The Quoted Companies Alliance has issued an update to its Corporate Governance Code for Small and Mid- Size Quoted Companies. The previous version of the QCA code was issued in 2013.
The QCA Code has stood the test of time through significant changes in the governance landscape, but now was the time for the document to become more focused and explicit, in particular, where encouraged behaviours have become accepted good governance practice.
As before, the new QCA Code is focused on a number of principles of corporate governance and a number of expected disclosures. The number of principles has been reduced from 12 to 10, and is underpinned by an overriding principle, namely that effective communication is a core element of effective application.
The new QCA Code focusses on three key areas:
– the correct application of the ten principles,
– their interaction with the disclosures, and
– how a company can apply the QCA Code bearing in mind its specific circumstances.
This updated QCA Code comes at a time when the London Stock Exchange has updated its rules for AIM companies, requiring them to now comply with a recognised corporate governance code: in most cases this will be either the stringent prescription of the FRC‘s UK Corporate Governance Code or the more purposive QCA Code.
Wedlake Bell corporate partner Edward Craft led the working group, drawn from across the QCA community of small cap companies, investors and advisers in delivering the new QCA Code.