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Separate 
appraisal 
of the chairman and chief executive should also be carried out, with links to the remuneration 
process.
 
3.8 Increased accountability and responsibility 
Corporate governance rules have created standards of '
best practice
' that all companies, not just listed 
ones, are encouraged to follow.
These standards have raised public expectations of directors' conduct, and widened the range of 
stakeholders taking an interest in a company's governance. 
Directors now 
face increased risk
of: 

 Legal 
action
, as they are now more accountable for their actions and responsible to a wider range 
of stakeholders 

 Dismissal
, as service contracts are shorter in length and directors must stand for re-election by 
the shareholders regularly 
Directors have had to alter their behaviour to counter these increased risks. They are devoting more time 
to meeting the requirements of '
best practice
'
, and to investor/stakeholder relations.
However, this would result in directors' attention being diverted away from making the company 
profitable, potentially damaging the long-term success of the business. 
3.9 Division of responsibilities 
For best performance, it is important for a company to have a division of responsibilities at the head of 
an organisation. The simplest way to do this is to require the roles of 
Chair 
and 
chief executive
to be 
held by two different people.
This division has not been made legally mandatory in the UK but the UK Corporate Governance Code 
(FRC, 2018) states that the roles of chairman and chief executive should not be exercised by the same 
individual. The division of responsibilities between the chairman and chief executive should be clearly 
established, set out in writing and agreed by the board.