The central components of this voluntary code, the Cadbury Code, are:
that there be a clear division of responsibilities at the top, primarily that the position of Chairman of the Board be separated from that of Chief Executive, or that there be a strong independent element on the board;
that the majority of the Board be comprised of outside directors;
that remuneration committees for Board members be made up in the majority of non-executive directors; and
that the Board should appoint an Audit Committee including at least three non-executive directors.
The provisions of the Code were given statutory authority to the extent that the London Stock Exchange required listed companies to 'comply or explain'; that is, to enumerate to what extent they conform to the Code and, where they do not, state exactly to what degree and why. The detail of this explanation, and the level of implied censure on companies which do not adhere to the Code, have both varied over time, but the basic 'comply or explain' principle has endured over the intervening years and become the cornerstone of UK corporate governance practice.