Principle based approach

For example, the chairman has recently died and a replacement has not yet been found. The CEO might also act as the chair for a short time.

A rules named approach would be strict on not allowing the one person to hold the posts of CEO and Chair; the principles based approach would allow it for a while in exceptional circumstances that could be used to justify it.

Similarly, almost any of the UK corporate governance code rules could be broken for a while if there is good reason to do so. For example, the number of executive directors and NEDS becoming unbalanced. Also principles based approached do not lay down precisely how much time directors must devote to their office or how often the board should meet. The principle is that the directors must provide strategic leadership etc, but it leaves flexible how they can do that. A rules based approach might try to lay down precise rules about this but tpa single set of rules is unlikely to be appropriate to all companies.