London Stock Exchange have announced an implementation of the new Corporate Governance requirements for companies listed on Alternative Investment Market (AIM) effective from 28 September 2018.
All new applicants to AIM from 30 March 2018 are required to state which Corporate Governance Code they intend to follow but otherwise will have until 28 September 2018 to fully comply with the new requirements in AIM Rule 26.
AIM companies are now required to disclose on company’s website:
“Details of a recognised Corporate Governance Code that the board of directors of the AIM company has decided to apply, how the AIM company complies with that Code, and where it departs from its chosen Corporate Governance Code an explanation of the reasons for doing so.”
There is no explicit requirement to include Corporate Governance disclosures in the company’s annual report, however many recognised Corporate Governance Codes do require some annual report disclosures.
The new rules do not define or prescribe a list of the ‘recognised Corporate Governance Code’ allowing AIM companies a choice. This could be particularly beneficial for AIM companies who also have a home listing as it may be more suitable for them to report using recognised standard in their home jurisdiction.
AIM companies are required to review their Corporate Governance disclosures annually. This review is likely to take place at the same time as an AIM company prepares its annual report and accounts. The AIM company’s website should include the date on which its adherence to the Code was last reviewed and, in conjunction with this review, update its AIM Rule 26 disclosures to remain accurate.
The AIM Notice 50 issued on 8 March 2018 summarised that:
“The London Stock Exchange considers that good standards of Corporate Governance are a significant contribution to a company’s long term success. Accordingly, AIM companies and nominated advisers are reminded that good Corporate Governance is supported by a meaningful explanation of the company’s practices against the principles of the chosen code, rather than simply identifying areas of noncompliance. This principles-based approach to Corporate Governance is consistent with our overall approach to AIM.”
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