Chapter 20

THE EMPEROR’S NEW CLOTHES

Why boards and managers find accountability relationships difficult

Jill Mordaunt
 Introduction
• Board members when questioned said they felt confident in
their ability to question the CEO of their organisation about
matters of concern. Yet in the real world, board members rarely
did this. If board members raised problems, they did it covertly
and outside the board.
• How do boards and managers seek to balance these in ways that
allow them to maintain their integrity and yet still satisfy the
expectations of different stakeholders?
• Aim of this chapter: explore the paradoxes of accountability. It
seeks to link up some existing management ideas in different
ways to offer insight into how, what we might conceive of as an
accountability game, is played.

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 Accountability as paradox
• Accountability requirements often have a negative
impact on organizations and the people who work in
them.
• Public organizations are established for social
purposes to deliver benefits to their end users, yet
they often seem to be focusing their energies on
meeting the demands of other external stakeholders.
• This raises issues such as ‘In whose interests does
(should) this organisation operate?’

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 Accountability as paradox
• The concept of accountability does not come without confusions and dilemmas that
arise at different points.
• What are the sources of this complexity and are there ways in which some
reconciliation between competing demands may be achieved?

• Broadly, the different accountability relationships may be typified as:

– Market accountability is about those who buy from, choose to use or fund the
organisation. In this view the organization's managers and trustees are
accountable to the customer.
– Managerial accountability is concerned with rules and regulations that specify
criteria against which the organization's (and individuals within it) performance is
measured.
– Political accountability is concerned with wider concepts of civic and democratic
obligation and implies notions of reciprocity of rights and responsibilities.
•

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 Accountability as paradox
• We can add to these three types, the following types:
– Required accountability that flows from the organizational environment: the legal,
political and economic context in which the organisation operates. Those who
demand this kind of accountability generally have strong powers of remedy for
failure to comply with their demands (for example: disqualify people who fall
below standards).
– Proactive or voluntary accountability that flows from organizational values:
the belief that the organisation should in its actions and working methods
consciously seek to align itself with certain groups and interests. This is also
called offered accountability. Here the organisation chooses to be accountable
because it is deemed appropriate. Such accountability is offered to
beneficiaries and the wider public for example through meetings or via a
website.

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 Accountability as paradox
• The strength of external stakeholders is interesting. Regulators and
funders have clear powers to demand accountability via legal sanctions
or withholding funding.
• Yet, the differential powers of stakeholders to hold the organisation to
account, means that some external stakeholders generally wield greater
power than beneficiaries do. (see figure 20.2, pp. 253). Too much
attention to the powerful stakeholders means that the interests of
beneficiaries may be overlooked or ignored.
• There may be similarity of interest between internal and external
stakeholders in ensuring organizational performance but faced with
divergences of interest there is a tendency for the demands of those
with the ability to apply strong sanctions to prevail.
• This differential power between stakeholders to demand accountability
and to apply sanctions, poses serious dilemmas for non-profit managers
(because they depend on donations).

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 Accountability as paradox
• These tensions and paradoxes in policy-making, leadership and
management are well recognized and are mainly described by the
dilemma theory.
• Dilemma theory arises out of social psychology and sees the ways of
addressing the inevitable conflicts and tensions of managerial life as a
dialectical process by which managers, as they seek to resolve these,
reach higher synergies. This is personally risky for managers or board
members as it means dealing with issues where the understandings and
therefore the responses of others is uncertain and potentially negative.
• A dilemma diagram (pp. 254) allows to reflect on competing
accountabilities. It shows how what is commonly seen as a zero-sum
trade-off (tending to polarized viewpoints) can be reconstructed as a
shared dilemma that needs to be navigated and negotiated. The
problem facing managers and boards is how to take the demands of
external agencies and their beneficiaries seriously without being taken
over by them. Different problems might emerge (corruption, decoupled
reporting, etc.)
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 Accountability as paradox
• Consequently, because of the power to ‘hold to
account’, there is a tendency for organizations to be
driven by external requirements and to drift
towards the lower right hand quadrant of this
diagram.
• As such, and to ensure compliance between
external stakeholders and beneficiaries, formalized
control procedures that focus on external control
and sanctions are counter-productive. If individuals
are forced to be accountable, they comply, but then
accountability is then frequently seen as an
imposition.
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 The accountability game
• Although managers take accountability seriously (i.e. take great care to
comply with the demands made of them, particularly by funders and
regulators, however, they generally do not appear to think very deeply
about accountability due to lack of conceptual clarity and complexity
that surrounds accountability.
• Example: when conducting interviews with trustees about their uses of
financial information, they were asked to whom they thought they were
accountable. The most frequent responses were either that they had
not thought about it or they did not really know.
• Reference this example, it seems that mostly accountability is enacted
by means of ‘formulaic compliance’ (i.e. prescribed agreement with no
clear understanding; given by formula).
• There may be great defensiveness when questioned about the
performance of the organisation. This leads to accountability appearing
like a game played to appear compliant but without commitment.

