Long live accountability!

If AccountAbility, as an organisation governed by its stakeholders, is “dead” then long live accountability! Because many lessons can be learned for how to create more democratically accountable organisations and societies from the changes at AccountAbility and the subsequent criticisms from its disgruntled stakeholders and former staff. The lessons are broad ranging, suggesting a new era of reflective, systemic thinking and collective action. As a crisis is too important to waste, I share some of these lessons and initial implications here.

So to briefly recap: the resignation of the entire Standards Board from AccountAbility, a leading organisation in corporate responsibility and organisational governance arena, sparked a vibrant and personal debate about the organisation’s new direction. The organisation is perusing a consulting services orientation, and therefore away from an one focused on building a field of practice.After initial criticism of the directors, and then a defence of their new approach, attention has shifted to supporting new networks to facilitate the further use and development of stakeholder engagement standard AA1000, as well as reflection on the lessons for organisational governance, and thus accountability in general, from what happened at AccountAbility.

That lesson-finding is what has piqued my interest. As I specialise in how organisations relate to and engage stakeholders, I followed AccountAbility’s work from the start, and appreciated its publications, conferences, and standards development. However, some key dimensions of accountability appeared to be avoided in the organisation’s work and standards. The current drama between AccountAbility and its stakeholders could provide an opportunity to draw lessons for future practice by those who seek more democratic accountability in economy and society. Although not privy to first hand experience of the changes at AccountAbility, there seem to be some general lessons:

1. there is a difference between hard and soft accountability and risks from not appreciating the difference;
2. efficiency should not be used as an argument against principles of democratic governance, but democratic governance mechanisms be made more efficient;
3. clarifying and expressing a political philosophy is not unprofessional but actually of practical importance;
4. it is not any accountability that we value but democratic accountability to those significantly affected by decisions;
5. the expression of certain values does not reduce the importance of organisational governance in shaping the nature and legitimacy of an endeavour;
6. we will need more governmental measures to harden soft accountability innovations, and that will require clearer understanding of the need for, and nature of, democratically accountable standards organisations;
7. this field of practice requires new professional institutions that exhibit a new professionalism which focuses not only on the needs of the client but also on a clear public purpose;
8. we would collectively benefit from expressing our sense of participating in a social movement, and developing networks and organisations dedicated to maximising the transformative impact of all our work in in this field.

I’ll briefly explain each of these potential lessons. The first, that there is a difference between hard and soft accountability and are risks from not appreciating the difference, is an analysis that has been advanced by many in civil society in the past decades, in response to rising voluntary corporate responsibility. One criticism of corporate responsibility work is that it often ignores power relations, including the distinction between mandatory and voluntary mechanisms of governance. Many NGOs and trade unions, therefore, have criticised CSR as distracting us from needed innovations in holding corporations and investors accountable through law. They have highlighted how terms like “accountability” are used in vague ways by some CSR and sustainability organisations, ignoring the fundamental different between choosing to give an account (due to one’s own views on the benefits of stakeholder engagement for learning, organisational performance, or on moral cause for doing), and procedures for being held to account by stakeholders whether one likes it or not. AccountAbility’s work also avoided this distinction. In a paper for the UN in 2004, I explored the different assumptions and ideologies between those pushing for voluntary responsibility and others seeking more mandatory accountability, hoping to contribute to a synergy of approaches.

In 2009 AccounAbility changed their governance to place all power in hands of the directors. The new organisation had a Standards Board, Governing Council and Charter, which appeared to keep the same semblance of stakeholder governance. Semblance being the operative word, as it appears all executive power was placed in the hands of the directors who could then decide by majority. We might ask: if following a Charter is optional, is it really a Charter? If a Governing Council can be ignored, is it really a “Governing” council? If a Standards Board can be ignored, is it really a “board”? Should grand titles be used for what are optional mechanisms, when the real power is held in other roles in the organisation? Probably not if it distracts us from where real power lies, and thus what real, i.e. mandatory, accountability exists.

I’m toying with an idea… that there is no such thing as voluntary accountability, that it is an oxymoron. Because to wish to give an account, to receive advice, etc, is not accountability. To do such is to chose a form of responsibility and openness (depending on how its done). By not making this distinction and helping even to obfuscate it, some of AccountAbility’s stakeholders made decisions that lost them their real mechanisms of accountability over the organisation and so they have came to experience first hand what the difference between real accountability and “voluntary accountability” means.

