards and audit committee attributes—provides a more nuanced understanding of the factors influencing MSWRR in emerging economies.

People’s social engagement somewhat fosters social norms and values that seed moral science in their minds (Paul et al., 2006). The higher level of social networks, social integration and social engagement improves the cognitive view of human beings (Zunzunegui et al., 2003); therefore, board members with more social engagement can understand the social reality, and they play a significant role in improving corporate human rights practices. The higher-level social engagement of the board members is recognized when they have engagement in various social welfare activities, attachment with various social and cultural organizations, and their functions are scrutinized by the public to a large extent. Their social engagement helps them to potentially identify the tangible needs of society; hence, their participation on the board prioritizes stakeholders’ demands in the decision-making process and enhances corporate legitimacy. Director’s social capital encompasses social ties and networks of the directors, which facilitate the board of directors finding out the needs of stakeholders in corporate value maximization strategies and improving corporate CSR engagement (Al-Dah, 2019). Accordingly, directors who have community engagement focus on socially desirable issues like health, education, human rights, women’s empowerment and employee welfares; hence, their expertise extends the board’s attention to stakeholder interests and enhances corporate social performance (Evans et al., 2022). Directors who are engaged in multiple organizations are well informed about environmental and social challenges, and they can share their experiences on other organizations’ CSR strategies and policies related to how to measure and mitigate stakeholder expectation; consequently, boards of directors can take quality decisions regarding corporate social responsibility (Reguera-Alvarado and Bravo-Urquiza, 2022). However, the director’s network is aligned with the channel of exchanging information, ideas, knowledge and experiences on social and environmental phenomena, workers’ rights and community involvement and human development index issues, which enhance the board’s ability to make provisions for stakeholders’ demands and their privileges on corporate objectives (Li et al., 2023). A prior study by Hillman et al. (2008) documents that directors’ engagement with various organizations is considered an important predictor for motivating corporations to engage in CSR activities. Prior literature also reports that directors’ social networks and experience (Al-Dah, 2019), community-influential directors (Evans et al., 2022) and directors’ social networks (Li et al., 2019) have positive impacts on corporate social performance. Hence, we offer the following hypothesis:

The political system has a profound impact on everything happening around us (Dillon, 2019). Therefore, we believe that politically connected directors have a significant role in addressing stakeholders’ demand for MSWRR. Director with political connection means board members who have political ties or who actively participate in political parties. Politically connected directors are considered strategic resources, as their vast level of political and social networks assists in the decision-making process and motivates corporations to be more stakeholder interest-oriented to enhance corporate sustainability and operating performance (Shin et al., 2018; Wahab et al., 2020). Directors with political connections can easily handle the threats associated with the interests of stakeholders. They can play a substantial role in corporations when public policy is required to be incorporated into the corporate objectives (Gilpin, 2016). Besides, directors with political connections are directly linked with the legislation-making process and policy instruments of the government; therefore, their participation in the corporate board opens a new boulevard for the corporations to legitimize their responsibilities towards modern slavery risks. The politically connected board members are aware of the government’s rules and regulations, and they have more access to information, public policy decision-makers and social groups; therefore, they can properly guide and inform other board members regarding corporate uncertainty associated with stakeholder interests (Al-Mamun and Seamer, 2021). In addition, politically connected directors help in making strong internal governance mechanism and smoothing corporate resource maximization strategies by their higher-level networking and communication with the high officials and political leaders and by creating access to government-controlled resources (Wang et al., 2021). Besides, directors’ political connections facilitate connecting with government bureaucracies and allocation of government resources (Zhang and Truong, 2019), resulting in corporations easily accomplishing their social and worker rights-related obligations. The presence of political directors enriches the board with knowledge resources, including short-term and long-term public policy; therefore, corporations perceive more pressures regarding their environmental uncertainties and CSR engagement (Li and Guo, 2022). Moreover, governmental units like regulatory and institutional frameworks are the most powerful stakeholders, and politically connected directors are like the representatives of the government; hence, their presence in the decision-making process motivates corporate boards to be more compliance-oriented to maximize firm value (Wang, 2015). However, politically connected directors support corporate governance to make congruence between stakeholder expectation and corporate resource maximization strategies (Tang et al., 2016). Several prior studies also report that politically connected directors have positive impacts on corporate social engagement and firm value (Tang et al., 2016; Zhang and Truong, 2019; Li and Guo, 2022).

