Comprehensive Ethics Audit: Process, Benefits, and Employee Views

This presentation provides a comprehensive overview of ethics audits, defining their purpose, the need for them, and the potential benefits. It explores the steps involved in conducting an ethics audit, including establishing a foundation, developing metrics, and assembling a functional team. The pre...Read More

Ethics Audit

Hello!
I am <insert name here>
I am presnet before you to
let you know about the
different aspects of Ethics
Audit.
2

1. Ethics Audit
What does it mean?

“ Ethics Audit refer to the
audits undertaken to
judge whether or not an
organization is following
their ethical codes/
values/codes of conduct,
which have been set by
the company itself.
4

Summary
▪ What ethics audit is and what it
encompasses would be the first focus of
discussion.
▪ The discussion would then cover the
manner in which an ethics audit is to be
undertaken.
▪ Lastly, the discussion would highlight
what all can be found from such audits,
particularly when undertaking it from
employees perspective.
5

Need
for
ethics
audit?
Why do we need to do
it?
6

Purpose of Ethics Audit: Ensuring transparency
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Identification of relevant ethical issues
Reviewing and accessing adequacy of present practices
Designing practical strategies for modification of present
practices
Monitoring quality assurance strategy implementation

What would Ethics audit
save us from?
Any ethical scandal could be avoided
by undertaking regular ethics audit.
Some famous examples include:
▪ Facebook- Data breach
▪ Tesla- False and misleading
information (Jaeger, 2018)
▪ Samsung- Bribery charges (Shen,
2017)
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Pros and Cons of Ethics Audit
Pros
▪ Takes cost, resources
and time of company
▪ Can be easily done
through financial audit
▪ Timely corrective
steps saves image of
company
▪ Maintains faith of
stakeholders of
company by making
timely interventions
Cons
▪ Error finding and
taking corrective
measures
▪ Highlights loopholes
left in financial audit
▪ Reputational
damages are costly
in long term
Decision?
▪ Fine line between
ethics and law, which
is often misused
▪ Ethical obligations
different from legal
ones
▪ Need Ethics Audit to
win stakeholder
confidence
9

Ethics Audit: Benefits of an Ethics Audit 10

2. How to undertake
Ethics Audit?
I know what it is, but how to do it?

Steps to undertake Ethics Audit
1. First step
Beginning through
a comprehensive
foundation
2. Second step
Developing clear
metrics
3. Third step
Creating a proper
functional team
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4. Fourth step
Undertaking the
audit effectively
5. Fifth step
Keep an eye on
possible other
issues
6. Sixth step
Consistently
responding and
undertaking proper
communication

What to ask in Code of Conduct Audit
▪ Are the employees clear on
their role when it comes to
adherence of varied code of
conduct standards?
▪ What is the opinion of
employees regarding their
company adhering to ethical
polices? 13

Let’s do an Ethics Audit on Starbucks
▪ Are we clear on company
values?
▪ Do we know Code of
Conduct and Code of
Ethics?
▪ Have we assessed risk?
▪ Are their ethical policies
on conducting business?
▪ Have we undertaken
training audit?
▪ Is there any inquiry/reporting
mechanism?
▪ Have we developed a
communication program?
▪ Have we assessed/
evaluated ethics and
compliance programs?
▪ Do we have commitment of
leadership? (Ahmed, 2019)
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Let’s reveal the answers
▪ Starbucks has been named as one of the
most ethical organizations across the globe.
▪ The company has held this title for 12
years.
▪ It follows sustainable sourcing.
▪ It has a dedicated chief ethics and
compliance officer (Starbucks, 2018).
▪ Company recognized as industry standards
in terms of its ethical sourcing (O'Brien,
2018). 15

3. What does Ethics
Audit reveal?
An employee perspective

Findings of Ethical Audit
▪ An ethical auditor usually looks at:
▫ Working hours of employees
▫ Wages they get
▫ Adherence of health and safety norms
▫ Status of Right to Work
▫ Fair and just treatment of employees
▫ Treatment with temporary workers
▫ Provisions of rest days and breaks.
17

Findings of Ethical Audit
▪ A good ethical audit would reveal:
▫ Employees being able to chose
their employment
▫ Employees having access to
collective bargain and being
able to associate with others
▫ Employees being provided with
hygienic and safe working
environment
▫ Worker getting fair wages
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Findings of Ethical Audit
▪ A good ethical audit would
reveal:
▫ Child labor: a strict no-no
▫ Working hours never
being disproportionate
▫ Working environment
being discrimination free
▫ Absence of inhumane/
harsh treatment (ALIW,
2018).
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Conclusion
▪ Ethics audit is checking the adherence to
ethical promises of companies.
▪ A detailed process needs to be followed to
undertake Ethics Audits.
▪ Clear standards set on what is acceptable
and what is not.
▪ Timely ethics audit can save reputation of
company and creates positive impression
on stakeholders
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References
▪ Ahmed, J. (2019). 9 Steps to Audit and Monitor an Ethical Culture. AuditBoard. https://www.auditboard.com/blog/9-steps-to-audit-and-
monitor-an-ethical-culture/
▪ ALIW. (2018, February 08). Ethical Audits – What they are and why you need one. https://www.vwa.co.uk/blog/news/5914/
▪ China Labor Watch. (2010, November 04). TED Case Study: NIKE: Nike Shoes and Child Labor in Pakistan.
http://www.chinalaborwatch.org/newscast/66
▪ Forumias. (2020). What do you mean by ethics audit? Is it different from a financial audit? https://forumias.com/portal/what-do-you-
mean-by-ethics-audit-is-it-different-from-a-financial-audit-2/
▪ Jaeger, J. (2018). Top ethics and compliance failures of 2018. Compliance Week. https://www.complianceweek.com/opinion/top-
ethics-and-compliance-failures-of-2018/24720.article
▪ Krell, E. (2010). How to Conduct an Ethics Audit. SHRM.
https://www.shrm.org/hr-today/news/hr-magazine/pages/0410agenda_social.aspx
▪ O'Brien, B. (2018). 4 companies who succeed by focusing on ethical sourcing and manufacturing. Trade Ready.
http://www.tradeready.ca/2018/topics/supply-chain-management/4-companies-succeed-focusing-ethical-sourcing-manufacturing/
▪ Parker, G. (2016). 5 Huge Companies Known For Implementing Horrific Working Conditions. Money Inc. https://moneyinc.com/5-huge-
companies-known-implementing-horrific-working-conditions/
▪ Reamer, F.G. (2007). Conducting an Ethics Audit. Social Work Today. https://www.socialworktoday.com/archive/EoEJanFeb07.shtml
▪ Shen, L. (2017). The 10 Biggest Business Scandals of 2017. Forbes. https://fortune.com/2017/12/31/biggest-corporate-scandals-
misconduct-2017-pr/
▪ Sketch Bubble. (2020). Benefits of Ethics Audit.
https://cdn.sketchbubble.com/pub/media/catalog/product/optimized/1/0/1026072ec1444c1c09762e2a941cf913fcca6d3aacde3e2289
93332adfef0ca6/ethics-audit-mc-slide5.png
▪ Starbucks. (2018, February 12). Starbucks named one of the World’s Most Ethical Companies.
https://stories.starbucks.com/stories/2018/starbucks-worlds-most-ethical-companies-2018/
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Thanks!
Hope you had fun learning
about Ethics Audits 
Any questions?