Acca aaa s21 Notes

September 2021 to June 2022 exams
Watch free ACCA AAA lectures 
11

---

Only on 
OpenTuition
you can find: Free ACCA notes 
•
Free ACCA lectures 
•
Free ACCA tests 
•
Free ACCA tutor support 
•
The largest ACCA community
3. The UK Corporate Governance Code
The OECD principles are put into effect in a variety of ways in different countries. The UK Corporate 
Governance Code published by the Financial Reporting Council (FRC) can be referred to as an 
example of best practice.
The Principles of the Code emphasise the value of good corporate governance to the
long-term
success of the company. 
Comply or explain
The Code has no force in law and is enforced on listed companies through the Stock Exchange. Listed 
companies are expected to ‘‘comply or explain’’ and this approach is the trademark of corporate 
governance in the UK.
Listed companies have to state that they have complied with the code or else explain to shareholders 
why they haven’t. This allows some flexibility and non-compliance might be acceptable in some 
circumstances.
The UK and most of Europe have adopted a principles-based approach rather than a rules-based 
approach to Corporate Governance. Broad principles are set out but then companies decide how to 
put those into operation. This can provide flexibility and adaptability.
In the US most corporate governance is regulated through statute, the Sarbanes-Oxley Act 2002. This 
takes a procedural ('rules-based') approach that is much more prescriptive, requiring both directors 
and auditors to sign off documentation stating that the rules have been followed. Criminal charges 
can follow if the Act is not followed.
Main principles of the UK Code
๏
Board Leadership and Company Purpose 
๏
Division of Responsibilities 
๏
Composition, Succession and Evaluation 
๏
Audit, Risk and Internal Control 
๏
Remuneration