Accountability Essay ⋆ Business Essay Examples ⋆ EssayEmpire

This concept comprises many alternative meanings and connotations. Although a typical definition would suggest the fundamental notion involved is one of responsibility to someone, or for some action (and both elements could be present simultaneously, of course), there is the added dimension of the need to actually render an account (i.e., of one’s conduct) to a superior person or authority so that the adequacy of the level of performance might (retrospectively) be judged.

At a general level, accountability is the basis of agency theory, whereby an appointed agent needs to demonstrate that they have exercised due discretion in the execution of the principal’s best interests— although academics for many years have pointed out the implicit encouragement, because of the existence of reward structures that benefit the agent, for that agent to falsify records of activities undertaken on their principal’s behalf. The Parable of the Unjust Steward is a classic case here, in which the steward, likely to be dismissed because of his poor performance, encouraged his master’s debtors to falsify the amounts owing so as to curry favor with them and thereby achieve the potential for future employment when dismissed from his present job.

At the more specific (i.e., corporate) level, the concept of accountability finds expression in organizational legitimacy theory. This suggests there is a social contract between businesses and the society in which they operate, and that this mandate to exist might be withdrawn should those businesses not be seen as doing things of which society approves. This makes businesses “accountable” and only by rendering an indication of that accountability (and “account” in this context should not be interpreted as necessarily a financial one) is satisfaction achieved.

Not surprisingly, therefore, a thesaurus will suggest “responsibility,” “liability,” “culpability,” “answerability,” and “chargeability” as accepted synonyms. Additionally, increasing concern in the early years of the 21st century that good governance should be practiced by governments and nonprofit organizations, as well as by commercial concerns, means that “transparency” is additionally becoming perceived as an essential ingredient in the process—although it has been suggested that while accountability allows for feedback regarding a decision or action only after the event, transparency enables such reporting during, or even before, the relevant event. This has resulted in greater pressure than ever before being put on businesses to be more accountable regarding their actions as they affect both society and the environment.

Many different forms of accountability have been identified, with no less than eight types presently in vogue: moral, administrative, political, managerial, market, legal/judicial, constituency relation, and professional. Although most of these variations on the accountability theme are relatively straightforward, “constituency relation” is potentially obscure. This type of accountability relates to members of agencies representing citizens’ interests in a particular domain, and possessing political rights and (more specifically) a government’s obligation to empower such members to run for election; or, alternatively, to appoint them to public sector positions such as to hold government accountable and ensure that all relevant constituencies are heard in the policymaking process.

In Britain (as elsewhere in the developed world) accountability has been formally enshrined as a crucial principle of national government since the mid-1990s, at which time it became accepted that holders of public office should perceive themselves as accountable for both their decisions and actions to their public. Additionally, politicians should be prepared to submit themselves to whatever level of scrutiny appears appropriate to the office they hold.

Outside government, business, and nonprofit organizations, accountability has found extension to such things as nongovernmental organizations (NGOs) with their development of the International Non-Governmental Organizations’ Accountability Charter, so as to encourage signatory NGOs to work globally in the advancement of human rights, sustainable development, environmental protection, humanitarian response, and other “public goods”; and international aid agencies such as the World Bank and International Monetary Fund (IMF). This last development raises an interesting question regarding to whom a specific body might be considered accountable. While it is the developing nations who receive the beneficence of aid programs, it is the more wealthy nations in the world who provide the wherewithal. So are the World Bank and IMF accountable to the givers or to the receivers?

Various bodies have appeared to promote the accountability agenda, probably most significantly Account-Ability, which for example, produces an annual Account-Ability Rating that measures the extent to which companies put responsible practices at the heart of their business (with the 2007 “winner” being the British petroleum giant BP). Account-Ability is also concerned with specific countries’ efforts to advance global competitiveness based on responsible business practices (in which endeavor it has recruited the expertise of Nobel laureate Al Gore). The intention is to provide a unique health check on responsible globalization, in addition to identifying major opportunities for more responsible marketing, taking into account factors such as climate change, human rights, anticorruption, and gender issues.

Bibliography:

Schedler, “Conceptualizing Accountability,” in A. Schedler, L. Diamond, and M. F. Plattner, The Self-Restraining State: Power and Accountability in New Democracies (Lynne Rienner Publishers, 1999);
G. Woodward, P. Edwards, and F. Birkin, “Organizational Legitimacy and Stakeholder Information Provision,” British Journal of Management (v.7, 1996).

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