CORPORATE ACCOUNTABILITY AND COMPLIANCE
Corporate accountability has, over the course of the last few years, emerged as a major consideration for companies. It is being discussed more today than perhaps ever before. A number of issues have elevated it to the top of many boardroom agendas, as well as the agendas of stakeholders. The financial crisis of 2007-2008 and unethical corporate activity across many jurisdictions have highlighted the importance of accountability among companies. Globalisation has also been a driver. As economic activity has migrated from West to East, lured by the promise of low production costs and higher returns, unethical business practices have flourished. Though jobs and economic growth have been generated, environmental destruction, tax evasion, corruption and worker rights violations have become more common.
As a result of the excesses and malfeasance of many businesses, corporate accountability has assumed greater importance. Stakeholders, regulatory bodies, non-governmental organisations (NGOs) and the general public are demanding greater accountability and responsibility from companies. Social awareness of corporate operations, particularly in emerging markets, is growing.
Yet, the fact that there is no single definition or consensus on corporate accountability has made it difficult to hold companies fully accountable for their actions. In its simplest form, corporate accountability requires companies to appreciate the impact of their business operations on society as a whole. Companies are expected to create growth in a sustainable way, and without infringing the social and economic rights of the communities in which they operate.
It is important, however, to differentiate between accountability and responsibility. On the surface they may appear interchangeable, and though they do share similarities, there are some key differences.
Jul-Sep 2018 Issue