4.2.3 What are the main features of the national corporate code regarding size, lay-out and subdivisions?

For the underlying empirical research the Combined Code 2003 and 2006 are used, however the 2008 and 2010 code are reviewed as well in this theoretical part to evaluate the corporate governance developments in the UK.

The UK 2010 Code consists of principles (main and supporting) and provisions. The main principles have to be complied with and a company is required by the listing rules to report to its shareholders on how the principles are applied (Voogsgeerd 2006, p. 47). With regard to the code provisions the comply or explain principle is applicable (UK Code 2010, p. 4). Originally in previous codes the comply or explain principle was not applicable to the provisions regarding the institutional shareholders (Voogsgeerd 2006, p. 47). Nowadays this is no longer an issue since the provisions on institutional shareholders are transferred to the Stewardship Code. The UK 2010 Code contains one more principle and four more provisions than its predecessor and as discussed under the above key question some more provisions have been modified. The UK 2010 Code starts with a paragraph emphasising the code's and corporate governance's function. Thereafter the modifications of the latest version are discussed in a separate preface. Consequently the comply or explain principle is explained further in a separate section and thereafter the five sections of the code are explained (Leadership, Effectiveness, Accountability, Remuneration and Relationships with Shareholders), after which the actual code starts. All but the last section are focused on the board. Also noticeable are the three schedules after the code. The schedules go into the design of performance-related remuneration for executive directors (provision D.1.1 refers to this Schedule A), the disclosure of corporate governance arrangements (see section 4.2.6) and the engagement principles for institutional shareholders, nowadays transferred to the Stewardship Code.

To summarise the above, over time the UK national corporate governance codes have increased in size and detailed nature and extensive attention is paid to the comply or explain principle and its disclosure. However, compared to other national corporate governance codes they are not that extensive and detailed (see the final section of chapter 4) but still do or did function as an example.