The Cadbury Report, titled ''Financial Aspects of Corporate Governance'', is a report issued by "The Committee on the Financial Aspects of Corporate Governance" chaired by Sir
Adrian Cadbury, chairman of
Cadbury
Cadbury, formerly Cadbury's and Cadbury Schweppes, is a British multinational confectionery company owned by Mondelez International (spun off from Kraft Foods) since 2010. It is the second-largest confectionery brand in the world, after Mars. ...
, that sets out recommendations on the arrangement of company boards and accounting systems to mitigate
corporate governance
Corporate governance refers to the mechanisms, processes, practices, and relations by which corporations are controlled and operated by their boards of directors, managers, shareholders, and stakeholders.
Definitions
"Corporate governance" may ...
risks and failures.
In 1991 the
London Stock Exchange
The London Stock Exchange (LSE) is a stock exchange based in London, England. the total market value of all companies trading on the LSE stood at US$3.42 trillion. Its current premises are situated in Paternoster Square close to St Paul's Cath ...
set up the Cadbury committee and the report was published in draft version in May 1992. Its revised and final version was issued in December of the same year. The report's recommendations have been used to varying degrees to establish other codes such as those of the
OECD
The Organisation for Economic Co-operation and Development (OECD; , OCDE) is an international organization, intergovernmental organization with 38 member countries, founded in 1961 to stimulate economic progress and international trade, wor ...
, the
European Union
The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are Geography of the European Union, located primarily in Europe. The u ...
, the
United States
The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
, the
World Bank
The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...
etc.
Background
Sridhar Arcot and Valentina Bruno in their article called "In Letter but not in Spirit: An Analysis of Corporate Governance in the UK" explain the background to the Cadbury Committee. Although wrong on the historical facts, as
Robert Maxwell
Ian Robert Maxwell (born Ján Ludvík Hyman Binyamin Hoch; 10 June 1923 – 5 November 1991) was a Czechoslovakia, Czechoslovak-born British media proprietor, politician and fraudster.
After escaping the German occupation of Czechoslovakia, ...
died on 5 November 1991 and "The Committee on the Financial Aspects of Corporate Governance" known as "The Cadbury Committee" was set up in May 1991 for other reasons than the Maxwell case,
it gives an interesting reading of the situation at the time:
History lesson: Cadbury 1992
Lessons from the report according to The National Computing Centre, 2010:
* Financial Aspects of Corporate Governance
* Division of top responsibilities:
** No one individual has powers of decision
** Majority of independent non-executive directors
** At least three non-executives on the audit committee (oversee accounting/financial reporting)
** Majority of non-executives on the remuneration committee
** Non-executives to be selected by the whole board
See also
*
Corporate governance
Corporate governance refers to the mechanisms, processes, practices, and relations by which corporations are controlled and operated by their boards of directors, managers, shareholders, and stakeholders.
Definitions
"Corporate governance" may ...
*
Hampel Report (1998)
*
Turnbull Report (1999)
*
Higgs Report (2003)
*
Smith Report (2003)
*
King Report on Corporate Governance
*
UK Corporate Governance Code
The UK Corporate Governance code, formerly known as the Combined Code (from here on referred to as "the Code") is a part of UK company law with a set of principles of good corporate governance aimed at companies listed on the London Stock Exchang ...
*
Treadway Commission in the United States
References
Citations
Sources
* History lesson: Cadbury 1992 © The National Computing Centre 2010.
External links
Report of the Committee on the Financial Aspects of Corporate Governance (the Cadbury Report)��{{Webarchive, url=https://web.archive.org/web/20230827144549/https://www.ecgi.global/sites/default/files/codes/documents/cadbury.pdf , date=27 August 2023
Corporate governance in the United Kingdom
1992 in economic history
Reports on finance and business
1992 in the United Kingdom