Principles-based governance
Principles-based governance sets broad expectations for responsible direction and accountability and requires judgment about how to achieve them in the organisation’s circumstances. It can be supported by more detailed provisions and explanations. It is not an absence of enforceable obligations, and the legal or listing framework determines what must be followed or reported.
Worked example
A board explains how its arrangements provide independent challenge and why a departure from a particular code provision is appropriate, rather than treating the existence of an explanation as proof of effective governance.
Common mistake
Assuming principles are optional, that every principles-based system uses identical comply-or-explain rules, or that judgment permits misleading disclosure.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | SBL | Direct | September 2026–June 2027 |