1. Department for Business Innovation and Skills and HM Treasury Making Companies More Accountable to Shareholders and the Public (updated 9 December 2013), available at https://www.gov.uk/government/policies/making-companies-more-accountable-to-shareholders-and-the-public (accessed 12 December 2013).

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3. For instance, see Spira, L ‘Enterprise and accountability: striking a balance’ (2001) 39 Mgmt Decision 739 CrossRefGoogle Scholar; Pye, A ‘Corporate boards, investors and their relationships: accounts of accountability and corporate governance in action’ (2001) 9 Corp Governance: Int'l Rev 186 CrossRefGoogle Scholar; Aguilera, R ‘Corporate governance and director accountability: an institutional comparative perspective’ (2005) 16 Br J Mgmt S39 CrossRefGoogle Scholar; Jones, R ‘Law, norms and the breakdown of the board: promoting accountability in corporate governance’ (2006) 92 Iowa L Rev 105 Google Scholar; Reberioux, A ‘Does shareholder primacy lead to a decline in managerial accountability?’ (2007) 31 Camb J Econ 507 CrossRefGoogle Scholar; Brennan, N and Solomon, J ‘Corporate governance, accountability and mechanisms of accountability: an overview’ (2008) 21 AAAJ 885.Google Scholar

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5. For instance, see Financial Reporting Council ‘Consultation on the revised Uk Corporate Governance Code’ (December 2009) at 17, available at http://www.frc.org.uk/images/uploaded/documents/Consultation%20on%20the%20Revised%20Corporate%20Governance%20Code1.pdf (accessed 2 December 2011).

6. For instance, see Financial Reporting Council ‘Effective corporate governance’ (July 2011), available at http://www.frc.org.uk/FRC-Documents/FRC/FRC-Effective-Corporate-Governance.aspx (accessed 27 August 2013).

7. For instance, see Corporations and Markets Advisory Committee ‘Guidance for directors’ (Canberra April 2010) at 13–15, available at http://www.camac.gov.au/camac/camac.nsf/byHeadline/PDFFinal+Reports+2010/$file/Guidance_for_directors_Report_April2010.pdf (accessed 2 December 2011); OECD ‘Corporate governance: accountability and transparency: a guide for state ownership’ (10 February 2010).

8. For instance, see Monks and Minnow, above 2, pp 11, 12, 15, 16Google Scholar; Hutchison, H ‘Director primacy and corporate governance: shareholder voting rights captured by the accountability/authority paradigm’ (2005) 36 Loy U Chi L J 1111 at 1112Google Scholar; Banks, E Corporate Governance: Financial Responsibility, Controls and Ethics (Basingstoke: Palgrave Macmillan, 2004) p 22.Google Scholar

9. M Dubnick and K Yang ‘The pursuit of accountability: promise, problems, and prospects’ (2010) at 20, available at http://ssrn.com/abstract=1548922 (accessed 19 March 2012).

10. S Demirag ‘Short termism, financial systems and corporate governance’, above 2, p 20.

11. Report of the Committee on the Financial Aspects of Corporate Governance under the chairmanship of Sir Adrian Cadbury (hereafter referred to as the Cadbury Report) (London: Gee Publishing, December 1992) at [3.2].

12. Ibid, at [3.2]–[3.4].

13. Final Report of the Committee on Corporate Governance (London: Gee Publishing, January 1998) (hereafter referred to as the Hampel Report).

14. For instance, Financial Reporting Council ‘The Uk Corporate Governance Code’ (September 2012) Main Principles Section C, available at http://www.frc.org.uk/Our-Work/Publications/Corporate-Governance/UK-Corporate-Governance-Code-September-2012.aspx (accessed 5 August 2013).

15. Above 13, Section D at [2.18]–[2.22].

16. European Union Internal Market Directorate General (Brussels, 2002) at 46, available at http://ec.europa.eu/internal_market/company/docs/corpgov/corp-gov-codes-rpt-part1_en.pdf (accessed 15 March 2012).

