Cadbury Committee, The (1992)

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An initiative by the accountancy profession and its sponsors (the Financial Reporting Council, the London Stock Exchange and the Bank of England) “to help raise the standards of corporate governance and the level of confidence in financial reporting and auditing.” The committee’s final report, published in 1992, provided a benchmark set of recommendations on governance widely considered to be best practices. These included:

1. Separation of the chairman and chief executive officer titles.
2. The appointment of independent directors to the board.
3. Reduced conflicts of interest at the board level because of business or other relationships.
4. The creation of an independent audit committee.
5. A review of the effectiveness of the company’s internal controls.

The recommendations of the Cadbury Committee formed the basis of London Stock Exchange listing requirements and have influenced governance standards in the U.S. and several other countries. They have subsequently been revised by later committees.


ICAEW: The Cadbury Report