AccountAbility in mist of turmoil

The directors of AccountAbility and the practical caretakers of the AA1000 standard have suffered a major setback. In their efforts to turn the previous “open source” standard into a basis for a sustainable business model they are experiencing a crisis of identity.

On the 11th the whole standards board (SB) resigned in an open letter to the directors of the organization. You can find the letter here.

The event that is described shows a couple of issues that I think one can learn from.

  • That culture matters. The AA was established as a multi-stakeholder run organisation with the aim to:
    • Enable open, fair and effective approaches to stakeholder engagement;
    • Develop and recognise responsible competitiveness in companies, sectors, countries and regions;
    • Create effective collaborative governance strategies for partnerships and multilateral organisations that are delivering innovation and value, and
    • Set and influence sustainability standards.    

None of which it has been able to achieve with any great success creating a crisis of the purpose of the organisation was really in sync with the stakeholders it so badly wanted to communicate with. When the AA became professionalised in order to “turn the ship” around the old culture of the NGO had to be put aside this created a identity crisis from which the organisation have been unable to recover.

  • When creating change you also need to change the artefacts. The AA1000 was the artefact of the old organisation it meant something to them that somehow was sacred and untouchable. When the professional management took this icon of what was “right” about CSR reporting they practically tried to sell the cultural soul of all the people that was involved. This cultural sell-out created tension within AA which it was unable to control and resulted in first that the Governing counsel in November 2010 resigned and finally the SB.

I do not offer an opinion (even though I have one) on if it is right or wrong for AccountAbility to change their reison d’etre. I the case of this organisation I find it interesting that that change is a difficult thing even for those that wanted change is their main purpose.

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3 thoughts on “AccountAbility in mist of turmoil

  1. Interesting to see that AccountAbility themselves does not mention this on their website. It says something about their ability to handle decent when it comes to internal issues.

  2. In what I think is in the spirit of accountability and transparency I have received the below statement from the AccountAbility management team. I’m a strong believer in that people should have enough knowledge in order to make up their mind on any give subject and this also one of these times. So when you read the blog post and statement from the SP then take a few minutes to hear what AccountAbility have to say.

    Best regards
    Jacob

    13 January 2011

    Dear Colleagues,

    In the spirit of transparency and accountability, we wanted to bring to your attention certain developments pertaining to the governance structure of the AA1000 Standards. Earlier this week, AccountAbility accepted the resignation of the Standards Board, the voluntary advisory body convened last summer to provide technical guidance on the AA1000 Standards.

    While we shared the mutual goal of strengthening Standards, there were fundamental disagreements between AccountAbility’s Management Team and the Standards Board over the future governance of the Standards function, the propriety of certain Board members and others in leadership positions maintaining competing business interests, and ongoing concerns about breaches of independence. As a result, AccountAbility’s Management Team deemed that the viability of the Standards Board was untenable.

    We believe the Board’s position was heavily influenced by false, misleading and inaccurate information provided by certain disgruntled former employees of AccountAbility. Assertions that AccountAbility’s business model has changed are simply wrong. AccountAbility remains a not-for-profit company limited by guarantee as it has since 2005. Its core lines include Standards (which oversees the AA1000 Standards), Research, and Services. We do not offer Assurance Services nor have any plans to develop an assurance business.

    Furthermore, the notion that Standards are financially subsidizing the rest of AccountAbility and that the directors of AccountAbility are profiting from AA1000 is patently false. In fact, the exact opposite is the case – the Standards function is subsidized by the other areas of AccountAbility.

    Since the change in leadership last year, AccountAbility has taken several concrete steps to support the AA1000 Standards, among them:

    • reinstating the full time position of Global Director of Standards,
    • developing a specific strategy and business plan for Standards,
    • fully subsidizing the Standards operating budget,
    • actively supporting the rollout of the revised Stakeholder Engagement Standard, and
    • convening the Standards Board and Technical Committees to provide direction and technical guidance.

    Given our belief that a strong governance structure is essential to the further development and usage of the AA1000 Standards, AccountAbility has been actively overhauling the governance and oversight structure for AA1000 and the organization as a whole. The new structure and process we will be introducing will provide broader, more senior-level stakeholder representation from the public and private sectors, civil society, and the standards community.

    Although this is an unfortunate situation, we should not, and will not let these differences distract us from our mission of advancing AA1000 and engaging with stakeholders. Nothing can underscore our continuing commitment to steward and advance the AA1000 standards – and to ensure its integrity –
    than the recent appointments of two highly-regarded accounting and financial reporting standards setters, Mr. Kurt Ramin and Ms. Liv Watson. We are confident that under their leadership the AA1000 Standards will set the benchmark in corporate responsibility.

    Should you have further questions, please feel free to contact us.

    Sincerely,

    The Management Team at AccountAbility

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