17. For instance, see Young, A ‘Frameworks in regulating company directors: rethinking the philosophical foundations to enhance accountability’ (2009) 30 Company Lawyer 355 at 355, 356.Google Scholar

18. Taylor, B ‘From corporate governance to corporate entrepreneurship’ (2001) 2 J Change Mgmt 128 CrossRefGoogle Scholar; Huse, M ‘Accountability and creating accountability: a framework for exploring behavioural perspectives of corporate governance’ (2005) 16 Br J Mgmt S65.CrossRefGoogle Scholar

19. The definition originally appeared at http://www.berr.gov.uk/bbf/corp-governance/page15267.html and has been superseded by the following address: http://webarchive.nationalarchives.gov.uk/20090902193559/berr.gov.uk/whatwedo/businesslaw/corp-governance/page15267.html (accessed 6 October 2011).

20. Financial Reporting Council ‘Response to the European Commission Green Paper on the Eu Corporate Governance Framework’ (2011) at 26, available at http://www.frc.org.uk/images/uploaded/documents/FRC%20response%20to%20the%20Green%20Paper%20on%20the%20EU%20corporate%20governance%20framework%20July%202011.pdf (accessed 15 March 2012).

21. Above 11, at [6.1].

22. For example, Bottomley, S The Constitutional Corporation (Aldershot: Ashgate, 2007) p 80.Google Scholar In an excellent and recent book, Corporate Governance in the Shadow of the State (Oxford: Hart Publishing, 2013), Moore, Marc does endeavour to analyse the concept of accountability although the learned author does not go into detail in defining the concept. He is more concerned with seeing how it fits in corporate governance.Google Scholar

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24. Dubnick and Yang, above 9, at 14.

25. See A Licht ‘Accountability and corporate governance’ (September 2002) at 1, available at http://ssrn.com/abstract=328401 (accessed 19 March 2012).

26. There are many mechanisms that presently exist that might be regarded as seeking to enhance accountability.

27. Above 11, at [6.1].

28. For example, see in the UK, The Companies (Tables A–F) Regulations 1985, SI 1985/805 Table A art 70 and The Companies (Model Articles) Regulations 2008, SI 2008/3229 reg 2 and Sch 1, art 5 (private companies); reg 4 and Sch 3, art 5 (public companies). In the US, see Delaware General Corporation Law §141(a) (2009) and Model Business Corporation Act §8.01 (2008).

29. John Shaw & Sons (Salford) Ltd v Shaw [1935] 2 KB 113.

30. Bainbridge, S The New Corporate Governance (New York: Oxford University Press, 2008) p 34.Google Scholar

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33. Bottomley, above 22, p 68; Bainbridge, above 30, p 34.

34. Licht, above 25, at 20; Harlow, C and Rawlings, R ‘Promoting accountability in multilevel governance: a network approach’ (2007) 13 Eur L J 542 at 547. SeeCrossRefGoogle Scholar Scott, C ‘Accountability in the regulatory state’ (2000) J Law & Soc'y 27 Google Scholar at 39: problems of accountability arise as a result of delegated authority.

35. Licht, above 25, at 3.

36. The theory was pioneered by Alchian, A and Demsetz, H in ‘Production, information costs, and economic organization’ (1972) 62 Am Econ Rev 777 andGoogle Scholar Jensen, M and Meckling, W ‘Theory of the firm: managerial behavior, agency costs, and ownership structure’ (1976) 3 J Fin Econ 305 and employed by many scholars in various disciplines since.CrossRefGoogle Scholar

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38. As far back as 1797, Jeremy Bentham was talking in terms of managers having responsibilities to their principals: Bentham, J Pauper Management Improved: Particularly by Means of an Application of the Panopticon Principle of Construction (Young's Annals of Agriculture, 1797) pp 51–52 and referred to inGoogle Scholar Gallhofer, S and Haslam, J ‘Approaching corporate accountability: fragments from the past’ (1993) 23 Account & Bus Res 320 at 322.CrossRefGoogle Scholar

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45. Bavly, above 2, p 7.

