ACCOUNTABILITY

Accountability in the Public Sector



Accountability in the Public Sector

Accountability

The word 'accountability' derives from the Latin word computare, which literally meant 'to count', and which denoted book-keeping and forms of financial record-keeping. Today, however, the word 'accountability' conveys a more general sense of 'giving a report of oneself'. As such, it overlaps with concepts like 'responsibility' and 'liability'.

So, accountability can be defined in the following manner: when people are meant to pursue the will and/or interests of others, they give an account of their actions to those others who are then able to decide whether to reward or censure them for the actions (Worthington, 2003, pp. 14-21). Accountability thus conveys the idea that an agent (such as an elected politician or a civil servant) is responsible for acting on behalf of a principal (such as a citizen or government minister, respectively) to which they should respond and report. The principal is thereby able to hold the agent accountable for his or her actions.

Accountability in the Public Sector

The statutory business judgment rule was included in the Corporations Act in 1999 and since then has been a controversial law. It acts as a defence for the businesses that operate in good faith. They ensure that this law is for a proper purpose and that the director has no personal interest. The business should be operated in a manner that helps in achieving the goals and that the directors of the company are performing to the best of their potential and that proves to be beneficial for the company, as well. It is important that the section 180(2) is understood. This section of the Corporations Act is related to the directors of the organization. They are required to take decisions that are in the best interest of the company without bringing their personal interest in between (Zattoni, 2012, pp. 63-68 ).

They should have the appropriate knowledge and information related to the decision that they have to take so that they are in a position to take the best decision possible (Tomasic, Et.al, 2002, pp. 24). Furthermore, under this act, the directors are required to make sure rationally that the judgment (decision) that they are taking is in the best interest of the corporation. The rights of the directors are ensured provided they work in a manner that is outlined by the law and that is in the best interest of the company.

Section 180 of the Corporations Act is known as Duty of care and diligence and the business judgment; therefore, it is very important for the directors to ensure that they take decisions keeping in mind their duties. The subsection 2 of this law includes an element of 'business judgment' as well. This can be explained as the decision to take or not take action in respect of a matter relevant to the business operations of a corporation rule. This law has been designed to make sure that the directors of the companies are working in a manner that is unbiased and ...