Accountability

Societal Accountability

Every organization is accountable broadly to the society of which it is a part. The assumption that every organization is a creation of individuals partnering to pursue common goals through a shared organizational structure is the basis of the notion of accountability. [Page 5]One perspective is that these organizations are evidence of a broader social contract that forms the foundation of every society. This contract is manifest in the action of chartering by which society legitimizes the central purpose or mission of any new organization. An alternative perspective is that organizations are created by individuals contracting with each other to achieve a common set of goals. The private organizations then seek to be legitimized through an explicit contract with a public institution such as the government. In either case, organizations must give regular public accounts of their activities to maintain their legitimacy.

Answering the question of to whom, both public sector and private sector institutions are accountable to the general public. Governmental organizations are accountable to the general citizenry under the guise of a constitution that provides the groundwork for their existence. Private organizations designed for various purposes, such as business corporations, have a similar requirement, although they are accountable to only a part of society. One view focuses solely on share-holders as the group to whom a corporation is responsible because they have joined with each other as owners of the organization. A competing view broadens the scope to any group that has an interest in, or claim upon, the corporation. Customers, suppliers, employees, competitors, and other groups join with shareholders as groups to whom the corporation must demonstrate its accountability.

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