Responsibility vs. Accountability

The J.D. Fox Exec Definitions

Simple and understandable. Do your job. Make sure your assigned tasks get done.

What about accountability? We've already bashed the pointless definitions by the business management experts enough. But did you notice: None of the articles discussed above expanded outward and talked about the consequences to the organization as a whole or to its investors when responsibility or accountability, however they define it, aren't met. What about the company's net worth on its balance sheet, expected profits, or stock value? If they go up, who gets the gains? If they go down, who suffers the loss? What about the state of repair of your condo buildings in a homeowners association? Or the operating account balance? Who pays to remediate neglected buildings, or restore wasted funds?

Let's look back at the second definition of the root word, account: records of financial transactions, cash balances, and asset values. Using that, here is what should be the conventional definition of accountability in a business or mutual benefit organization:

If you own a private company, and the company makes a profit and its net worth goes up, that money shows in the accounts as yours. If it loses money, that was your money you lost; either it was savings that you invested into the business, or it was cash you borrowed and now still owe even though it's gone.

If you own stock in a publicly traded company, dividends or stock price changes affect your personal net worth. The board of directors on the company is responsible for hiring a competent CEO to make a profit, who is then responsible for running the company. They all might own stock in the company too, but none of them are accountable to you for the value of your stock. If you put all your money in the stock, the company's marketing plans just don't work and they go out of business, your money is gone, and there's no one to pay you back.

If you buy a home in a homeowners association, you become accountable for funding the association's bank accounts. Not just responsible as in they'll complain or demand answers if you don't pay your dues. You're accountable; it's on your account, and if you don't pay your dues, the association will take your home and sell it, cover what you owed, and give you what remains. You're also accountable for the value of common area land and buildings, and for operating costs of amenities such as pools, playgrounds, and gyms. The board of directors and employees of the association are responsible for maintaining the property and paying the bills, but if the property loses value, then your share of the investment goes down in value and no one owes you. It's your account. If a roof unexpectedly collapses and a special assessment (charge imposed on all owners, on top of regular dues, for unexpected expenses) is required to pay for the repair, you might start a movement to replace the directors or maintenance staff for having failed in their responsibility to detect and prevent the imminent disaster, but you will still pay your share, through the assessment, for the repair, because you're accountable. You can't escape it. If you decide to sell your home to avoid the coming special assessment, the obligation for the buyer to cover it will impact your sales price.