Lights On: How Transparency Increases Compliance in Cambodian Global Value Chains
Key Insights for Managers
Could publicly reporting factories’ audits improve their compliance with labor standards? Author Raymond Robertson found that a transparency policy, which publicly reported factory audit results of 21 critical compliance areas, was associated with improved adherence to labor standards. This result suggests that audit result transparency may be an effective tool that brand managers can leverage, perhaps via a partnership with a trade group or with a non-profit organization, to improve supplier labor standard compliance.
The study focused on garment factories in Cambodia enrolled in the Better Factories Cambodia program. These results are based on regression analysis of nearly 9,000 audits of Cambodian garment factories conducted in 2001-2017.