We, therefore, argue that in emerging economies, where state influence is significant, politically connected board members play a critical role in shaping corporate MSWRR. These directors enhance political legitimacy and regulatory alignment by encouraging disclosure practices that align with state and societal expectations. Their political ties often grant access to state resources, which firms may reciprocate through improved MSWRR as part of an implicit social contract. Furthermore, politically embedded directors serve as governance signals, strengthening the firm’s perceived ethical integrity among stakeholders. Beyond symbolic value, such connections function as active governance mechanisms to manage legitimacy risks, anticipate regulatory pressures and respond to stakeholder scrutiny.

Thus, we offer the following hypothesis:

The family business is very common in South Asian countries, including Bangladesh, India and Pakistan (Rahman and Ullah, 2012). There is a greater chance to form a corporate board of directors with family members. Prior studies report that when a corporate board is constituted with family members, it brings mixed consequences in the roles and practices of the corporate governance mechanism (Singh, 2021) and exerts family dominance behavior in the decision-making process (Anderson and Reeb, 2004). A significant number of board members from the same family dominate other board members to put more emphasis on corporate profit maximization strategies rather than stakeholders’ satisfaction (Ehikioya, 2009). A study by Mahbub et al. (2019) reveals that a family-dominant board creates impediments in taking stakeholders’ interests-oriented decisions into consideration; consequently, corporations face a legitimacy crisis in terms of corporate accountability and transparency towards environmental and social responsibilities. The family-concentrated board always attempts to enhance corporate value for their self-satisfaction; hence, they discourage more allocation on worker rights and safety issues (Muttakin and Subramaniam, 2015), focus on capital gearing behavior and emphasize how to increase profit by trespassing worker rights and privileges in the name of improving operational insights. Prior study reports that family shareholders take CSR as a strategic response to achieve family objectives rather than broader implications of corporate long-term benefits (Tenuta and Cambrea, 2022). Although agency conflict between owners and managers is reduced by the presence of a family-dominant board (Vieira, 2018), the relationship between corporations and stakeholders is confined to a great extent; consequently, corporations are engaged in breaking sustainability business principles by their operational activities. Moreover, the family-dominated board exercises substantial influence on corporate affairs and mainly focuses on family interest rather than carefully emphasizing the other stakeholders’ needs (Veltri et al., 2021). Prior literature also reports that family businesses generally appoint chairpersons and executive directors from family members; therefore, the significant role of independent directors in considering stakeholders’ interests in the decision-making process is impeded, consequently increasing the level of conflicts with stakeholders and low level of CSR performance (Leung et al., 2014). In addition, having the ownership and control in the hands of family businesses (Zattoni et al., 2015), the fairness of corporate governance such as opportunities for broad discussions and arguments and finally quality decision making is somewhat jeopardized in the decision-making process, therefore, the emerging issues such as modern slavery risks and worker rights could not bit in the decision-making process. Considering the above-mentioned arguments, we believe that a family-concentrated board is negatively associated with corporate MSWRR. Thus, we offer the following hypothesis:

