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Chapter 8

Corporate Governance Code

Obviously, best practice is intricately tied up with the size and resources of the entity
in question. For listed entities, the most important issues of best practice are
contained in the UK Corporate Governance Code.

The Code is not a rigid (or enforced) set of rules. Instead it consists of principles
(main and supporting) and provisions. In the UK all entities quoted on the stock
exchange have to comply with the FSA listing rules and these include a requirement
that all entities include in their annual report:

 a statement of how the entity has applied the main principles set out in the
Code and

 a statement as to whether the entity has complied with all relevant provisions
set out in the Code.

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