Corporate Governance Code

This code, created by the Financial Reporting Council (FRC) as a successor to the Combined Code on Corporate Governance (2008), is a set of standards to guide companies on good corporate governance. Corporate Governance is an important pillar of corporate responsibility, and has significant value if addressed in the right way. According to the code, 'good governance should facilitate efficient, effective and entrepreneurial management that can deliver shareholder value in the longer run'.

The Code is not legally binding, but its main principles are a necessary requirement for companies listed on the London Stock Exchange. While there can be some exemptions, these must be specifically explained to shareholders (a principle known as 'Comply or explain'). In effect, the code lays out principles that, if adhered to, aim to provide assurance to shareholders that a company is being governed effectively and efficiently. It refers specifically to areas such as: board composition and development, remuneration, accountability, audit procedures and shareholder relations.

Listed companies must report to their shareholders how they have applied the principles of the code to their company.