What is a corporate social responsibility audit?

Is your company a good global citizen? Does your company “walk-the-talk?” How do you know? Do you want to “unleash” the social entrepreneurs at your work? This audit will help you measure your company’s actual social performance against the social objectives it has set for itself.

Many successful companies have become world-renowned for incorporating social causes and social initiatives into their cultures, their values, and business strategies. Increased customer preference for social responsibility points to the importance of understanding how this type of philosophy can enhance your business.

In other words, is your company a good global citizen? How do you know? What can you do to improve your positioning?

Research has shown that integrating business strategy and corporate social responsibility contributes to:

  • Positive brand awareness
  • Increased employee satisfaction
  • Reduced operating costs
  • Improved community relations
  • Corporate accountability

When making payroll and finding your next customer are top priorities, it may at times seem difficult, if not impossible, to focus on your corporate social responsibilities. But there is no better time to integrate a socially responsible corporate culture into your organization than right now. This is especially true in early-stage companies and start-ups, when business practices and organizational norms are just being formed.

Does Your Company “Walk-the-Talk?”

Careful, accurate monitoring, and evaluation of your company’s social responsibilities and actions are important. Not only because your company wants to be sure it is implementing policies as planned, but also because social responsibilities by their nature are open to intense public scrutiny.

  • But how do you know if you are hitting the mark, or falling short of your own expectations and objectives?
  • Does your company “walk-the-talk?”
  • What are the steps you can take to incorporate socially responsible initiatives into your business, while at the same time adding value to your company?
  • To make sure your company is “making good” on your initiatives you can conduct a corporate social responsibility audit of your company’s performance.

Corporate Social Responsibility Audit

Formal strategic process that will help you measure your company’s actual social performance against the social objectives it has set for itself, and how your decision making, mission statement, guiding principles, and business conduct are aligned with social responsibilities. The audit helps in discovering the interests and objectives of your employees and stakeholders.

You need to start out scoring your company’s performance in such general areas as employee benefits, plant safety, ecology, and community involvement in social causes. Your goal is to find out which nonprofit organizations and social causes your employees would like to support, and how you can incorporate your employees’ interests into your business plan. You also need to discuss what your employees have done in the past, and find out what other companies are doing in your business space.

The auditing process may be conducted internally by your company. However, you can choose to have one conducted by an outside consultant who will impose minimal biases, which may prove to be more beneficial to your company. Consider that fact as with a financial audit, an outside auditor brings credibility to the evaluation. This credibility is essential if management is to take the results seriously and if the general public is to believe your company’s public relations, social cause activities, and social cause marketing.

Once the social responsibility audit is complete it may be distributed internally, or both internally and externally, depending on your company’s goals and findings. Some companies publish a separate periodic report on their social initiatives and later have it available on their Web site. And nearly all publicly traded companies now include a section in their annual report devoted to social responsibility activities.

The audit may be used for more than simply monitoring and evaluating your company’s social performance. For example, you may also use the auditing process to scan your external environment and to determine your company’s vulnerabilities, then decide to launch new social cause initiatives within your company. Companies searching to differentiate themselves in their marketplace start with an audit to help them creative new social cause marketing initiatives with nonprofits. These initiatives aid in capturing market share from direct competitors, and even help introduce new products.

Step 1: Situation Analysis
- Have you violated any of your Corporate Social Responsibilities?
- If so, why? What happened? Who else knows about these violations?
- What about any of your suppliers? What about any of your buyers? What about any of your direct competitors? Have any of them ever violated any of their responsibilities? Why?
- What is your mission statement and how does it align with your responsibilities to your community and stakeholders? What about your goals? What about your corporate values? Does your business plan reflect what you are finding?
- What does your community and stakeholders think about your company? What about your industry? What about your competitors? What about your end users, your customers?
- Are your findings positive or negative? What are the trends and direction?

Step 2: Benchmark
- How would you describe, define the ethical standards and norms in your industry?
- Do you have a corporate code of conduct? How did it come about?
- How do you share it, communicate your corporate code of conduct with your employees? How do you know that they know it?
- When was the last time you reviewed it? Does it need any changes?
- What about your competitors? Do they have a corporate code of conduct?
- What are your direct competitors doing in respect to social cause programs?
- Which social cause programs have worked in your industry? Why?
- Which social cause programs have not worked in your industry Why not?
- What does the future, the trend analysis, indicate for your industry?
- What other significant trends are shaping your industry? What about regulations that may impact your industry? How did they come about? What is their root cause?
- How are companies in other industries complying with their social responsibilities that are similar to yours?

Benchmarking Examples:
- Cisco
- FedEx
- HP Global Citizenship
- IBM
- McDonald’s Corporation
- Silicon Valley Bank
- Starbucks
- Wells Fargo

Step 3: Brainstorm
- Based on your findings and discovery above, what can you do differently, to strategically set your company apart?
- What do you want to do better? What things need improvement at your company?
- What do you want to continue doing? What are the things you are doing better than your competitors?
- What area of your community, or who in the community, is most affected by your business? How?
- What community issues are likely to affect your business and/or employees?
- What role does your company want to play in the community?
- What have you done in the past to help this relationship?
- What are your employees’ interests and to which social causes are they committed?
- Does your business plan, business strategy fit well with what you are uncovering so far?
- Does your business plan, business strategy need to be reworked?
- What would be the timeline on getting your plan and strategy revised?
- Who could help you with this process?

Step 4: Evaluate Alternatives
Consider each one of these alternatives: Sponsorship, co-branding, licensing, new product promotion, philanthropic investments, donations of products and services, and employee involvement.
- Which one(s) seem best for your situation analysis? Why?
- What does your corporate leadership team think? What do your employees think?
- How are you going to evaluate and measure the outcomes for your social cause initiatives?
- What kind of resources are you willing to commit? For how long?
- How will you know you are doing well? Who is going to be the judge of that?
- How are you going to get your employees motivated and passionate to get behind your choice?
- How are you going to select an alternative? Who is going to help you select?

Step 5: Create the Action Plan
- What are the key talking points of your audit you feel you need to communicate right now?
- Do you feel you are you going on the “offensive?” Or the “defensive?” Why?
- Which social cause initiative looks like the best answer for your situation? Why?
- What are some of your deadlines to get started? How fast should you be moving on this?
- What moves do you think your direct competitors will do once you launch your social cause initiative or program?
- With whom should you be sharing your audit? How are you going to share your audit?  – What do you expect them to feel, to think and to do once they read your audit?
- What do you need to share and when–with your internal stakeholders, executives, employees, investors, etc.? With your external stakeholders, suppliers, buyers, local communities, and the media?
- Who can help you prepare a summary of your corporate social responsibility audit?
- Who is going to be the person in charge of creating and launching your new social cause initiative?