Stock Exchange

The London Stock Exchange has published a newsletter, Inside AIM, to address some of the questions it has received from nominated advisers in relation to the corporate governance changes that take effect from 28 September 2018.

By way of background, from 28 September 2018, AIM companies will be required to disclose details of a recognised corporate governance code they have decided to apply. Companies will have to explain how they comply with their chosen corporate governance code and, where they depart from that code, provide a detailed explanation of the reasons for doing so.  This principles-based approach to corporate governance is intended to allow shareholders to evaluate how the principles have been applied, rather than simply identifying areas of non compliance.

The Exchange has not prescribed a list of recognised codes so AIM companies have a range of options to suit their specific stage of development, sector and size.  The Exchange has, however, identified benchmarks for AIM company codes, such as the QCA Corporate Governance Code and the UK Corporate Governance Code. In addition, where an AIM company has a dual listing in their home state, it may report using an appropriate standard in that jurisdiction.

An AIM company’s corporate governance statement must be published on its website. The website disclosure must be clearly presented and easily accessible from the AIM Rule 26 website landing page. The statement may incorporate details by reference (for example disclosures that are provided in a clearly delineated corporate governance section of the annual report) provided that the material is freely available and the statement clearly indicates where interested parties can read or obtain copies of that material (for example, the relevant pages or section of the annual report or the URL for the relevant web page).

In accordance with AIM Rule 26, if an AIM company has not yet made disclosure against a recognised code in its annual report, the corporate governance statement must be disclosed on its website by 28 September 2018. After 28 September 2018, an AIM company will have to review its corporate governance disclosures annually, typically at the same time as the company prepares its annual report and accounts. The company’s website should include the date when it last reviewed its compliance with its chosen code and update its AIM Rule 26 disclosures to remain accurate.