Mechanisms of Stockholders Accountability

Every company has its organization and it may consist of several

members. One of the members of the company is the Stockholder. The
stockholder is the one that owns the corporate stock in the company. And as
a stockholder, they are involve in the profit sharing and must secure the
performance of the managers is at their will.
However, the accountability is not only observed on the managers but
also on the stockholders. The accountability is the answerability of the
obligation to perform the delegated responsibility and to exercise the
authority for the proper performance of the work. There are two types of
accountability namely: Vertical accountability and Horizontal Accountability.
The Vertical Accountability refers to mechanisms in which citizens and their
associations can directly hold the powerful to account, such as through
elections in which voters select representatives and also hold incumbents to
account. This is exercise between the organizations or from the top
management to low level management. While on the other hand, the
Horizontal Accountability refers to inter-institutional mechanisms or checks
and balances. This is exercise from the industry or from firm to firm.
The stockholders accountability has three essential features and
enumerated as: (1) It is external; (2) It involves social interaction and
exchange; and (3) It implies rights of authority. This also includes the Four
Core Components of Accountability in Global Governance namely: (1)
Transparency; (2) Answerability or Justification; (3) Compliance; and (4)
Enforcement or Sanctions. As well as, the Six Basic Components for
Accountability which is the (1) Person Responsible, (2) Stakeholder, (3)
Subject Matter, (4) Evidence, (5) Accountability Rule and (6) Accountability
Analysis Point. This core component is a critical role that must be seen to
ensure that the stockholder is in full responsible to make the accountability
for real.