The Cadbury Report

Cadbury Report on Corporate Governance

The Cadbury Report, published in 1992, outlined a number of key recommendations aimed at improving corporate governance and financial reporting.

Key recommendations on how a company's board should operate.

The roles of the CEO and Chairman should be separate to ensure a balance of power.

Non-executive directors should be appointed to bring an independent perspective to the board.

The board should have a strong and independent element, with skilled members.

Executive pay should be subject to a remuneration committee comprised mostly of non-executive directors.

Advice on company financial systems and audits.

Companies should be transparent with their financial reporting and disclosures.

A sound system of internal control is essential for managing risk and financial integrity.

The external audit process should be rigorous and auditors should be accountable to shareholders.

Ensuring that companies are accountable to their shareholders.

The creation of an effective audit committee is recommended, mostly with non-executive directors.

Companies should actively engage and dialogue with shareholders.

Clearly defined roles and duties for accountability at all organizational levels.

Strengthening the position of the shareholders.

Shareholders should be encouraged to participate in Annual General Meetings (AGMs).

Voting should be facilitated and transparent to ensure that shareholders can effectively exercise their rights.

All shareholders should receive equitable treatment and access to information.

Implementation recommendations for companies.

Companies should apply the Code's principles, disclosing how they have applied them.

Regulatory bodies should monitor and enforce compliance with the code.

The code allows a degree of flexibility, acknowledging that not all practices will suit every company.