Companies should be talking to a much wider range of interested parties when they audit their supply chains, says Sarah Selby
Social auditing may have a lot to learn from the stakeholder dialogue approach. The increasing pressure on companies to take responsibility for the social performance of their suppliers has led to the widespread application of tick-box audit approaches traditionally used by technical auditors. Yet such approaches have rightly been criticized for their tight focus on a checklist of issues, the narrow range of stakeholders they consider and the limited scope they offer to understand and improve workplace conditions. Similarly, traditional audits often fail to identify areas where suppliers are not complying with the social and health and safety standards laid down, and generally do not help the supplier to resolve such issues.
So are there alternatives? The participatory approach recognizes that ‘bottom-up’ supply chain measures encourage greater involvement from those affected, allowing companies to make more use of the perspectives, knowledge and skills of their suppliers. Participatory social assessments aim to include the voices of employees and local community members which are often excluded or marginalized in shorter, more traditional site assessments. They use a range of techniques to identify priority issues, identify root causes and solutions, and to reach literate or non-literate groups of different ages, genders, ethnicity and backgrounds. They also aim to empower stakeholders and to promote their interest and involvement in any changes needed.
Unlike traditional audits, a participatory assessment need not conclude with a report summarizing non-compliance issues. Indeed, its essence is to ensure that feedback on all findings is given to all participants, kick-starting the process of developing solutions to often complex issues.
There is, however, a financial cost. More time on site is needed to build relationships with employees and to secure a commitment to find solutions that work, and new skills have to be developed.
Given the large number of suppliers used by major companies, compromises may have to be made. At the outset, it may be necessary to carry out a rapid social assessment, based on short visits, to identify high-risk and high-volume suppliers who can be targeted first.
The participatory approach, then, is not an easy route, for it needs time, money and commitment, which is why it has been applied only on a limited basis up to now. But it may offer a better way forward for social auditing than the traditional checklist approach. Not only is it a more inclusive way of doing things, it has the potential to lead to greater productivity and loyalty from suppliers and their employees, and to protect brand and reputation by promoting improved working conditions. It therefore has the potential to increase efficiency and profits.
Sarah Selby is a consultant with ERM.