Business Ethics and Corporate Governance, Second Edition

THE AFTERMATH OF THE CADBURY REPORT

The Cadbury Committee’s Report, especially its recommendations concealed in the Code of Best Practices, shocked the corporate world in Britain and elsewhere. Its most revolutionary recommendations reverberated several transformatory changes that were to be incorporated in the corporate sector everywhere and its ramifications vibrated not only in the advanced countries of the West, but also could be heard in emerging and transition economies like those of Russia, India and those in South East Asia. The most controversial of the Cadbury’s recommendations was the one that required that the ‘directors should report on the effectiveness of a company’s system of internal control’. It was the extension of control ...