ABSTRACT
This chapter discusses the obstacles and drawbacks that exist with the mechanisms as well as the limits that exist in relation to particular kinds of mechanisms. Board accountability is, necessarily, complex as boards are often constituted by different people with different agendas and different functions. In particular, the difference can cause conflicts when it comes to addressing accountability issues. In particular, conflict can arise between executives and non-executive directors (NEDs). Short-termism can be encouraged by performance accountability because it leads to a concentration on immediately accessible quantitative data such as quarterly earnings figures. Shareholder expectations as to the level of accountability that is provided can be unreasonably high. Courts in many jurisdictions, such as the UK, are reluctant to find directors liable for breach of duty as a result of business judgements. The Financial Reporting Council has acknowledged that the dispersed ownership structure that exists in the UK can create hindrances to effective organisation of shareholders to hold directors accountable.
