IFC moved Tuesday towards a principles-based approach to environment and social standards for investment. Contrary to critics that worry about moving from box checking to a principles-based approach, we are confident it will lead to greater accountabilty. Why? Because principles based systems make clear the parameters to decision making and judgment calls – and by making these transparent, decision makers can be held responsible for performance. We will have greater success promoting corporate responsibility throughout the emerging markets by putting the emphasis on performance and helping our clients rather than on compliance.
A handy definition of accountability I borrow from Peter Venton's 'General Theory of Delegation, Accountability and Empowerment.' He notes that accountability is a relationship based on obligations to demonstrate, review and take responsibility for performance, both the results achieved in light of agreed expectations and the means used.
Our approach in the new performance standards is based on our experience but also the evidence of what works coming from others studying the link between corporate responsibility and competitiveness and performance.