Thursday, June 10, 2010

Accountability—a matter of words?

Yet another of those three-countries Q&A jokes:
Question: What is the difference between a failing, firm-destroying CEO in Japan, the United Kingdom and the United States?
Answer: The Japanese CEO commits suicide (harikari, also harakiri or seppuku), the British CEO politely resigns and the American CEO fights over the size if his (seldom her) bonuses.

Joseph Stiglitz, Nobel Prize Laureate in Economics, uses this comparison (the presentation here is slightly modified) of consequence-drawings to contrast individualism (the latter CEO) against individual responsibility (the other two). In the chapter “Toward a New Society” in his book entitled FREEFALL [1], he illustrates how accountability seems to be just a matter of words—words often used to deny one's responsibility for the consequences of actions such as irresponsibly luring others into non-transparent high-risk undertakings of the financial kind.

One conclusion towards doing the “right thing” and getting a grip on accountability is to measure performance: What you measure is what you value, and vice versa! Of course, you need to define your measurement—again a matter of words, but also of theory and desired objectives. Anyway, don't just leave it to the CEOs.

[1] Joseph E. Stiglitz: FreefallAmerica, Free Markets, and the Sinking of the World Economy. W. W. Norton & Company, New York and London,
2010 (the 3-CEOs-page: 282).