The audit committee plays a crucial role in corporate governance mechanisms (Said et al., 2009) by supervising corporate reporting, ensuring internal compliances and controlling managerial opportunism (Braiotta et al., 2010). Prior studies report that a large size of audit committee facilitates comprehensively monitoring managerial functions relevant to corporate social, environmental and worker rights reporting issues and supports disclosing the increased level of sustainability information (Setiany et al., 2017; Buallay and AlDhaen, 2018). A large audit committee has the potential resources and diversity in expertise, which lead to higher-level supervision capacity and an increased level of CSR disclosure (Appuhami and Tashakor, 2017; Dwekat et al., 2020). The audit committee, as the board sub-committee, strengthens the board of governance and enhances board ability (Kend, 2015), consequently reducing managerial opportunism and improving the relationship between corporations and stakeholders. Moreover, an audit committee acts as a delegate committee in the organizations, resulting in improved corporate governance practices (Pucheta-Martínez et al., 2021) and ensuring environment-friendly and socially responsible value-relevant code of conduct that safeguards the interest of stakeholders. Prior literature also reports that the audit committee provides greater support to external and internal auditors when managerial obfuscation creates impediments in the financial and non-financial information reporting process (Zhou et al., 2018). The establishment of an audit committee is the process of confirming voluntary monitoring on managerial functions to oversee the increased public interest (Aldamen et al., 2012). Moreover, an audit committee ensures internal auditors’ independence and competencies, reviews their plan and supports the execution of the plan in accordance with the compliances (Alzeban, 2020), consequently improving the corporate disclosure level. Similarly, public acceptability increased due to the increased level of reliability of corporate financial and non-financial performance. Besides, the audit committee reduces conflicts between managers and stakeholders by authorizing the higher-level dissemination of sustainability-related information (Desoky, 2025). The audit committee with professional expertise can ensure broader-level corporate accountability by providing valuable insight on corporate resource maximization strategies and financial reporting practices (Fariha et al., 2022). Prior several studies also find the positive relationship between audit committees and corporate financial and social performance (Alzeban, 2020; Pucheta-Martínez et al., 2021; Fariha et al., 2022; Desoky, 2025). Considering the above-mentioned discussions, we believe that the audit committee is positively associated with corporate MSWRR. Hence, we offer the following hypothesis:

The present study population was the listed textile industries of India, Pakistan and Bangladesh. The modern slavery laws were enacted by developed countries (UK, Australia), which required large businesses to report publicly their actions and policies towards the minimization of modern slavery risk and the protection of worker rights (Christ et al., 2019; Sarumpaet and Fauzi, 2020). It is imperative to note that MSWRR issues are very emerging in the corporate arena, and corporate reporting on these issues is on a voluntary basis in South Asian countries. Besides, resource constraints such as tangible and intangible resources limited small corporations from producing voluntary information in the annual reports. Considering these circumstances and following the guidelines of UK and Australia, we also selected large sample corporations by utilizing the market capitalization method and availability of annual reports in the public domain. The market capitalization method refers to a corporation’s total value (current share price X the number of outstanding shares) in the stock market. As per the market capitalization method, we selected 20 large textile industries from the National Stock Exchange of India Limited, 20 large textile industries from the Pakistan Stock Exchange Limited and 10 large textile industries from the Dhaka Stock Exchange PLC, resulting in a total of 50 (20 + 20+ 10) large textile industries from three countries (India, Pakistan and Bangladesh). Textile industries are involved with supply chain management, exporting textile goods and maintaining a large supply chain in the USA, UK and Europe. Modern slavery and worker rights violations are also strongly linked to supply chain management. Therefore, we select textile industries as our study sample. However, our priori argument about large corporations is also in accordance with prior literature; for instance, large corporations were scrutinized under more public pressures, their market representation was higher and their delegacy was more in response to the various jurisdictions of buyer associations regarding modern slavery issues (Christ et al., 2019). Their size and marketplace presence indicated that their MSWRR disclosure would have ramification impacts on the market and entire supply chain management (Flynn, 2020). In addition, large corporations are more anticipated by stakeholders for MSWRR consequential, so they will disclose more information (Flynn and Walker, 2021) and confirm the continuousness of data, data reliability and validity, which support regression with exogenous variables. Therefore, we utilized a sample comprising 300 annual reports for six firm-year observations during the period from 2016 to 2021. However, our study period started from 2016, as the United Nations declared Sustainable Development Goals (SDGs) in 2015, which obliged universal respect for human rights and targets 8.7 and 8.8 of goal 8 combined guided to confirm decent work conditions with the elimination of modern slavery and the protection of worker rights (Christ et al., 2019; Moussa et al., 2022). Table 1 represents the country-wise and year-wise distribution of observations.

