Applying Governance Codes
Governance codes contain guidelines around best practice in governance. Adherence to and reporting against a code of governance provides stakeholders with a mechanism to determine how the organisation is complying with these guidelines, offering them assurance.
What is a governance code?
In undertaking my work, I have found that there can be different interpretations of what constitutes a governance code. Below are some descriptions from various sectors:
- UK Corporate Governance Code: “... a set of principles of good corporate governance…”
- Charity Governance Code: “…a practical tool to help charities and trustees develop high standards of governance.”
- ICAEW: Sets out standards of good practice for listed companies on board composition, remuneration, and audit.
How do we gain assurance?
Organizations often use a "comply or explain" or "apply and/or explain" approach. Understanding these mechanisms is crucial for transparency and for avoiding the negative consequences of governance failures, such as reputational damage, financial loss, or the impact on employee livelihoods.