279
Privatization emerged as a new public management practice that led to public cuts
and gained status with the implementation of government reforms under the administrations of Margaret Thatcher and Bill Clinton Hughes 2003). Privatization encouraged corporations to become more responsive to external stakeholders, that is,
customers, suppliers, governments, and other civil society groups and individuals.
Accountability can be internal or external (Mulgan 2000; Stewart 1999). Internal
accountability occurs between the CEO and board chair account for financial reporting and guarantees profitable revenues to shareholders. This form of accountability
became the norm in the corporate sector after the publication of the Cadbury’s
Report in 1992 (Brennan and Solomon 2008). The report embraces accountability
as a corporate principle to improve corporate effectiveness (Committee on the
Financial Aspects of Corporate Governance 1992). The notion of internal accountability was reinforced by Friedman (1970) and other economists, promoters of neoliberalism between the1960s and 1970s (Eisenhardt 1989a; Wilson 1968). They
argued that the responsibility of a business is to increase profits and that corporations are not accountable to external stakeholders but only to shareholders. Internal
accountability mechanisms are presented in the form of reports from board chairs to
shareholders (Bovens 1998) and the engagement of external auditors that prove the
accuracy of these reports (Brennan and Solomon 2008).
External forms of accountability, instead, are based on the premise that society is
an active rather than a passive stakeholder entitled to request accountability by corporations (Gray et al. 1997). Freeman’s (1984) work on stakeholder theory challenges conventional internal accountability practices, adding democratic, social,
and sustainability attributes to this notion. External accountability, therefore, contests old business practices (Cooper 1992; Gray et al. 1997; Mulgan 2000). Under
this form of accountability, corporations are encouraged to engage with external
stakeholders, be more inclusive and sustainable, and comply against voluntary sustainability accountability norms (Eisenhardt 1989a; Mulgan 2000; Cummings 2001;
Fontrodona and Sison 2006). Lack of external accountability compromises corporations’ ability to respond for their performance (Boiral and Henri 2017) resulting in
adverse impacts on the environment, local communities, and corporations themselves (Amer 2015).
18.3 Methodology
A multiple case study approach was used because it facilitates a comparative examination of the three regions of interest. The selection of the three case studies was
based on three criteria: (1) regions where companies adhere to the network’s principles, (2) locations where businesses display various forms of accountability, and
(3) cases that display accountability issues. The examination of country cases first
consisted of a review of business accountability in the form of sustainability reporting and performance of companies adhered to the global network. Theory building
was also applied to draw inferences from the literature, and policy reviews are also
18 SDG 17 Partnerships for the Goals
Privatization emerged as a new public management practice that led to public cuts
and gained status with the implementation of government reforms under the administrations of Margaret Thatcher and Bill Clinton Hughes 2003). Privatization encouraged corporations to become more responsive to external stakeholders, that is,
customers, suppliers, governments, and other civil society groups and individuals.
Accountability can be internal or external (Mulgan 2000; Stewart 1999). Internal
accountability occurs between the CEO and board chair account for financial reporting and guarantees profitable revenues to shareholders. This form of accountability
became the norm in the corporate sector after the publication of the Cadbury’s
Report in 1992 (Brennan and Solomon 2008). The report embraces accountability
as a corporate principle to improve corporate effectiveness (Committee on the
Financial Aspects of Corporate Governance 1992). The notion of internal accountability was reinforced by Friedman (1970) and other economists, promoters of neoliberalism between the1960s and 1970s (Eisenhardt 1989a; Wilson 1968). They
argued that the responsibility of a business is to increase profits and that corporations are not accountable to external stakeholders but only to shareholders. Internal
accountability mechanisms are presented in the form of reports from board chairs to
shareholders (Bovens 1998) and the engagement of external auditors that prove the
accuracy of these reports (Brennan and Solomon 2008).
External forms of accountability, instead, are based on the premise that society is
an active rather than a passive stakeholder entitled to request accountability by corporations (Gray et al. 1997). Freeman’s (1984) work on stakeholder theory challenges conventional internal accountability practices, adding democratic, social,
and sustainability attributes to this notion. External accountability, therefore, contests old business practices (Cooper 1992; Gray et al. 1997; Mulgan 2000). Under
this form of accountability, corporations are encouraged to engage with external
stakeholders, be more inclusive and sustainable, and comply against voluntary sustainability accountability norms (Eisenhardt 1989a; Mulgan 2000; Cummings 2001;
Fontrodona and Sison 2006). Lack of external accountability compromises corporations’ ability to respond for their performance (Boiral and Henri 2017) resulting in
adverse impacts on the environment, local communities, and corporations themselves (Amer 2015).
18.3 Methodology
A multiple case study approach was used because it facilitates a comparative examination of the three regions of interest. The selection of the three case studies was
based on three criteria: (1) regions where companies adhere to the network’s principles, (2) locations where businesses display various forms of accountability, and
(3) cases that display accountability issues. The examination of country cases first
consisted of a review of business accountability in the form of sustainability reporting and performance of companies adhered to the global network. Theory building
was also applied to draw inferences from the literature, and policy reviews are also
18 SDG 17 Partnerships for the Goals