25 years since Cadbury: the future of corporate governance in the UK

Held on Thursday, March 2

With support from Mazars.


  • Lord Myners

  • Sir Win Bischoff (FRC)

  • Paul Lee (Aberdeen Asset Management)

  • Anthony Carey (Mazars)

Event Debrief


With the BEIS Green Paper on Corporate Governance currently doing the rounds, we were delighted to be joined by a distinguished panel to debate the issues – Lord Myners, Sir Win Bischoff, Paul Lee, of Aberdeen Asset Management, and Anthony Carey, of Mazars (which hosted the event).

Within the constraints of the Chatham House Rule there’s a limit on how much detail we can give, but there was at least consensus on what the outstanding issues are (even if too many have been unresolved since the days of the Cadbury Report 25 years ago). In no particular order:

  • The share registers of big quoted companies are fragmented to such a degree that no individual fund manager or owner has the means to pressurise boards in a significant way.
  • Nevertheless, there is still widespread dissatisfaction with how they use the powers they do have, e.g. on business strategy and executive pay, to ensure companies take account of the interests of wider stakeholders, as required by Section 172 of the Companies Act 2006.
  • A failure to hold boards to account has meant that too often the penalties of mismanagement have fallen on shareholders rather than managers.
  • Current governance arrangements are a little too much ‘bark’ and not enough ‘bite’ to drive futher change.

None of these issues is trivial, so you won’t be surprised to hear that we didn’t arrive at a solution in the space of two hours. Nonetheless, there was a reasonable amount of agreement around steps that would be positive – accepting, of course, the scope for scepticism on how effective each might be. Again in no particular order:

  • Particularly for major decisions (for instance takeovers and reorganisations), boards ought to explain publicly how they paid attention to the interests of wider society.
  • On pay, there should be greater transparency (on pay ratios as well as pay below board level) and more explicit justification of pay decisions.
  • Fund managers need to consolidate their influence, perhaps through an investor forum, and demonstrate to the ultimate owners that they are using their powers actively and responsibly.
  • The FRC and other bodies need to be willing to take a stronger line with fund managers who do not demonstrate responsible stewardship… And as you’ll see from Sir Win’s speech, the FRC has appetite to discipline directors in the same way as it can accountants.

So, we have a reasonable view of some of the steps that might improve governance over the next 25 years. As to what the detail will look like – we’ll just have to wait and see.

Jane Fuller



Nearly a quarter of a century has passed since the publication of the Cadbury Report and the development of the UK’s first corporate governance code. Governance has since been reviewed and refined many times – through Greenbury, Turnbull, Hampel, Higgs, Walker and more – to give us the current Corporate Governance Code and Stewardship Code, both under the aegis of the Financial Reporting Council.

New iterations have often followed new crises, which suggests that, while governance has doubtless improved, no system will ever be perfect. BT’s current Italian problems will scarcely be the last corporate scandal for investors to digest.

Is it time to step back from successive crises and take in the big picture? To ask not “how can the last crisis be prevented?” but “where do we want to be after the next quarter of a century?” To discuss the current state of corporate governance in the UK and how it should evolve, we are delighted to welcome two pillars of the governance world:

  • Lord Myners is Chancellor of the University of Exeter – and a great many things before and besides. In particular, he took on the role of City Minister for the duration of the financial crisis, was a member of the FRC and the Takeover Panel, and has chaired the All Party Parliamentary Group on Corporate Governance.
  • Sir Win Bischoff is Chairman of the Financial Reporting Council. A career banker, his senior appointments have included roles at Citigroup, S&P, Prudential, and J.P. Morgan – though he is perhaps best known for taking on the chairmanship of Lloyds Bank soon after the takeover of HBOS and steering it through to 2014. 

Joining Paul and Win, we are pleased to welcome two governance specialists:

  • Paul Lee is Head of Corporate Governance at Aberdeen Asset Management. Formerly, Paul was Head of Investment Affairs at the NAPF, a director of Hermes EOS and before that a financial journalist. He was for 7 years a member of the Auditing Practices Board (subsequently the Audit and Assurance Council) at the FRC.
  • Anthony Carey is a partner and Head of Board Practice at Mazars in the UK, a director of the QCA, and was project director of the Turnbull Report. He is actively involved in Mazars’ Business. For Good™ initiative, co-authors the firm’s Board Charter for Sustainable Success and is a member of the FRC’s Financial Reporting Lab Steering Group.

If you would like to join us for what I am sure will be a lively discussion, please let us know by emailing alex@csfi.org or by calling the Centre on 0207 621 0156. Thanks to Mazars for its hospitality and refreshments.