Cadbury Corporate Governance Essay

1236 WordsOct 30, 20175 Pages
Whilst the definition of corporate governance most widely used is "the system by which companies are directed and controlled" presented by Cadbury Committee, (1992). More specifically it is the framework by which the various stakeholder interests are balanced, or, as the IFC (International Finance Corporation) states, "the relationships among the management, Board of Directors, controlling shareholders, minority shareholders and other stakeholders". The OECD Principles of Corporate Governance states that: "Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are…show more content…
These rules are basically as follows: 1. Ethics: a clearly ethical basis to the business 2. Align Business Goals: appropriate goals, arrived at through the creation of a suitable stakeholder decision making model 3. Strategic management: an effective strategy process which incorporates stakeholder value 4. Organisation: an organisation suitably structured to effect good corporate governance 5. Reporting: reporting systems structured to provide transparency and accountability Consequently, the golden rules indicate that ‘best corporate governance practice equates best management practice’. Source: Institute of Directors, 2011. Corporate governance is founded on laws, policies, processes, systems and behaviours and together they provide a system for the way in which an organisation is directed, administered and controlled. As such, the Charity Commission, (the ‘Commission’) recognises that to deliver its strategic aims, objectives and priorities successfully, it needs sound corporate governance arrangements in place, (Charity Commission UK). Corporate Governance is not - or should not be - about debate and discussion on executive compensation, shareholder protection, legislation and so on. In recent times, corporate governance became not only a subject of fierce debate and public outcry, but also, as a result of this and arising legislation, a subject which been wearisome for many company directors. The hidden gem here is to a great
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