Gap Inc. has always had a commitment to social responsibility. They are regularly recognized by independent organizations as one of the most ethical retailers. They closely monitor things such as wages, treatment of women, and working conditions. This applies to their domestic operations and also extends to the suppliers in countries around the world to whom they contract the manufacture of their clothing. When they find practices in foreign suppliers firms that violate their own code of ethics, they attempt to remediate the situation through training and negotiation. This is due to the fact that there is a limited number of suppliers and demand for their services exceeds their production capacity. In other words, there are more apparel companies wanting to use those manufacturers than there are different manufacturers to contract with. As a result, Gap is reluctant to lose a supplier. However, Gap remains firm in their commitment to social responsibility. In fact, Gap has terminated contracts with more than 135 factories when remediation was either rejected or ineffective. Questions: 1. What are the potential risks to their shareholders for taking this approach to contract manufacturing? 2. What are the potential benefits of these policies to shareholders? 3. What possible impact do you believe these policies have on their share price? Defend your answer.