14. Social-ethical audit B 14 / 1 BUSINESS ECONOMICS 5 / 6 Copyright Mark Van Couwenberghe, 2017-2018

14.0 OVERVIEW B 14 / 2 14.1 AUDIT: WHAT? page B 14 / 3 14.2 SOCIAL-ETHICAL AUDIT: WHY? page B 14 / 4 14.3 SOCIAL-ETHICAL AUDIT: WHAT? page B 14 / 5 14.4 SOCIAL-ETHICAL AUDIT: EXAMPLE page B 14 / 6 14.5 EXERCISES T page B 14 / 10 14.6 VOCABULARY page B 14 / 12 Copyright Mark Van Couwenberghe, 2017-2018

B 14 / 3 14.1 AUDIT: WHAT? An audit is a systematic way to control activities and procedures, in order to enable the company to improve its operations adapt more quickly to changes There are 2 types of audit: internal (company performs audit) external (audit company performs audit) Audits should have 2 characteristics: objective independent Audits can be performed in different areas: financial audit, product audit, supplier audit, … Copyright Mark Van Couwenberghe, 2017-2018

14.2 SOCIAL-ETHICAL AUDIT: WHY? B 14 / 4 14.2 SOCIAL-ETHICAL AUDIT: WHY? VALUE CHARTER What? Key-queston: Does the company live-up to its value charter? SOCIAL-ETHICAL AUDIT ANSWERS Copyright Mark Van Couwenberghe, 2017-2018

14.3 SOCIAL-ETHICAL AUDIT: WHAT? B 14 / 5 14.3 SOCIAL-ETHICAL AUDIT: WHAT? A social-ethical audit is an audit that enables the company to evaluate if the value charter is implemented in reality The audit analyzes the social impact of a company The results of the audit will be used to adapt the company’s targets, strategies and operations in close consultation with all stakeholders Explain “stakeholders” Copyright Mark Van Couwenberghe, 2017-2018

14.4 SOCIAL-ETHICAL AUDIT: EXAMPLE B 14 / 6 14.4 SOCIAL-ETHICAL AUDIT: EXAMPLE Every social-ethical audit will be very “specific” (tailormade to the company), but the following 4 areas keep coming back as focus points: Internal social policy Relation between employer and employees Quality and content of jobs Working conditions … Environmental policy Sustainability (example: waste management, renewable energy, …) External social policy Ethical-social choices (example: human rights, …) Ethical-economic policy Compliance with rules (example: taxes, …) Copyright Mark Van Couwenberghe, 2017-2018

B 14 / 7 Difference between financial audit and social-ethical audit: Copyright Mark Van Couwenberghe, 2017-2018

B 14 / 8 Social Venture Network is a website that wants to inspire entrepreneurs to practice “social business” and contribute to a more “social economy”; the website describes the different focus areas for a company per stakeholder Stakeholders: Employees: http://svn.org Copyright Mark Van Couwenberghe, 2017-2018

B 14 / 9 Business partners: Customers: Society: Environmental organizations: International partners: Copyright Mark Van Couwenberghe, 2017-2018

B 14 / 10 14.5 EXERCISES Read and analyze the following problem situations in the social-ethical area and discuss measures to counter each problem: Estimates from the Department of Economics show that about 17% of all students is active in the labor market without an offical contract A report from the European Commission shows that, although the situation is improving, women are still limited in their careers as a result of the “glass ceiling” Copyright Mark Van Couwenberghe, 2017-2018

B 14 / 11 Weapon manufacturer FN signed an important contract with the US Army to produce a new weapon that neutralizes the enemy Two businessmen are being prosecuted for not paying social security contributions and using the money to start-up new companies Copyright Mark Van Couwenberghe, 2017-2018

B 14 / 12 14.6 VOCABULARY EN NL Copyright Mark Van Couwenberghe, 2017-2018

B 14 / 13 EN NL Copyright Mark Van Couwenberghe, 2017-2018

B 14 / 14 EN NL Copyright Mark Van Couwenberghe, 2017-2018