Modern slavery and supply chains: key lessons for boards

Boards are operating in a period of accelerating change where environmental and social pressures, geopolitical dynamics, shifting expectations and system-wide risks are increasingly shaping organisational performance. 

Modern slavery is one of the issues increasingly demanding board attention, particularly in relation to organisational operations and supply chains. For directors, the challenge is not just understanding these risks but determining how they should be governed in practice. 

Drawing on experience following the introduction of Australia’s Modern Slavery Act in 2018, a number of practical lessons have emerged for boards. While shaped in an Australian context, they are equally relevant for directors in New Zealand and globally. 

Focusing on harm to people 

As with health and safety, a useful starting point is to shift the focus from organisational risk to the risk of harm to people. As modern slavery legislation evolves, directors should prioritise identifying and addressing risks of harm to people, not just potential risks to their organisation.  

This involves going beyond simple compliance or reputational concerns and focusing on the actual impacts on vulnerable workers. Directors should ensure that organisations are actively mapping their supply chains, engaging directly with suppliers, and seeking transparent information about working conditions, wages, and recruitment practices. 

By centring their efforts on the wellbeing and rights of individuals, directors can ensure their approach is both ethical and effective, rather than a box-ticking exercise. This is ultimately a governance question – ensuring that oversight reflects the real-world impacts on people, not just organisational exposure. 

Connecting modern slavery to broader system risks 

Modern slavery does not sit in isolation. It is closely connected to other environmental, social and governance (ESG) issues, including greenhouse gas emissions, workers’ rights, environmental degradation, materials waste and recycling, diversity and inclusion, and other supply chain practices. 

For example, buying materials without checking their source can not only overlook worker exploitation, but also resource waste, carbon intensity and process inefficiency. Supply chains with opaque business practices and vulnerable workers are likely to have other complex and interconnected problems. 

For boards, this means integrating modern slavery into governance and risk oversight, rather than treating it as a standalone compliance issue. In practice, organisations are more likely to make progress when these issues are considered alongside procurement, resilience and supply chain performance. 

Taking a long-term, capability-building approach 

For most organisations, this is not an overnight transformation. Addressing modern slavery risks across operations and supply chains is complex, particularly where supply chains are deep or fragmented. Boards should not expect rapid maturity, but rather a gradual progression in capability. This requires ongoing commitment, robust governance and a willingness to adapt as new challenges emerge. 

Most organisations will find that transformation takes time, requiring both a cultural shift and practical changes to procurement, due diligence, and reporting practices. Genuine progress will come from embedding ethical standards, fostering transparency, and working collaboratively with suppliers and stakeholders, over time increasing capital allocation and supplier engagement funding. 

Progress is often incremental rather than immediate. This is long-term work, and boards should approach it with persistence and realism. 

Aligning commitment with capability 

One of the more common challenges is the gap between commitment and capability. There is often a disconnect between high-level statements and the resources allocated to deliver them. Progress is unlikely without sufficient resourcing directed at complex supply chain challenges.  

Directors should ensure that commitments to addressing modern slavery are matched with sufficient capability, including budget, expertise and internal ownership. Without alignment, progress will stall. 

Boards should also be cautious about making absolute statements such as “zero tolerance” if systems are not yet in place to identify and respond to issues in practice, or if supply chains are already likely to involve vulnerable workers. 

Balancing data with real-world engagement 

Most organisations now have access to increasingly sophisticated data analytics and technology to help identify and better understand modern slavery risks across supply chains. Tools such as digital due diligence systems, supplier assessment platforms, AI-powered risk mapping, and real-time monitoring can improve visibility and help identify potential hotspots more efficiently than ever before.  

However, nothing replaces the value of genuine relationships and on-the-ground conversations with suppliers. Speaking directly with suppliers, asking the right questions, and listening to their experiences often reveals risks that no algorithm can flag. Building trust and understanding at every tier of the supply chain is essential for meaningful, long-term impact and reducing modern slavery risks in practice. 

A practical starting point is to focus on a smaller number of suppliers in high-risk areas. For boards, this reinforces that effective oversight relies not just on data, but on judgement, context and ongoing engagement. 

Embedding modern slavery into governance practice 

For boards, modern slavery is not a standalone compliance issue, but part of a broader shift in how organisations understand risk, responsibility and long-term performance. It requires sustained attention, practical engagement and a willingness to look beyond immediate organisational impacts to the wider systems in which businesses operate. 

The challenge for directors is not whether to act, but how to embed these considerations into governance in a way that is consistent, credible and enduring.