Analysing Fund Managers’ Accountability

This chapter examines the complex interplay between fund managers' accountability and their decision-making processes. It starts by exploring how performance management systems, which aim to enhance fund managers' performance, also shape their behaviours through the imposition of accountability. The chapter argues that the traditional 'what you measure is what you get' (WYMIWYG) principle is an oversimplification, as accountability involves a multitude of psychological, organisational, and contextual factors. It delves into the cognitive and social aspects of accountability, highlighting how fund managers navigate conflicting demands from various stakeholders, including investors, regulators, and society at large. The chapter also discusses the impact of ESG and SDG imperatives on performance measurement, emphasizing the need for a more integrated and transparent approach to evaluating fund managers' performance. Furthermore, it explores the potential unintended consequences of simplistic accountability imposition, such as the crowding out of intuitive expertise and the promotion of short-termism. The chapter concludes by advocating for a more nuanced understanding of accountability that goes beyond formal metrics and incentives, emphasizing the importance of fostering an enabling organisational culture that supports ethical reflection and principled dissent.