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Critically review the evidence that the corporate governance structures and reporting requirements required in the UK by the Cadbury Committee and its successor - Essay Example
Pages 7 (1757 words)
In the late 1980's in the United Kingdom, as in many other counties, a mood of general disquiet arose, as result of the actions of a number of bodies, in both the public and private sectors. In the public sector there appeared to be a growing trend for officials and elected representatives to pay little regard to either the consequences of their actions, or the public's reactions to them…
In response to this public pressure, in 1991 the then Conservative government under Prime Minister John Major established the Cadbury Committee and its successors. The remit of these bodies was to establish guidelines under which companies and public bodies should operate. These guidelines were not to be enshrined in law (especially for companies), but rather to be promulgated as "best practice" under which industries would regulate themselves.
Perhaps the most telling case was that of the Mirror Group Newspapers pension fund. Over a period of time the company's pension fund had been plundered of some 400,000,000. The money was used for a variety of purposes, including the enhancement of the MGN's share value, and the personal use of the Chairman, Robert Maxwell.
Of great concern also were the performances of directors of newly privatized utilities. In many cases those same individuals who had been at the helm of state owned bodies now came to have their salaries massively increased, (in some cases three or four-fold) simply because, in the eyes of the public, their enterprise was now privately rather than publicly owned.
As a result of these and other in ...
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