The change in organisational governance happened in 2009, in the name of greater effectiveness and efficiency. There may have been difficulties with the existing system, but that does not imply a need to reduce democratic control. This could be a second lesson: that efficiency should not be used as an argument against principles of democratic governance, but democratic governance mechanisms need to be made more efficient.

We should also reflect on why the key difference between voluntary and mandatory mechanisms were ignored, despite the strong voice of civil society on this issue. Might it be that in the push to professionalise matters of responsibility and stakeholder engagement, a technocratic language was developed and deployed that seemed apolitical and practical? In such a context to be “taken seriously” by large institutions, discussing matters in terms of “power” and “rights” and “justice” would not have helped. It is certainly not the usual language of accounting and conformity assessment – the two professions that standard-setting relates to. This is the third potential lesson: that clarifying and expressing a political philosophy is not unprofessional but actually of practical importance. Some may not like to hear a language of power and rights, but perhaps to normalise such language in business contexts is part of the challenge? And to continue to marginalise them, part of the problem?

The case of AccountAbility also reminds us that we need to refine our understanding of what forms of accountability we value. It is a mistake to view the current incarnation of AccountAbility as less accountable. It is very accountable to its current directors. That is a form of accountability that its staff have experienced in the past year – like us or lump it. In the report on NGO Accountability I wrote for the UN in 2006, I stressed the importance of understanding the desired situation as democratic accountability – where decision makers are accountable to those affected by their decisions, where they can change decisions and decision makers if they so choose. I briefly shared these ideas in AccountAbility’s own journal. That could be the fourth lesson: it is not any accountability that we value but democratic accountability to those significantly affected by decisions. Therefore we need to be clearer about these political views in our work, and not avoid them with the convenient and sloppy use of terms like “multi-stakeholder”. Invite a few people together and you have a “multi-stakeholder” process. Mussolini’s government was multi-stakeholder – many fascist regimes invited together the “wise” from different parts of society. Today “multi-stakeholder” could be a code word for corporatism if we do not stress the importance of empowering those affected by decisions – of promoting democratic accountability.

Taken together, these lessons should remind us that the expression of certain values does not reduce the importance of organisational governance in shaping the nature and legitimacy of an endeavour. We must speak of values but not rely on people in positions of power expressing them. If organisations are to play an important role in securing or serving the public good then we must not rely on the moral character of their senior office holders. That idea is the basis of the concept of national democracy and the separation of powers in a state. i.e. accountability to the people is key, not the responsibility of those with power. This fifth insight is important for those of us who work in the emerging field of social enterprise. There is a key difference between an organisation that is non-profit and that which is for-profit; there is a key difference between an organisation which is member governed and that which is run by its executive. The growing interest in measuring social investment and social impact aside from consideration of the organisation undertaking the work is therefore problematic. On the one hand it ignores how for-profit enterprises can contribute to economic inequality, which underlie many social and environmental problems. More generally though, it stems from a reductionist mindset that does not appreciate the evolving nature of how people address social challenges, and how the governance of their organisations shapes how they adapt.

If you are appreciating the speculation here on what we could learn from the recent goings on with AccountAbility, then you will appreciate the need for a new era in work on corporate accountability. Consequently a sixth lesson comes into view: that we will need more governmental measures to harden soft accountability innovations. If we want executives to pay more attention to the well-being of their employees, consumers, communities and the environment, then we will need more effective law. This law could combine existing innovations in private (or voluntary) social and environmental standards – it could make them mandatory. More governments are passing laws that require companies to meet a relevant private social and environmental standard, such as the Forest Stewardship Council (FSC) for timber companies. If this government backing for private regulatory systems is to grow, which it must, then we will need a clearer understanding of the need for, and nature of, democratically accountable standards organisations. Otherwise, governments might be backing standards that are not in the best interests of affected stakeholders.