46. Blair, M and Stout, L ‘Director accountability and the mediating role of the corporate board’ (2001) 79 Wash U L Q 403 at 440. The approach that is mentioned is often seen as the basis for stewardship theory. For a consideration of stewardship theory, seeGoogle Scholar Davis, J, Schoorman, F and Donaldson, L ‘Towards a stewardship theory of management’ (1997) 22 Acad Mgmt Rev 20.Google Scholar

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55. Roberts and Scapens, above 52.

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63. Often referred to as ‘doing the Wall Street Walk’.

64. Dooley, above 40, at 525.

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67. Financial Reporting Council ‘Uk stewardship code’ (September 2012), available at https://www.frc.org.uk/getattachment/e2db042e-120b-4e4e-bdc7-d540923533a6/UK-Stewardship-Code-September-2012.aspx (accessed 10 May 2013).

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71. Hutchison, ibid, at 1116.

72. Cadbury Report, above 11, at [1.2].

73. Hampel Report, above 13, at 7. This view has continued amongst some. For example, see Taylor, above 18, at 127. This was because accountability had obscured business prosperity, although it has been said that there does not appear to be sufficient evidence to support that conclusion: Spira, above 3, at 739.

74. OECD ‘Principles of corporate governance’ (2004); OECD, above 7.

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76. See eg Castello, I and Lozano, J ‘Searching for new forms of legitimacy through corporate responsibility rhetoric’ (2011) 100 J Bus Ethics 11 at 19, 23, who between 2006 and 2008 traced an increase in claims by firms that they were engaging in voluntary actions and formal mechanisms to make themselves accountable, which the authors attributed to the firms seeking legitimacy.CrossRefGoogle Scholar

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81. Bovens, above 79, at 954.

82. Moore, above 22, p 41

83. Bottomley, above 22, p 73

84. See text to 170 below.

85. Black, above 75, at 28.

86. See Beu, D and Buckley, M ‘The hypothesized relationship between accountability and ethical behaviour’ (2001) 34 J Bus Ethics 57 at 63, 66CrossRefGoogle Scholar; Licht, above 25, at 37; Koppell, J ‘Pathologies of accountability: Icann and the challenge of “multiple accountabilities disorder” ’ (2005) 65 Pub Admin Rev 94 at 95CrossRefGoogle Scholar; Luke, B ‘Examining accountability in state-owned enterprises’ (2010) 26 Fin Account & Mgmt 134 CrossRefGoogle Scholar at 157–158; Dubnick and Yang, above 9, at 13.

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89. Jos and Tompkins, ibid.

90. March and Olsen, above 56, p 151

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97. Roberts et al, above 4, at S15–S19. See also Sinclair, above 23, at 233, criticising performance evaluation for having the same effect.

98. K Chansa ‘Accountability: a case study of Zsic’ (2006), referred to in ‘Accountability in corporate governance’ Economy Building (8 March 2011), available at http://economybuilding.wordpress.com/2011/03/08/accountability-in-corporate-governance/ (accessed 2 December 2011).

99. Sinclair, above 23, at 221, arguing that the more we try to define the concept, the murkier it becomes.

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103. Dicke, L ‘Ensuring accountability in human services contracting: can stewardship theory fit the bill?’ (2002) 32 Am Rev Pub Admin 455 at 462CrossRefGoogle Scholar; Koppell, above 86. See also literature cited in Bovens, ibid, at 950.

104. Mulgan, above 96, at 555; Bovens et al, above 93. Not everyone agrees that all the elements outlined need be present; see eg Kaler, J ‘Responsibility, accountability and governance’ (2002) 11 Bus Ethics: Eur Rev 327 at 329–330.CrossRefGoogle Scholar

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107. Uhr, above 105.

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112. Bovens, above 23, at 451.

113. Behn, above 23, p 1; Kaler, above 104, at 329; Koenig-Archibugi, above 57, at 238.

114. Lerner and Tetlock, above 94, at 256.

115. Harlow and Rawlings, above 34, at 545, who do not agree that sanctions are a core aspect of accountability.

116. Kaler, above 104, at 329–330. He sees the attribution of blame as a weaker version of coercive accountability and punishment as the stronger version: ibid, at 330.

