After 15 years I’m standing down as the RSA’s Chief Executive next summer. While there is much to do between now and then, I thought I might occasionally look back to see if there are any useful lessons for myself or anyone else. In this post I’ll look at what might sound like rather dry topic - organisational accountability.
I will argue the principles and practice of accountability comprise just about the most important part of leadership and that confusion and evasion around accountability is one of the reasons for the state of our troubled democracy.
People granted power should be answerable for their actions and accept the consequences of failing to meet reasonable and agreed expectations. Accountability can be, and often is, enforced through mandatory reporting processes and direct consequences for perceived failure. But voluntary accountability, through which those in office choose to take responsibility, is also vital. It is an example of what the economic historian Avner Offer calls a “commitment device”; the social norms and habits that societies abide by in recognition of the collective dangers of acting without such commitments. A society without voluntary accountability would either be anarchic and cruel or overwhelmed with constant litigation.
Many leaders I speak to or advise are seeking to be answerable in more authentic and powerful ways. But there are different levels of ambition.
Level one – aiming for targets
Here the aim is simply for leaders to perform against the explicit criteria set for them by their owners, governors or funders. Ethical imperatives at this level include not setting goals that are too easy or misleading, not falsely claiming progress and not buck-passing responsibility for failing to meet agreed objectives. This is the least ambitious level but still raises many issues around measurement and allocating responsibility. A surprising number of third sector organisations do not even achieve clarity and consistent responsiveness at this level.
Level two – aligning targets
Badly designed accountability can result in leaders and organisations hitting the target but missing the point. Proxy indicators of value (such as waiting times in the NHS) can distort priorities. Goodhart’s law indicates that when an output is used to measure performance, the relationship between that factor and real-world value – the outcome –is likely to diminish. An oft-cited example is articles in refereed journals; these became a much less reliable measure of academic diligence and excellence when chosen by the regulator as the criterion for judging and rewarding academics, departments and universities.
To help organisations achieve impact and live up to their mission, objectives need to be aligned with what matters. This is not easy, particularly for organisations seeking social impact. There is the question of whether some things can be usefully measured or whether the measures of progress are credible.
But there is a more intractable problem: as objectives are refocussed from organisational outputs towards evidence of change in the world it becomes more difficult reliably to ascribe responsibility. It is, for example, more important to judge the RSA by whether we contribute to a good work economy than how much media coverage our latest report received. But while the latter can be accurately measured, the influence we have on the former is virtually almost impossible to track. As the RSA’s CEO I have answered to my Board through multiple iterations of our KPIs but I can’t say they have ever been quite right.
From this I draw two conclusions. First, one way of bridging the divide between measurable outputs and the contested nature of real-world change is to use trusted outsiders to provide an independent view of the organisation’s impact. Very few organisations are brave enough to do this, fewer still to publicise what the independent voices say. Second, leaders and those to whom they are answerable should recognise that organisations need to offer an account of outputs and a credible theory about real world impact while recognising the limitations of both types of measure.
Level three – acknowledging and managing trade-offs
In the corporate sector there have been various alternatives to the reductive idea of shareholder value including the balanced scorecard and the triple bottom line. Responsible corporate leaders commit to balance accountability for ‘profit’ with impact on ‘people’ and ‘planet’ increasingly using environmental, social, and corporate governance (ESG) frameworks. For them, and even more so for public and third sector leaders, it is surely obvious, not only that there are many different core objectives for which they should be accountable, but that these are often in tension.
If accountability is based on multiple objectives, relating to quite different domains, things become more complex. Perhaps it is not surprising that organisations often duck that complexity. More and more businesses advertise their ESG framework, but in many of them employees find their day-to-day incentives are still overwhelmingly aligned with profit.
A friend of mine who works on ethical leadership says that acknowledging the existence of genuine dilemmas is an essential first step to developing a practical ethical mindset but that most executives are loath to admit such conflicts exist. Unless accountability systems incorporate multiple measures and openly recognise potential trade-offs between objectives they are neither as powerful nor honest as they could be.
Level four – building the foundations for intelligent accountability
Of course, accountability isn’t just about the trade-off between different objectives; it also involves competing interests and answering to the different groups who have those interests. Indeed, this is probably the single biggest continuous challenge of leadership in large organisations: how to balance accountability to staff, funders, owners and governors, customers and clients, service users, suppliers and stakeholders, and wider society today and into the future.
