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7 Effective Ways to Maintain Corporate Accountability

You’ve probably heard a lot about accountability, particularly on leadership. But what does it refer to, and how does it contribute to effective management in a company?

Before you know more deeply, you must understand the outline of the understanding of accountability. In short, accountability is the accountability of one party with another party related to activities such as reports, administration, and bookkeeping.

Also Read: Top 5 Bookkeeping Tips for Every Business Owner

When a company gives you responsibility, you must definitely show accountability. Accountability involves making personal decisions to engage in a situation and showing a willingness to strive to achieve the results the company wants.

We’ll deeply cover the more profound understanding, functionality, and elements you’ll need to maintain corporate accountability. In addition, you can understand how the behavior of responsible people can build trust, relationships and even affect the company’s business outcomes.

What is Accountability?

Accountability is an ethical term of obligation that refers to the capacity to describe a person’s actions and judgments of steps or activities that a person has undertaken.

For example, you or your division can be said to be accountable if it can bear the consequences of performance or actions that have been done. If you or your division doesn’t have enough accountability, it’s hard for them to trust your efforts because they believe you or your division is doing something without consequences.

To better understand the notion of accountability, see Andreas Schedler explanation (1999), conveys the conceptual definition of accountability, namely:

“A is said to be accountable to B if A is obliged to provide information and justification to B about all actions and decisions of A, and to receive punishment in case an action or decision deviates from the supposed.”

Andreas Schedler (1999)

Thus, accountability is crucial to building trust and relationships between a person or division. Once you have sufficiently understood the notion of obligation, understand the principles that exist in accountability below.

Principle of Accountability

There are principles of accountability that you should know in general, namely:

  1. Leaders and all staff are committed to creating an organization that has an accountable value;
  2. Being a system that ensures consistent use of resources based on applicable laws and regulations;
  3. Indicate the extent to which the goals and objectives set have been achieved;
  4. Measure all actions and decisions based on the vision, mission, results, and benefits of the organization;
  5. Maintain the values of integrity, transparency, objectivity, honesty, and innovation.

Types of Accountability

In general, the classification of liability is divided into horizontal, vertical, or public, depending on the context. All three have differences that you can understand, namely:

Vertical Accountability

Vertical accountability is a type that refers to a set of principles or conditions that apply to a particular position.

For example, a person is accountable to a higher authority, such as a company manager or a corporate stakeholder responsible to investors.

Horizontal Accountability

Horizontal accountability refers to responsibilities unrelated to the position of a company or organization. Usually, accountability is horizontally related to society or the external environment.

An example is a company’s public service mission, such as a Corporate Social Responsibility (CSR) program.

Public Accountability

In the context of government, the term “public accountability” refers to providing information to relevant stakeholders about the government’s financial activities and performance.

What is Accountability
Source: Medium

Accountability Function

What are the uses or functions of accountability? Understand the four parts below, among others:

Monitor tasks and activities

The use of accountability is to monitor and manage the tasks and programs of activity. For example, a manager will apply the principle of accountability to his subordinates to monitor the work being done.

Success measuring tools

Accountability can serve as a benchmark for a company’s leadership success. For example, a mentor in a business or organization may evaluate the outcome or performance of an intern in leading a business by upholding the principle of accountability.

Reduce the number of abuse of duty

Abuse of duty and authority over office may occur. The cause is expected due to the presence of system defects in an organization. There may be abuse that can have an impact on the stage of corruption.

The accountability function allows accountability reports to the board of directors to ascertain whether an organization has potential or indicates abuse of duty and authority to maintain reputation and transparency.

Improving performance effectiveness and efficiency

Accountability can contribute to the effectiveness and efficiency of an activity or job. For example, in corporate finance, creating financial statements using accounting software makes the report results more time-saving and accountable.

So that the principle of accountability can run to measure and make decisions that help the company determine the wishes of stakeholders.

Effective Ways to Maintain Accountability in The Company

Once you understand this article, it feels like business people want to have an accountable company. Accountability in the workplace triggers the company to succeed, but it can be challenging to implement or maintain.

So what are the elements you need to maintain accountability? Here’s the answer:

Make sure there is transparency.

By acting transparently, companies can almost certainly adhere to the principle of accountability. Transparency can be understood as an openness to the supervision of programs and activities by parties related to it.

Your employees may seem tedious, but when people understand the goals behind policies and procedures and have clear guidelines for employees to follow, they’re more likely to do what’s right.

Management support and involvement

Managing a business by upholding accountability requires a direct role for management. Company management must show support by participating in the company’s programs or activities.

Creating a comfortable space for employees to participate in an accountable manner requires more effort for the management team. As a result, you get the freedom to hold employees accountable to the organization as expected. 

In addition, management participation is also beneficial in evaluating the results and performance of the company’s activities and programs.

Development of values and actions

The development of values and actions companies can do by linking actions or decisions taken by management following the company’s values.

For example, when management decides to lower the Key Performance Indicator (KPI), the company expects the division to improve the quality to achieve the desired target.

Also Read: Five Strategies for AFive Promotion Strategy Business Should Apply

Competitive spirit

The competitive spirit is a common trait among leaders. Although being first isn’t for everyone, no one wants to be the last. This has a lot to do with openness getting better.

A competitive spirit can improve performance. So that management also pays special attention to developing employees who have high fighting power potential. The result is that leadership can indirectly increase the chances of success of the company.

Funding

Responsibly managing the initiative will undoubtedly demand significant funding. The company must finance the company’s activities in an incentive-based manner to produce good financial performance.

In addition, the purpose of financing is to encourage the implementation of programs or activities to avoid mistakes.

Balance scorecard

A balanced scorecard is a management system that translates a company’s strategic goals into a set of performance goals that are measured, monitored, and changed as necessary to ensure the organization’s goals are met.

Maintaining or even increasing accountability is undoubtedly possible with a balanced scorecard. Beyond its physical dimensions, the balanced scorecard can visualize the company’s goals and objectives.

Other rewards

If management and corporate culture are healthy, motivational tools such as money as incentives can be viewed as adequate and fair compensation for organizational performance.

Other forms of compensation may include rewards or career advancements for future employees, which can instill a spirit of progress and commitment to achieving the company’s goals.

Conclusion

It is appropriate for businesses to prepare and present transparent financial statements that do not exaggerate and reduce. Additionally, you must prepare a financial accountability report, which serves as a financial statement based on the accounting cycle of activity and the source of funds used.

Automated financial statements will help you save time in the process of creating and presenting financial statements. The report’s results are also highly accurate, and you can read them in real-time.

Use the best Accounting Software from HashMicro. We provide an integrated system that can help you present any form of corporate finance. Increase profitability with accurate budget calculations.

We have become a solution for hundreds of enterprises in Indonesia and Singapore. Companies like Baskin Robbins, The Coffee Bean, TransCorp, Bank of China, and others, have turned to HashMicro. To check out more, click here.

Interest in getting savvy tips for improving your business efficiency?

Fadel Rasyidhttps://www.fadelrasyid.site
I see myself as an active and curious person. Constantly open to learning and growing with values. I never can't see the bright side of a situation — a content writer at HashMicro & a digital marketing enthusiast.

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