Accountability

Definition

Accountability originally referred to accounting and reporting requirements that company management owed to shareholders and creditors regarding the company's financial performance. Accountability is currently viewed as the company's responsibility to report to a broad range of stakeholders, including trading partners, consumers, local communities and society in general regarding its policies, activities, and performance meeting regulations, relevant standards and codes of practice, and community expectations.

According to AccountAbility, a non-profit organization established in 1995 in the U.K., "accountability is 'explanation transparency to stakeholders', 'responsiveness to stakeholder concerns' and 'compliance to standards to which it is voluntarily committed and to rules and regulations that it must comply with for statutory reasons'. These aspects of accountability may in practice have very different drivers, including legal compliance,

stated policy commitments, reputation and risk management, and the company's sense of moral and ethical duty." *1 From a CSR perspective, accountability entails fulfilling legal obligation as well as maintaining a dialogue with various stakeholders regarding social expectations or based on the company's judgment. For example, regulations do not necessarily require the publication of environmental activity reports but many companies voluntarily publish such reports to provide information about their environmental policies and burdens and to answer social interest and request for information concerning environmental issues. When incidents or accidents occur, companies hold press conferences to fulfill the responsibility to provide an explanation to society. Further, IR activities and stakeholder meetings, factory tours, explanatory meetings for local communities, and dialogue with NPOs and NGOs are also considered measures taken by companies to ensure accountability.