The Quoted Companies Alliance (‘QCA’) have recently published a report looking at the status of the QCA Corporate Governance Code (‘QCA Code’). The QCA Code was designed to provide growth companies guidelines for effective corporate governance, suitable for their size and resources.
Since the launch of the latest QCA Code in 2013, its adoption and influence has grown substantially and it is now widely regarded as the corporate governance code of choice for small and mid-sized growth companies. Now, in 2023, as the QCA has looked to review the QCA Code, and so it is a good time to look at its impact on the Main Market, AIM and AQSE.
At the end of 2017, there were approximately 950 companies on AIM, with over 400 companies applying the QCA Code (approximately 45% of companies). Of the remaining companies, many did not apply a corporate governance code at all and a handful either adopted, in whole or part, the UK Code or a jurisdictional code. Following the revision of the QCA Code in 2018, and the change to AIM Rule 26, over 89% of companies on AIM chose to adopt the QCA Code.
In June 2023, the QCA analysed corporate governance code adoption on AIM, AQSE and the Standard Listing segment of the LSE Main Market. The annual reports and accounts and corporate governance statements of all companies on these markets were reviewed, covering the previous 12-month period. The objective was to understand the extent of adoption and compliance with corporate governance codes, with a particular focus on the QCA Code.
The QCA research has demonstrated that QCA Code adoption has reached a record level, we believe both in absolute terms and in overall market share. The level of adoption by companies across AIM, AQSE and the Standard List makes the QCA Code the most widely-used corporate governance code for small and mid-sized quoted companies in the UK.
In addition, a function of the QCA Code’s growing adoption and the contraction of the Premium Listing segment means that it is very nearly used by as many companies as the Financial Reporting Council’s UK Corporate Governance Code. If we were able to track reliably the number of private companies known to use the QCA Code as a point of reference, we believe it could be the most pervasive overall.
To obtain and read a copy of the full report click on the link.