Transcript
NARRATOR
The UK corporate governance code has to date been updated in responses to high profile failures in corporate governance. The first version of the code was published in 1992 by Sir Adam Cadbury, known as the Cadbury Report. The report was commissioned following a number of high profile corporate scandals in the UK, mainly involved in fraud such as Polly Peck, BCCI, and Robert Maxwell.
The major principles covered separation of the CEO and chairman roles, appointed of non-executive directors and formation of an audit committee attended by non-executive directors. In 1994, the principles of the code were appended to the London Stock Exchange's listing rules. All listed companies were required to comply with the principles or explain why they did not.
Public outcries over executive pay of recently nationalised firms led to another code being introduced, the Greenbury Report. This introduced additional principles where a remuneration committee set executive pay and executive pay linked to long term performances were introduced. In 1998, these two codes were brought together to form the combined code.
Over the next decade, further updates were made in response to corporate failures, such as Enron, Northern Rock, and the banking crisis with the combined code renamed as the UK corporate governance code. In the last decade, code has been updated three times with the aspiration to increase boardroom accountability and increase trust in the business.