Cadbury Corporation Case Study

• all directors are equally responsible for actions and decisions the Board;
• Board should appoint audit, remuneration and nomination committees.
The Committee mandated the appointment of audit committee based on the New York Stock Exchange audit committee requirement, report of the U.S Tread Way commission and its positive experiences on the U.S stock market.
Comply or Explain
The Cadbury Committee summarized it recommendations in a Code of Best Practice later called as Cadbury Code. The Code contained nineteen clauses under four headings viz Board of Directors, non-executive directors, executive directors and reporting, and controls. The Committee mandated that all listed companies should state the compliance of the Code or give reasons for non-compliance in the annual report. Besides, the Committee suggested the sponsors to appoint a new Committee by the end of June 1995 to examine the compliance of Code, implementation of its other recommendations and need for updating the Code in line with emerging issues. The London Stock Exchange appended the Committee’s recommendations and Code in its listing rules and immediate ly implemented the same.
The Greenbury committee In 1994, an endless escalation of executive pays particularly in the newly privatized public utilities forced the British Prime Minister John

The combined Code was issued on June 1998, it contained both principles and detailed Code provisions with two parts. In the first part, the company will be required to give report on application of the combined Code principles. In the second part, the company will be required to confirm whether it complies with the Code provisions or - where it does not - provide an explanation. This Code was appended with listing rule of the London Stock Exchange and applied to all listed companies in U.K from 31 December