ABSTRACT
This chapter investigates the objectives of accountability in corporate governance. According to the supreme director and board primacy advocate Stephen Bainbridge, 'effective corporate governance depends on ensuring directors are accountable for corporate decisions'. The chapter identifies the overarching objective of accountability, but then acknowledges that this is rather vague, and clearly there are other sub-objectives that are critical and needs to be achieved if the overarching objective is to be attained. Accountability mechanisms alters behaviour by causing accountors to internalise relevant norms so that they voluntarily comply with those norms, or they alter behaviour by deterring conduct through sanctioning. The International Monetary Fund states that Accountability, including transparency, contributes to higher quality decisions leading to improvements in resource allocation, macroeconomic stability and ultimately in economic growth and prosperity. Accountability can encourage the directors to have the same focus as shareholders and it can align interests.
