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In September 2018, London Stock Exchange required companies on AIM to adopt a corporate governance code. Of the 900+ companies on AIM, nearly 90% adopt the QCA Corporate Governance Code (the QCA Code).

Around one year later, the QCA commissioned YouGov to ask those AIM companies how this change impacted them. Did the process of adopting a governance code help their boards and businesses and, if so, how?

The results gave a positive endorsement for the AIM rule change. 39% report that the process of adopting a code has helped their business, citing how it has helped formalise new processes (42%), encouraged their board to consider new points of view (31%), and made it easier for investors to assess them (20%).

Similarly, we have seen a positive outcome for investors in smaller quoted companies. 40% of companies now disclose more information to the market. Including how they evaluate their board (40%), their strategy and business model (28%) and sustainability measures (13%) and board diversity (15%).

30% of companies are considering succession planning in more detail as a result of adopting the QCA Code. This can be a difficult conversation to have in the boardroom of smaller companies, particularly where there is a founder/CEO. 

The positive effect that the QCA Code has had on the companies themselves has been welcomed by investors. We believe that this will help improve the overall perception and integrity of small-cap markets in the UK.

Key findings

  • 39% of companies say that adopting the QCA Code has helped their business
  • It has done this by:

    • Helping formalise new processes (42%)
    • Encouraging the board to consider other points of view (31%)
    • Making it easier for investors to assess them (20%)

  • As a result of adopting the QCA Code, 40% of companies have disclosed more information to the market. Including on:

    • Board evaluations (40%) and board members skillsets (29%)
    • Strategy and business model (28%)
    • Sustainability measures (13%) and board diversity (15%)

  • 30% of companies have considered succession planning in more detail as a result of adopting the QCA Code. 15% have disclosed more information to the market on this.

Sample quotes from AIM company respondents

We take governance seriously, but we don’t want to be run by governance.

“I think the one thing that I think the QCA Code has forced upon us, that’s perhaps worth mentioning, is succession planning.

Sample quotes from investor respondents:

I think it [the QCA Code] has catalysed the internal conversations of the companies and got them to be more systematic in their view of what governance is and how they go about reporting against this.

I think there has been more content in the annual reports. Obviously very varied, some are better, some are worse, but it has generally caused a good amount of discussion about the whole issue.

Tim Ward, Chief Executive, Quoted Companies Alliance:
“The QCA Code was drafted by a group drawn from from small and mid-cap companies, investors, and other advisors in the sector. The goal was to create a flexible, principle-based code designed specifically for smaller companies on equity markets, but also suitable for private companies, particularly those that are pre-IPO.

“The results of this survey confirm to us that we have created a framework that allows smaller companies, with less resources, to communicate their governance arrangements effectively. They can do this  without being overly burdened with one-size-fits-all prescriptive requirements. This has saved smaller companies precious time and resources that should be dedicated to growth – creating jobs and wealth in the UK and around the world, whilst allowing them to tell their story in a way that suits them. Investors have welcomed this approach.”

Will Pomroy, Director – Engagement, Hermes Investment Management:
“The recommended disclosures in the QCA Code have led to more information in key areas being made available to investors. The effect that the QCA Code has had on the companies themselves is very welcome and this will help improve the perception and integrity of small-cap markets in the UK.”

Oliver Rowe, Director, Reputation Research, YouGov:
“Investors tell us that governance of a company is an important factor when they weigh up their investment decisions, with a company’s chosen code and adherence to it becoming an increasingly common heuristic for them to get a sense of who the firm is.

“Indeed, companies who “live and breathe” the QCA Code are seen to be synonymous with being “well run”. While this image is important for investors, companies report that the QCA Code has more tangible benefits than just being seen to be following something. Companies report back that there are very real parts of the Code which they feel could fundamentally improve their performance if they can find ways to weave them into their daily processes rather than just become a box-ticking exercise.”


— ENDS —

Notes to editors

Corporate Governance on AIM: Research Report

Read the full report here


139 respondents, representing companies on AIM, completed a quantitative online survey. This was complemented by results from 15 qualitative interviews with individuals from companies and AIM-company investors.

(AIM is the London Stock Exchange’s international market for smaller growing companies.)

About the QCA

The Quoted Companies Alliance is the independent membership organisation that champions the interests of small to mid-size quoted companies. 


Peter Curtain, Allerton Communications: 02036331730, 

Anthony Robinson, Head of Policy & Communications, QCA, 02073978148, 

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