Corporate Accountability

Image Credit: Climate Justice Programme

What does it mean to be accountable for our actions? We are asked this question almost every day in one form or another. We are accountable for our personal behavior, our commitments, our relations with spouse, children, friends and co-workers, and our engagement with the world around us. We are accountable for our decisions, our investments, our respect for law, and our moral choices. Every day would seem, then, to be a moving calculation of multiple accountabilities — a ledger of life, with surpluses and, yes, deficits.

From a political perspective, accountability for programs and statutes, implementations and budgets, falls to our elected representatives who have been selected by a majority of us who believe they will be accountable for our interests. The same holds true for executives who are accountable to their corporate shareholders for the protection and growth of their investment; indeed, it is that obligation often cited by CEO’s for their decisions measured in increased revenues and the stock price. Often, these executives are measured, indeed held accountable by corporate directors for such profits, their approval expressed by significant raises and bonuses, the disapproval expressed by incentivized exit.

But are there other standards by which corporate behaviors should be measured. If you have read the book or seen the film The Big Short you will know that only one, minor executive was convicted for involvement in the mortgage-backed securities and credit default swap fraud in the early 2000s, the collapse of which brought the world economy into recession, motivated an enormous amount of taxpayer dollars to be diverted to bail-outs, protections, and re-financing for the banks and investment companies that were the knowing perpetrators of this disaster.

In 2015, Royal Dutch Shell announced that finally, after stubborn indifference to obvious challenges, failed operations, and incompetent management, announced that it would close down its drilling project in Arctic waters, a decision that was reported to have caused a $9 billion loss in shareholder value. These numbers are astronomical and the consequences may take years to redress, and yet no one is held accountable, neither the bankers who profited obscenely from their cynical behavior or the Shell CEO who could not, or would not, give in to the ill-logic of his decisions.

This is not paradox. Rather it is a deliberate state of mind that informs many aspects of the economy and can only be confronted by a public, as voters and as shareholders, who reject this behavior and demand accountability.

At the #COP21 Paris Summit, an international consensus was reached regarding emissions controls and limitations by nation states and the fossil fuel energy sector; it was widely reported as a major success, albeit also that the program goals and committed funds were admittedly inadequate and conformity to stated goals and commitments purely voluntary. The actuality of both the timing and amounts provided remains to be seen.

The divestment movement in the United States is an example of how engaged citizens can encourage, even force a change in corporate behavior by causing public investment in those companies to be terminated. Some large academic endowments have taken that step; others have not, despite faculty and student protest. CalPERS, the largest US public pension fund has joined with some 60 other institutional investors to ask the US Securities and Exchange Commission to make oil and gas companies detail the risks of climate change as part of their regulatory and public reporting. A group of ExxonMobil shareholders are demanding something similar, just as news reports have revealed that Exxon managers knew for decades the full impact of their products on air quality, acid rain, and the concordant consequences. In recent weeks, the Attorneys General of New York and California, as well as the U.S. Justice Department, have announced investigations of whether such obfuscation to both shareholders and the public is a violation of securities laws and other statutes.

Today, global markets tell us that the energy sector, specifically oil and gas, is in severe decline, with record surplus, reduced demand, and prices so low that many companies can no longer afford to produce. The world financial situation is painfully reminding us that our leaders have failed to see beyond the short-term, have based our finances on a false and finite foundation, and have covered up the inevitable failure until the very end.

This reality affects every person on earth. It has put even the ocean at risk, thus our future survival. Who will be held accountable? What are we going to do about it?


PETER NEILL is founder and director of the World Ocean Observatory, a web-based place of exchange for information and educational services about the health of the world ocean, providing links and proactive services to individuals, aquariums, science centers, educational institutions, governmental and non-governmental organizations to build public awareness and a global constituency for the ocean. “Accountability” was originally published as an audio podcast on WORLD OCEAN RADIO. Peter Neill is author of “The Once and Future Ocean: Notes Toward a New Hydraulic Society” available now.