THE CADBURY CODE ‘COMPLIANCE REPORT’
| Date | 01 January 1996 |
| Pages | 82-89 |
| DOI | https://doi.org/10.1108/eb024869 |
| Published date | 01 January 1996 |
| Author | ALICE BELCHER |
| Subject Matter | Accounting & finance |
THE CADBURY CODE 'COMPLIANCE REPORT
Received: 14th August, 1995
ALICE BELCHER
ALICE BELCHER
IS LECTURER IN LAW AT THE UNIVERSITY
OF
KEELE SHE HAS PUBLISHED
GENERALLY ON COMPANY LAW AND
INSOLVENCY LAW AND IN PARTICULAR
ON 'REGULATION
BY
THE MARKET' AS
ENVISAGED BY SIR ADRIAN CADBURY. SHE
CAN BE CONTACTED AT KEELE
UNIVERSITY, SCHOOL AND DEPARTMENT
OF
LAW, KEELE, STAFFORDSHIRE ST5 5BG,
TEL.
+44(0)1782 583218,
FAX.
+44(0)1782 583228.
ABSTRACT
This paper
critically
reviews the contents
of the
'Compliance
Report' published by
the Cadbury Committee in May 1995.
The
Compliance
Report could
be seen
as a
rather
self-congratulatory
farewell from
the original Cadbury Committee before
their successor body, known for the
moment
as
Cadbury
II,
takes over the task
of
reviewing corporate
governance issues
and making
recommendations.
This
paper
concludes
that the
Compliance
Report is
both disappointing
and
complacent.
INTRODUCTION
Perceived failures in corporate gov-
ernance,1 accountability,2 financial
reporting and auditing provided the
impetus for the work of the Commit-
tee on the Financial Aspects of Cor-
porate Governance (the Cadbury
Committee). These have been
expressed as 'Concerns over: the
spread of creative accounting; the
spectacular increases in unexpected
business failures; the apparent ease
of unscrupulous directors in expro-
priating other stakeholders' funds;
the very limited role of auditors;
[and] the apparently weak link
between executive compensation and
company performance'.3 The stated
objective of the Cadbury Committee
was 'To help to raise the standards of
corporate governance and the level
of confidence in financial reporting
and auditing'.4 Their method of
addressing these concerns was to
issue a report making various recom-
mendations most of which were
included in the Cadbury Code of Best
Practice. The Committee recom-
mended that the boards of all listed
companies registered in the UK
82
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