Calls for greater accountability in both the for-profit and non-profit sectors has been an ongoing discussion amongst politicians, regulators, industry bodies and business leaders for some time now.
Stakeholders are playing an increasingly active role in the day to day activities of business. We are moving from a position of “the only business of business is business” to one that places increasing importance on stakeholders and the position that “business at any cost is no longer acceptable”.
Boards of Directors and business leaders now must be more cognisant of a broad range of their stakeholders and manage accordingly. In this month’s article, we look at the “to whom, for what and how” of accountability.
Accountability to whom?
Accountability relationships are complicated by the fact that non-profits are expected to be accountable to multiple stakeholders:
The complexity of these relationships and the degree of accountability is dependent upon a number of factors including, the industry in which the business is operating, the size of the organisation which in turn relates to revenue streams (number and size) and the corresponding number of staff and clients. There are no set formulae for how an organisation determines the level of accountability to each stakeholder; this is dependent upon individual assessment and agreement; however what is not an option is that any are ignored.
It is recommended that the Board and management allocate specific time to:
Accountability for what?
The board of a non-profit organisation is accountable for the following aspects of the business:
Given the “for whom and for what” as noted, “the how” is very much going to be user driven. Examples of this include:
The “how “of accountability can be the minimum to meet compliance requirements or the best it can be to enhance performance and create a sustained business model – the choice is yours.
The general position is that accountability is not simply about compliance with laws or industry standards but is, more deeply, connected to your organisation’s purpose and stakeholder trust. Leaders therefore should pay greater attention to strategy- driven forms of accountability that can assist their organisations achieve their mission and long term goals. Furthermore, choices have to be made, for a non-profit cannot be accountable to everyone for everything. As such, non-profit leaders need to focus their attention on accountabilities that really matter and deliver real value for both parties, not just tick the box.