The Quoted Companies Alliance, the independent membership organisation that champions the interests of small to mid-size quoted companies, has published today its revised Corporate Governance Code for Small and Mid-Size Quoted Companies (QCA Code) at a launch event at the London Stock Exchange.
Last published in 2010, the QCA Code has been revised and updated to take into account a number of corporate governance developments. Some key changes include:
- Emphasising the benefits of good governance to a public company, including how it can build trust between the company, its shareholders and potential shareholders;
- Focusing on the prime importance of companies delivering good quality explanations of its approach, actions and behaviour;
- Emphasising the central role of the chairman in delivering good governance;
- Further embedding the principle of constructive engagement between companies and shareholders in light of the UK Stewardship Code;
- Including greater detail on the characteristics of an effective board; and
- Reordering the Quoted Companies Alliance’s 12 principles of corporate governance to place greater emphasis on the delivery of growth in long term shareholder value.
The QCA Code is widely recognised as an industry standard for those growing companies for which the UK Corporate Governance Code is not applicable. This includes standard listed companies and those on AIM and the ICAP Securities and Derivatives Exchange.
The QCA Code adopts key elements of the UK Corporate Governance Code, current policy initiatives and other relevant guidance and then applies these to the needs and particular circumstances of small and mid-size quoted companies on a public market. Focusing on 12 principles and a set of minimum disclosures, the QCA Code encourages companies to consider how or whether they should apply each principle to achieve good governance and provide quality explanations to their shareholders about what they have done.
Baroness Hogg, Chairman of the Financial Reporting Council, comments: “I welcome the updated QCA guidelines which set out for smaller quoted companies how they can apply the principles of good governance in the UK Corporate Governance Code to their own circumstances. Well run companies achieve sustained success and for that reason, as the QCA Code rightly emphasises, transparency and engagement with shareholders about how the company is governed can help to attract and retain investment.”
Tim Ward, Chief Executive, The Quoted Companies Alliance, comments: “Good governance is a key part of a company’s strategy for growth. When a small or mid-size public company puts in place good and effective governance arrangements, that company makes a bold statement that it wants to attract further investment. The QCA Code is a stepping stone for growing companies that will help them to deliver long term growth.”
Edward Craft, Partner at Wedlake Bell and Chairman of the Quoted Companies Alliance Corporate Governance Expert Group, the group that led the revision of the QCA Code, comments: “Through the revised QCA Code, we want to encourage further positive engagement between companies and shareholders. This is why we have focused on the importance of companies explaining why they do what they do, rather than merely reiterating published guidance. Good disclosure and open dialogue are necessary to achieve good governance and to maintain trust between companies and shareholders.”