Thirty years of social accounting, reporting and auditing: what (if anything) have we learnt?

TLDR

Society’s growing anxiety over powerful organisations has driven the development of accountability mechanisms, with social accounting emerging as a key tool to ensure organisations align power with responsibility in complex democracies. The article delineates three strands of social accounting and extracts lessons on how it informs accountability, democracy, and sustainability. It explains the tension between accountability and control, shows how a stakeholder model can define a social account, and briefly discusses attestation.

Abstract

In an increasingly complex world with increasingly powerful organisations it seems inevitable that society – or groups in society – would become anxious about whether these organisations could be encouraged to match that power with an appropriate responsibility. This is the function of accountability – to require individuals and organisations to present an account of those actions for which society holds them – or would wish to hold them – responsible. And the history of social accounting, at its most fundamental, is a history of attempts to develop this accountability. It seems to me that the widespread and systematic practice of social and environmental accounting is a deeply essential element in any well‐functioning, complex democracy. The corollary is that the absence of such mechanisms raises fundamental questions about the nature of modern democracies. This article briefly outlines what I believe to be the three strands of social accounting. It then identifies a few of the lessons that we may be able to learn from current experience and, in particular, how social accounting is related to accountability, democracy and sustainability. The central issue of the tension between accountability and control is touched upon: I then illustrate how the stakeholder model can be used to help define the social account, and conclude with a few words on attestation.