Our dependent variable is the extent of corporate MSWRR, and we collect data from annual reports, as the annual reports are the main sources of MSWRR information, particularly in developing economies. Moreover, the attraction of annual reports includes relatively ease of access, and researchers have no discretion over how the variables are designed (Flynn, 2020, p. 5). The most widely used content analysis technique is applied to quantify the qualitative data based on a checklist framework that is developed based on past literature, Modern Slavery Act of buyers’ countries, human rights issues and pressures exerted by various national and international organizations and stakeholders in the study context (Christ et al., 2019). A total of 11 themes are incorporated in the checklist framework ( Appendix), and before finalizing the themes and items of the themes, we attempted to rigorously read ten annual reports from each country, made rigorous discussions, and finally, the themes and items were checked three times to reduce the replications and anomalies on the checklist framework (Ahmad et al., 2018; Mehedi et al., 2024a).

The disclosure score is calculated by using dichotomous procedure while each theme of the checklist framework was awarded 1 when any items of the theme are disclosed by a particular corporation, otherwise 0. The study considered the word and meaning of the sentences to score a particular theme (Flynn and Walker, 2021). The corporate MSWRR index is calculated by the number of themes disclosed by each corporation divided by the total number of themes of the checklist framework (Ahmad et al., 2018; Ullah et al., 2019). The following formula was used to calculate the MSWRR index.

where MSWRRj = Corporate modern slavery and worker rights reporting index for jth corporations.

• nj = Number of themes expected for jth corporations, where n ≤ 11; and

• Xij = 1, if ith themes are disclosed for corporations j, otherwise 0.

To measure the reliability of the disclosed information towards MSWRR, the study conducted Cronbach’s coefficient alpha test and found that the Cronbach’s coefficient alpha value of the eleven themes of MSWRR is 0.859. According to prior studies, the Cronbach’s coefficient alpha value indicates that internal consistency among the eleven themes is appropriate, and they are the same underlying construct (Ullah et al., 2019).

We collect data related to independent and control variables from the various sections of the annual reports, websites and LinkedIn account. Director with social engagement (DSE) is measured by proxies 1 or 0, if a board with directors who participate in social welfare activities, cultural activities and NGOs is awarded 1, otherwise 0. Board members with political connections (DPC) are measured by the proportion of board members who have political ties or who actively participate in political parties, while a family-concentrated board (FCB) is recognized by the proportion of board members from the same family. Moreover, audit committee (AC) is weighted on the number of members on the audit committee (AC). The control variable includes firm size (FS), which is measured by the log value of total assets. Large firms utilize more resources; they are more in the political spotlight; consequently, they are more under stakeholders’ scrutinity, which motivates them to produce more CSR disclosure (Fernández-Gago et al., 2018; Flynn, 2020; Rao et al., 2022). Dividend payout ratio (DPR) is evaluated by cash dividend/market price of the share. Dividend payout reduces the resources under the manager’s control, which confirms the efficient use of resources and reduces managerial opportunistic behavior in resource maximization strategies; therefore, dividend payout is more stable in high CSR firms (Benlemlih, 2019). Besides, corporate profitability (CPT) is measured by return on equity (net profit/shareholder’s equity) (Ting, 2021; Mehedi et al., 2024a). Profitable firms indicate that they have more resource utilization capacity that provides flexibility to take reasonable CSR initiatives (Muttakin and Subramaniam, 2015). Directors with media exposure (ME) is measured by if a board with directors who participate in media dialogues, seminars, symposiums, social media platforms or LinkedIn account is awarded 1, otherwise 0. The business environment is influenced by society through the media, therefore, a director with media exposure has a significant role in the board discussions in considering the normative pressures exerted by the media towards CSR issues (Garcia-Sanchez et al., 2014). Directors with academician (DAC) is measured by if a board has a university teacher as director, which is awarded 1, otherwise 0. Academician directors mainly work in universities and research institutions; they hold a higher-level moral approach, and they can alter the innovation strategy by utilizing a scientific approach and increasing research and development investments, which facilitate firms to contribute to social well-being (Zhang et al., 2023). Directors with business background (DBB) is measured by if a board has directors with business background, which is awarded 1, otherwise 0. A director with a business background represents business-relevant expertise on the board, which improves the board’s ability to negotiate with other firms, advance fund mobilization and address critical sustainability issues (Mehedi et al., 2024b). On the other hand, directors with a law background (DLB) and directors with business professional degrees (DPD) are measured based on the proportion of the board of directors with law backgrounds and business professional degrees, respectively. Directors with a law background potentially help in decision-making by suggesting how to address social, political and legal issues (De Villiers et al., 2011). In contrast, business professional directors have in-depth knowledge of accounting and reporting systems; hence, their participation facilitates the disclosure of material information, consequently resulting in better accountability on sustainability issues (Mehedi et al., 2024b). The measurement of independent and control variables is depicted in Table 2.

