AIM market companies should be subject to a corporate governance code, according to ShareSoc, the body representing individual shareholders.

The demand comes amid a raft of recommendations for AIM, owned by the London Stock Exchange Group, to improve governance in the market and accountability to shareholders.

Among the other demands are calls for an improvement in the enforcement of AIM regulations; remuneration of directors should be disclosed and should be approved by a vote at AGMs; non-executive directors should be “clearly” independent; and the roles of NOMAD and corporate brokers should be separated.

A statement from ShareSoc said: “The reputation of AIM is such that it actually puts off good quality companies from listing on it. Therefore SMEs that wish to raise equity for expansion are often discouraged from listing on AIM and this is damaging for the health of the UK economy.”

It added: “One only has to remember recent cases such as Globo and Silverdell, or companies such as Izodia, Versailles and Langbar, or the numerous oil/gas or mineral exploration companies, some of which were of course simply fraudulent businesses.

“Do the few, sometimes massive, winners offset the losers? The answer is no. The AIM index has underperformed main market indices over the last 20 years.”