Protecting Investors Post Enron

The country’s economy depends on the drive and efficiency of its companies. Thus the effectiveness with which their boards discharge their responsibilities determines Britain’s competitive position. They must be free to drive their companies forward, but exercise that freedom within a framework of effective accountability

The introductory paragraph of the 1992 Cadbury Report into the financial aspects of corporate governance warned us of the importance of management regulation. 10 years after publication, the biggest corporate bankruptcy in US history is forcing the investment community and industry regulators to consider not whether shareholders and stakeholders should be better protected but how they can be better protected. The role of directors is to act in the best interests of the company and thus in the interests of shareholders collectively, both present and future. Auditors are formally appointed by shareholders and their audit should be carried out in their interests,