Civil Society Activism and Corporate Human Rights Disclosure: Experimental Evidence from the U.K. Modern Slavery Act (Revision 2 )

Governments often delegate to civil society the enforcement of laws requiring firms to disclose information related to their societal impacts. The authors present a field experiment testing the effects of civil society activism intended to pressure firms to comply with the U.K. Modern Slavery Act, which required corporate disclosure of actions taken to prevent human rights abuses. The authors randomly assigned persistently non-compliant firms to receive different versions of a letter encouraging compliance sent by a leading human rights NGO. Unexpectedly, firms sent a letter were, on average, less likely to comply than a control group that was not sent a letter. The compliance rate was higher among firms sent a letter that also included a list of already-compliant peer firms but generally remained below that of the control group, except in a condition where the listed peers were from the same geographic region as the focal firm. Post hoc analysis of board interlock networks reveals that this negative treatment effect was concentrated entirely among firms that shared directors with other firms: isolated firms showed no significant treatment effect. This pattern is consistent with networked firms being more resistant to activist pressure due to socially transmitted information about the prevalence of non-compliance and the lack of strict policy enforcement. The authors discuss implications of their findings for research on civil society activism, non-market strategy, and the role of inter-organizational networks in shaping the effectiveness of private politics as a tool for regulatory enforcement.