Accountability Compacts

Transcription

1 Accountability Compacts Corporate Responsibility, Accountability & the Social Contract Simon Zadek, Chief Executive, AccountAbility Senior Fellow, John F. Kennedy School of Government, Harvard University Honorary Professor, Centre for Corporate Citizenship, University of South Africa

2 promoting accountability for sustainable development Development and stewardship of norms and rules through collaborative governance involving business, public agencies and civil society organisations Stakeholder Engagement Markets that systematically reward the internalisation of social and environmental costs Collaborative Governance Responsible Competitiveness New forms of citizens participation in decision-making that impacts their lives an international, non-profit, multi-stakeholder-governed, membership organization

3 Responsible Competitiveness: July 2007 Danish Presidency DG Trade

4 national state of corporate responsibility Europe clearly excels. South Africa is the highest ranking emerging economy, then Korea, Chile, Malaysia, Costa Rica and Thailand. India was 43 rd, ahead of its rival China, ranked 66th. Pakistan came out worst, with Bangladesh and Paraguay, Zimbabwe and also scoring particularly poorly. Many Eastern European countries also scored surprisingly poorly. 1 Sweden (3) 10 Estonia (25) 11 USA (6) 22 South Africa (45) 28 Korea, Rep (24) 30 Malaysia (26) 37 Brazil (66) 43 India (43) 66 China (54) 83 Pakistan (91)

5 QuickTime and a TIFF (LZW) decompressor are needed to see this picture. collaborative governance, blending of public policy with business strategy is a pre-requisite for responsible competitiveness

6 function-accountability orientations Services accountability orientation: clients, governments, shareholders Rule-Setting accountability orientation: adopters, adopter s stakeholders Resourcing accountability orientation: beneficiaries, governments, partners

7 the greatest obstacles to success are transparency and accountability to beneficiaries and communications to wider public. [PPPs in Water, WEF, 2005]. A review of a high-profile, very costly, global health partnership concluded that failure was due to a lack of proper accountability, despite involvement of the UN, the World Bank, and other key public institutions a leading UK-based think tank, concluded that a lack of effective accountability is the single biggest cause of performance failure of UK PPPs in health, education and other public service and infrastructure [IPPR, 2001] The challenge is not whether, but how best to codify an appropriate approach to partnership governance and accountability.

8 phase one: partnership governance frameworks Enabling Principles: A set of 12 principles to frame diverse approaches to partnership governance and accountability. Diagnostic Framework: A diagnostic rating tool to enable assessment and communication of a partnership s governance and accountability structures, processes and norms. Guidelines: A set of guidelines to support development of effective governance and accountability structures, processes and norms.

9 phase two: focus on standards Ethical Trading Initiative (multi-sector) Equator Principles (financial services) Extractive Industry Transparency Initiative Fair Labor Association (textiles) Forest Stewardship Council Global Reporting Initiative (all sectors) International Council on Minerals and Mines Kimberley Initiative (conflict diamonds) Marine Stewardship Council MFA Forum (textiles) Responsible Care Initiative (most recently) (chemicals) Social Accountability International (multi-sector) UN Global Compact (multi-sector)

10 gaming the system First mover disadvantage Prisoners dilemmas Free riders

11 gaming the system "The competition of the Chinese banks is clear," said Mr Maystadt, whose European Union-backed bank is the world's biggest multilateral lender. "They don't bother about social or human rights conditions. "The international finance community needs to consider this problem," Mr Maystadt said. "We have to think about the degree of conditionality we want to impose." Stop Press: geopolitical change reshaping values, not just economics

12 how standards count collaborative Partnerships and public policy standards EVOLVING STRATEGY managerial Managerial Solutions compliance defensive Its not our job to fix THAT That is how things are Business has to fix it We need regulatory or collaborative solutions latent emerging mature institutionalized ISSUE MATURITY Paths to Corporate Responsibility, Harvard Business Review, Dec 2004

13 Blending Public Policy and Business Strategy Companies are successfully combining responsibility, research intensity, productivity and profitability. But there are challenges, and some companies are achieving economic results without strong performance on responsibility, and vice versa. Blending business strategy and public policies is the key to aligning innovation, competitiveness and responsibility requires smart We have chosen CSR as part of our strategy towards improved competitiveness. Gunter Verheugen, Vice President Enterprise and Industry, European Commission

14 development partnerships

15 who does what Public Delivery Intended Agencies Agencies Beneficiaries Define Outcomes Medium Low High Design Implementation Options Align Incentives Low High Medium High Low Medium Establish Accountability Compact Medium Medium Medium

16 dynamic accountability pathways Define Preferred Outcomes Establish Accountability Compact Effectiveness Pathways Design Activities/ Outputs Align Incentives/ Responsibilities

17 accountability compacts key lessons Effective accountabilities have RAISE features: Reciprocal in being collaboratively developed and agreed Accessible in being understood and monitored by all parties Interpersonal in framing on-going interaction and trust-building Systemic in being multi-directional and for all players Embedded in institutional and individual incentives. RAISE features deliver performance improvements because they go beyond compliance, and drive learning and innovation that informs purpose, process design and efficient implementation, the heartland of institutional and individual performance.

18 accountability compacts MFA Forum Purpose: To support countries dependent on textiles exports in transition following end of the Multi-Fibre Arrangement. Organizing Principle: the Collaborative Framework that defines roles and responsibilities of all public and private players. Activities: in-country convening/meditating key players to enable: Brands and suppliers to stabilize relationships around agreed program of change (labour standards, etc) Public agencies to better target public investments for worker retraining and trade-enabling infrastructure development NGOs and labour organizations apply leverage and expertise more effectively to achieve development outcomes.

19 Collaborative initiatives are becoming key to both market-based and nonmarket development Governance and accountability are key to effective collaboration. QuickTime and a TIFF (LZW) decompressor are needed to see this picture. Collaborative initiatives have particular governance and accountability issues and needs. Accountability Compacts are a critical organizing principle for effective collaboration Accountability is the DNA of civilized societies

20 phase four? Stop Press: how we run the world will never be the same again