Corporate governance

Corporate governance is not specifically defined either by the Companies Act 2006 or any other legislation. The generally accepted meaning is that given by the Cadbury Committee. This was a committee chaired by Adrian Cadbury that set out recommendations on the arrangement of company boards and accounting systems to mitigate corporate governance risks and failures and which, in 1992, produced the ‘Cadbury Report’ titled ‘The Financial Aspects of Corporate Governance’. In this report, corporate governance is defined as ‘the system by which companies are directed and controlled’.

For an overview of the corporate governance requirements relating to share schemes, see Practice Notes: An introduction to corporate governance and share schemes and for guidance on the more practical aspects of the UK corporate governance regime, see Practice Note: Corporate governance—fundamentals.