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The AccountAbility mess raises questions

Some readers may have heard about what is going on over at AccountAbility, the former NGO standards setter around some areas of CSR.

The organisation is currently mired in controversy and suffering an identity and funding crisis.

(The AA1000 Standards Board collectively resigned on January 11, 2011, citing organisational direction in a thinly veiled public attack via open letter. The letter is here) Comments from former employees and stakeholders are here.

Without going into all the detail (we’ll be publishing an in-depth article soon) of the mess that today’s AccountAbility finds itself in, the upshot is major change for the organisation.

(There is no mention of this change on their website, despite a request from the now-ex board to disclose what has happened)

That may not matter too much to some: AccountAbility has become steadily less relevant for many in the field in the last five or so years, driven as it was by the whims of poor leadership and the positive evolution in practice amongst large companies which overtook its work.

But what may matter is the turning of previously ‘open source’ style standards, around stakeholder engagement and reporting assurance, into a profit making venture for AccountAbility’s new directors.

This is what I hear is happening.

If that’s right, (and it is) it begs the question of whether this is morally right.

If a pure consultancy develops proprietary ‘standards’ they are largely ignored, seen as a marketing tool for services and/or a methodology.

If a multi-stakeholder driven NGO (as AccountAbility once was) does the same, and they are accepted by many, what right do later directors of the organisation, having made it for-profit, have to the cash generated by these standards in future?

It strikes me as quite wrong that the new bosses of the organisation can make financial hay from standards developed by others, to the benefit only of themselves.

What value will a for-profit AccountAbility create for anyone except private clients who will pay for those services?

That would not be a problem normally, but to be clear: The intellectual property and all of the reputation/database of the firm was created on a non-profit basis by others.

I’m no standards expert (thankfully), but sure this is not how it’s supposed to be, is it?

This does not pass the ethical ‘smell test’ that usually serves most of us well.

From what I hear, AccountAbility’s ‘evolution’ sounds like a group of new bosses trying to cash in from the shell of a once-useful organisation, with no moral right, even if they have wangled a legal right, to do so.

P.S. Blog readers can access PDFs of our two previous recent articles on CSR membership groups CSR Europe and BSR.

UPDATE 14/01/11: I’ve had an email from AccountAbility about this post. They sent me a letter they have put out to stakeholders. Here’s a copy of it.

AccountAbility, in the note to me, say that the firm is indeed still a not-for-profit company limited by guarantee.

But they also, disingenuously, suggested that my post is about the resignation of the standards board. It is not.

My question is a much more fundamental one: Who owns the assets, and who will profit from them, and how.

I sent the following questions in response and will post any answers I get:

1) What is your strategic plan for the organisation? To be a not for profit US-based and led consultancy? In which case, could I ask how the directors are paid, will the profits be paid to them, for example? Or used for another purpose? Will the directors take salaries much higher than in the past? ( I know of some ‘not for profit’ groups where all the profits are simply paid as high salaries to a few directors to retain that status, hence my question)

2) Who now owns the organisation? Ie who are the shareholders? And who are the actual legal directors? And how did they come to ‘own’ a not-for-profit company having not set it up themselves? Was it purchased? If so, can we know from whom, and when?

3) As a not for profit limited by guarantee, what kind of public reporting and accounting will be offered to interested parties?

2 Comments

  1. Important post Toby.

    As someone who has been involved in AccountAbility’s work from its inception in the mid 90s (although without any formal links for the last four years or so), I feel compelled to comment on your post a little.

    The organisational situation is certainly dire as you point out – the founding ideas and ideals have been eroded and the important intellectual capital generated via innovative multi-stakeholder governance processes have been, as you say, hijacked with the aim to serve personal / commercial gain rather than public good.

    However, as someone who has been following the AccountAbility Standards Board story, I’m compelled to offer a slightly different interpretation for their resignation. Although I obviously cannot speak on the SB’s behalf, I really don’t think the SB resigned because they lost belief in the relevance or quality of AA1000 Series. I think the contrary is true.

    The assurance and the stakeholder engagement standards are both unique and crucially important contributions to the sustainability and accountability movements – in fact they are the only internationally acknowledged and generally applicable standards in their respective areas.

    The fact that large organisations have ‘overtaken the work’ as you say in your post, to me provides the proof of the success and relevance of AA1000 – this was always part of AccountAbility’s ambition – to be the ‘intel inside’ and the ‘pace setter’ probing others, often much larger organisations and powerful constituencies, to follow suit and raise their game. It is widely acknowledged that AccountAbility used to punch well above its weight.

    All this, I think, is really what is behind the SB resignation – they understand the continued importance and relevance of AA1000 and wanted to safeguard the integrity and intellectual capital vested in them by distancing themselves from an organisation that was not following its own rules or fulfilling the stewardship role that it was entrusted with. I don’t see the resignation as the SB throwing their hands in the air and leaving the battle field – I see it as a courageous move to protect assets that are still very much worth protecting and rather than keep battling with an organisation that appears to have lost its ability to listen, they decided to shift their efforts to pastures new.

    Testament to the relevance of AA1000 and the support the series enjoys out in the field is the fact that an independent user group was formally launched today on LinkedIn – and few hours later the group is hitting over 100 members. New pastures are emerging rapidly and the AA1000 will live on for sure.

    Maria Sillanpaa

  2. Hi Maria, thanks for the comment.

    It was not my intention to get into the merits or otherwise of the standards, which as you say have some serious traction. We discuss those in many articles on http://www.ethicalcorp.com (and indeed are shortly to publish another very soon).

    I do feel, in common with many other membership/CSR groups, AA suffered from a crisis of both mission and relevancy in the last half decade. But they are no means alone in that and I do sympathise with the position. In my view focus, not breadth, is the answer to that. Most groups seems to view it the other way around and I think that's the root of the problem.

    That aside…

    My point was about the intellectual property of a non profit, and to whom its reputation and assets rightfully belong, particularly given how multi-stakeholder AA used to be.

    Best wishes,

    Toby

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