ACCA LW · Chapter 12 · Question 1 of 11
Which approach to compliance does the UK Corporate Governance Code adopt for companies to which it applies?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Comply or explain
Explanation
The UK Corporate Governance Code operates on a 'comply or explain' basis: a company within its scope must report how it has applied the Code's principles and either comply with its detailed provisions or explain why it has not. Departure from a provision is not a criminal offence and the court does not approve governance arrangements. Disclosure is mandatory so that shareholders can assess the explanations given and engage with the board.
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