117. Mulgan, above 47, p 193

118. Romzek and Dubnick, above 87, at 229.

119. Romzek and Dubnick, ibid, at 228–229; Contini and Mohr, above 79, at 30.

120. Jos and Tompkins, above 88, at 257.

121. Ibid, at 259. Terminology varies – for example, Sinclair defines performance-based accountability as managerial accountability which she distinguishes from administrative accountability, which is concerned with monitoring processes: Sinclair, above 23, at 227.

122. March and Olsen, above 56, pp 154–155.

123. Scott, above 34, at 42.

124. Mulgan, above 47, pp 27–28.

125. Scott, above 34, at 42, 48–49.

126. Mashaw, J ‘Accountability and institutional design: some thoughts on the grammar of governance’ in Dowdle, M (ed), Public Accountability: Designs, Dilemmas and Experience (Cambridge: Cambridge University Press, 2006) pp 115, 122.Google Scholar See also Scott, above 34, at 49.

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130. Mashaw, above 126, p 123

131. Mulgan, above 47, p 21. However, Mashaw argues that mechanisms that Mulgan would recognise as accountability mechanism may in practice operate very much like market mechanisms, where control is exercised through influence rather than a formal calling to account: Mashaw, ibid, p 124

132. Ibid, p 122

133. Freeman, J ‘The private role in public governance’ (2000) 75 NYU L Rev 543 at 664–665.Google Scholar

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135. Mashaw, above 126, p 132

136. Bovens, above 23, at 453; see also Mulgan, above 47, pp 19–20.

137. Frankel, above 80, at 32–35.

138. For example, Koppell lists transparency and exposure to liability as essential components of accountability, but not explicitly the obligation to provide an account: Koppell, above 86, at 96–97.

139. Bottomley, above 22, p 69

140. See eg Blair and Stout, above 46 (discussing to whom and how directors should be accountable; Bainbridge ‘Director primacy’, above 65, at 603 (discussing accountability to shareholders and accountability ‘mechanisms’); Jones, above 3 (discussing liability rules as a means of promoting accountability).

141. See eg Hansmann, H and Kraakman, R ‘The end of history for corporate law’ (2001) 89 Geo L J 439 Google Scholar; Bainbridge, ibid, at 563; Armour, J, Deakin, S and Konzelmann, S, ‘Shareholder primacy and the trajectory of Uk corporate governance’, (2003) 41 Br J Indust Rel 531 CrossRefGoogle Scholar at 531–532, although the learned authors argue that outside the core institutions of English corporate law there is scope for stakeholder voices. See also D Walker A Review of Corporate Governance in Uk Banks and Other Financial Industry Entities (26 November 2009) at Annex 3, p 137, available at <http://webarchive.nationalarchives.gov.uk/+/http://www.hm-treasury.gov.uk/d/walker_review_261109.pdf> (accessed 10 March 2014).

142. Company Law Review ‘Modern company law for a competitive economy: strategic framework’ (DTI 1999) at [5.1.19]. The Review Group was established by the DTI to examine UK company law and formulate principles for its reform. For a discussion of enlightened shareholder value, see Keay, A Enlightened Shareholder Value and Corporate Governance (Oxford: Routledge, 2013). This book argues that s 172(1) effectively enshrines a form of shareholder value in UK law. The form of shareholder value is one that accepts that in acting in the best interests of the shareholders, it is necessary for directors to take into account the interests of stakeholders.Google Scholar See also Hannigan, B ‘Board failures in the financial crisis: tinkering with codes and the need for wider corporate governance reforms: part 2’ (2012) Company Lawyer 35 at 39–40.Google Scholar

143. Reberioux, above 3, at 509.

144. Parkinson, J Corporate Power and Responsibility (Oxford: Oxford University Press, 1994) and quoted inGoogle Scholar Solomon, J Corporate Governance and Accountability (Chichester: John Wiley, 2nd edn, 2007) p 13.Google Scholar

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146. The Committee on Corporate Law ‘Other constituency statutes: potential for confusion’ (1990) 45 Bus Law 2253 at 2269Google Scholar; Keay, above 37, at 383, 385.

