Let's ensure the UK is helping growing firms
Commentary by Tim Ward, CEO, Quoted Companies Alliance
It’s hard not to feel excited about the prospect of watching these 1,000 companies progress and seeing what they will achieve in the years ahead.
For many fast-growing companies, a big part of how they develop will involve raising finance and, for some, going to the UK equity capital markets and becoming a quoted company will be the right way to do this.
The benefits of seeking public equity from a market like AIM includes not only access to capital for growth, but also the ability to make acquisitions by using quoted shares as currency, as well as a heightened public profile and status with customers and other stakeholders.
Becoming a quoted company is a big step, but not just something for the giant multinationals of this world. There are currently around 2,000 small and medium-size quoted companies in the UK, which is about 85% of all quoted companies. The contribution that these companies make to the UK economy is considerable – they employ approximately 1.4 million people, which is around 5.5% of private sector employment.
The UK has Europe’s biggest growth capital market in AIM. Joining AIM can enable companies to receive public equity financing while allowing them to develop in a more flexible regulatory structure. It also helps to avoid much of the disproportionate legal and other burdens levied on smaller companies on the regulated markets.
As an example, there has been a lot of interest in companies’ corporate governance in recent years. AIM companies have the choice of which governance code to follow; they do not have to adhere to the UK Corporate Governance Code as Main Market companies do. Following a recognised corporate governance code can help small and medium-size companies to develop. Many of these companies opt to follow the QCA’s Corporate Governance Code, which is tailored specifically for small and mid-size companies.
We’ve seen great progress when rules and regulations are made by Government departments and regulators, as they are now more inclined to think ‘small first’, but the UK can do more and the Government should strategically support the wider growth company sector as it supports certain specific industries through its Industrial Strategy.
We are all dependant on the future of each of these 1,000 companies; our future economic welfare depends on their development. The public markets are a key feature in enabling growing companies to grow and deliver.