Ethics auditing

what is the auditing process?

Audits should be unique to each company The following steps provide a general framework... Secure management and board commitment Establish an ethics audit committee Define the scope of the audit Review organizational mission, goals, and values Collect and analyse relevant information Verify the results through an outside agent Report the findings

what are the benefits of ethics audit?

Detect misconduct before it becomes a major problem Identifies potential ethical issues and improve legal compliance Improve organisational performance Improve relationships with stakeholders who demand greater transparency Sets goals against which to measure actual performance

how is a balanced scorecard a measurement tool for ethics audit?

Developed by Robert Kaplan and David Norton, the Balanced Scorecard incorporates nonfinancial performance indicators into the evaluation system to provide a more "balanced" view of organizational performance. The system uses four metrics—financial, internal business processes, learning and growth, and customer—to measure the overall performance of the firm.

what is an ethics audit?

Ethics audit: Systematic evaluation of an org's ethics programme and ethical performance. Different from social audit, which considers wider issues, e.g. economic, legal, ethical and philanthropic responsibilities expected by stakeholders.

what are the risks in ethics auditing?

May uncover ethical problems a company does not wish to disclose May reveal a problem that cannot be remedied Stakeholders may be dissatisfied with the information Conducting ethics audits requires financial and record keeping resources No guarantee that auditing is the solution Lack of standardization in auditing

what are the possible problems?

Not widespread. Chartered Institute of Internal Auditors criticised Britain's biggest business for paying lip-service to ethics - 94 FTSE 100 companies mentioned ethics in their 2014 annual reports, but only 23 had some way of measuring their ethics. Ethical measurement challenging. Some would say it isn't possible to adequately measure ethics. In any case, anything beyond a fairly shallow survey of ethics is very difficult to achieve. Aviva's method of measuring ethics simply consists of finding out how many staff have read their code of ethics. Incentivises dishonesty. Rewarding companies / teams / staff for ethics simply encourages them to report being ethical.

what is ethical crisis management and what does it involve?

Plans to respond to and recover from disasters that can disrupt operations, destroy organisational reputation, and erode shareholder confidence Involves... Contingency planning Assessing organizational risks Planning for potential occurrences Providing tools to respond

what are the elements of an ethics programme?

Proper selection of employees Ethics training Structural and communication systems (Ethics assistance line, Help desk) Management's commitment to the program Comparing standards against actual behaviour as part of an Ethics audit

what is a successful ethics audit?

Regular, complete, and documented measurements of compliance with policies and procedures Can be a precursor to establishing an ethics program Should be the most important part of an ethics program Primary purpose is to identify risks and problems in activities and plan steps to adjust/correct/eliminate concerns

what is the strategic importance of ethics auditing?

Should be conducted regularly Provides a benchmark of overall effectiveness of ethics initiatives Can be important in asset allocation and program development Can demonstrate the positive impact of ethical conduct and social responsibility initiatives on the firm's bottom line

six sigma?

Six Sigma focuses on improving existing processes that do not meet quality specifications or that need to be improved as well as developing new processes that meet Six Sigma standards. To meet Six Sigma specifications, the process must not produce more than 3.4 defects per million opportunities.

Triple bottom line?

This approach to measuring social, financial, and environmental factors (or people, places, and planet) recognizes that business has a responsibility to positively influence a variety of stakeholders, including customers, employees, shareholders, community, and the natural environment. The challenge is how to evaluate a business's social and environmental impacts, since there are no universally standard forms of measuring these criteria.

what is the CEO challenges survey?

Top concerns: Human Capital Operational Excellence Innovation Customer Relationships Global Economic & Political Risk Government Regulation Global Expansion Corporate Brand and Reputation Sustainability Trust in Business