View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Comment
July 22, 2020updated 21 Jan 2021 9:40am

BOOHOO SCANDAL COULD HAVE BEEN PREVENTED

By Zoya Malik

The importance of companies having complete transparency of their supply chain process has once again come to the fore with the Boohoo scandal after fresh modern slavery claims against the online retailer says risk and compliance expert GWCI 

It is however a crisis which business and compliance expert Graham Welland, who has a pedigree of over 40 years in protecting businesses, believes could have been prevented if Boohoo had carried out the appropriate due diligence on their suppliers.

Literally overnight the fashion retailer had over £1 billion slashed from its share price with major retailers cutting ties further adding to their woes, after it was discovered that factory staff were working for as little as £3.50 an hour and the company was flouting safety measures.

The online retailer, which continues to be under fire, has now launched an independent review of its UK supply chains with a view to removing the dubious links in their supply chain, however as Graham, CEO of global risk and compliance consultancy GWCI points out, the damage has already been done.

He explained,  “The financial and reputational repercussions facing businesses who fail to have a complete understanding of their partners or suppliers far outweighs that of the investment into an airtight compliance programme.

“Having worked with organisations across the globe, we have seen numerous examples of similar instances where both corporate giants and SME’s fall foul of modern slavery regulations and witness first-hand the irreparable financial and reputational damages that can result from such scandals.

“It is a situation which, when it does hit the headlines, is accompanied with devastating results which could have been avoided if Boohoo had the appropriate checks in place first.

“Only by vetting their entire supply chain and ensuring that the appropriate checks are first in place are companies safeguarded against falling foul of nefarious links in their own supply chains – whether that be anti-slavery, the use of child labour or human trafficking.

“Companies large and small often believe that the investment in both cost and time commitment in creating a compliance model is both unnecessary and laborious, however the Boohoo scandal has highlighted this could not be further from the truth.

“A reputation cannot be bought – it has to be earned and this scandal only serves to further emphasise that having total transparency throughout your company and supply chain is vital and realistically the most powerful weapon businesses can have when tackling such unethical activities.”

 

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A roundup of the latest news and analysis, sent every Wednesday.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to International Accounting Bulletin