You are Rebecca Thornfield, chief executive of Horizon Apparel, a UK mid-market clothing brand. An audit has just found that a knitwear factory in Dhaka, two links down your supply chain, pays well below a living wage on twelve-hour shifts. Your head of sourcing wants an answer by Friday, before the next order is placed, and the board meets in nine days.
The situation
Horizon is headquartered in Manchester, with about 2,100 employees, 74 stores and a website that takes just over a third of its orders. Its customers watch the price without hunting for bargains: they pay for fit and durability and, more and more, ask where the clothes are made. Annual profit has held at about £10 million for three years, and your finance director, Martin Oduya, reminds you it is the first figure shareholders look at.
You read the audit on the train from London to Manchester on Tuesday 3 March 2026. The factory makes knitwear and jersey for Horizon through a first-tier agent. The auditors found no child labour; they did find wages below International Labour Organization guidance. In 2025 a national newspaper exposed a competitor for sourcing from factories with similar pay and hours, and the fallout was severe: lost wholesale accounts, a boycott and a year of headlines.
Your head of sourcing, Farhan Chowdhury, puts four routes on the table. A living-wage certified supplier has quoted for the same work at unit costs 18% higher. The current supplier offers an eighteen-month improvement plan, with phased wage increases and an independent audit, at 8% more. You can also keep the factory and audit and monitor it at minimal cost, or change nothing and protect the margin.
You start the year with three dials: profit; a brand-reputation index of 50 out of 100; and the ethics committee's “moral compass”, which runs from −100, if every call favours profit, to +100, if every call favours ethics, and stands today at 0. This is the first of five calls this year. The last will be the annual corporate-responsibility report, and the chair has already warned you it will be read against everything Horizon has done in the meantime.