Global value chains (GVCs) are a manifestation of the contemporary global political economy. Viewing them solely as economic constructs, however, obscures the role that law and the wider regulatory environment play in their development and facilitation. The issue of modern slavery within GVCs has been the subject of careful scrutiny from a variety of legal sub-disciplines, including labour, welfare, and immigration law. In this chapter, I examine the role of company law, and particularly the fiduciary duty of directors to act in the interests of the company, in creating conditions under which modern slavery flourishes in GVCs. I suggest that the ideology of shareholder primacy that helps shape board decision-making is flawed both normatively and as a matter of legal doctrine. The central argument advanced is that shareholders’ interests are typically treated as a proxy for a company's interests due to the ambiguity in defining what it means to act in the interests of the company as a legal construct. Yet this focus on prioritizing the interests of shareholders can motivate lead companies’ directors to make decisions that deliver investor returns at the expense of fundamental labour rights and human dignity. The chapter concludes by exploring the potential of incorporating principles of proportionality into board decision-making. It is suggested that this approach can enhance directors’ knowledge and awareness of balancing competing interests, thereby avoiding the most egregious abuses of corporate power in the pursuit of profit.

Introduction

Writing in 2016, the IGLP Law and Global Production Working Group (the IGLP Working Group) observed that residing ‘at the heart of the GVC phenomenon’, law serves as ‘the vehicle through which value is generated, captured, and distributed within and between organizational and jurisdictional domains, and diverse and geographically disparate business operations are coordinated and governed’ (IGLP, 2016: 61). Law and the wider regulatory environment, comprising a complex mix of national, transnational, hard law, and soft law norms, are concerned with GVCs in numerous ways that influence the organization of GVCs. Company law is typically considered to be implicated in GVCs insofar as it shapes the structuring of activities within a chain and the liability (or lack thereof) of investors.