The Cadbury Code and Recurrent Crisis

A Model for Corporate Governance?

verfasst von: Dr. Donald Nordberg

Verlag: Springer International Publishing

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

This book raises questions about a hallmark mechanism of corporate governance – the use of codes of practice. It undertakes a critical examination of the origins and development of the UK code of corporate governance, which influenced codes devised around the world and practices of organisations well beyond the world of corporations listed on stock exchanges. Much lauded as a model of good governance, its core principles have persisted for almost 30 years. Yet during that time repeated crises in corporate governance have arisen, suggesting that it has not fully addressed the problem it was meant to solve.

This book will be valuable reading for scholars working on business ethics, corporate governance, and business history.

Inhaltsverzeichnis

Frontmatter

Chapter 1. Successes in Corporate Governance—Or Failures?

Abstract

Codes of corporate governance around the world have drawn inspiration from the UK’s Cadbury Code and its subsequent iterations. This widely admired and imitated regulative measure emerged from a crisis in corporate governance and was designed in part to prevent corporation collapses. In the past three decades, however, corporate collapses have continued and even intensified in impact. The chapter asks: In what ways has codifying corporate governance succeeded? In what ways has it failed?

Donald Nordberg

Chapter 2. The Problems and Remedies in Corporate Governance

Abstract

The field of corporate governance has attracted attention from a wide range of disciplines, seeking to diagnose the problems and often to prescribe remedies. This chapter sketches the literature and theoretical perspectives used in the field and outlines a framework for examining the problem at the heart of codes of corporate governance: the work of boards of directors, how it involves ethics and political contests over power, and how they resolve into institutions that inform future decision-making.

Donald Nordberg

Chapter 3. Codes and Their Contexts

Abstract

The codification of the work of boards marked a major shift of direction in corporate governance. This chapter sets the process in historical context, examining both the market and political settings that pre-dated the Cadbury Code. It shows how those contexts subsequently developed as renewed crises emerged, even as the core tenets of the code persisted.

Donald Nordberg

Chapter 4. Institutions, Logics, and Power

Abstract

Codes are an important part of the institutional framework that governs the operations of corporations and their boards of directors. This chapter provides a grounding in institutional theory, its emphasis on how structures determine outcomes, and how it can fail to take into account underlying issues of power. It discusses how institutional theorists have turned to two approaches—‘logics’ and ‘work’—to overcome the weakness and account for greater agency of social actors. It argues that a rhetorical view of logics and concern for discourse in work help explain contests over power in codes of conduct and the process of codification.

Donald Nordberg

Chapter 5. Issues Contested in the UK Code

Abstract

In creating a new, semi-formal institution, the UK code challenged existing custom and practice. While some of its principles proved relatively unconfrontational, others did not and the debate over them has continued through multiple iterations of the code. This chapter provides the background of three such areas of dispute: the shape of the board of directors, the ethos of the boardroom, and the nature of compliance.

Donald Nordberg

Chapter 6. Shape of the Board

Abstract

The structure of the board of directors has a lot to do with its purpose. The UK has traditionally had a unitary board, with executives and non-executive directors sharing power. Efforts from the European Commission, supported by peripheral actors in the UK, favoured a change to two-tier boards. This chapter analyses in detail how that debate played out during the three major versions of the UK, which arose in response to crises of confidence, when change was possible, when power might have shifted, and when incremental changes occurred.

Donald Nordberg

Chapter 7. Ethos and Explanation

Abstract

Board design has an impact on the relationship between directors and therefore the ethos of the boardroom. But the code also specifies the nature of compliance, and in the UK establishes a principle that permits explanations of the reasons for non-compliance, which also affects the ethos. This chapter examines in detail how these two issues—the nature of board relationship and what compliance means—and how they remained controversial through repeated revisions.

Donald Nordberg

Chapter 8. Discussion

Abstract

The three issues debated intensely demonstrate how the process of codification revealed otherwise unstated logics and involved attempts to use the exercise of the debates to shift and embed power with central actors in the field. This chapter discusses how the process was enacted, how it articulates the ethics, politics, and institutionalisation of corporate governance, and with what implications for UK corporate governance and for all the other jurisdictions and organisation types that followed its lead. It then suggests that why the changing context of investment might undermine the legitimacy of the code.

Donald Nordberg

Chapter 9. Conclusions

Abstract

The Cadbury Code was born in an emergency, and through various revisions and iterations has become part of the fabric not just of corporate life in the UK, but also around the world and in other domains. This recalls the benefits—in strengthening board process—but also reflects on its shortcomings. It asks practitioners and scholars to consider how the shifting context might affect how suitable its remedies are for the problems of corporate governance.

Donald Nordberg

Backmatter

Titel: The Cadbury Code and Recurrent Crisis
verfasst von: Dr. Donald Nordberg
Verlag: Springer International Publishing
Electronic ISBN: 978-3-030-55222-0
Print ISBN: 978-3-030-55221-3
DOI: https://doi.org/10.1007/978-3-030-55222-0