BENEFIT OF ACCOUNTABILITY AMONG EMPLOYEES

Accountability – is the acceptance of responsibility for honest and ethical conduct towards others

Accountability – is the acceptance of responsibility for one’s own actions and implies a willingness to be transparent.

In the corporate world, a company’s accountability extends to its shareholders, employees and the wider community in which it operates. In a wider sense, accountability implies a willingness to be judged on performance.

Understanding Accountability

Accountability is an essential concept in corporate finance. It is defined as an entity’s actions. This can range from accounting for financial discrepancies, conduct towards employees, financial mismanagement or losing shareholder confidence. This concept is particularly relevant to the accounting practices that a company adopts when it prepares financial reports submitted to shareholders and the government. Without checks, balance and consequences for wrongdoing a company cannot retain the confidence of its customers, regulators or the markets. A company’s environment Impact its investment decisions and its treatment of its own employees all have come under public scrutiny.

NOTE: Each company has its own standards and rule for accountability that may evolve over time.

Benefits of accountability

1.Accountability promotes operational excellence, when employees understand that their work is being looked at and evaluated, they are more likely to put forth stronger effort as it is understood that what they do matters. This is especially true when employees are rewarded for strong accountability with salary increase, promotions, and public recognition.

2. Accountability safeguards company resources. It is not limited to just doing your job, it is the practice of being honest and responsible for your actions in all situations. When employees are accountable, they are held to a standard that company resources are to be respected, and employees are less like to mistreat company assets as they understand there will be consequences for their actions.

3. Accountability yields more accurate results. Companies with a standard of accountability will have boundaries of acceptable deviation.

4. Accountability builds external investor trust. An investor’s confidence in a company is only driven so far based off the prospect of financial success. Investor must believe that a company is well-run, honest, competent and efficient with its resources. If a company can demonstrate its accountability, it will be seen more favourably, especially compared to an untrustworthy adversary.