Adrian Henriques, Professor of Accountability and CSR, Middlesex University (www.henriques.info)
My favourite anecdote of accountability took place about 10 years ago. At a meeting to discuss the then emerging idea of sustainability and ethics with the Chair of a major UK plc together with an ex-CEO of the company, the ex-CEO said this: “When I hear the words ‘corporate responsibility’ I can relax. I understand. There is sure to be something that can be worked out…. But when I hear the words ‘corporate accountability’, I reach for my gun!” Fortunately for me, although the words ‘corporate accountability’ featured quite a lot in our meeting, he didn’t seem to have his gun with him.
But his reaction captures the essence of what has happened to the whole area of ‘CSR’, companies and sustainability over the following 10 years. Ten years ago, in the dawn of CSR, it seemed that a new order was about to emerge with accountability at its centre. The world would be a place in which companies would take responsibility for their actions. And then do something about it.
What we got was the Global Reporting Initiative and CSR. What we got was the beginnings of corporate responsibility but precious little corporate accountability.
So what is the difference between responsibility and accountability? After all, dictionaries, very helpfully, usually define each one in terms of the other. When they are differentiated, corporate responsibility has a more ethical dimension. If you are ethical, then of course you are responsible, it comes with the territory. And responsible companies do the things that responsible companies do: they give to charity, they consider their employees their most valuable asset and they reduce their carbon emissions (at least per unit output).
I think the reason that the ex-CEO wanted to reach for his gun was that accountability often means legal accountability. In other words it covers those things for which the company can legally be held to account by the courts. It is, in the end, what they are compelled to do.
A key strand in the development of CSR, or corporate responsibility, has been its (lack of) definition and in particular, whether it is only what a company does that is not subject to legal requirement – as the European Commission would like to insist – or whether it includes legal requirements as part of what a company is responsible for. Personally I have always found hard to accept the idea that companies may not be responsible for what they are legally bound to do – but maybe that’s just me. Fortunately, the debate may be turning the other way, since ISO 26000, the new standard on social responsibility will include the legal aspect firmly within organisational responsibility.
Yet the debate itself was unfortunate since the real prize should be the idea of voluntary regulation. In initiatives such as the FSC and the MSC regulation becomes a matter for stakeholders directly, rather than something to be mediated through the legislature and the courts. Of course this approach is imperfect: there are many areas with no relevant initiatives – and above all it is dependent on market demand.
As a result it can be abused and today in the eyes of much civil society, voluntary regulation has not worked. There are again calls for the law to be changed to compel companies directly to behave ‘more sustainably’. The strangest thing, though, is that today there are also companies that are joining that call. There is a real acceptance of the role for companies that the UN Human Rights Council has outlined in its legal framework for human rights, for example. And there is also a plea for clarity over what companies should do in relation to climate change.
So perhaps the very resistance from companies to accountability is bringing about the legal form of accountability that they most feared. Let us hope that this time no-one feels the need to reach for their gun.