Ways organisations can enhance accountability Identify those who affect and are affected by the organisation. Practise stakeholder engagement. Identify priorities and key performance indicators by engaging with stakeholders. Measure, communicate, report and obtain feedback on sustainability performance. Utilise governance systems that inspire confidence and trust. Practise accountability throughout the organisational supply chain. Develop and observe an ethical code of conduct. Be consistent in words and actions, including public policy positions, advertising and marketing activities. Be transparent about performance through accessible reporting mechanisms.

‘Accountability’ consists of three elements:

1.	Transparency means the duty of an organisation to account to its stakeholders.
2.	Responsiveness means the need to respond to stakeholders.
3.	Compliance means the duty to comply with standards to which an organisation is voluntarily committed, and rules and regulations that it must comply with for statutory reasons.

An organisation’s accountability is fulfilled by being transparent, being responsive and by its compliance with appropriate rules; and by engaging with and accounting to stakeholders for its performance in these respects.

Organisational accountability is based on effective engagement with stakeholders. An organisation’s stakeholders are those groups who affect and/or are affected by the organisation and its activities. Stakeholders may include, but are not limited to owners, trustees, employees and trade unions, customers, members, business partners, suppliers, competitors, government and regulators, the electorate, non-governmental organisations (NGOs), not-for-profit organisations, pressure groups, and local and international communities. Engagement builds relationships with stakeholders to determine what is important, or material¹, to all involved in order to improve overall performance.

Why it is important to organisations
The principle of accountability acknowledges that an organisation is part of a wider environmental, social and economic system. Stakeholder engagement helps to secure an ongoing licence to operate. It also provides a powerful stimulus to innovation and helps an organisation gain new understanding and insight. In addition, accountability better enables an organisation to identify, evaluate and manage risks and opportunities arising from its impacts on and relationships with its stakeholders, such as customer and employee liability lawsuits and other issues affecting reputation and brand. Accountability supports improvements in the overall performance of organisations, enhancing financial performance and the long-term value of the organisation to shareholders and other owners.

	footnotes 1 Material means information needed by stakeholders for them to be able to make informed judgements, decisions and actions about an organisation's sustainability performance.

© 2001-2006 SIGMA Project

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