GURU NANAK INSTITUTE OF MANAGEMENT

A PRESENTATION ON

SOCIAL AUDIT

Swapnil Manali Jasmine Reepan Heena Medha Chandan Azeem Teja Arunima Aalia

HISTORICAL ROOTSTo casual observer social auditing is a new phenomenon. In reality, the concept of a social audit was formed much earlier in the 1940s when a depression era academic Theodore Kreps called on companies to acknowledge their responsibilities to citizens.

HISTORICAL ROOTS1960-70s a fresh wave of interest in social and ethical accounting, auditing and reporting (SEAAR). Concept of stakeholders emerges and organizations like the US Chamber of Commerce make the link between improvements in corporate social performance and long term profitability. While most of the early theorizing about Social Auditing came from the US, most of the practical experimentation took place in Europe.

WHAT IS A SOCIAL AUDIT ?A social audit is a process in which the people work with the government to monitor and evaluate the planning and implementation of a scheme or programme, or indeed of a policy or law. The social audit process is critically dependent on the demystification and wide dissemination of all relevant information.

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CNTDSA is a management tool and accountability mechanism which can enhance an organizations capacity to: Evaluate their impact on stakeholders Determine how well they are living up to the values they espouse. Improve their strategic planning process by identifying potential problems before they come up; and Increase their accountability to the groups they serve and depend on.

WHY SOCIAL AUDITS ?

To permit the performance.

enterprise

to

effectively

monitor

To permit the stakeholders in the enterprise affect its behavior. To allow enterprise to report on its achievements based on verified evidence rather than on anecdote and unsubstantiated claims. Permits those who invest in the enterprise and its stakeholders to judge if it is achieving the values which it set out to achieve.- Pearce (1996)

6 ELEMENTS OF SOCIAL AUDIT

Multi-perspective Comparative Comprehensive Regular Verification Disclosure

8 STEPS IN CONDUCTING SAAssemble organization and secure agreement and commitment. Define and prioritize the organizations objectives and establish the action it intends to perform to meet them. Identify the organizations stakeholders Agree upon indicators, information, benchmarks and targets. Data gathering systems put in place. Collating, analyzing and interpreting results External verification process Disclosure and act on results

6 REASONS TO CONDUCT A SA

Know what is happening Understand what people think and want Tell people what you are achieving Strengthen loyalty / commitment Enhance decision-making Improve overall performance- Zadek (1998)

POTENTIAL ISSUESSA has excellent promise as a management tool but some potential problems remain:

Reporting organization can deliberately limit audit scope in order to avoid controversies. Process can be managed internally to the disadvantage of some external stakeholders. Some significant stakeholders may be omitted. Organization may use arbitrary or inappropriate indicators to evaluate outcomes. The standards, independence and honesty of the auditor may be open to question. Therefore the need for Generally Accepted Assurance Standard (AA1000)

HOW IS IT RELATED

TO OTHER TYPES OF

AUDITS?

There are at least three types of audits: Government Audit Peoples Audit Social Audit

Government audit usually by professional auditors without significant involvement of affected people.Assesses primarily procedural integrity and outputs, Little ability to get public perceptions or verify outcome.

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CNTD

Peoples audits - conducted by the people, sometimes with assistance from movements and NGOs, with a standing invitation to the government. Can get public perception, local knowledge and public verification. Can assess outcomes and priorities. However, low acceptance of findings among governments. Social audit - conducted jointly by the government and the people, especially by those people who are affected by, or are the intended beneficiaries of, the scheme being audited. Can bring on board the perceptions and knowledge of the people, can look at outcomes and not just outputs, Can involve the people in the task of verification, Also, much greater acceptability by the government. 13

THE SCOPE OF A SOCIAL AUDIT

A social audit is conducted over the life span of a scheme or programme, and not just in one go or at one stage. It audits the process, the outputs and the outcome It audits planning, implementation, monitoring and evaluation.14

ELEMENTS OF A SOCIAL AUDITRaising awareness of rights, entitlements and obligations under a scheme. Specifically, about the right to participate in a social audit. Ensuring that all forms and documents are user friendly. Ensuring all relevant information is accessible, displayed and read out.

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ELEMENTS OF A SOCIAL AUDITEnsuring that the decision making process is transparent, participatory and, as far as possible, carried out in the presence of the affected persons. Ensuring that all decisions, and their rationale, are made public as soon as they are made. Ensuring that measurements, certification and inspection involves the affected people on a random and rotational basis.

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ELEMENTS OF A SOCIAL AUDITEnsuring that there are regular (six monthly) public hearings (jan audit manch) where the scheme and the process of social auditing is publicly analysed. Ensuring that the findings of social audits are immediately acted upon. Also ensuring that these findings result in the required systemic changes.17

SOCIAL AUDITS: CONCLUSIONSocial auditing is a process of measuring and reporting, in order to understand and ultimately improve, an organizations social performance.

Mission Related

Benefits

Managerial Issues

Accountability Issues

REVIEW OF BENEFITS

Quality Management. Recruitment and Retention of Employees. Promote Genuine Partnerships w/ Suppliers. Risk Management. Better Governance. Improved Accountability. Member / Stakeholder Engagement. Increased Investor Trust. Brand Equity

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