AIM’s new rules: what do the changes mean for corporate governance?

The London Stock Exchange (the Exchange) has overhauled the AIM Rules for Companies with the intention of making AIM more attractive to growing and founder-led businesses. The overarching approach is to reduce regulatory burdens and provide greater flexibility. On 5 August 2026, the Exchange published AIM Notice 64, setting out feedback on the June 2026 consultation on proposed changes to the Rules and confirmed implementation of the changes. The changes are effective immediately.

Important for boards of AIM companies is that this greater flexibility does not mean less responsibility. In several areas, the reforms place greater emphasis on boards exercising judgement and explaining how their governance arrangements operate in practice. For company secretaries and governance professionals, the challenge will be in helping boards to use this flexibility without losing sight of accountability, transparency and investor confidence.

This article will discuss the key changes and their implications for both directors and governance professionals in AIM listed companies.

Previously, companies were required to adopt a recognised governance code and explain any areas where they did not comply. Under the revised rules, companies can instead use a recognised code as a framework for developing governance arrangements appropriate to their circumstances, without having to formally comply or explain against every provision. This provides greater flexibility, particularly for smaller or founder-led businesses, but places greater emphasis on boards exercising judgement and being able to demonstrate that their governance arrangements remain appropriate and effective.

This change seeks to encourage more meaningful, rather than boilerplate, governance reporting. A small founder-led technology business may reasonably have a different committee structure from a larger AIM company; but it should still be able to demonstrate how the board provides effective challenge, manages conflicts, oversees risk and maintains accountability. Boards may well wish to continue using a recognised framework, such as the QCA Code, as a benchmark.

The revised rules also give AIM companies greater discretion over engagement with proxy advisors (organisations that advise institutional investors on how to vote at shareholder meetings). AIM companies can now choose whether to disclose details of their engagement with a proxy advisor, for example where they have challenged a voting recommendation. While this reduces the prescriptive nature of automatic disclosure, it also means that transparency may vary between companies. Boards and governance professionals will have to ensure that consistency and transparency for investors is maintained.

The revised rules retain a requirement for companies to provide investors with information about their governance arrangements, including:b

• board composition;
• directors' roles and responsibilities;
• remuneration and performance;
• risk and controls framework; and
• investor relations and shareholder engagement.

For company secretaries and governance professionals, Rule 26 should be viewed as an opportunity to improve the quality of governance reporting, rather than a reduction in compliance requirements. Company website disclosures must continue to tell investors how governance actually works within an organisation, not merely confirm that arrangements are ‘appropriate.’

The reforms recognise the importance of founders and entrepreneurial management teams within AIM companies. One notable change is the ability to use special voting share structures at admission, giving founders the potential to retain greater voting influence while accessing public capital. There is an obvious governance tension here. Founder involvement can provide continuity, entrepreneurial drive and a long-term perspective. However, concentrated voting power can also reduce the influence of other shareholders. We have seen this tension play out before, e.g., in the case of Elon Musk and his controlling stake in Tesla. It will be important to bear the governance lessons from these situations in mind. Boards must consider not simply whether a structure is permitted, but whether appropriate safeguards are in place. Directors should consider matters such as when enhanced voting rights can be exercised, succession arrangements, conflicts of interest and the protection of minority shareholders.

The revised AIM rules provide greater flexibility around certain non-standard remuneration arrangements, reducing the circumstances in which a nominated adviser must provide a fair and reasonable opinion. This gives companies more scope to structure arrangements around their particular circumstances but also places greater reliance on board judgement. Boards should be able to demonstrate that remuneration supports strategy, appropriately incentivises performance and does not create disproportionate risks for shareholders. The removal of a procedural requirement should not remove the underlying governance discipline.

An acquisition exceeding 100% of the relevant class tests will no longer automatically constitute a reverse takeover where there is no fundamental change to the company’s business, board or voting control. The threshold for a substantial transaction has also increased from 10% to 25%, to better align with the Main Market. This should give AIM companies greater flexibility to pursue growth through acquisitions. However, this also makes the board’s assessment of the transaction particularly important. Directors will now need to consider the substance and strategic effect of a deal, rather than relying solely on numerical thresholds. Responsibility for these judgements ultimately remains with the board (although advice can still be obtained from the nominated adviser).

The reforms seek to make it easier for AIM companies to raise capital. The new Capital Access Window provides an AIM company undertaking an equity fundraising with the ability to request a temporary suspension of trading, aiming to facilitate the fundraising process and broader investor participation.

Other changes reduce some admission requirements and provide greater flexibility around financial reporting and disclosure. These measures are intended to reduce unnecessary costs and make the AIM market more accessible to growth companies. Boards will need robust processes for considering the consequences of different options and ensuring that investors receive sufficient information to make informed decisions.

UK and EEA incorporated AIM companies may now prepare their accounts using local GAAP rather than IFRS Accounting Standards. For UK issues, FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland, is now expressly permitted.

The Exchange has removed the requirement of the traditional working capital statement from AIM admission documents. Instead, applicants must disclose their material capital resources, material financial commitments and liabilities, use of admission proceeds and the directors' reasonable opinion on future fundraising needs over the next 12 months.

The governance implications of these changes are significant for AIM companies and provide a good opportunity to undertake a governance health check.

Boards and company secretaries should consider the following:

• Rule 26: does your company's governance statement clearly explain how your arrangements work and why they are appropriate?
• Board effectiveness: does the board have the right balance of skills, experience and independence for the company's current stage of development?
• Founder influence: if enhanced voting rights are used, are appropriate safeguards, conflict management and succession arrangements in place?
• Remuneration: do incentives support the company's strategy while protecting shareholder interests?
• Risk and controls: are arrangements for identifying, managing and overseeing material risks sufficiently robust?
• Transactions: are there clear processes for assessing class tests, acquisitions, related-party matters and shareholder approval requirements?
• Investor relations: is information sufficiently timely and detailed to enable meaningful shareholder engagement?

The Exchange’s direction of travel is clear: less prescription in the interest of greater flexibility and proportionality. It is positive that companies can now better develop governance structures that reflect their particular circumstances rather than automatically replicating arrangements designed for much larger organisations. That said, proportionality cannot be an excuse for weak governance and effective board judgement is paramount.

For governance professionals, this creates an important opportunity to help boards move beyond a compliance-led approach. Their role will be increasingly important in translating regulatory flexibility into effective governance for boards, ensuring that decisions are properly considered, risks are understood, information flows effectively and the board can effectively explain its governance approach to investors. The reforms give boards more freedom to decide what works for their business. The responsibility is to use that freedom thoughtfully, transparently and in a way that maintains investor confidence.

Together, the reforms represent the most significant package of AIM Rule changes for several years, affecting companies considering an AIM IPO, existing AIM issuers planning transactions or fundraisings, and advisers to AIM companies. A mark-up of the AIM Rules showing the changes, including further changes made to the consultation draft, can be downloaded from the Exchange website (AIM Notices).