Abstract
In the late 1980s there was a series of sensational business scandals in the United Kingdom. There was particular public outrage at the plundering of pension funds by Robert Maxwell, at the failure of auditors to expose the impending bankruptcy of the Bank of Credit and Commerce International, and at the apparently undeserved high pay raises received by senior business executives. The City of London responded by creating a special committee to examine the financial aspects of corporate governance. This paper describes the resulting Code of Best Practice produced by the Cadbury Committee. To reduce the power of executive directors in the boardroom the Code recommends a greater role for non-executive directors, changes in board operations, and a more active role for auditors. The paper reviews the various published reactions to the Cadbury Report, and concludes that the Code is unlikely to halt the incidence of business scandals in the United Kingdom.
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Colin Boyd teaches at the College of Commerce, University of Saskatchewan. His study of the Zeebrugge Car Ferry Disaster is published in a number of strategy and ethics case-books. In 1993/94 he was a Visiting Research Fellow at the Centre for Applied Ethics, University of British Columbia, which provided financial support for the production of this paper.
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Boyd, C. Ethics and corporate governance: The issues raised by the Cadbury report in the United Kingdom. J Bus Ethics 15, 167–182 (1996). https://doi.org/10.1007/BF00705585
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DOI: https://doi.org/10.1007/BF00705585