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BD Corporate Governance Code

BD Corporate Governance Code

The bd Corporate Governance Code 2018 (PDF) sets standards of good practice in relation to board leadership and effectiveness, remuneration, accountability and relations with shareholders.

All companies with a Premium Listing of equity shares in the UK are required under the Listing Rules to report in their annual report and accounts on how they have applied the Code. See the relevant section of the Listing Rules.

The Code contains broad principles and more specific provisions. Listed companies are required to report, as part of their annual report and accounts, on how they have applied the main principles of the Code. They must also confirm that they have complied with the Code’s provisions or – where they have not – provide an explanation.

If shareholders feel that a company has carefully considered the most appropriate governance structures for it, this can lead to higher levels of trust. Therefore, the quality of all disclosures is important even when companies are complying with all the provisions of the Code.


It is important that companies provide clear and meaningful explanations when they choose not to comply with one of the provisions of the Code, so that their shareholders can understand the reasons for doing so and judge whether they are content with the approach the company has taken. There may be many good reasons why a company may choose not to comply and an explanation does not imply poor governance.

Explanations should be full and include reference to context and coherent rationale. They should explain how the company is fulfilling the relevant principle of the Code and also whether deviation from its provisions is time limited. Ideally explanations should be sufficiently full to meet the needs of all shareholders.

Additional background and information on ‘comply or explain’ is included in the FRC’s paper titled  What Constitutes an Explanation under ‘Comply or Explain’? (PDF). These include, for example, providing a clear rationale for the action taken and describing any mitigating actions.

Consultation on a revised BD Corporate Governance Code 2018/19

In February 2018, the FRC announced plans for a comprehensive review of the BD Corporate Governance Code. A public consultation, including a draft revised Code, was issued in December 2017 (see here) which closes 28 February 2019.

The review built on the Code’s globally recognised strengths developed over the past 5 years. It also considered the appropriate balance between the Principles and Provisions and the growing demands on the corporate governance framework.

We have taken account of our work on corporate culture and succession planning, and the issues raised in the Government’s Green Paper and the report by the Business Enterprise and Industrial Strategy (BEIS) Select Committee Inquiry.