The U.K. government’s recent launch of its Civil Society Strategy recognizes the social responsibility government and internal auditors have for creating the society we want to live in. Civil society in the U.K. today is not just about the well-being of the nation and everyone who lives there — it reflects the contributions we all make through our values to well-being in other civil societies across the globe. Those values are internal auditors’ greatest asset and resource. They also are what internal auditing is based on and should be all about.
The strategy’s aims are fourfold: Support people to play an active role in building a stronger society, unlock the full potential of the private and public sectors to support social good, help improve communities to make them better places to live and work in, and build stronger public services. I can think of no internal audit plan or program in any organization or sector that these aims and their achievement could not improve in terms of objectives, risk planning, engagement, results, findings, and follow-up.
Internal auditors all have a responsibility to make social auditing happen. Recent ventures into auditing culture and a new appreciation for culture’s role in establishing effective governance practices have touched on the importance of organizational stewardship and stakeholder engagement. Culture is not just about an organization’s values and how it performs. It also is about how the organization impacts the civil societies in which it operates.
Many institutional investors have signed on to the United Nations Principles of Responsible Investment with an environmental, social, and governance (ESG) duty: “To act in the best long-term interests of our beneficiaries. In this fiduciary role, we believe that [ESG] issues can affect the performance of investment portfolios.” ESG as a performance measure will continue to grow in importance for governments, investors, and organizations. It should also do so for all internal auditors in every country.
Good governance embraces environmental and social responsibilities in many ways. Achievement of the U.N. Sustainable Development Goals by its target of 2030 is just one aspect of this process. Today’s responses by organizations to the development and growth of integrated and strategic reporting will have a strong influence on the future of environmental and social responsibility declarations by organizations and the assurances they give and require. Internal auditors will always have a part to play to make this happen in their own organizations, across all sectors. The U.K.’s Chartered Institute of Internal Auditors has links into voluntary networks of internal auditors working in the charity, social housing, and higher education sectors. Their messages and progress are an excellent example of how professional internal auditing is already enhancing well-being in the U.K. and across the globe.
A version of this article first appeared on Audit & Risk magazine’s website, www.auditandrisk.org.uk. Reproduced with permission.