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Corporate Accountability

Corporate Accountability

What Is Corporate Accountability?

Corporate accountability alludes to a publicly traded company's performance in non-financial areas, for example, social responsibility and sustainability. Corporate accountability embraces that financial performance ought not be a company's just important goal and that shareholders are not by any means the only individuals to whom a company must be responsible; partners, for example, employees and community individuals likewise require accountability.

Figuring out Corporate Accountability

Related to the annual financial reports that the Securities and Exchange Commission (SEC) expects corporations to create, many publicly traded companies distribute their own corporate accountability reports to fulfill requests from their shareholders and the public. Private organizations, not part of a government body, set standards for social and environmental responsibility that they expect public companies to meet and be accountable for.

Corporate accountability keeps up with that businesses ought to be held responsible for the impact of their actions on society and the environment. Corporate accountability is additionally an important concept for investors and shareholders concerned with ethical investing.

Corporate Accountability in History

Governments don't have broad authority to control corporations aside from when specific legislation has been passed. By and large, passing such legislation has required a coordinated public work to persuade lawmakers to control particular practices.

One of these early efforts was the campaign to ban tobacco smoking ads and to label tobacco products as dangerous, which brought about the 1969 passing of the Public Health Cigarette Smoking Act. This provoked both public outcry at TV and radio ads for tricking in new smokers without giving equivalent weight to the perspectives that smoking is dangerous, as well as a comprehensive Office of the Surgeon General report that framed the specific wellbeing hazards of smoking.

Other Corporate Accountability Campaigns

Resulting campaigns have campaigned for other public wellbeing drives, environmentally sound or sustainable business practices, and social justice issues like employee abuse and pay off and corruption. At times drives are set off by specific incidents like periodic campaigns to manage oil industry practices after enormously publicized oil spills. Numerous nonprofit organizations โ€” like Corporate Accountability International and Friends of the Earth โ€” have mandates to lobby for increased corporate accountability for specific campaigns.

Corporate Accountability Reports

The increased pervasiveness of such developments and uplifted concern with ethical or responsible investing has driven many companies to create annual corporate accountability reports. There is no unmistakable configuration for these reports, and they change widely from one industry to another. Be that as it may, various private organizations offer services or rules to follow companies' accountability and judge their practices.

Corporate accountability reports can act as great publicity for a company. Common report highlights remember sections for the treatment of employees, efforts to create goods or offer types of assistance in a sustainable manner, company culture and internal management, and quantitative evaluations of the externalities โ€” both great and terrible โ€” of companies' business practices.

Corporate Social Responsibility (CSR) versus Corporate Accountability

Is there a difference between corporate social responsibility (CSR) and corporate accountability? The two terms are at times confounded or considered to be interchangeable. Notwithstanding, corporate responsibility and corporate accountability are normally recognized from each other in a manner that appears to be unpretentious, yet which conveys an important qualification.

Broadly, both corporate responsibility and corporate accountability accept that corporations have liabilities past generating a profit for their shareholders. Such obligations incorporate the negative duty to abstain from truly hurting the environment, people or networks, and the positive duty to safeguard society and the environment โ€” by protecting the rights of workers and networks impacted by business activities, for instance.

In any case, though corporate responsibility frequently demonstrates voluntary approaches, corporate accountability normally alludes to more fierce or enforceable strategies of impacting corporate way of behaving โ€” pressure applied by social and political actors past the company itself. Such actors can embrace a scope of strategies, including yet not limited to preparing legal mechanics to uphold social standards.

Hence, corporate accountability's preemptive measure of delivering annual accountability reports.


  • Corporate accountability alludes to a publicly traded company's performance in non-financial areas like social responsibility and sustainability.
  • The concepts of corporate accountability are important for those concerned with ethical investing.
  • That's what corporate accountability holds, past creating a gain for its shareholders, a company must likewise be accountable to its employees and community individuals.