Companies listed on London’s Alternative Investment Market (Aim) will have to boost their corporate governance arrangements by September 28 when new rules come in.
Companies will need to have posted on the Rule 26 section of their website details of which corporate governance code they follow and a narrative description of how they apply the principles of that code. This will need to be updated annually.
Aim companies will therefore need to review their corporate governance arrangements, and identify and address any areas of non-compliance, between now and the September deadline.
Under changes to the Aim rules introduced in March, from September 28 the information an Aim-listed company must keep on its website under Aim Rule 26 will include:
- Details of a ‘recognized’ corporate governance code that the board of directors of the company has decided to apply. Two examples of acceptable codes are the Financial Reporting Council’s UK Corporate Governance Code and the Quoted Companies Alliance Corporate Governance Code
- How the company complies with that code
- Where the company departs from that code – and a detailed explanation of the reasons why
- The date on which the above information was last reviewed.
These disclosures will become known as a ‘corporate governance statement’.
Explaining the challenges ahead, Alasdair Steele, partner at law firm CMS in London, tells IR Magazine: ‘The biggest change for Aim-listed companies is the requirement to comment specifically on areas where they diverge from their chosen governance code.
‘For many, this is a greater level of disclosure than they have had to make historically and means many will need to carry out detailed governance code compliance checks between now and September 28 so they can make the necessary disclosures. I would also expect to see this greater level of disclosure flow through to fuller disclosure in Aim-listed companies’ annual reports.’
