Social Audits

Social auditing refers to the process of identifying, analyzing, measuring, evaluating, and monitoring the impact of an organization's operations on different stakeholder groups. The auditing process is carried out in five steps.

First, an exhaustive enumeration of the organization's social activities is compiled into a social data bank. Since compiling such a data set may prove to be a daunting task, due to the wide range of social [Page 1944]activities that the organization performs, a lengthy and well-planned study may be required.

Second, the compiled data are analyzed such that the meaning and cost-benefit ratios of the social activities may be inferred. Analysis is conducted by using sophisticated statistical analysis tools and expert judgment.

Third, the impacts of the organization's activities on different stakeholder groups are measured. Since measures of social effects are not as well-developed as economic measures, proxies such as opinion and attitude measures are usually used.

Fourth, social performance is evaluated. The effectiveness of the organization's social activities is assessed by comparing actual performance to standards developed using norms and goals. The more clear and specific the norms and goals are, the more accurate the evaluation is. Fifth, continuous monitoring of social effects is maintained.

The success of the social audit depends on the accuracy of the steps discussed above. In addition, three recommendations need to be met. First, the social audit needs to strictly adhere to the selected norms and goals used as standards in the evaluation step. Second, the results of the social audit need to be integrated into the decisionmaking process of the corporation in the form of feedback as an integral part of the management of the company's social activities. Third, the social audit has to be carried out by competent and skilled professionals who are knowledgeable of the relevant social issues and problems.