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Social Accountability (SA)

SA is the process of assessing and reporting a business's performance on fulfilling the economic, legal, ethical, and philanthropic social responsibilities expected of it by its stakeholders. While corporations have long been held responsible to investors and stockholders, many firms and stakeholders now advocate an expanded view of this accountability, which includes reporting on the role of business within broader society. SA is part of a movement known as SEAAR, the acronym for social and ethical accounting, auditing, and reporting.

Verifying Social Commitment

Social audits, SA reports, and corporate citizenship audits are common names for tools that companies employ to identify and measure their successes and ongoing challenges with social responsibility. Regardless of the name, these reports are important for demonstrating a firm's commitment to ensuring the continuous improvement of its social responsibility efforts. Thus, SA has to be treated similarly to any other corporate initiative in terms of budget, assessment, and executive commitment. Without reliable measurements of the achievement of social responsibility objectives, a company has no concrete way to verify their importance, link them to organizational performance, justify expenditures, or effectively address stakeholder concerns.

Therefore, a key issue with SA is the way in which companies measure, represent, and report on their social responsibility activities and stakeholder relationships. SA reports are currently voluntary, as no law or regulation requires a specific reporting method or verification of the report's claims. Thus, SA is not subject to internal auditing standards and external assurance practices that accompany financial statements and related reports. However, some firms seek independent verification of the SA report. Major accounting firms and other consultants conduct assessments and attestations as to the accuracy and completeness of such reports.

Since this type of verification is rare, critics worry that some SA reports are merely public relations efforts that contain disinformation and distortions. Critics also question the extent to which companies may use these reports to enhance their reputations rather than as tools for sincerely improving stakeholder relationships.

SA8000 Certification

To remedy these concerns and to create a best practices approach, there are several organizations devoted to ensuring SA within the global marketplace. Social Accountability International, formerly known as the Council on Economic Priorities Accreditation Agency, seeks to create and refine consensus-based ethical workplace standards, accredits qualified organizations to verify compliance with these standards, and promotes the understanding and implementation of social performance standards worldwide. SAI developed and supports SA8000 certification for assuring humane workplaces. SA8000 covers eight primary elements: (1) child labor, (2) forced labor, (3) health and safety, (4) freedom of association and right to collectively bargain, (5) discrimination, (6) disciplinary practices, (7) working hours, and (8) remuneration.

Each of the areas includes a number of specific criteria that must be met for a facility to be certified. For example, in the case of disciplinary practices, a facility must demonstrate that it neither engages in nor supports corporal punishment, physical or mental coercion, and/or verbal abuse of employees. The remuneration category requires a facility to compensate employees fairly and legally, communicate clearly about wages and benefits, and ensure wages are sufficient to meet the basic needs and some discretionary choices of its personnel.

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