Corporate Governance Codes and Standards
Purpose and structure of codes
Governance codes set expectations on board composition, independence, committees, remuneration and disclosure. Candidates must understand the comply-or-explain model versus rules-based regimes, and how listing rules may incorporate a code by reference. Know the typical recommendations: board balance, at least half independent non-executives (varies by jurisdiction), separation of chair and CEO, annual evaluation, and audit committee independence.
Applying the code
Questions often test whether a departure must be disclosed and explained, and whether explanation is acceptable or whether the provision is mandatory. A frequent trap is treating a code recommendation as a legal requirement; most are not, unless incorporated into listing rules or statute. Another trap is misapplying independence criteria - shareholdings, tenure, family ties and former employment can all compromise independence.
Disclosure and reporting
Understand the annual governance statement, the "apply and explain" variant, and the role of the external auditor's review of governance disclosures in some regimes. Recognise that codes evolve; cite principles rather than memorising clause numbers.
Rule of thumb - principle, provision, practice
For any code question, identify the principle (why), the provision (what is recommended), and the practice (what the company actually did). If practice departs from provision, the answer usually turns on whether the explanation is clear, reasoned and disclosed.