Do codes of conduct improve worker rights in supply chains? A study of Fair Wear Foundation

The rise of private regulation of sustainability in global production networks has led to intensive debates about the impact of this regulation at the point of production. Yet, few empirical studies have systematically examined this impact in practice. Based on multiple factory audits of 43 garment factories conducted by the multi-stakeholder initiative Fair Wear Foundation, we show that codes of conduct improve (although marginally) worker rights on an overall level but that few significant results are found for specific worker rights. Our findings also lend support to the widespread argument that codes have uneven impact. Furthermore, we show that even rigorous multi-stakeholder factory audits seldom are able to identify process rights violations (such as those affecting freedom of association and discrimination), and that auditing is thus is more fundamentally flawed than assumed in previous research. Given companies' extensive investments in private regulation of worker rights, the findings have important implications for both scholars and managers. (C) 2014 Elsevier Ltd. All rights reserved.