ACCOUNTABLILITY

Accountability of Corporations



Accountability of Corporations

Corporations` Accountability

Accountability has become a key concept in both general administration and democratic theory. Its meaning is contested, but the general definition “obligation to answer for the performance of duties” would fit most versions. In this sense, accountability is a relationship between two parties—the person or organization answering or being held to account (the account or agent) and the person or organization to whom the account is owed (the account holder or principal) (Behn 2001, 25).

Analysis of accountability therefore, begins with the ambiguous question:

Who is accountable to whom?

Accountability obligations depend on the terms of the relationship and its institutional context, leading to two more key questions:

For what is the account or accountable and how?

This entry covers the following topics: defining accountability, typologies of accountability, mechanisms of public sector accountability, democratic accountability, and accountability in international relations, single versus multiple accountability, accountability in networks, and accountability and the new public management (Bovens 2008, 85).

The main ethical responsibilities of the company with the workers and the community are:

Serving society with useful and fair.

Creating wealth in the most efficient way possible.

Respect the human rights to decent working conditions that promote health and safety and human development and skilled workers.

Ensure the continuity of the company and, if possible, to achieve an average growth.

Respect the environment as possible avoiding any contamination by minimizing waste generation and rationalizing the use of natural resources and energy.

Strictly comply with laws, regulations, norms and customs, respecting the legitimate contracts and commitments.

Ensure equitable distribution of wealth generated.

Monitoring of compliance by the company.

Maintenance of business ethics and fighting corruption.

Supervision of working conditions and health / as workers.

Monitoring of the management of resources and waste.

Reviewing the company's energy efficiency.

Proper use of water.

Fight against climate change.

Evaluation of environmental and social risks.

Monitoring the adequacy of the supply chain.

Design and implementation of strategies for partnership and collaboration of the company.

Involve consumers, local communities and wider society.

Engaging employees in CSR practices

Marketing and building corporate reputation

Role of Stakeholders

Stakeholders in a corporation extend beyond employees, suppliers, and contractors to directors, shareholders, and creditors. Responsibilities of ownership and socially responsible investment principles are advanced by these stakeholders and socially affected persons (Bovens 2007, 468).

The manner and participation of interaction between corporations and stakeholders has evolved. Stakeholder influence has been exercised through various forms of share-holder activism, which has resulted in regulatory changes, as well as corporate policy amendments. Shareholders voting on resolutions in person or through proxy have affected internal corporate policies to the extent that as early as 2006, the U.S. Securities Exchange Commission adopted a rule requiring companies to include shareholder resolutions with proxy voting forms. The practice of distributing resolutions with proxy voting forms at company expense continues to be a legal requirement, as is the requirement to discuss these resolutions at annual or significant shareholder meetings (Day 2007, 62).

Balancing business and other social concerns remain a dynamic exercise that will likely always be an issue. In the 1960s and 1970s, shareholders demanded that corporations address human rights such as an equal opportunity and rights for black persons, as well as changes to ...