Glossary term
Accountability
Subject: Governance, Corporate Governance
Accountability is the obligation to answer for decisions, actions and results, and to accept consequences, to a person or body with the right to ask. It cannot be fully handed to someone else.
Explanation
Three things must be in place: someone is clearly assigned the role, they have the authority and information to act, and there is a body able to question them and apply consequences. Without all three, accountability becomes blame-shifting. In an organisation it runs through the reporting lines up to the board, and from the board to shareholders. Accountability differs from responsibility. A manager can delegate a task, which moves the responsibility for doing it, but remains accountable for the outcome. Regimes for financial firms have made this personal, requiring named senior individuals for defined areas. Clear lines also help investigations, since it is known who decided what. When a failure occurs, a clear owner lets investigators and the board go straight to the cause.
Example
A water utility's billing system fails and thousands of customers are charged twice. Under the governance map, the head of operations is named owner of the billing process. She cannot blame the vendor who ran the update. She reports the failure to the board, leads the repair and refunds customers, and her bonus is reduced as the policy requires.
Not to be confused with
- Responsibility
- Responsibility is the duty to do a task and can be delegated. Accountability is answering for the outcome, and it stays with the owner.