A REVIEW ON CADBURY REPORT
Prepared By: JST 2014
• The Cadbury report was once referred to as The Report of The Committee on the Financial Aspects of Corporate Governance. The report was published in December 1992, following the recommendations of the Cadbury Committee. • Address concerns about the working of the corporate governance system. • The Committee made it its purpose to address the financial aspects of corporate governance and out of this produced a Code of Best Practice.
• The Cadbury Committee was established in May 1991 by the Financial Reporting Council, the London Stock Exchange, and the accountancy profession. • Reasons: Increasing lack ...view middle of the document...
e. those listed on a Stock Exchange Focused on preventing corporate collapses such as Enron, Polly Peck and the Maxwell companies
Corporate governance based on Africa
What relevance does it have to Africa where there are few public listed companies Most companies are non-listed, private family owned businesses where the shareholders and the managers are often the same people
Four pillars of Corporate
Accountability Fairness Transparency
Ensure that management is accountable to the Board
Ensure that the Board is accountable to shareholders
Protect Shareholders rights Treat all shareholders including minorities, equitably Provide effective redress for violations
Ensure timely, accurate disclosure on all material matters, including the financial situation, performance, ownership and corporate governance
Procedures and structures are in place so as to minimize, or avoid completely conflicts of interest Independent Directors and Advisers i.e. free from the influence of others
Cadbury Report 1992
This, more than any other initiative in corporate governance reform, has led to the shift of directors’ dialogue towards greater accountability and engagement with shareholders…’ and ‘…has generated the more significant change of corporate responsibility toward a range of stakeholders, encouraging greater corporate social responsibility in general’
The report covered three areas
Directors ▪ It defined the composition of the board, its responsibilities, and the responsibilities of the chairman, and the audit and remuneration committees. Auditing Shareholders
Corporate Governance in Africa
In 1994, The King Report in South Africa also included within its Code of Corporate Governance requirements on sustainability and ethical standards
This was due to the context of a developing country and business ethics in Africa
Sustainability recognizes stakeholder rights...