Issues in corporate governance develop according to an identifiable process. Using the influence model of Jones and Pollitt (2002, Understanding How Issues in Business Ethics Develop. Basingstoke: Palgrave), we compare the conduct of and influences on the investigations leading to the Higgs Review (2003) and the Cadbury Report (1992). We suggest that, while there are similarities in the investigations, there are important differences arising from the review process adopted, the role of the government, the background of the leaders of the investigations and the influence of academics. These differences have important implications for the effectiveness of the implementation of the conclusions of the Higgs Review.
Since 1992, corporate governance in the UK and much of the world has been articulated in codes of conduct, rather than formal law and regulations or even less formal social arrangements. Moreover, despite their gradual revision over the years, their core tenets survived despite repeated and arguably growing shocks to the system they were meant to protect. That suggests the problems they sought to address have not been solved. Britain – in particular its banks – was perhaps the worst hit by the global financial crisis, at a cost to the state that continues more than a decade later. How did various revisions fail to undertake fresh approaches to the recurring crises? This book explores how corporate governance in Britain came to be codified, what key disputes took place during its major revisions, and how it institutionalised a way of viewing what corporate governance should be. This study also suggests that the while the flexibility that was built into the code's compliance regime allowed for variations, few companies took the opportunities provided to experiment with other ways of organisation the work of boards of directors. The code is much admired, with good reason. And it has achieved wide legitimacy. But is it the model for corporate governance? The Cadbury Code and Report was the starting point for this new direction. . The UK code of corporate governance is widely admired and imitated, but it has not prevented the types of emergency that led to its creation – recurring failures of large corporations because of the lack of oversight and internal control. The biggest case was the financial crisis of 2007-09, in which the UK suffered disproportionate damage, as we shall see. Were we expecting too much of a code of conduct? Why did the framers of the code not recommend something stronger than a voluntary code of conduct? This study examines those questions through analysis of the debates that led up to the drafting of the original Cadbury Code and then the major revisions undertaken in 2003 and 2010 in response to renewed crises. It does so through a critical discourse analysis of contributions to the consultations that informed the drafting, undertaken against the economic and political context that shaped the code and was then shaped by it.
This paper investigates the determinants of the board structure of non‐financial firms prior to, and post, the implementation of the recommendations of the Cadbury Committee. It provides evidence that managerial entrenchment is reduced following Cadbury, with the power afforded to CEOs with high levels of stock ownership being significantly diminished following the imposition of new standards of 'best practice' regarding board structure. However, in spite of considerable pressure for institutional investors to play an active role in encouraging best practice regarding board structure in their investee companies, we find no evidence of such behaviour in either time period, even in the presence of poor firm performance.
The concept of culture promised to make organization studies more historical. This promise has not been fulfilled. Possible reasons for the failure to integrate business history and organization studies are explored and a synthesis developed, using the historical concept of invented tradition in conjunction with the social cognition biases identified by organizational culture. The major part of the article then demonstrates how Cadbury, a British confectionery company well known for its Quaker traditions, invented its corporate culture by attributing significance to the Quaker beliefs of the Cadbury family retrospectively. A history is reconstructed, mainly from published sources, to demonstrate how the histories constructed by the firm, including a centenary celebration in 1931, were part of the process of giving meaning to the firm's labor-management institutions.
In: Zalewska , A 2014 , ' Challenges of corporate governance : Twenty years after Cadbury, ten years after Sarbanes-Oxley ' , Journal of Empirical Finance , vol. 27 , pp. 1-9 . https://doi.org/10.1016/j.jempfin.2013.12.004
This paper sets the background to the Special Issue of the Journal of Empirical Finance on Challenges of Corporate Governance. It identifies the alternative approaches that can be taken to solve agency problems stemming from asymmetries of information: (i) ex-post monitoring through audit and information provision, (ii) ex-ante monitoring through boards, and (iii) incentivisation through the alignment of managerial incentives with shareholders. It discusses how the UK and the US have responded to corporate failures and relates the development of regulation in these countries to the three alternative approaches. It concludes with a discussion of three groups of challenges: (i) understanding alternative regulatory approaches, (ii) determining the importance of geo-diversity of business culture, and (iii) overcoming the problems of the political economy of corporate governance.
In: Price , M , Harvey , C , Maclean , M & Campbell , D 2018 , ' From Cadbury to Kay : Discourse, intertextuality and the evolution of UK corporate governance ' , Accounting, Auditing and Accountability Journal , vol. 31 , no. 5 , 10 , pp. 1542-1562 . https://doi.org/10.1108/AAAJ-01-2015-1955
Purpose: The purpose of this paper is to answer two main research questions. First, the authors ask the degree to which the UK corporate governance code has changed in response to both systemic perturbations and the subsequent enquiries established to recommend solutions to perceived shortcomings. Second, the authors ask how the solutions proposed in these landmark governance texts might be explained. Design/methodology/approach: The authors take a critical discourse approach to develop and apply a discourse model of corporate governance reform. The authors draw together data on popular, corporate-political and technocratic discourses on corporate governance in the UK and analyse these data using content analysis and the historical discourse approach. Findings: The UK corporate governance code has changed little despite periodic crises and the enquiries set up to investigate and make recommendation. Institutional stasis, the authors find, is the product of discourse capture and control by elite corporate actors aided by political allies who inhabit the same elite habitus. Review group members draw intertextually on prior technocratic discourse to create new canonical texts that bear the hallmarks of their predecessors. Light touch regulation by corporate insiders thus remains the UK approach. Originality/value: This is one of the first applications of critical discourse analysis in the accounting literature and the first to have conducted a discursive analysis of corporate governance reports in the UK. The authors present an original model of discourse transitions to explain how systemic challenges are dissipated.