1. Ethical Corporation • July-August 2012 Ethical Corporation – Subscription Sample Pack 11
Standards council was persuaded to restructure the
organisation to become a limited company.
The battle for AccountAbility When Sunny Misser, a sharp-suited
former PricewaterhouseCoopers man from
By Mallen Baker New York, took over in late 2009 he had no
The long-running standoff between AccountAbility and stakeholders of the such reservoir of trust to draw from. You
AA1000 sustainability standards continues. Can some structural changes and new could hardly have pictured a starker
appointments ease the tension? contrast with Zadek, and in Misser you had
someone who unashamedly promoted a
E ighteen months ago, explosive disagree-
ments over the future of standards
thinktank AccountAbility burst into view
absorbed into other operations, such as the
Global Reporting Initiative (GRI).
AccountAbility was a membership
more commercial approach.
Now the new AccountAbility has
emerged. It focuses on three areas: advisory
when its own standards board collectively organisation, with individual and corporate services, research, and standards. In 2010,
resigned, and the organisation’s management members, and AccountAbility’s forays into AccountAbility reported a turnover of £3.3m,
issued an open letter attacking the propriety commercial consultancy had created with a profit of £189,000. It has offices in New
of a number of board members and “certain tensions with some of its members – even York, London, Dubai, São Paulo, Washington
disgruntled employees of AccountAbility”. DC, Johannesburg, Zürich and Riyadh. The
A bewildering series of claims and company lists its specialist sectors as financial
counter-claims followed. A central fear AccountAbility’s transformation services, pharmaceuticals, energy and extrac-
emerged that the organisation, recently has caused a number of tives, telecommunications, consumer goods,
under new management, was taking a more and food and beverages.
commercially minded course that created a stakeholders to go ballistic It has a newly formed advisory council
conflict of interest for the guardian of the including Sir Mark Moody-Stuart, the extrac-
AA1000 standard. before management changed hands. As tive industry veteran whose CV includes
And today the war being fought in the early as 2007, the organisation’s annual leadership roles at the Global Reporting Initia-
name of better stakeholder engagement report disclosed that those members who tive and UN Global Compact. It has a website
rages on. So what has actually happened in had established businesses providing report you would associate with a budding profes-
the interim, and is there a constructive way assurance using AA1000 feared the potential sional firm rather than what some used to
forward that will preserve the impact of the for the host body to exercise an unfair consider a slightly ramshackle campaigning
good work of the past? advantage against them. organisation.
AccountAbility was set up in 1995 with the The transformation has caused a number
aim of “progressing the professional practice Activist background of stakeholders to go ballistic.
of social and ethical accounting, auditing and While former AccountAbility chief executive A group of concerned former partici-
reporting”. At that time, it had the vision of Simon Zadek has his critics, he was widely pants set up an “AA1000 User Group” forum
becoming the professional body for account- viewed as an intellectual driving force in the hosted on LinkedIn. It became the place
ability practitioners as the sector matured. movement, and with his heart and soul very where intemperate claim and counter-claim
It created the AA1000 set of standards much in the same place as the activist could be exchanged in public in an occa-
covering assurance and stakeholder engage- community. The tensions and arguments sionally astonishing way, and it produced
ment. The early versions were over-complex, were already there, but he had a reservoir of an executive of people tasked by that
but included key principles that have since trust to count on, which came to bear – for community to find a way forward.
become commonly recognised as useful and instance – when the organisation’s advisory At its urging, AccountAbility agreed in
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2. 12 Ethical Corporation – Subscription Sample Pack Ethical Corporation • October 2012
June 2011 to set up, an interim standards
board (ISB) to oversee things while it could
regroup and put a more enduring process
in place. It established an independent
nomination committee chaired by Roger
Adams of the professional accountancy
body ACCA, a figure respected by both
sides. This group then identified who
should be on the new board.
The ISB was chaired by Anant Nadkarni,
vice-president for group corporate sustain-
“I no longer considered
AccountAbility to be an
appropriate steward of
the standard”
Paul Scott, corporateregister.com
ability at Tata. It included a number of
people who had been involved with
AA1000, including some of those associated
with the LinkedIn group.
Judy Kuszewski, one of the LinkedIn
group interim executive committee, says:
“We did consider it a success when Account-
Ability agreed to form the interim standards
board to replace the one that resigned, and Stakeholders have accused AccountAbility of a lack of engagement in the past
the nomination committee which Roger
Adams was chairing. But it hasn’t, to date, be able to put the standards in their pocket to the fact that the proposed board for the
resulted in independent governance.” and walk away with them.” The committee new company would have a majority for
In fact, the board became increasingly was behaving as though it was separate to members of the AccountAbility manage-
divided as members of the LinkedIn group the body that had set it up, he says. ment team, therefore undermining its claim
demanded specific guarantees and became Nadkarni is frustrated that the conflict to be independent.
frustrated at what they saw as slow action obstructed progress. “Such standards as And they became increasingly angry by
and lack of communication. AA1000 need to be co-created. They cannot what they saw as the failure to act on
In November 2011, when the AA1000 be produced by one group alone, they need promises – a fact stressed by members of the
Stakeholder Engagement Standard was ready to be co-created to meet common aims.” executive committee to Ethical Corporation
to have its final draft published, members of – and the absence from the dialogue of the
the group went ahead and published it first on Building alternatives head of standards, Kurt Ramin, and chief
an independent website that failed to mention AccountAbility produced a white paper on executive Sunny Misser.
