Why the business needs to be accountable to shareholders?

A business needs to be accountable to its shareholders as they are the owners of the business. In practise, because of the wide spread of share ownership, typically including a mix of individual shareholder's and pension funds which invest in shares to produce a return for their own shareholder's, accountability is not always so easy to establish. There are moves towards more accountability these days with block voting of larger groups of shareholders against such matters as board member pay and this is a trend likely to continue as excessive bonus and pay arrangements in the face of a falling share value have at last begun to be addressed. Companies and their boards of directors will therefore become more accountable in future.