The Cadbury Code of Best Practices Had 19 Recommendations

The Cadbury Code of Best practices had 19 recommendations. The recommendations are in the nature of guidelines relating to Board of Directors, Non-executie Directors, !xecutie Directors and those on "eporting and Control. "elating to the Board of Directors these are# The Board should meet regularly retain full and effectie control oer the company and • monitor the executie management There should be a clearly accepted diision of responsibilities at the head of a company, • $hich $ill ensure balance of po$er and authority, such that no indiidual has unfettered  po$ers of decision. %n companies $here the Chairman is also the Chief !xecutie, it is essential that there should be a strong and independent element on the Board, $ith a recogni&ed senior member. The Board should include non-executie Directors of sufficient caliber and number for • their ie$s to carry significant $eight in the Board's decisions. (The Board should hae a formal schedule of matters specifically resered to it for • decisions to ensure that the direction and control of the company is firmly in its hands. There should be an agreed procedure for Directors in the furtherance of their duties to • ta)e independent professional adice if necessary, at the company's expense. *ll directors should hae access to the adice ad ice and serices of the Company +ecretary, • $ho is responsible to the Board for ensuring that Board procedures are follo$ed and that applicable rules and regulations are complied $ith. *ny uestion of the remoal o f Company +ecretary should be a matter for the Board as a $hole. "elating to the Non-!xecutie Directors the recommendations are#  Non-executie Directors should bring an independent udgment to bear on issues of • strategy, performance, resources, including )ey appointments, and standards of conduct. The maority should be independent of the management and free from any business or • other relationship, $hich could materially interfere $ith the exercise of their independ ent  udgment, apart from their fees and shareholding. Their fees should reflect reflect the time, $hich they commit to the compan y.  Non-executie Directors should be appointed for specified terms and reappointment • should not be automatic.  Non-executie Directors should be selected through a formal process and both, this •  process and their appointment, should be a matter for the Board as a $hole. or the !xecutie Directors the recommendations in the Cadbury Code of Best /ractices are# Director's serice contracts should not exceed three years $ithout shareholders' approal • There should be full and clear c lear disclosure of their total emoluments and those of the • Chairman including pension contributions and stoc) options. +eparate figures should be gien for salary and performance-related elements and the basis on $hich performance is measured should be explained. !xecutie Directors' pay should be subect to the recommendations of a "emuneration • Committee made up $holly or mainly of Nonexecutie Directors. "eporting and Controls the Cadbury Code of Best /ractices stipulate that# %t is the Board's duty to present a balanced and understandable assessment of the • company's position.

•

•

•

•

•

The Board should ensure that an obectie and professional relationship is maintained $ith the *uditors. The Board should establish an *udit Committee of at least three Non-executie Directors $ith $ritten terms of reference, $hich deal clearly $ith its authority and duties. The Directors should explain their responsibility for preparing the accounts next to a statement by the *uditors about their reporting responsibilities. The Directors should report on the effectieness of the compan y's system of internal control The Directors should report that the business is a going concern, $ith supporting assumptions or ualifications as necessary.