The best corporate governance helps to underpin good long-term company performance. The Code operates on the principle of 'comply or explain'. Listed companies are required under the Financial Conduct Authority’s ('FCA') Listing Rules and Disclosure and Transparency Rules either to comply with the provisions of the Code or explain to investors in their next annual report why they have not done so. This is the foundation of the Code’s flexibility and enables companies to adopt and explain a different approach they feel benefits the company. However, if shareholders are not satisfied with the explanations they can use their powers to hold the directors to account.
“The obligations and responsibilities of the company secretary outlined in the Act, and also in the Code, necessitate him or her playing a leading role in the good governance of the company.”
FRC Guidance on Board Effectivenes
The Code, sets out standards of good practice in relation to:
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