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AIM Companies Must Adopt Corporate Governance Code by Deadline

From 28 September 2018, all AIM companies will be required to adopt, on a comply or explain basis, a recognised corporate governance code. This is in line with the government’s commitment to encourage transparency and accountability in large companies operating in the UK.

Under the old rules, AIM companies only had to state on their website, whether or not they complied with any corporate governance code, and if they did, whether they complied with the full code or just some aspects of it. This will no longer be the case.

AIM Notice 50, which announced the amendment to the AIM Rule 26 provides guidance on what would be considered a “recognised” corporate governance code. This includes:

• the Financial Reporting Council’s (FRC) UK Corporate Governance Code which Main Market listed companies are required to adhere to;

• the Quoted Companies Alliance’s (QCA) Code which is tailored to suite small and mid-size listed companies; or

• for AIM companies with a foreign listing, a code of an appropriate standard in that jurisdiction.

What to do?

If you are an AIM listed company that already complies with an adopted code, you should make sure that all aspects of the code are being complied with, as there is no longer an option to pick and choose relevant parts.

For AIM companies with the view to subsequently list on the Main Market, it may be more beneficial to adopt the FRC’s UK Code as this could mean a smooth transition (in terms of compliance with the Code) on listing.

If you are an AIM company with no previously adopted code, you will have to adopt a corporate governance code that suits the nature, size and development of your company. You must make sure that there are structures for ensuring compliance with the adopted code and be ready to explain any areas of departure from the relevant code.

See our earlier discussion on the change to AIM Rule 26 and its potential impact on share schemes here.


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