Corporate Responsibility Audits: Doing Well by Doing Good

Buy this article E-mail this page 

Part of the Corporate Responsibility collection.
To view this collection, click here.

Responsibility audits are a management tool for demonstrating the potential qualitative and financial benefits of mirroring core values and ethics in day-to-day practice. Waddock and Smith argue that corporate financial performance and socially responsible practices are positively correlated. They outline a responsibility auditing process that improves both the bottom line and a firm's stakeholder relationships with owners, employees, suppliers, customers, local communities, and government entities.

Companies typically overlook the hidden costs of problematic or less responsible practices. The authors cite examples of how operating responsibly often saves money (in overhead, employee turnover rates, insurance costs, and other non-value-added expenses) and may even create profitable new opportunities.

Eight companies beta tested the authors' responsibility audit by comparing their operating practices with their formally stated vision, values, and mission. All uncovered deficiencies in four operating areas: employee relations, quality systems, community relations, and environmental practices. The audit process consistently revealed that when a company adopted proactive, responsible practices, it reaped measurable improvements in efficiency and productivity, lowered legal exposure and risks to the company's reputation, and reduced direct and overhead costs. By creating an adaptive and proactive corporate culture from the top down, operating responsibly becomes a core business strategy.

Sandra Waddock is a professor of management at the Carroll School of Management, Boston College. Contact her at: waddock@bc.edu. Neil Smith is managing partner of SmithOBrien Management Consulting & Research, Cambridge, Massachusetts.

$	6.50	Buy PDF
$	12.00	Buy PDF and permission to copy
$	5.50	Buy permission to copy from your own original
$	6.50	Buy paper reprint
$	12.00	Buy paper reprint and permission to copy

Academic pricing and volume discount information

[top] [back]