1. Implementing and Auditing Ethics Programs
Ethical Decision Making For Business 8e Fraedrich/Ferrell/Ferrell
C H A P T E R 9
CHAPTER 9
Implementing and Auditing Ethics Programs

2. The Ethics Audit
Systematic evaluation of an organization’s ethics program and performance to determine whether it is effective
Regular, complete, and documented measurements of compliance with policies and procedures
Can be a precursor to establishing an ethics program
Helps to identify the firm’s current ethical standards, policies, and risk areas
Source: Digital Vision

3. The Social Audit
Process of accessing and reporting a business’s performance in fulfilling the economic, legal, ethical, and philanthropic responsibilities expected by its stakeholders
Broader in scope than an ethics audit
An ethics audit might be a component of a social audit

4. Benefits of an Ethics Audit
Identify potential risks and liabilities and improve legal compliance
Can be key in improving organizational performance
Improved relationships with stakeholders
Pressure to account for actions in areas including corporate governance, ethics programs, customer relationships, employee relations, environmental policies, and community involvement

5. Top Business Issues Over the Next Five Years
Notice that environmental issues and climate change is far and away the greatest topic of concern, followed by privacy issues and data security and demand for safer products

6. Ethical Crisis Management
Plans to respond to and recover from disasters that can disrupt operations, destroy organizational reputation and erode shareholder confidence
Involves contingency planning, assessing organizational risks, planning for potential occurrences and providing tools to respond

7. Crisis Management and Recovery
U.S. companies are failing to identify and manage ethical, social, economic, and environmental concerns
Anticipation of problems and intervention can stave off organizational disaster
Source: Triangle Images

8. Risks in Ethics Auditing
Ethics audits may uncover ethical problems that a company cannot remedy
Stakeholders may be dissatisfied with the information
Conducting the audits is a financial and record keeping burden
No guarantee that auditing is the solution to ethics concerns

9. The Auditing Process Secure top management and board commitment
Establish an ethics audit committee
Define the scope of the audit
Review the organizational mission, goals, and values
Collect and analyze relevant information
Verify the results through an outside agent
Report the findings to
Audit committee, managers, and stakeholders

10. Strategic Importance of Ethics Auditing
Should be conducted regularly
Provide a benchmark of overall effectiveness of ethics initiatives
Can be important in asset allocation and program development
Can demonstrate the positive impact of ethical conduct and social responsibility initiatives on the firm’s bottom line (盈虧)
Ethics audits have drawbacks as well:
They can be expensive, can disrupt employees’ routines, and can be difficult to find qualified auditors