Which companies are required to apply the UK Corporate Governance Code?

The requirement for a company to apply the UK Corporate Governance Code primarily pertains to premium listed companies on the London Stock Exchange. These companies are expected to adhere to the principles set out in the Code, which is designed to enhance corporate governance practices, accountability, and transparency in the corporate sector. The Code is a framework that these organizations must follow to ensure proper management and ethical conduct, aligning their practices with investor expectations and stakeholder interests.

Premium listed companies are held to a higher standard due to their visibility in the marketplace and their responsibilities to a broader range of stakeholders. This includes regulations regarding board composition, director roles, and shareholder engagement. The emphasis is on maintaining high governance standards, which are essential for maintaining investor trust and promoting sustainable business practices.

Other entities, such as larger private companies or small unlisted companies, are not mandated to follow this specific code. Larger private companies may choose to adopt governance practices such as the Wates Code, but they are not legally obligated to apply the UK Corporate Governance Code. Similarly, small unlisted companies are not subject to the same rigorous requirements prescribed for premium listed companies. This differentiation in governance requirements helps to balance the complexity of regulations with the size and structure of the company.