147. Sternberg, E ‘The defects of stakeholder theory’ (1997) 5 Corp Gov 3 at 5.CrossRefGoogle Scholar

148. See text above to 86 and following.

149. See eg Smith, Dg ‘The shareholder primacy norm’ (1998) 23 J Corp L 277 Google Scholar; Blair and Stout, above 46; Stout, L ‘Bad and not-so-bad arguments for shareholder primacy’ (2002) 75 S Cal L Rev 1189 Google Scholar; Ireland, P ‘Shareholder primacy and the distribution of wealth’ (2005) 68 Mod L Rev 49 CrossRefGoogle Scholar; Keay, above 37.

150. See eg Institute of Directors in Southern Africa ‘King Code of Governance for South Africa 2009, Code of Governance Principles’, which requires accountability to stakeholders, available at http://www.ecgi.org/codes/documents/king3.pdf (accessed 23 December 2013).

151. Licht, above 25, at 29.

152. Gorga, E and Halberstam, M ‘Knowledge inputs, legal institutions, and firm structure’ (2007) 101 Nw U L Rev 1123 Google Scholar; Siebecker, M ‘Trust & transparency: promoting efficient corporate disclosure through fiduciary-based discourse’ (2009) 87 Wash U L Rev 115 at 117Google Scholar; E Gorga and M Halberstam ‘Litigation discovery and corporate governance: the missing story about the “genius of American corporate law” ’ (28 March 2013), available at http://ssrn.com/abstract=2239322 (accessed 1 May 2013).

153. FRC, above 14, C.3.8.

154. Generally regarded as part of the accountability process: Koh et al, above 4. Financial reporting has been regarded this way for many years, and certainly since the time of Jeremy Bentham in the early nineteenth century: Gallhofer and Haslam, above 38, at 321–322.

155. Required by the Act, s 416.

156. This effectively replaced the Business Review from 1 October 2013: The Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013, SI 2013/1970.

157. The Act, s 414C(1).

158. Query whether this actually occurs. Empirical studies suggested that the Business Review often gave little away – P Taylor ‘Enlightened shareholder value and the Companies Act 2006’, PhD thesis (Birkbeck College, University of London, 2010) at 186; Aiyegbayo, O and Villiers, C ‘The Enhanced Business Review: has it made corporate governance more effective?’ [2011] J Bus L 699 Google Scholar at 715–716 – and the same shortcoming might well be innate in the Strategic Report.

159. The Act, s 414C(2).

160. The Act, s 414C(7).

161. B Hermalin and M Weisbach ‘Transparency and corporate governance’ (21 January 2007) at 1, available at http://ssrn.com/abstract=958628 (accessed 1 May 2013).

162. Department of Business, Innovation and Skills ‘Corporate governance’, available at http://webarchive.nationalarchives.gov.uk/20090902193559/berr.gov.uk/whatwedo/businesslaw/corp-governance/page15267.html (accessed 29 April 2013).

163. Hampel Report, above 13, at [1.2]; Roberts, J ‘No one is perfect: the limits of transparency and an ethic for “intelligent” accountability’ (2009) 34 Account Org & Soc'y 957 at 966.CrossRefGoogle Scholar

164. Licht, above 25, at 29; Sarra, J ‘New governance, old norms and the potential for corporate governance reform’ (2011) 33 Law & Pol'y 576 at 576.CrossRefGoogle Scholar

165. Above 11, at [3.4].

166. Ibid, at [5.2].

167. FRC, above 14.

168. ‘Wearing two hats: the conflicting control and management roles of non-executive directors’ in Keasey, K, Thompson, S and Wright, M (eds) Corporate Governance: Economic, Management and Financial Issues (Oxford: Oxford University Press, 1997) p 56.Google Scholar

169. FRC, above 14, at [B.2.4].

170. Roberts, above 163, at 957.

171. AccountAbility ‘Aa1000 framework standards for social and ethical accounting, auditing and reporting’ (November 1999) at 8, available at http://www.accountability.org/images/content/0/7/076/AA1000%20Overview.pdf (accessed 27 August 2013).

