This spring, we have been working closely with the Quoted Companies Alliance to revise its  Corporate Governance Guidelines.  Edward Craft, a partner in the Wedlake Bell corporate team and the chairman of the Quoted Companies Alliance corporate governance expert group, led the process to update the code in light of recent developments in this arena in the UK.  The revised Corporate Governance Code for Small and Mid-Size Quoted Companies (the Code) was formally launched on 1 May 2013 at the London Stock Exchange.  We sought to make the Code more accessible and informative and to encourage boards of quoted companies to think and develop the right corporate governance strategy which fits the particular needs of their business.

The Code is there to fill the gap for companies outside the FTSE 350 where full compliance with the requirements of the UK Corporate Governance Code may not be appropriate.

The twelve key principles

The Code is based around the following twelve principles of corporate governance:

Delivering growth in long term shareholder value
1. Setting out the vision and strategy
2. Managing risk and implementing internal controls
3. Articulating strategy through corporate communication and investor relations
4. Meeting the needs and objectives of your shareholders
5. Meeting stakeholder and social responsibilities
6. Using cost effective and value added arrangements

Maintaining a flexible, efficient and effective management framework within an entrepreneurial environment

7. Developing structures and processes
8. Being responsible and accountable
9. Having balance on the board
10. Having appropriate skills and capabilities on the board
11. Evaluating board performance and development
12. Providing information and support


The twelve principles aim to encourage engagement between companies and their shareholders and highlight the prime importance of an effective management team and communicating with shareholders in achieving good corporate governance, shareholder value and growth.

Minimum disclosures

Boards need to consider the twelve principles of good governance and determine how these should be applied to their company.  Appropriate explanations should be provided to shareholders on the decisions a company has taken. The Code includes a set of minimum disclosures which are intended to assist companies in communicating such explanations and demonstrate good corporate governance to its stakeholders.

Effective boards

A company’s corporate governance strategy is created and developed at board level and, accordingly, a number of the twelve principles relate to the maintenance of an effective board.  The Code considers an effective board to be one which:

  1. works as a team led by the chairman;
  2. has a chairman who demonstrates his responsibility for corporate governance;
  3. develops and clearly articulates the strategy of the company;
  4. has a balance of skills, experience and independence;
  5. regularly informs and engages with shareholders; and
  6. evaluates its performance and acts on the conclusion.

How has the Code evolved?

The Code seeks to embed the principles of constructive engagement between companies and shareholders in light of recent developments to the principles of stewardship. The Stewardship Code was first published shortly before the previous Quoted Companies Alliance document in 2010 and has developed further over the last three years.  Its principles have become better understood and embedded and it was important that the Code be revised to reflect this.

In order to encourage shareholder communication and engagement, the Code places a strong emphasis on delivering good quality explanations to shareholders.  Clear and well-reasoned explanations can be used to build trust between a company, its shareholders and potential shareholders.

The Code further emphasises the central role of the chairman in delivering and maintaining good governance. This is reflected in the chairman’s key role in creating an effective board.


Much information, guidance and documentation has been published in this area in recent years. The revised Code seeks to encourage small and mid-size companies to be bold and tell their individual story to their shareholders and prospective shareholders.  The Code provides guidance on how to achieve this but the key message throughout the Code is for companies to develop and follow a corporate governance policy which is right for their respective business.  One size does not fit all.

Hard and soft copies of the Code are available from the QCA at the following link:

Edward Craft & Shveta Nehra