Not all standards organisations recognise the need to be democratically accountable, and some are even run for profit. When I was helping formulate the concept for the Marine Stewardship Council (MSC), I lost the arguments that it follow the FSC model, which provided opportunities for all stakeholders to engage. The argument from the large consulting firm to advise on organisational governance was that there were more efficient systems of governance that would move faster. They failed to realise that standard setting on sustainability issues is as much a political as a technical issues (and rightly so!). Today the FSC accounts for 11% of worlds forests in production and the MSC about 6% of the world’s fisheries, while the MSC received vastly more start up investment, so although I see impact from both, I don’t see greater efficiency from unaccountable governance. The ISEAL alliance has gone some way to defining credible standard setting, but failed to specify democratic accountability as core to credible standard setting. There is a role for government to play here, and I have been hoping for sometime that the UN might help in clarifying credible multi-stakeholder standard setting.

Some of the upset expressed about the change of direction from AccountAbility is because the organisation was serving an emergent profession and, for some, playing a role in a new social movement for the transformation of economy and society. It was not only a community but a sign-post for that community. Many people saw AccountAbility becoming a professional institute for an emergent profession of people working towards more engaged and progressive organisations, economies and societies, however it is they define that. It didn’t, and that need and opportunity remains. Some groups like Net Impact have the potential but are not there yet. In any process towards professionalisation in this space, we should remember that professionalisation is a two-edged sword. Not only can it enhance the performance of practitioners, it can also lead to protectionism and privilege conservative voices, thereby restricting innovation (For instance, I recall with fondness the days when there were no Professors of CSR to pointlessly pontificate from ivory towers). The seventh lesson is therefore that our field of practice still requires new professional institutions that exhibit a new professionalism which focuses not only on the needs of the client but also on a clear public purpose.

Yet more than a profession, many people operate in this space as their vocation. That helps explain why so many people have responded collectively to the changes at AccountAbility and created their own networks in an instant. That is why if you search “corporate responsibility movement” you will see over 55,000 hits. I just discovered that the first hit is my last book. In it I draw from the lessons of past social movements to suggest how our work on corporate responsibility is, and should, evolve. The eight and for now final lesson Id like to suggest is that we would collectively benefit from expressing our sense of participating in a social movement, and by developing networks and organisations dedicated to maximising the transformative impact of all our work in in this field. We may have for-profit portals and information services, such as CSR Wire, Just Means, CSR International, CSR Asia and my own Lifeworth. We also have business clubs like BSR, WBCSD, IBLF and many others around the world. Yet there are no social movement organisations for our work, where we can learn how to become more than the sum of our individual actions. Anita Roddick spoke of a social movement for responsible business that she said had failed in her lifetime because it had become co-opted by large consulting firms and lost its transformative ambition. Will we also be lamenting lost potential in our last interview?

Hmm.

The answer to that has to be no…

…even if we fail.

If someone has some funding and time to help, I’d be happy to turn Lifeworth into a non-profit association of its members committed to transforming economies (as we enter our 10th year we have 7000 subscribers around the world so would have a head start). It seems a bit presumptuous to offer to build a movement organisation.. but I suppose someone has to do it. Id happily join another if you are starting one… but only if its an efficient democracy!

It is important we learn from our set backs as well as our successes. That was my message to the UN Global Compact’s participants on its 10^th anniversary – what if we are failing? Where is the ambition for real transformation? How can we build practical programmes of work with that ambition? It is in this spirit of seeking more transformative ways of working in future that I have developed some ideas on the lessons from the changes at AccountAbility.

There is an added reason why I wasted my weekend on this polemic.. its a sense of urgency. Because the issues I outline above will only become more important in the coming decades. A resource crunch is coming, due to the double effect of depleted resources and disruptions to agriculture, production and transportation from climate change. A quick look at recent history tells us that at times of crisis, powerful people use fear to justify efficiency and effectiveness over democratic accountability and fairness. It is important we learn to define, defend and advance democratic accountability in all institutions of society.

Perhaps AccountAbility will go on to be a great consulting services company. Looking at the massive overheads and insidious sycophancy of the mainstream competition, it has a fantastic market opportunity (unless it apes those consulting firms). Inadvertently, its directors have done the movement to transform economies a great service – by providing lessons to clarify our vision of what is needed and how. So if AccountAbility, as it once was, is dead, long live accountability!

(Acknowledgement: Thanks to Maya Forstater whose blogs and tweets got me thinking.)