We offer a set of hypotheses to find out the role of various corporate governance factors on the extent of corporate MSWRR by developing the following ordinary least square (OLS) model.

where, MSWRR represents the dependent variable in this study. Besides, DSE, DPC, FCB, AC are used as independent variables, while FS, CPT, DPR, ME, DBB, DLB, DPD and DAC are used as control variables; $µit$ represents year fixed effect and $εit$ is the error term. However, we also offer fixed-effects model to control unobserved heterogeneity in the study findings and develop the following equation.

In Equation (2), we just add additional variable $ki$⁠, which represents the unobserved heterogeneity. The fixed-effects model can control the unobserved heterogeneity (unobserved individual firm effects) in the study findings (Orazalin, 2020).

Correlation matrix identified the level of relationship among the independent and control variables. A high-level correlation among the variables indicates the multicollinearity problem that signals it is inappropriate for conducting further analysis. Prior study documents that if the association between two variables is less than 0.80 or 0.90, it indicates that the multicollinearity problem is absent (Mehedi et al., 2020). We conducted Pearson correlation coefficient and found that the level of relationship among the explanatory variables is between −0.52 and 0.66 (Table 3), indicating that the multicollinearity is not a serious issue in the proposed model. Moreover, the variance inflation factor (VIF) among the explanatory variables is a maximum of 3.005, which is less than the threshold value of 10, so it is understood that multicollinearity is not a concerning issue for conducting further analysis of data (Mehedi et al., 2020; Ahmad et al., 2018).

The extent of MSWRR is presented in Table 4. The total number of firm-year observations of Bangladesh, India and Pakistan are 60, 120 and 120, respectively. So, the average disclosure is calculated by the number of themes disclosed by firm-year observations divided by the total number of firm-year observations for demonstrating the extent of MSWRR of a particular country. The sample textile industries of all three countries disclosed the highest amount of information on health and safety issues, while they did not disclose any information regarding the theme of human trafficking. In addition, Indian textile industries also produced the highest amount of information on the themes of abuse and violence, screening, and whistleblowing. But they produced lowest information towards human rights issues compared with the textile industries of Bangladesh and Pakistan. Although corporations from all countries responded to the themes of child labor and forced labor issues, in the case of debt slavery, a minimal amount of information is disclosed by only Indian textile industries. The overall mean values of MSWRR of textile industries of Bangladesh, India and Pakistan are 0.372, 0.645 and 0.462, respectively, indicating that Indian corporations disclosed the highest amount of MSWRR information, followed by Pakistan and Bangladesh. However, the mean value indicates that the extent of MSWRR disclosure of textile industries of three emerging South Asian countries is relatively insignificant.

