Nicholas McGuigan, Associate Professor of Accounting and Director of Education at Monash Business School, Co-Instigator of The Accountability Institute, Editor Accounting Education, Associate Editor, Higher Education Research and Development Journal, Associate Editor, Issues in Accounting Education
Thomas Kern, Ex-Banker, Ex-Academic and Co-Instigator of The Accountability Institute
Changing the Language of Business – From Ac’count’ing to Accountability
“Language allows us to create new thoughts. It changes our behavior and ways of seeing. To transition global and local business towards regeneration and resource preservation we need a new language. A holistic language that accounts for the ecological and sociological as well as the economic. Our greatest challenge therefore is to change the language of business – accounting – from one of ac’count’ing to one of accountability.”
– Thomas Kern and Nick McGuigan (The Accountability Institute).
Accounting as a Metaphor and Reality Construction
Accounting’s power lies not in its ability to monitor and mirror reality but rather in its ability to influence and shape everyday reality (Morgan, 1988)
Our economic and financial systems are complex. It is perceived as the accountants’ job to present such “complex multi-dimensional realities” in their records and reports in a ‘true, fair and understandable’ manner. Those reports and analyses are the basis for decision-making, by managers, investors, lenders, consumers and governments, in essence all members of society.
Accountants prepare their reports and analyses through metaphorical constructs – a mostly monetary, numerical view of reality – where numbers are insufficiently representative of a much broader and more diverse business environment. Accountants become part of a “complex web of reality construction”. With their reports they represent versions of reality, be it the economic viability of an organisation, the costs and benefits of a particular investment decision or the operational effectiveness of a production system or public investment. Those numbers decide whether employees are hired or fired, which public services are offered or how wealth is distributed. At the same time, those numbers are used by decision-makers to avoid personal responsibility. They are used (and abused) to justify decisions in favour of particular interest groups. They stand between the decision-makers and the decision-takers.
The accountants’ representations become a part of the fabric through which a situation is “accounted for” (or not accounted for). This becomes cyclic:
“In representing reality we as accountants are constructing reality” (Hines, 1988).
This powerful and at times overbearing language has resulted in us existing in a world of The Corporation and its monetisation and commodification of all spheres of society. Previously confined to economics and trade, the accountants’ monetary representation of reality is infiltrating the arts, science, nature, medicine and education, where items of value are being reduced to commodities that can be bought or sold.
“How we think about our work, our relationships with others and the natural world, our community, our physical and spiritual health, our education and our creativity are all being shaped by economic values and assumptions” (Michaels, 2011).
Our accounting language is permeating all facets of life, reducing our decisions to mere financial consequence.
New Frames of Reference
Facing the global, systemic crises of climate change, population growth, mass migration, food insecurity, resource scarcity and social structures no longer fit for purpose, we are convinced that we need a broader language of business, changing from ac’count’ing to accountability. The accounting language requires enrichment through the incorporation of non-financial, non-monetary values, like human, social and environmental factors to re-diversify our culture.
In our search for suitable frames of reference, we discovered the permaculture ethics and design principles and other holistic human systems. For the purpose of developing a holistic accounting language we are currently investigating and creatively playing with Integrated Reporting, Bhutan’s Gross National Happiness and an accounting model based on Steiner’s Threefold Society, to mention just a few.
The Role of Education and The Accountability Institute
Current business and accounting education models, exacerbated through the above-mentioned commercialization, perpetuates traditional, mono-cultural accounting and economic models. Performance measurement systems for University academics tend to favour quantitative, capital markets based research required for publication in the dominant US-based journals, further feeding such perpetuation.
We see future-oriented education as the perfect lever for change. We can not only help by developing more responsible future decision-makers through opening up students’ minds to critical and holistic thinking. But we can also inspire and collaborate with our fellow educators to multiply such efforts.
For this purpose, we created The Accountability Institute as a progressive forward thinking educative space for creating new forms of transformative learning. The institute’s vision is to develop a holistic language for reporting and decision-making that extends beyond money. To achieve this we aim to foster collaborations between art, science, technology and economics, bringing these fields into conversation to create a new language – a language of accountability. With this vision in mind we aim to redefine business and accounting education for new generations of responsible decision makers, provide a platform for innovative business and accounting educators, and bring holistic visioning and development to accounting educators, professional bodies and standard setters.
Please join us on our journey. You can like our page and contact us directly firstname.lastname@example.org.