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The Cadbury CommitteeA History$

Laura F. Spira and Judy Slinn

Print publication date: 2013

Print ISBN-13: 9780199592197

Published to Oxford Scholarship Online: September 2013

DOI: 10.1093/acprof:oso/9780199592197.001.0001

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(p.233) Appendix 2 The Committee’s Remit

(p.233) Appendix 2 The Committee’s Remit

Source:
The Cadbury Committee
Publisher:
Oxford University Press

The earliest draft of the Committee’s terms of reference is dated 25 April 1991.

To consider the following issues and to produce a code of recommended practice, which would command widespread support:

  1. (i) communications between boards, shareholders (including shareholders’ committees) and other shareholders;

  2. (ii) the case for audit committees including their composition and role, with special reference to the audit and auditors and the internal audit;

  3. (iii) the auditors’ responsibilities, including the extent and value of the audit report—the appointment, remuneration, resignation and dismissal of auditors and their relationship with audit committees;

  4. (iv) the frequency, clarity and nature of corporate reporting;

  5. (v) the responsibilities of executive and non-executive directors and other layers of management for planning, for reviewing and reporting on performance, and in relation to illegal acts.

No other revised versions of this have survived in the archive, but it is most likely that some approximation of the Committee’s terms of reference as published in the draft and final reports and set out below (it was unchanged between them) was agreed either by the end of the year at the meetings in the autumn of 1991 or at the two-day retreat in January (p.234) 1992. Comparing the two, we see a slight shift in focus. ‘Good practice’ replaces ‘would command widespread report’, the order is changed, the wording becomes more specific, and the reference to ‘illegal acts’ is removed.

  1. To consider the following issues in relation to financial reporting and accountability and to make recommendations on good practice:

  2. (a) the responsibilities of executive and non-executive directors for reviewing and reporting on performance to shareholders and other financially interested parties; and the frequency, clarity and form in which information should be provided;

  3. (b) the case for audit committees of the board, including their composition and role;

  4. (c) the principal responsibilities of auditors and the extent and value of the audit;

  5. (d) the links between shareholders, boards, and auditors;

  6. (e) any other relevant matters.