Descriptive statistics of independent and control variables are presented in Table 5. The minimum value of directors with social engagement, directors with political connection and family-concentrated board indicates that such types of directors are absent in the formation of the board of directors of some corporations. The minimum and mean value of the audit committee indicates that all sample corporations have audit committees, whereas the number of members of the audit committee is at least three in most corporations. On the other hand, the standard deviation of corporate size recognizes that there is no significant difference in total assets of the sample corporations, while the minimum value of corporate profitability demonstrates that some corporations incurred a net loss in a particular year. However, the mean value of corporate profitability shows that return on equity is on average just above 9% among the sample corporations. Moreover, the minimum value of the dividend payout ratio identifies that some corporations were unable to pay dividends to their shareholders. The mean value of director with media exposure, director with academicians, director with business background, director with law background and director with professional degree notices that corporations incorporated a significant number of directors who are categorized into such types.

Most prior studies have focused on endogeneity problems when finding the relationship between corporate governance and corporate financial and social performance (Zaid et al., 2020; Reeb et al., 2012; Wintoki et al., 2012). We have followed various econometric techniques consistent with the prior studies to reduce endogeneity problems to find out the exact outcomes from the proposed study model. To investigate the association between corporate governance variables – including director with social engagement (DSE), director with political connection (DPC), family concentrated board (FCB) and audit committee (AC) – and corporate MSWRR, we initially employed an OLS model. Subsequently, to account for unobserved characteristics inherent to firms, a fixed effects model is applied (Zaid et al., 2020). We report outcomes of the OLS and fixed effects model in Table 6. From the OLS model, we find that the adjusted R-squared value shows that explanatory variables explain 39.9% variation in the dependent variable “modern slavery and worker rights reporting”, while the F-statistics (p = 0.000) indicates that the empirical model fits the data and the regression equation has the full capacity to explain the variation (Zaid et al., 2020). The OLS model also indicates that DSE and AC have positive, significant associations with MSWRR, and DPC has a positive association, while FCB has a significant negative association with MSWRR.

From the fixed effects model, we find that the model (adjusted R-square = 0.096) explains 9.6% of the variation in the dependent variable “modern slavery and worker rights reporting”, indicating that the regression equation does not meaningfully explain the variation. The findings from the fixed effects model also indicate that DSE, FCB and AC are positively associated with MSWRR, while DPC is negatively associated with MSWRR. Although the Hausman test supports the fixed effects model, the study findings from fixed effects estimation compared with OLS estimation signal that the findings might be affected by omitted corporate characteristics. Moreover, the fixed effects and OLS model are unable to consider the simultaneity and dynamic endogeneity. To reduce this doubt, we conducted some post-estimation tests (Table 7) and found that our study models face heteroskedasticity, autocorrelation and dynamic endogeneity problems. From Table 7, the Breusch–Pagan/Cook–Weisberg test for heteroskedasticity (p < 0.05), the Breusch–Godfrey LM test for autocorrelation (p < 0.05), the Ramsey RESET test (p < 0.05), the Durbin–Watson d-statistic (less than 1), the Uhat test (p < 0.05 and higher R-squared value) and Durbin’s alternative test for autocorrelation (p < 0.05) signal that our OLS and fixed effects models face an endogeneity problem (Mehedi et al., 2024b).

To remove the effects of simultaneity, dynamic endogeneity and autocorrelation from our proposed model, we develop the following two-step system GMM equation.

In Equation (3), we just introduce $MSWRRit−1$⁠, which is the first lag of the dependent variable. Besides, all variables’ definitions are the same as our OLS model. Following prior studies (Aslam et al., 2021; Huang et al., 2022; Hadani, 2024; Gull et al., 2023; Gerged et al., 2023), we employed a two-step system GMM model to address any endogeneity and reverse causality problems (Aslam et al., 2021). The system GMM estimator is considered as one of the best statistical tools for resolving heterogeneity, endogeneity and estimation bias issues (Aslam et al., 2021, p. 1662). Hadani (2024) documents that GMM ensures consistent estimates by reducing the effects of unobserved heterogeneity, simultaneity and dynamic endogeneity. The system GMM (Arellano and Bover, 1995; Blundell and Bond, 1998) relies on internally generated instruments that are lagged values and internal transformations; therefore, it can deal with different types of potential endogeneity and simultaneity (Hadani, 2024; Gull et al., 2023). The two-step system GMM reduces endogeneity problems occurring from reverse causality of the variables (Huang et al., 2022; Gerged et al., 2023). Aliani (2023) argues that the two-step system GMM captures endogeneity issues by creating internal instrumental variables; therefore, its estimation removes unobserved heterogeneity or simultaneity issues and provides strength to the theoretical interpretations.