AccountAbility but claimed authorship by the governance for AA1000 in June 2012 which Liv Watson, one of the founders of the
AA1000 Technical Committee (still online at the proposed the setting up of a separate XBRL standard on electronic business
time of writing at http://aa1000ses.net). community interest company (which carries reporting, had been brought into Account-
Naturally this raised questions of intel- specific safeguards under UK law that it Ability at the same time as Ramin to help
lectual property, and whether the group must be focused on community benefit, not put the standards on track. She left after
had gone too far. Some saw it as one of a private profit). The standards would be only a few months, frustrated at what she
series of outrageous moves by the critics vested in this company, and it would be run saw as the apparently unbridgeable gap
that displayed bad faith. at arm’s length from the commercial opera- between AccountAbility and its critics.
ISB chairman Anant Nadkarni says that tions of AccountAbility, even as it received “If [AA1000] is going to have trust in the
such action was completely unheard of, in some financial support from it. marketplace,” she says, “we need to have
all his time of involvement with groups Initially this seemed that it might answer the standard open and free of any conflict of
such as GRI, Social Accountability Interna- many of the concerns. But members of the interest. The infrastructure issue needs to be
tional and the Global Compact. “Some LinkedIn group were critical of the fact that resolved. I don’t think a lot of people will
people were arguing that because they are the plan was being driven through without adopt the standard until this is the case, and
passionate about this area, they wanted to the full agreement of the ISB. They pointed others will simply move in to fill the space.”
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3. Ethical Corporation • October 2012 Ethical Corporation – Subscription Sample Pack 13
IMPAKPRO/ISTOCKPHOTO.COM
through a round hole, and there’s a consensus Adams herself is not undaunted by the
that we can get enough people to the table to task, but believes that the AA1000 standard
create an alternative. We’re looking for a is still worth fighting for. She recalls with
platform where KPMG, PwC and WWF could pride her involvement back in the late 1990s
all contribute, leaving their badges outside when, she says, she had a sense of working
and focusing on the common task.” alongside the leaders in the field.
“My first priority,” she says, “is stake-
Concerns ‘addressed’ holder engagement and sorting out the
Sunny Misser still believes there is everything governance arrangements with the new
to play for and maintains – having consid- standards board. I know we’re not going to
ered the feedback from what he describes as please all of the people, but we can do more.”
“the entire stakeholder universe” – that the She believes that, in the face of some-
majority of concerns are being addressed. times fierce criticism, the AccountAbility
“We have created a community interest team has been able to put some of the
company, and the transfer of the intellectual baggage behind it and move forward.
property of the standards is under way. We In an echo of Anant Nadkarni’s comment
are adding another non-AccountAbility on “co-creation”, Adams acknowledges this
appointee to the board of the company, and is not a task she can do alone. “We really
are happy to add a further one to put the need those who want the standards to work
management team in the minority. to help make them work.”
“We have a nominating committee for
the new standards board chaired by SAI An AccountAbility solution
founder Alice Tepper Marlin and we can Several people supportive of the LinkedIn
state quite unequivocally that Account- group who asked not to be named
Ability does not, and will never, do expressed anxieties about the breakaway
assurance work off the standards in compe- group being set up, which they said ran the
tition with those stakeholders that do. risk of having its vision defined by what it
“We have done everything that has been wasn’t rather than what it was. They still
asked of us.” believed that the best resolution would be
Is he worried about the foundation of a for AccountAbility to sort things out, for all
rival group? Misser shakes his head. He that time was short and trust low.
And others have begun to add their firmly believes, he says, that it is best for This perhaps is the group that Adams
voices to the chorus. Posting in the LinkedIn AA1000 to be supported by a stable organi- will need to win over in the quest to put the
group, Paul Scott of corporateregister.com, sation, with established processes, able to last two turbulent years in the life of AA1000
which has held the inventory of companies bring in the highest-calibre resources with a behind it.
using AA1000, said: “In April this year I gave solid financial input. And although it is clear that some of the
notice to AccountAbility that we would not What about the criticisms of lack of gripes could go away easily if AccountAbility
be continuing with this [arrangement] … engagement and communication? Misser started to deliver promised changes to a
The reasons I gave were, among others, that agrees that this area has not been a success. speedier timetable, some genuinely tricky
Outreach and relationship building had dilemmas will remain. Most specifically – is it
not been one of the head of standards’ possible for a for-profit company to be asso-
It is clear that some of the strengths, and Ramin has since left Account- ciated with a public-good standard without
gripes could go away easily if Ability, Misser says. (Though, at the end of the take-up of the standard being affected?
AccountAbility started to deliver September 2012, Ramin is still listed on the Companies that historically acted as a
company’s website as a “special advisor”.) catalyst for standards, such as B&Q and the
promised changes to a speedier The group is now placing its hopes on a Forestry Stewardship Council over 20 years
timetable new appointment in that particular hot seat ago, accepted that the value of the standard
– Professor Carol Adams. Adams, who was that it was completely independent.
I no longer considered AccountAbility to be was on the interim standards board, has But then, other standards bodies, such as
an appropriate steward of the standard.” been involved in AA1000 since the early GRI and Social Accountability International
Talk in the LinkedIn group has moved days, and a number of the critics had – offer a range of commercial services in
towards the possibility of a new rival initia- unaware of her impending appointment – relation to their standards. And so it comes
tive. As yet there are no specific proposals identified her as one of those supportive of down to where the grey ill-defined lines lie
about how this might be formed. AccountAbility who carried a good track that mark the extent of what AccountAbility
John Aston, managing director of Astoneco record and credibility. can do before it becomes an obstacle to the
Management, says: “We’ve given a team the She will come in with the brief, says future success of the AA1000 standards.
chance to play – but they haven’t performed. Misser, of picking up the ball where it has The answer to that one can only be
We’re going to stop trying to put a square peg been dropped. discovered as events unfold. I
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