STAKEHOLDER ACCOUNTABILITY If we believe that stakeholders are important, and if we believe that stakeholders may also have some responsibility for company behaviour, we need to ensure that companies are reporting adequate information to these stakeholders.
Over recent years, company Annual Reports have grown massively in size, and part of this growth has been in non-financial reporting. Triple Bottom Line
But this raises additional issues: reporting refers to the growth in Social and Environmental disclosures alongside financial disclosures. o Are there any "rules" on what should be reported? o Will there therefore be any comparability year on year, or within industries? o Will information reported be balanced ... or will it inevitably be more positive than negative? o
There have been developments in these areas in recent years. Environmental accounting and audit frameworks (such as EMAS and ISO14000) have been developed to provide some guidance.
Auditing information is difficult, because unless there are some standards or other criteria to assess against, it is hard to imagine what the eventual audit report might say.
Some companies (such as Shell, BP, British Airways) are actively seeking the views of stakeholders in what they disclose, and are allowing them to report their opinions within the Annual Report.
But maybe there is another solution… Who (if anyone) will check the accuracy of this information? Full Cost Accounting Assess the costs and benefits to all stakeholders of all company activity, and require these to be shown within a company’s performance figures. For example, the cost of pollution clear-up could be put through a company’s accounts, thus reducing its profit.
Potentially this could be extended so that the company was forced to actually incur the cost – or be rewarded for any environmental benefits created?
Clearly, this is taking the current accountancy system forward in a very different way!
Over recent years, company Annual Reports have grown massively in size, and part of this growth has been in non-financial reporting. Triple Bottom Line
But this raises additional issues: reporting refers to the growth in Social and Environmental disclosures alongside financial disclosures. o Are there any "rules" on what should be reported? o Will there therefore be any comparability year on year, or within industries? o Will information reported be balanced ... or will it inevitably be more positive than negative? o
There have been developments in these areas in recent years. Environmental accounting and audit frameworks (such as EMAS and ISO14000) have been developed to provide some guidance.
Auditing information is difficult, because unless there are some standards or other criteria to assess against, it is hard to imagine what the eventual audit report might say.
Some companies (such as Shell, BP, British Airways) are actively seeking the views of stakeholders in what they disclose, and are allowing them to report their opinions within the Annual Report.
But maybe there is another solution… Who (if anyone) will check the accuracy of this information? Full Cost Accounting Assess the costs and benefits to all stakeholders of all company activity, and require these to be shown within a company’s performance figures. For example, the cost of pollution clear-up could be put through a company’s accounts, thus reducing its profit.
Potentially this could be extended so that the company was forced to actually incur the cost – or be rewarded for any environmental benefits created?
Clearly, this is taking the current accountancy system forward in a very different way!
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