Corporates lag behind on accountability

The top corporates have a lot of work to do to improve their accountability, according to a new report...

Last Updated: 31 Aug 2010

The ‘Global Accountability Report’ from the One World Trust, a governance think tank, ranks 30 of the world’s most powerful corporates, governmental bodies and NGOs – and the corporates put in a fairly lamentable showing. Only one of the ten companies studied made it into the top ten – mining giant BHP Billiton in 9th – and just two more managed to rack up over 50%. Given that the think tank reckons 80% is the benchmark for anyone who’s introduced ‘reforms beyond the basic minimum’, that’s not terribly impressive. And after the events of the last year, operating behind a veil of secrecy may no longer be an option…

To be fair, none of the 30 organisations under consideration exactly covered themselves in glory. The International Foundation for Organic Agriculture (who?) came out on top, and that only managed a score of 71% - closely followed by the European Bank for Reconstruction and Development (which we’ve at least heard of) with 70%. And they were the top performers – at the other end of the scale,  NATO and the International Olympic Committee managed a frankly dismal 36% and 32% respectively…

Rather alarmingly, corporates got the lowest average scores in all four of the study’s major indicators: transparency, participation, evaluation and ‘complaint and response mechanisms’. They performed relatively well in the latter, suggesting they’re at least making an effort to get feedback – but by all accounts, they don’t seem to be doing much about it…

The issue, of course, is that a lack of accountability and transparency has undoubtedly exacerbated the impact of the recent banking crisis – and there’s no reason why this shouldn’t happen in other sectors in the future. ‘Today it is finance; tomorrow the accountability problem may hit people failing to respond to climate change or health care issues,’ said the think tank’s executive director Michael Hammer. He reckons a step change is required; his theory is that the top organisations have done the easy reforms, but they’re struggling to implement anything more complicated.

And greater accountability doesn’t have to be bad for the bottom line – quite the reverse, in fact. One World quotes the example of GE, whose Ecomagination energy-efficient products initiative is on course to generate $20bn in revenue by next year. As Hammer says: ‘Organisations need to look at accountability as an opportunity rather than a problem.’ Unfortunately that still seems a little way off...

In today's bulletin:
The beginning of the end for Woolworths
Brown hits back after German bashing
Channel 4 eyes BBC Worldwide merger
The grate Italian cheese bailout
Corporates lag behind on accountability

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