written for: Corporate Social Responsibility Handbook 2000
by: Sarojini Persaud
A Means to Integrate the Profit Motive and Human Rights
years after the "new" political dispensation affirming
a culture of Human Rights, particularly socioeconomic rights,
South African corporations are challenged to re-think, reconfigure,
and re-align their "bottom line" measures of performance.
Traditional reporting on corporate performance, which focused
on the financial bottom line, is no longer a sufficient performance
measure in a democratic context with constitutionally entrenched
human rights. Increasingly, corporations, as juristic persons,
enjoy many "human rights" and, therefore, are expected
to not violate these rights and to act as good corporate citizens.
increasingly provide opportunities for corporations to demonstrate,
at a minimum, their observance of human rights, but as "first
prize", their commitment and active promotion of such
rights; that they are good corporate citizens. Sustainable
socioeconomic development can, therefore, be said to intertwine
with the profit motive. But the balancing of these two objectives
has not been easy. This is reflected in the myriad of CSR/CSI
programmes across corporations. The challenge is for CSR/CSI
to embed rigorous and integrated methods that can generate
credible performance measures of corporate observance/promotion
of human rights and in so doing, demonstrate good corporate
citizenship. One method that holds a lot of potential for
effective measurement is Social and Ethical Accounting, Auditing
and Reporting (SEAAR).
and Ethical Accounting, Auditing, Reporting: A Method for
Measuring the Impact of Corporate "Social Investments"?
SEAAR is a cyclical process that organisations
employ to measure performance in two ways: social impact and
ethical behaviour. Measurement of performance is anchored
in the organisations mission and guiding values but
carried out through comprehensive stakeholder engagement.
SEAAR closely follows the financial accounting, auditing and
reporting cycle in that it requires an organisation to develop
an accounting system to monitor its performance through data
capture, analysis and report writing. This is followed by
the auditing / verification of reports to ensure the integrity
of the accounting and report writing processes. Finally, the
audited report is published and made accessible to stakeholders.
This "cycle" culminates in an organisation holding
itself accountable to its stakeholders and doing so in a transparent
organisations are to adequately report on their performance,
they must include their social impact (contribution to socioeconomic
development) and ethical behaviour (observance, protection,
and promotion of values such as human dignity, freedom, and
equality). Where relevant, corporations must also report on
their impact on the environment because the right to a sustainable
environment is a human right. A corporations CSR/CSI
portfolio can, therefore, be an excellent "accounting"
platform because, in spite of the motive for creating them,
CSR/CSI programmes target human rights and should account
to the organisations stakeholders in terms of human
rights observance/fulfillment/promotion. This is where SEAAR
potential benefit of SEAAR for corporations is that it can
be used to measure the performance of their CSI/CSR programmes.
It can help them to ask and answer the question: "is
our social investment / social responsibility programme making
a difference in light of the socioeconomic (development) needs
of communities and the nation as a whole?" SEAAR contends
that the best persons/entities to answer this question are
the very communities/groups/organisations, the stakeholders,
that CSI/CSR programmes target. Without credible data to measure
performance, corporations cannot assess their CSI/CSR programmes
and, therefore, they cannot proudly account for their performance.
SEAAR provides the CSR/CSI programme with a rigorous method
of engaging stakeholders to develop meaningful performance
measurements, and to carry our performance assessments, in
order improve their impact and relevance.
Institutional Basis for SEAAR: Institute for Social and
Ethical Accountability Southern Africa (ISEA-SA)
is a "new" discipline that is promoted through the
institute for social and ethical accountability South
Africa (ISEA-SA). ISEA-SA is a not-for-profit and membership
based professional institute. It is intended to be a SADC
regional body that has formal professional links with a partner
organisation called ISEA "international" based in
the UK. Legally incorporated in November 1999, ISEA-SAs
establishment is the culmination of a consultative process
initiated in 1995 which, throughout the period between 1995
to 1999, involved organisations from the private, public,
and voluntary sectors. ISEA-SA adds value to institutions
and organisations, across all sectors, through the introduction,
promotion, and development of a values based approach to performance
measurement. It is not a service delivery organisation in
that it does not do SEAAR training or consulting. The raison
detre for ISEA-SAs is as follows:
is a regional not-for-profit membership organisation that
Promote and advocate the discipline of Social and
Ethical Accounting, Auditing, and Reporting
Develop the discipline through research
Accredit and evaluate practitioners, including the review
of standards on an ongoing basis
Monitor the delivery of training to ensure compliance
is motivated by values such as transparency, integrity,
accountability and human rights and by a concern to ensure
triple bottom line accountability from all sectors in order
to achieve sustained socio-economic transformation."
strength and value is its non-partisan interest in the professionalisation,
promotion and development of social and ethical accounting,
auditing and reporting (SEAAR). Through a rigorous accreditation
system for practitioners, organisations and institutions will
derive optimum benefit from SEAAR processes such as the identification
of relevant and effective performance measures through effective
stakeholder engagement processes. As the institute, or professional
body, for the SEAAR discipline, ISEA-SA realises that it must
be sensitive to the socio-economic, environmental, political,
etc., issues of the region so that perception and reality,
regarding how SEAAR is introduced and implemented, are congruent
and positive. ISEA-SA, therefore, partners with other organisations
in order to have optimum reach and impact when promoting and
advocating for the use of SEAAR but, maintains its professional,
legal, and ethical independence.
responding to new things or changes, there are four options
from which we generally choose. The same applies when we are
first introduced to SEAAR. We could respond through denial
"SEAAR does not exist!" Or, we could respond
by resisting "they cant make me do it!"
This may be followed by exploration "well
does not seem so bad
maybe we should try it out?"
Finally, there could be acceptance "I am a convert
and want to spread the word!" When first exposed to SEAAR,
a reaction may be to vacillate between resistance and exploration.
Resistance because it seems like SEAAR just dumps another
reporting obligation on an organisations already strained
resources. Exploration because SEAAR has an intuitive logic
that resonates for many organisations wanting to improve their
performance. So, at first glance, it may seem that an organisation
is caught between a rock and a hard place "we
want to do it but we just cannot manage".
elegance of SEAAR, in fact, is that it provides a framework
for an organisation to integrate its existing performance
measurements and reporting formats so that duplication and
overall inefficiencies are minimised. The strategy in doing
SEAAR is to build on what the organisation is already doing.
For example, what legal compliance reports is the organisation
already preparing? What is it doing regarding employee satisfaction
and climate studies? Is the organisation engaged in environmental
impact measurement and reporting? How is the organisation
engaging its stakeholders? All of these are individual "accounts"
that an organisation is already keeping. It simply uses different
words to describe them. SEAAR offers a cohering framework
for performance measures and reporting that is, in actuality,
not all that "new"! The value of SEAAR is that it
augments organisational performance by anchoring it in an
organisations mission, guiding values, and stakeholder