International Academy of Management

Sir Adrian Cadbury Receives IAM Award at IESE

Sir Adrian Cadbury received the annual prize awarded by the International Academy of Management (IAM) at IESE on February 10. The prize was presented by Prof. Pedro Nueno,
vice-president of the IAM

Sir Adrian is author of the Cadbury Code, which has become a model all over the world for systems of corporate governance. The award coincided with a gathering of the IAM, one of the world's oldest institutions in the field of business management. The meeting, held at the Barcelona campus, focused on challenges of corporate governance in Europe, Asia and the United States.

“The role of the Board of Directors, and the difference between governing and managing, must be very clear. The task of the Board should be to identify and control the work carried out by the managers, but not to do their work,” said Sir Adrian, during his remarks.

“Leadership has to come from the Board of Directors. It is entrusted with establishing the values, policies and strategies needed to achieve the objectives of the company. To do otherwise will destroy everything,” he said.

Moreover, the Cadbury Code states that the President of the Board has to be keenly aware of whether the board is functioning as a group or not. Meanwhile, the General Manager's role is to keep the company on course.

“These two tasks are too much for one person,” according to Sir Adrian. “It's necessary to take into account, however, that these are guidelines and not absolute rules. That is to say, at some moments, it may be necessary that the company have only one head leading the company.”
The Cadbury Code has different versions for distinct countries. It was originally created in 1992 in accordance with the framework of the United Kingdom. Sir Adrian, who has been invited to speak at numerous events about the document and explain how it can be adapted to fit the contexts of various countries, stresses that the characteristics of each nation have to be analyzed before implementing the code.

“The code cannot be exported, since every country is different. In this way, each country creates its own code. It's first necessary to see how a country's system works, and later see how it can be adapted to the system. Yet, there are some exportable elements in the code, such as the principle of transparency,” he said.

Referring to the Enron case, Sir Adrian stressed the importance of fundamental values within companies. “The job of the Board is to know if the values on which the company rests are good. If they are not, even if you have a good system of corporate governance, codes of conduct become useless, and scandals can occur. The responsibility lies with the board, but also with the rest of the company.”