Cadbury Committee Report 1992

Cadbury Committee Report 1992 (Huge problem of Scam)

The ‘Cadbury Committee’  a view to overcome the huge problems of scams and failures occurring in the corporate sector worldwide.he main aim of addressing the financial aspects of CorporateGovernance.The “Cadbury Committee” was set up in May 1991 But Committee published its final report Dec 1 (1992) 

The Financial Reporting Council’s London Stock Exchange +  British Accounting Profession made Committee Sir Adran Cadbury the chief member of this committee. The Cadbury Comittee’s main object is How Governance Could be Improved.

The committee’s main objective is to uplift investors’ low confidence. ताकि जो confidence जो investor का कम हो चुका है उसको दुबारा से भरोसा मिले  या फिर उसको inhence , improve कर सके। & Also a Some other purpose:-

  • 1.) Make good off to overcome the juice problem of Scams.
  • 2.)To raise the standard of corporate governance.
  • 3.)It tells the different duties and responsibilities of a board of director shareholder and auditors. 
Code of Best Practice

The Boards of all listed companies should Comply with the Code of Best Practices. All listed companies should make about their compliance within their report and accounts as well as give reasons for any areas of non-compliance. a statement

The Code of Best is segregated into four Sections:-
  1. The Board of Directors.
  2. The Non-Executive Directors
  3. Executive Directors
  4. Reporting & Controls
  5. Board of Directors :-
  • Regular meetings & complete control of the company.
  •  Clearly accepted division of responsibilities. (इस point का मतलब ये हैं, हर division के लिए हर किसी को अलग-अलग काम और उनकी responsibilities होनी चाहिए | )
  •  Include non-executive directors. (हर Co. का अपना चाहिए Non-executive directors होना चाहिए |यही से mainly Non- executive directors की शुरुआत हुई थी।)
  • Might take direction from professionals.  (professional की मदत लेना उनसे discuss करना
  •  Good Communication between directors and the Company Secretary.
       2. Non-executive Directors :-
  • Independent Judgement  ( They always want should only make the right decision )
  • Specific term (appointment)  (अगर 1 साल complete हो जाता है तो उसके बाद दुबारा contract बनाना पड़ेगा | )
  • independent from any type of Business.
  •  selection through formal procedure.
      3. Executive Directors :-
  • Pay according to Remuneration Committee. (According employee  salary, Pension , Bonus.)
  • Full disclosure of their Remuneration in Documents.
  •  Director service tenure time not more then 3 years . (अगर continue करवाना है तो shareholder की permission .)
       4. Reporting & Control
  • Professional relationship with auditor.
  • Est. audit committee which deal clearly, its authority & duties.
  • Report on effective of company internal control.
  • Accurate representation of company position.
  • Regular rotation of auditors.

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