Abstract:

Accountability has become an icon of good governance, and this applies equally to corporate governance. It is in fact often an element in definitions of corporate governance and it has been said that accountability can foster better corporate governance. Various bodies, such as the OECD, have identified board accountability to be a critical aspect of corporate governance. It is widely posited that holding directors accountable for their behaviour and decisions is fundamental to good corporate governance. But why is that the case? We might say intuitively that there should be accountability, but we need specific and convincing arguments, especially as accountability is perceived to be such a critical issue and the fact that some argue that accountability will destroy innovative and entrepreneurial activity and impede directors in the use of their power. The rationale behind the need for accountability must be examined in order to inform debates over accountability. The paper identifies and then explores the possible reasons that are, or can be, given for regarding board accountability as a significant element in corporate governance. It then assesses them in order to ascertain whether they can be, or should be, regarded as sound rationales for demanding board accountability.

Bio:

Andrew Keay is Professor of Corporate and Commercial Law in the Centre for Business Law and Practice, School of Law at the University of Leeds specialising in corporate and insolvency law, and is a barrister practising from Kings Chambers in the Chancery field. Andrew has been a partner in an Australian law firm and Deputy Registrar of the Australian Federal Court in Melbourne. He holds a doctorate in law from the University of Queensland and has taught at several Australian universities before coming to England. He is the author of many books with four of the latest being Directors’ Duties 2^nded (Jordans, 2014), McPherson’s Law of Company Liquidation, 3^rd ed (Sweet and Maxwell, 2013), The Enlightened Shareholder Value Principle and Corporate Governance (Routledge, 2012) and The Corporate Objective (Edward Elgar, 2011). He has been published in numerous journals in several countries. His work has been cited by courts in England, Scotland, Canada, Australia, New Zealand, Singapore, South Africa and Hong Kong as well as by the Privy Council. He is the Commonwealth editor and editorial board member of Gore-Browne on Companies.

By: Laura Arnold
Last updated: Thursday, 13 February 2014