When I interviewed the chief executive of community running organisation Parkrun some years ago, I was struck by one of the metrics he counted as most valuable.

Whereas elite sportspeople believe shaving seconds from a personal best is the ultimate sign of progress, driving down the average time taken to complete the five-kilometre run that has become a joyful habit for thousands of people every Saturday morning was not part of his mission.

In fact, Parkrun prided itself on the average running time going up, because that was a sign that more people of all abilities were giving the activity a try.

It was a detail I recalled as my colleagues at the Quoted Companies Alliance compiled our first report on the adoption and application of the QCA Corporate Governance Code since it was revised in 2023.

Don’t let perfect be the enemy of good, the saying goes. For the last 12 years, our QCA Code has propounded the benefits of good governance, not perfect practice. Its ten principles for small and mid-sized quoted companies have found favour on the growth markets AIM—where 92% of issuers apply them—and Aquis, where the figure is 73%.

Like Parkrun, that breadth of participation is valuable to foster understanding and communal effort. But, make no mistake: these companies are running their own race. Governance is intended to support their progress, not inhibit it, as they balance internal challenges with satisfying external stakeholders.

With that in mind, the QCA draws up its principles in consultation with members and entirely separately from the Financial Reporting Council, which is responsible for the UK Corporate Governance Code. What we do not do is monitor the principles’ application. All we expect is that any company seeking to apply the Code buys a copy of it from us as a contribution to our campaigning work. The Code document is supplied free to members—but merely following the Code does not bestow membership.

‘A trusted framework’

For companies, investors and the consultants that operate in between, we are at pains to emphasise that governance disclosures should not be approached as a compliance exercise. This is a trusted framework that can be applied flexibly to suit whatever stage of development a company is at.

The key is flexibility. That is why, in our latest study, it was encouraging to see that 20% of AIM companies declare they depart from the QCA Code in some way, twice the proportion that did so when we last looked two years ago.

Even better, the smallest companies—and there are a significant number on AIM with a market valuation of less than £5m—are twice as likely to apply the Code flexibly compared with those worth more than £100m.

Those that think these figures demonstrate some companies aren’t trying hard enough might as well go and jeer at the Parkrun laggards. To me, our findings offer clear evidence that the QCA Code is working as intended—enabling companies to adopt it at an early growth stage and mature into fuller adoption as they scale.

It is a message I will emphasise in January, at the beginning of what we expect to be a busy QCA Code adoption year. I plan to write to every AIM company and their key shareholders, as well as proxy advisers, whose cookie-cutter approach can sometimes miss the nuance of what the QCA Code stands for.

And it is here that my athletics analogy runs out of puff. I will just note that these brilliant companies have bags of energy and are typically 50% more productive than the national average. Given the right backing, they can become even bigger contributors to the UK economy—our blue chips of tomorrow. Through our QCA Code, networking events, political engagement, research reports and advice and guidance, we intend to support them every step of way.

James Ashton is chief executive of the Quoted Companies Alliance