What is Ethical Auditing?
Ethical auditing measures the cultures and behaviours of an organisation and determines the extent to which its values are embedded across its people and processes.
Why Perform Ethical Audits?
- Ethical audits are crucial to understand, measure, report on, and help improve an organisations social and environmental performance.
- It provides a thorough examination of labour practices.
- It looks into the suppliers of goods and services to ensure ethical trading.
- The ethics of marketing activities are examined to identify areas of improvement.
- A company may be legally compliant, yet still engage in unethical practices.
Corporate responsibility (CR) and business sustainability address the ethics of an organisation’s activities and how it operates in a way that is viable in the long term. These two factors are intrinsically linked; a business that damages the systems on which it depends will ultimately fail due to unsustainability. CR starts by recognising that an organisation’s activities have an impact on society, the environment and the economy.
There are four main groups of responsibility:
Community – focusing on how the organisation’s activities positively or negatively affect the general public.
Employees – focusing on the rights and well-being of employees and other workers.
Environment – from recycling materials to the whole carbon footprint of the organisation.
Market Place – including issues such as fair trading, corporate taxes and anti-bribery.
While the core rationale for CR is to reduce the risk of corporate disaster and ensure a sustainable business practice, there are other benefits:
- Increased efficiency and reduced waste, e.g. Cutting fuel costs through environmental initiatives.
- Supporting employee engagement, retention and employer brand.
- Building trust and enhancing brand in the marketplace.
How to Audit in Your Company
An audit is performed to show that the behaviours in an organisation’s Code of Conduct and Policies and Procedures exist in practice.
A commitment to ethics begins with formal policies in the employee handbook. This is a vital first step in building a culture of strong ethics and shows how serious management is about ethical issues.
The policies should cover a full range of common issues in business, including discrimination, equal opportunity, financial management, sourcing, customer relations and the impact of company operations.
Effective Ethical Audit Process
- Start with a detailed foundation.
- Develop measurable evidence.
- Create a cross-functional team.
- Audit efficiently.
- Look for improvement.
- Respond consistently and communicate effectively.
Things to remember with a supplier audit:
- Prepare all the questions you need to ask.
- Follow the ethical audit process.
- Follow a trail if something comes up that you are unhappy with.
- Give a good impression.
- Be polite, courteous and professional.
- Show positive results as well as negatives.
- Arrange a suitable follow-up, on or off site.
Using Results Effectively
- Using the results in a positive way will improve the performance of the company and the employees.
- Audits are not a fault-finding exercise – they should be about improvement.
- They also provide verification within your industry and show legal compliance.
Grow Your Business, Grow Your People
Hunter Global can help your business grow with new systems that ensure compliance. We will show you how to implement policies and procedures, both legal and industry-specific, to effectively manage your business and achieve your goals. We also help with ethical auditing and can guide you through the process. For more information contact us and we will be happy to help!