Michael Crooke
Chief Executive Officer
Patagonia
Corporate Responsibility Audit™
Auditing your company's level of corporate accountability reveals how well its does what it says it stands for. Whether we conduct the assessment or develop a custom framework for you to self-audit, our proven sustainability auditing process ensures that your practices, processes and systems reflect your core values, meet stakeholder expectations, and support the company's growth strategy.
As the basis of a public report or as an internal roadmap for organizational change, the Corporate Responsibility Audit™ is a comprehensive and integrated assessment of corporate culture and operating practices across key corporate functions and business units. It provides a clear, objective picture of just how well a company is performing against its own values and standards, industry trends, the best practices of comparable companies, the expectations of key stakeholders, and the bottom line.
The Audit employs a systematic process of assessment, recommendations, and cost-benefit analyses to inform management of often hidden reputation and financial risks and viable and responsible solutions.
Practice areas assessed include:
- Quality management systems and supply chain management
- Environmental practices and energy conservation
- Human resources, labor relations, and human rights
- Community involvement
- Stakeholder collaboration
- Governance
Inherent in assessing a client's operating practices is an understanding of its corporate culture. Does the company's culture respect employees for their skills, intellect and varied experiences, and encourage them to be creative, self-directed, and do the right thing? In every company there are also subcultures, which can vary widely between departments and business units. Unless the corporate culture and subcultures are aligned over the business case for corporate responsibility, it's unlikely the company will sustain more progressive and responsible practices in the long run.
Our assessment of the culture examines influences on employee behavior, how things get done, and the achievement of strategic goals. These influences may include:
- Power and authority relationships within the company
- Symbolic dimensions (company history and myths, heroes, brand)
- Social and psychological dynamics such as cultural and social factors
- Organizational behavior, including attitudes toward people - different personal and professional experiences, generational differences, and cross-functional relationships within the company
In conducting a culture assessment, we often find that companies need to:
- Develop individual and team leadership skills to effectively communicate and lead organizational change globally
- Align corporate core values with those of senior management and employees and the communities where they live and work
- Integrate core values into decision making
- Develop key performance indicators and accountability systems
- Update policies and codes of conduct and train employees in their implementation
- Put in place human rights guidelines for where and under what circumstances they will do business in countries with a poor human rights record
SmithOBrien Corporate Responsibility Audits have resulted in recommendations that identified:
- 5.9% rise in return on sales, by saving $8.5 million in reduced waste
- $450,000 in savings, by improving employee access to mental health benefits and therefore, reducing absenteeism 2%
- 25% increase in production capacity, by reducing EHS regulatory requirements and related production disruptions
- 7% rise in net profit, by saving $459,000 through improving job satisfaction in high turnover, dead-end jobs
- 2% increase in market share, by collaborating with a non-governmental organization (NGO) to open a new market segment
Supplier Code of Conduct ROI
Our expertise at quantifying the financial effects of adopting responsible operating practices includes the global supply chain. Corporations spend substantial resources on developing brand image and shareholder value, but their global reputation and earnings are inextricably tied to the labor, environmental, and human rights practices of partners and suppliers.
Implementing a supplier code of conduct, a first step toward reducing risk inside the supply chain, can be fraught with administrative and logistical problems and unreliable results with costly reputation and financial consequences. In addition, successful supplier programs require frequent internal and independent monitoring and incentives to achieve the desired results.
By upgrading internal accounting and data collection systems, clients can regularly track and quantify the return on investment from a supplier code of conduct program so they and their suppliers understand better the financial returns of code implementation. Clients can also track how their investment in improving the working conditions of their suppliers has affected the economies and sustainability of surrounding communities.
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