Level four accountability is co-determined. If the ways groups judge organisations are thoughtless or purely self-interested it is harder for leaders to balance different demands. If all we care about when we buy clothes is price it is hard for fashion companies to be accountable to staff or ethical investors who want the organisations to be judged by how it treats people and the environment. Equally, if public sector leaders seem only to care about one type of accountability – for example headteachers who are obsessed with OFSTED inspections and league tables – it can lead to unhappiness and cynicism among those who rightly feel different aims and values should be considered.
There are ways leaders can make create a context in which there is a greater chance competing accountability claims can be intelligently balanced. One involves trying to influence expectations.
It is easy to overestimate how fixed are people’s expressed preferences. Many attitudes have shallow roots and can be shifted by new experiences and information. When I started at the RSA the expectation among many Fellows was that the RSA was a kind of club, which existed to boost their status and offer suitable perks. It has taken many years, but now most Fellows see the organisation very differently.
This shift was in part the result of a change in the make-up of the Fellowship. It didn’t take me long in post to realise that what many Fellows wanted of me was not the same as the expectations of Trustees or our charitable mission. I remember one particularly grisly event hosted on a Friday lunchtime in a hotel near East Midlands Airport. The hostile reception to my speech calling for the Society and Fellowship to look outward included one chap denouncing the Trustees for appointing a socialist vandal. The only response I got to a similar speech at a ‘dinner dance’ event organised by our Yorkshire region was a letter denouncing me for leaving for my return train before the Loyal Toast.
Not long after I suggested that our marketing material should no longer feature the idea that being nominated for Fellowship was an award for past achievements. Instead, I wanted us to portray it as an invitation to join a community of change makers. An understandably worried recruitment team warned me that personal status was an important incentive for joining and renewing. They were right; Fellowship dropped to less than 26,000 and looked like it might keep falling. But today we have over 30,000 Fellows and in aggregate they have very different expectations to those I met in 2006.
Does this mean all our Fellows are satisfied? Far from it. Many I’m sure are hoping my successor will do a better job than me. The difference now is that what the Fellows want us to get better at – achieving impact, connecting them with each other, supporting them as change makers – is what we as an organisation want to improve and what we need to do to fulfil our charitable mission.
The journey to shape the RSA Fellowship and their expectations also taught me another – painful – lesson. In any membership organisation, indeed in any voluntary group, the most active people carry great sway. But leaders beware; becoming accountable to activists can be problematic. Their views are often unrepresentative, and they can be slightly obsessive, especially over procedural issues. About three years into my time at the RSA I made the mistake of taking on a group of activists opposed to change before I had helped build up a countervailing constituency that shared my ambitions. Indeed, a group – called ‘Fellows’ Voices’ – that had existed to make this case had closed themselves down when they saw I was going in their direction. When I tried to change the Society’s governance, the Fellows that retained the idea of the Fellowship as a social club, began to organise. I suspect the East Midlands and Yorkshire committees were in the vanguard and I came within a whisker of being turfed out at an AGM.
The noisiest RSA Fellows used to be regional chairmen (they were nearly all men) who had a penchant for wearing chains of office. Now the typical RSA activist is running a thematic network or driving a local initiative. But it has been a long game. Quite early on, I created an elected Fellowship Council, which is now on its sixth iteration. Having started as a fractious group obsessed with procedure, it has year on year become more focussed on working with the rest of the RSA to achieve impact. The Council is still –as it should be - very challenging but now it is holding us to account for the right stuff.
Both Covid-19 and the anti-racist movement have impacted many charity and public sector leaders. The RSA has been working with the National Lottery Community Fund and group of third sector leaders to explore what has happened on the ground in 2020. One theme is how the single minded focus on the impact of the crisis led many funders to be more trusting and open ended in dispersing grants. This in turn has enabled third sector leaders to try to focus less on accountability upwards to commissioners and more outwards to the communities they serve and service users who are experts by experience.
This is a positive development but as well as being more powerful, lateral accountability is also more complicated than vertical. I remember one council leader telling me years ago that in order to connect with people in a run-down neighbourhood to explore regeneration possibilities they first had to find a way round those who asserted – often on dubious and self-interested grounds – to be community representatives. Getting multi-stakeholder accountability right can benefit from using effective techniques such as forms of deliberation or action-learning, but it also requires leaders to show clarity, patience and to be street smart.