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 The accountability game
• Often accountability processes do not work as intended, yet, this does not mean
they may not ‘work’ in other ways. Therefore, some paradoxes (i.e. inconsistencies)
arise.
• Although accountability is a means of taking stock and learning from problems –
quite the opposite may happen in reality.
• The game is reinforced by the formulaic way in which accountability regimes are
implemented and exercised. It may be that those devising them had ‘good
intentions’ but the actual operation of the system is often viewed as dysfunctional
and troubling.
• Accountability regimes often appear not to be devised in a considered way. Mimetic
behavior can take place where regulators and organizations look at what others
have done and seek formulae that may be implemented without deep thinking
about what forms of accountability are required in specific contexts.
• Those who do try to make accountability meaningful to their organisation may bring
in expert advice. The advice may be something that the organisation does not want
to hear. Then the organisation may distance itself from the problem and fail to listen
to the advice. But even when managers and board members do listen, the advice
offered leaves unspecified the behaviors that are actually required to bring about
change.

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 The accountability game
• When implementing accountability, and despite the
fact that boards and managers advocating that
people expose ‘wrong-doing’, in many cases, it is
often the whistle-blower as much as the wrong-doer
who is punished.
• This will create new paradoxes. Accountability
appears formulaic and yet to be very important when
wrongdoing is exposed. At the same time, it appears
that there are moments, when both external and
internal stakeholders seek to avoid engaging with
problems (as not to be punished).
• So, for accountability regime to work, trust is very
essential.
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 The emperor’s new clothes
• So why, when individual managers and board members are often so clear about the problems, do so
many continue to play the accountability game?
– The problems arise because people want to avoid upsetting values deeply embedded in the
organisation.
– Although managers and board members’ ‘espoused theory’ holds values of being in control,
winning and not upsetting people – their actual behavior sustains defenses that act against
these. Thus senior managers in non-profit organizations and funders often state that they value
‘feedback’, participation and involvement by those they fund or support.
– Although their ‘espoused theory’ emphasizes partnership and participation, their ‘theory in use’
emphasizes unilateral control, dependency, submissiveness and crucially not embarrassing
others but allowing them to maintain ‘face’.
– These organizational defensive regimes are, anti-learning, overprotective and self-sealing.
Senior managers might comment over an idea by saying “It’s a very interesting idea …”,
however, “Interesting” is the word we most commonly use to express either our indifference or
objection, while acting as if we want to be supportive.
 On the surface, senior managers espouse particular strong commitments. However, in fact they take
no responsibility for ensuring that the espoused aim happens, because underlying these value
commitments are competing commitments such as making sure that you do not upset people or
avoiding conflict at any cost.
 These competing commitments are stronger than the stated commitment as they expose people’s
most deep-seated and greatest fears.

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 Changing the game – is it possible?
 There is a strong desire on the part of external stakeholders to ensure that
those they fund and support act in appropriate ways that are fit for
purpose and deliver the services that the end user needs and wants.
 However, the operation of the accountability game seems to work against
this.
 The solution lies in moving towards what a Mode 2 approach to
organizational problems.
– Mode 2 approach refers to having valid information, informed choice
and responsibility to monitor the implementation of that choice.
– Mode 2 approach leads to action strategies where problems or issues
are proposed and inquiry into and confirmation of those strategies is
sought and that face-saving is minimized.
– The task is to change the mind-set of the actors in the organisation by
people learning to be more reflective.

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 Changing the game – is it possible?
 Another approach is the “educative strategy”
– It allows to develop ways of talking that give organizational members
better ways of discussing the competing commitments that prevent
their espoused commitments becoming reality.
– This means moving from positions of negative critical thinking and
taking responsibility for problems within the organisation rather than
seeing the problems lying with others.
– It means creating agreements that allow all involved to point to
shortcomings.
– By developing these different ways of talking, leaders, managers and
front-line staff will also be able to change the way in which they
approach their work.
 A third approach is the “conversation for accountability”
– It has the effect of shifting the emphasis away from what was done
wrong to what has been done well.
 However, we should note that all these approaches do not consider the
external pressures on organizations that maintain the status quo.
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