Corporate governance is the system of rules, practices and processes that are put in place to manage and control a company. A company with good corporate governance in place creates an environment of trust, transparency and accountability. This, in turn, helps that company attract long-term investment and build its financial stability and business integrity. It is likely that such a company will see strong, continuous growth and, if it ensures that the interests of all its stakeholders are balanced, make a positive contribution to society.
For a consideration of the key aspects of corporate governance, see Practice Note: Corporate governance—fundamentals.
The corporate governance environment in the UK has been evolving since the late 1980s.
Following a number of high profile corporate scandals, the Committee on the Financial Aspects of Corporate Governance was established in May 1991 to review the aspects of corporate governance relating to financial reporting and accountability. The committee was chaired by Sir Adrian Cadbury and its final report, The financial aspects of corporate governance, was published in December 1992 (it is usually known as the Cadbury
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