Corporate Accountability

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DEFINITION

The performance of a publicly traded company in non-financial areas such as social responsibility, sustainability and environmental performance. Corporate accountability espouses that financial performance should not be a company's only important goal and that shareholders are not the only people a company must be responsible to; stakeholders such as employees and community members also require accountability.

INVESTOPEDIA EXPLAINS

In conjunction with the annual financial reports, which the Securities and Exchange Commission requires corporations to produce, many corporations choose to produce corporate accountability reports to satisfy demands from the public and shareholders. Private organizations, not a government body, set standards for social and environmental responsibility that they expect public companies to meet and be account for. Corporate accountability is also important to shareholders concerned with ethical investing.


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