Corporate governance and Cadbury report 1994 UK

1. PRESENTED BY:
TAHA AHMAD GILL.
HUZAIFA MUSHTAQ.

2. 
Corporate governance is a system by which
organization is directed & control by senior
officers. The governance structure specifies the
distribution of rights and responsibilities among
different participants in the corporation (such as
the board of directors, managers, shareholders,
creditors, auditors, and other stakeholders) and
specifies the rules and procedures for making
decisions in corporate affairs.
CORPORATE GOVERNANCE

3. 
PARTIES IN CORPORATE
GOVERNANCE

4. 
CORPORATE
GOVERNANCE PILLARS

5. 
ACCOUNTIBILITY
 Ensure that management is accountable to
Board.
 Ensure that Board is accountable to
Shareholders.

6. 
 Protect shareholder rights.
Everyone should be treated equally.
FAIRNESS

7. 
 Ensure Timely, accurate disclosure of
Material's Matters.
 Material matters: FINANCIAL
SITUATION, OWNERSHIP &
PERFORMANCE.
TRANSPERANCY

8. 
Who work for shareholders.
 They are in organizations but not work for it.
 Their interest is not Financial.
 They look misconduct in organizations.
INDEPENDENCE

9. 
 Good corporate governance can help companies
ensure efficient use of resources.
 To attract Investors.
 To recognize stakeholder interests.
 Less chances of Fraud.
 Corporate governance plays a vital role in
underpinning the integrity and efficiency of financial
markets
IMPORTANCE OF
CORPORATE GOVERNANCE

10. 
CONTINUED…

11. 
Poor corporate governance weakens a company’s
potential.
 Financial difficulties.
 High chances of fraud.
 Capital will flow.
POOR CORPORATE
GOVERNANCE

12. 
 The Cadbury Report, which shows Aspects of
Corporate Governance, is a report chaired by
Adrian Cadbury that sets out recommendations
on the arrangement of company boards and
accounting systems to mitigate corporate
governance risks and failures.
CADBURY REPORT 1994
UK

13. 
Sir Adrian Cadbury chaired a committee whose aims
were to investigate the British corporate governance
system and to suggest improvements restore investor
confidence in the system. The Committee was set up
in May 1991. The report embodied recommendations
on corporate governance. The final report was
released in December 1992 and then applied to listed
companies reporting their accounts after 30th June
1993. And it was made public in 1994.
BACKGROUND OF
CADBURY REPORT

14. 
CADBURY’S REPORT
COMPANY:
AN ORGANIZATION NAMED
“SATYAM COMPUTERS” WHICH
WAS AFFECTED BY POOR
CORPORATE GOVERNANCE .

15. 
 Satyam computer ltd. Was established on
June 24 1987. The founder of organization
was Mr. Ramalinga raj. CEO of that
company at the time of scam was Mr.
Rahul.
 Satyam computers headquarters was in
Hyderabad.
ABOUT SATYAM COMPUTERS
LTD.

16. 
 Satyam case was not an easy issue.
 It was involved in 14000 crore scam.
 SATYAM Scam had been a great example of poor
corporate governance.
 It had showed poor relation b/w shareholders and
employees.
 This company is an example for other companies to
avoid poor governance.
 Taking this scam as a role model, other companies
should implement good governance in order to set up
rules and regulations.
SATYAM CASE

17. 
SATYAM announced acquisition with two
parties namely MAYTAS properties and INFRA
company.
 Due to adverse reaction from institutional
investors this partnership collapse within 12
hours.
 After the deal was aborted, Four of the directors
resigned from the board of the company on the
same day.
SATYAM SCAM DETAILS

18. 
 Governance issue arises in SATYAM ltd.
Because of non fulfillment of obligations of a
company to various stakeholders.
 It shows poor relation between all stakeholders.
 An organization is obligated to pay all taxes to
government in time. But SATYAM didn’t pay
their taxes to government.
DETAILS CONTINUED…

19. 
 It is well known that shareholders has a right to get
all information from an organization. They have the
right to be shown all financial.
 In SATYAM case, the above obligations were never
fulfilled, the acquisition between two companies
were announced without consent of shareholders
 THE SHAREHOLDERS WERE CHEATED!!!!
CONTINUED…

20. 
Bank Balance (Rs.5042 cr)
 Accrued Interest ( Rs. 376 cr)
Liability (1230cr)
Debtors (490 cr)
Revenue (2700 cr)
Financial Statements of
Company.

21. 
NOTE:
THIS(SATYAM) COMPANY
WAS BANNED FOR 8 YEARS