ABSTRACT
This chapter explores the importance, benefits and merits of requiring accountability, and its role in corporate governance. It considers how boards operate and behave, and which might lead to the need for accountability. Most of these aspects emanate either from the fact that the membership of boards include non-executive directors (NEDs) and their positions are subject to significant limitations, and that errors in decision-making can result from the board's cognitive and behavioural shortcomings. Many commentators have depicted agency problems as one of the major issues of corporate governance. In fact, this might be seen by many as the primary, or only, rationale for ensuring that the board is accountable. The existence of accountability mechanisms has the effect of deterring the worst mistakes of directors and it can incentivise thoughtful decision-making by boards, which in turn can lead to improved corporate performance.
