The way in which you can best define corporate accountability would be as the ability of those who a corporation has affected to hold said corporation to account for those operations.
What this concept demands is that fundamental changes to the legal framework that the company operates in to be made.
What these may include is placing social and environmental duties on directors to complement duties that currently exist on financial matters as well as legal rights for the local community who have suffered due to the directors not upholding these duties, seek due compensation.
‘Held to Account’
As opposed to urging companies to give account of their own free will on their activities and the impacts they cause to improve the social and environmental performance´s that they are providing, it is the belief of the ‘movement’ of corporate accountability that corporation should be ‘held to account’ – what this implies is enforceable action. This position is one that is more radical than that of the corporate social responsibility (CSR) advocates.
NGOs and local stakeholders the world over have for years now fought countless campaigns over specific issues against certain companies. There have even been times in which firms have been brought court. Under the US Alien Tort Claims Act (ATCA) many popular cases have arisen, this statue sends compensation for ecological debts or environmental liabilities that have been left behind by companies.
Thousands of shoppers have been persuaded by consumer campaigns to purchase fair trade, recycled paper, and organic bananas, chocolate, coffee, and teas, food that is GM-free, timber that the FSC (Forest Stewardship Council) has certified as sustainable, and so much more. What this is known as is Green Consumerism. From the perspective of corporate accountability, voluntary CSR and Green Consumerism place their focus on the individual company which is oftentimes located in the North and the consumer and ignore those social and environmental justice issues for communities which are oftentimes located in the South.
The question that is often asked here is whether or not it is right for the governments of the north to place the onus on corporate and individual voluntarism, while they sit back and do nothing for the indigenous communities which are pushed off of their own land and as rain forests are cleared for the production of cheap oil or gas, bauxite, or palm oil for the consumers in the North.
Social and Environmental Justice
NGOs believe that social and environmental justice is something that people are serious about, then surely the time has come for the mainstreaming of common social and environmental performance standards. The way that this would be done would be via changes taking place in the legal framework which would allow for people to hold corporations accountable for their social and environmental wrongdoing.
What the emerging corporate agenda includes is proposals for institutional mechanisms to be established which would hold corporations accountable, as opposed to merely urge companies to report voluntarily or to improve standards. What is promoted by corporate accountability initiatives are independent monitoring, complaints procedures, compliance with both national and international law as well as other standards that have been agreed upon, reporting that is mandatory and of course redress for malpractice.