We report the results of GMM estimation in Table 8. From study models 1 and 5, we find that directors with social engagement and MSWRR are positively and significantly associated; therefore, we conclude that our hypothesis H1 is accepted. The study result is also similar to the prior study by Li et al. (2019), and they document that directors with higher-level social networks demonstrate more propensity to social issues and corporate charitable donation. Moreover, Ramón-Llorens et al. (2019) argue that when community leaders or representatives of social organizations become directors, they show more interest in stakeholders’ demands and provide legitimacy, reputation and credibility in the organization. From study models 2 and 5, we find that directors with political connections have a positive and significant association with MSWRR; therefore, we conclude that our hypothesis H2 is also accepted. Our study finding is consistent with a prior study by Fernández-Gago et al. (2018); they claim that politically connected directors are considered as strategic assets in the organization, and when corporate accountability towards MSWRR becomes a crucial issue, they contribute significantly to the decision-making process by furnishing required information about the government’s policy instruments along with powerful stakeholder expectations. From study models 3 and 5, our study documents that family concentrated board (FCB) is negatively and significantly associated with MSWRR; thus, our hypothesis H3 is also accepted. The result is similar to the findings of Ehikioya (2009) and Mahbub et al. (2019), and they argue that a family-concentrated board plays a domineering role in the decision-making process; therefore, voluntary reporting practices have received little attention, and they provide more priority to shareholder resource maximization. From study models 4 and 5, we also find the positive and significant association between the audit committee and MSWRR; thus, our hypothesis H4 is also accepted. This result is also relevant to the prior study by Setiany et al. (2017) and Buallay and AlDhaen (2018), and they posit that the supervisory role of the audit committee enhances the strength of the corporate governance mechanism and facilitates a focus on CSR issues and voluntary reporting practices. A large audit committee demonstrates a better controlling mechanism on management affairs, consequently stakeholder interest is prioritized in the decision-making process. Following Zaman et al. (2024), we calculate economic magnitudes of our independent variables, which are positively associated with MSWRR, and find that a one-standard deviation increase in director with social engagement, director with political connection and audit committee translates into 7.04%, 7.15 and 8.73% higher MSWRR, respectively. Moreover, if the audit committee increases from 3 to 5 members, then the average MSWRR will increase almost 17.83%. However, the significant p-value of the Arellano-Bond test for AR (1), the insignificant p-value of the Arellano-Bond test for AR (2) and the insignificant p-value of the Hansen test of overid. Restrictions indicate that our study findings are free from heteroskedasticity, autocorrelation and endogeneity problems.

We take several attempts to find out endogeneity-free findings about the relationship between corporate MSWRR and our interested variables of corporate governance mechanisms. First, we conduct an OLS model and fixed effects model and results reported in Table 6. The dissimilarity of findings between two models and post-estimation test signals that omitted corporate attributes have substantial impacts on the study findings. Hence, we employ an alternative econometric technique – a two-step system GMM – to reduce the endogeneity problem, and the results are reported in Table 8. However, to check the robustness of findings based on the two-step system GMM, we again conduct the two-step system GMM with an alternative dependent variable (the standardized values of MSWRR) and results are reported in Table 9. We find the qualitatively similar results reported in Table 8. Therefore, we conclude that our study findings are more robust and endogeneity-free.