172. The Act, s 414B.

173. Aiyegbayo and Villiers, above 158, at 705.

174. See Keay, above 142, p 157 as far as the precursor to the Strategic Report, the Business Review, was concerned.

175. Zadek, S ‘Balancing performance, ethics and accountability’ (1998) 17 J Bus Ethics 1421 at 1428.CrossRefGoogle Scholar

176. Bamberger, above 95, at 407.

177. N Goodway ‘Activist shareholder Knight Vinke urges Ubs to split up investment bank’ The Independent 3 May 2013.

178. Kaler, above 104, at 330. Kaler sees punishment as the step after the attribution of blame, and it is to that matter we refer next.

179. See eg Short, H and Keasey, K ‘Institutional shareholders and corporate governance in the United Kingdom’ in Keasey et al, above 168, p 32 Google Scholar; Black, B and Coffee, J ‘Hail Brittania? Institutional investor behavior under limited regulation’ (1994) 92 Mich L R 1999 Google Scholar; Keay, A ‘Company directors behaving poorly: disciplinary options for shareholders’ [2007] J Bus L 656 Google Scholar; McCahery, J, Sautner, Z and Starks, L ‘Behind the scenes: the corporate governance preferences of institutional investors’ (December 2010)Google Scholar, available at http://ssrn.com/abstract=1571046 (accessed 29 April 2012).

180. Under Pt 11 of the Act. These actions are brought by shareholders effectively on behalf of the company and against directors and others.

181. See text to 137 above.

182. For example, the need to obtain a shareholder vote on remuneration policy: the Act, ss 439A and 226B.

183. Bamberger, above 95, at 393.

184. Bovens above 23, at 450; Bovens et al, above 93, at 234.

185. Bavly above 2, p 8.

186. See eg Blair, M and Stout, L ‘Trust, trustworthiness, and the behavioral foundations of corporate law’ (2001) 149 U Pa L Rev 1735 at 1789–1798CrossRefGoogle Scholar; Eisenberg, M ‘The divergence of standards of conduct from standards of review in corporate law’ 62 Fordham L Rev 437 Google Scholar; Rock, E and Wachter, M ‘Islands of conscious power; law norms and the self-governing corporation’ (2001) 149 U Pa L Rev 1619 at 1658–1659CrossRefGoogle Scholar; Manning, B ‘The business judgment rule and the director's duty of attention: time for reality’ (1984) 39 Bus Law 1477 at 1481–1485, 1490–1492.Google Scholar

187. Several commentators argue that the possibility of sanctions is an element of accountability. For instance, Bovens, above 23, at 451; Strom, K ‘Parliamentary democracy and delegation’ in Strom, K, Müller, W and Bergman, T (eds) Delegation and Accountability in Parliamentary Democracies (Oxford: Oxford University Press, 2003) p 62 CrossRefGoogle Scholar; Mulgan, above 47, at 9; Bovens et al, above 93, at 234.

188. Licht, above 25, 5, at 29.

189. Thompson, above 50, p 3. Jones agrees with this in the context of corporate governance: above 3, at 146.

190. Referred to in Aguilera, R and Cuervo-Cazurra, A ‘Codes of good governance worldwide: what is the trigger?’ (2004) 25 Org Stud 415 at 418.CrossRefGoogle Scholar

191. The provision gives the shareholders the right, by way of the passing of an ordinary resolution, to remove a director from office. It is employed rarely.

192. R Lindsay ‘Shell freezes top directors' pay after revolt’, The times 16 February 2010.

193. N Clark ‘Executive pay triggers revolt at William Hill’ The Independent 13 May 2011.

194. Lindsay, above 192.

195. G Spanier ‘Wpp's Martin Sorrell pockets £17m despite pay cut’ The Independent 1 May 2013.

196. The Act, s 263(2)(c) (for England and Wales, and Northern Ireland); s 268(1)(c) (for Scotland).