The Quoted Companies Alliance (QCA) has, on May 8, published an extensively revised version of the Corporate Governance Code for Small and Mid-sized Quoted Companies. The guidance is principally intended for those listed on the Stock Exchange, the Alternative Investment Market (AIM), or else the ICAP Securities and Derivatives Exchange.

The initial QCA Code, having been published in 2010, adapted various elements of the UK Corporate Governance Code and current policy initiatives to befit the requirements and circumstances of smaller, less complex quoted companies. The document outlined 12 principles along with a set of minimum disclosures, herein prompting companies to consider whether to apply select principles to their own governance and reporting procedures.

“As AIM companies and those with a standard listing on the UK’s main market aren’t covered by the UK Corporate Governance Code, it is particularly valuable to have this guidance on what is the best practice for these markets,” states corporate law expert Martin Webster of Pinsent Masons, “The flexibility allowed by the QCA guidelines works to the advantage of both companies and their investors.”

As opposed to the UK Corporate Governance Code, implicated companies are not necessarily required to formally disclose compliance with the QCA Code. Though the QCA require that companies adopting the code report certain minimum disclosures on a ‘comply or explain’ basis.

Perhaps most notable of the changes are those relating to the delivery of growth in long-term shareholder value, and far greater considerations on the characteristics of an efficient board. There are also new chapters relating the role of the executive director, and updated provisions relating to the assessment of director independence. Companies, it is suggested, are to explain in both their annual reports and in discussions with shareholders to what degree they consider their directors to be independent.

Regardless of an emphasis on delivering long-term growth in shareholder value, Matthew Findley of Pinsent Masons said: “It is helpful for the smaller companies to see trends and initiatives picked up in the 2013 QCA Code in a way which is relevant to their particular circumstances… The QCA clearly recognises that a ‘one size fits all’ approach to governance will not always work for these companies and its approach is to be welcomed in promoting good governance amongst smaller quoted companies.”