Accountability and democracy
Accountability is a big issue in organisations but it is important for wider society. One of the many problems of our political system is that democratic accountability rarely even gets to my level one and when it goes further it is usually for self-interested rather than public-spirited reasons. Politicians should be accountable, but they should also take responsibility for a grown up, honest and inclusive conversation about what they should be accountable for, to whom and how.
In all but entirely totalitarian societies (even there, behind closed doors) accountability is a continuous subject of contestation with debates refracting ideological divides and social concerns. For example, a critique of democratic accountability was an important element of ‘new right’ thinking in the 1970s and ‘80s; the set of ideas that contributed to the Western dominance of what has come to be termed neo-liberalism.
These critiques were based on the public choice theories of high-profile American academics including Kenneth Arrow, Mancur Olson and James Buchanan. If democracy was subject to inherent irrationality, minority capture and producer interests, as these theorists cogently argued, then it would surely be an improvement to replace public accountability with the discipline of market, or quasi-market, forces. Similarly, the ‘principle-agent problem’ – in which those supposedly acting on the interests of a business owner pursue their own competing interests – is a rationale for the model of shareholder value. This assumes that the supreme, or even only, accountability executives of listed corporations should have is to maximise their company’s share price.
As well as narrowing the focus of corporate responsibility and encouraging practices such as off-shoring, highly lucrative executive pay packages and share buy-backs, neo-liberal thinking also contributed to models of public sector accountability based almost wholly on quantitative performance metrics often presented in comparative forms such as league tables. During the pandemic public sector managers – particularly in health – have described the sense of solidarity and even freedom that has emerged to the setting aside of such targets and competition mechanisms in favour of the collective fight against a single enemy.
In recent years concerns about accountability have shifted with the growth of social polarisation and forms of political populism. Politicians like Donald Trump, Viktor Orban, Jair Bolsonaro and Boris Johnson question or reject constitutionalism in favour of an accountability, which privileges the demands and expectations of their political base. Trump’s recurrent narrative was that nothing – including laws or norms – would stand in the way of him delivering his promises to his devoted supporters. Similarly, Johnson, in the name of ‘getting Brexit done’, has been willing to prorogue Parliament, disregard an international agreement and forgive ministers and advisors for failings that would in previous times have been grounds for an enforced resignation.
Although the recent wave of populism may have peaked, liberals have rarely galvanised the public with appeals to accountability. The constitutionalist ideal of a strong establishment, which prizes the rules of the game over the outcome, has been largely dispelled as populist leaders have demanded and invariably gained blind loyalty from their fellow travellers.
Weak and mythical accountability is a big part of the erosion of trust and credibility in our politicians and political institutions. Ministers make promises they can’t realistically deliver – for example negotiating a Brexit deal without making any significant concessions – while at the same time evading accountability for things that are their responsibility like honesty, coherence and the effective delivery of policy. Equally politicians too often seem more accountable to their activists, backbenchers, party funders and media backers than to the general public, let alone the most vulnerable in society who need good government more than anyone.
As I sit here finishing this piece the BBC website features the headline ‘Formula for locating new homes revised after Tory backlash’. This highlights three failings. First, why is the government dialogue with its own party activists so weak that it couldn’t build or sustain support for this policy? Second, why do we seem to think it is acceptable that a government elected to represent all of us is demonstrably and unashamedly much more influenced by its own unreconstructed activist base than the view of the public, experts or third sector groups? Third, why does so much policy emerge without going through the kind of deliberative processes that might make it stronger and less likely to be abandoned at the first contact with reality? This is our broken system of democratic accountability in a microcosm.
The idea of open and public accountability was central to the emergence and design of modern representative democratic systems. Accountability is arguably the single most important challenge and responsibility of organisational leaders. But neither the practice but the understanding of accountability is adequate to the expectations of today’s citizens and the needs of the modern world. Until we all address this more fully there is little chance that we can rebuild the basic trust in institutions that is the bedrock of successful nations and systems.
The RSA, together with leaders from across government, civil society and the creative industries, finalise bold new ideas for the North of England’s creative industries, to be revealed in full at the Convention of the North on 29 February.