Companies listed on the Alternative Investment Market (Aim) have significantly upped their corporate governance standards since a September 2018 rule change, an annual review has revealed.
The market, which lists smaller companies and has less onerous regulations, was reviewed by accountancy firm UHY Hacker Young and lobbying group Quoted Companies Alliance.
Their findings showed improvements in transparency in a number of areas, following a change in Aim's rules that said companies must explain website how they comply with a “recognised corporate governance code”.
Before the change, for example, only 24 per cent of Aim-listed companies explained how the board ensures ethical standards are recognised, rising to 80 per cent after. The study singles out “disclosure of detailed information on independent directors and board performance” as a particular area of improvement for small-cap companies.
Despite these advances, Martin Jones, partner at UHY Hacker Young, said “Aim companies still have a lot of work to do” in bringing governance up to scratch. For instance the report highlights how only 12 per cent of companies’ websites or reports include a detailed description of the board evaluation process.
Tim Ward, CEO of the Quoted Companies Alliance, noted a need for improvement, but said that corporate governance at Aim companies had “come a long way in the last five years”.