We remarkably point out that when labor is cheaper, businesses benefit more from utilizing the large extent of labor forces to cover the desires of the large number of customers. But there is a dark side, as this notion stimulates labor exploitation, which is known as modern slavery (Christ et al., 2019). As a result, South Asian countries, including Bangladesh, India and Pakistan, have been exposed for high modern slavery risks. The current study findings based on stakeholder theory indicate that corporations from Bangladesh, India and Pakistan demonstrate low levels of MSWRR. They disclose more health and safety issues rather than child labor, forced labor, debt slavery, human trafficking and human rights. The findings further lead policymakers’ attention to take effective actions for reducing modern slavery risk in supply chain management. We suggest that, in the context of developing economies, strong regulatory and institutional framework is urgent to reduce modern corporate slavery risks and worker rights vulnerabilities. In addition, the mandatory requirement for MSWRR is more crucial for ensuring corporate accountability in developing economies.

The study findings also indicate that directors with social engagement, directors with political connection and audit committees play a positive and significant role in improving MSWRR, while the role of family-concentrated board is negatively and significantly associated with MSWRR. We offer significant policy implications for policymakers and industry practitioners. We suggest that industry practitioners should constitute their corporate board with members who have engagement with various social and cultural organizations and who actively work in NGOs. As they have adequate knowledge of social phenomena and experience negotiating various perplexing social, political and religious issues. Hence, their participation enriches the board by confirming multi-dimensional knowledge-based and informational diversity, which facilitates corporations to address modern slavery risks and protect worker rights issues. Moreover, our finding also recognizes that politically connected board members are strategic resources in the organizations; when powerful stakeholders exert pressures on corporations, in turn, corporate survivability becomes more challenging. As they are well informed about policy guidelines of powerful stakeholders and governmental units, and they even have well-structured connections with various political and social actors, they can support corporations to potentially minimize modern slavery risks and improve worker rights reporting practices. In addition, corporations should establish audit committees with sufficient members so that they can ensure better monitoring and control of managerial affairs and advise the corporate board regarding the discrepancies of information expected by stakeholders. In contrast, a family-concentrated board influences the corporate board to put emphasis on profit-seeking operations and guides management to focus on resource allocation, concentrating on self-interests rather than stakeholders’ interests; therefore, the MSWRR is low. We suggest policymakers rethink how they can rationally reduce the dominance of family-concentrated board and managerial capitalism in developing economies. Our suggestions favor a diversified board, including independent directors, directors with social engagement, political connections, academicians and professional experts and diligent audit committees in the governance mechanisms; they might reduce the domineering role of a family-concentrated board in the decision-making process.

The study findings would reinforce corporate initiatives to reduce modern slavery risks and ensure worker rights around the globe. Our study findings would be supportive to the policymakers, governmental units and industry practitioners to improve the effectiveness of the corporate governance mechanisms and to reduce modern slavery risks in the globe in general and developing economies in particular. The study findings are based on stakeholder theory on the most modern slavery-affected countries, so it would keep a significant contribution to modern corporate slavery and worker rights reporting in developing economic contexts. Although shareholders expect resource maximization strategies for increasing their wealth and stock value, stakeholder theory suggests corporations gain legitimacy by addressing modern slavery issues to stakeholders, aiming at achieving survivability in society. When survivability becomes vulnerable due to modern slavery and weak working environments, stakeholder theory suggests that corporations need to mitigate risks associated with stakeholders’ demands. In addition, corporate MSWRR enhances corporate reputation (Albitar et al., 2025) and brings a competitive advantage in the market; hence, shareholder value will also increase in the market. However, we also put forward some additional suggestions to maintain tight control on corporate profit-seeking operations and to reduce unethical business practices. For instance, (I) policymakers should also set up the rate of maximum profit on capital employed and (II) impose additional tax on the excess profit earned to discourage extra work pressures on workers and reduce corruption and money laundering in developing economy contexts like Bangladesh. However, we acknowledge a limitation, as personal judgment is involved in the development of the MSWRR framework and content analysis to quantify and score the disclosure index. The future research might be a comparison between firms from mandatory and voluntary corporate MSWRR countries through the multi-level theoretical framework. Furthermore, future research might investigate the mediating role of CEO’s ethics between corporate governance mechanisms and corporate MSWRR.

Gratitude to IGPRC, for recognizing as semi-finalist for this research proposal in the inaugural IGPRC 2022.

Table A1