Cadbury

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 The "Cadbury Code" is the foundational framework of modern corporate governance globally, established in 1992 by the UK's Cadbury Committee (chaired by Sir Adrian Cadbury). It introduced the world’s first "comply or explain" governance model, focusing on financial accountability, board composition, and auditor oversight. [1, 2, 3, 4, 5]




The original Cadbury Report recommendations include:
  • Separation of Powers: The roles of Chairman and Chief Executive Officer (CEO) should be divided to prevent unchecked decision-making power.
  • Independent Directors: Boards must include a balance of independent, non-executive directors to ensure objective oversight.
  • Audit Committees: The board must establish an audit committee (consisting of at least three non-executive directors) to review internal controls and financial reporting.
  • Comply or Explain: Rather than creating legally binding constraints, companies follow a voluntary code of best practices. If a company does not comply, it must publicly explain to shareholders why. [5, 6]
Read the full, original Cadbury Report via the European Corporate Governance Institute, or explore modern updates on the Financial Reporting Council overview. [1, 4]


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