Apply or Explain

Print  Save to PDF  Share

Apply or explain approach means (for example) that where the Board of directors takes a decision that to follow a recommendation from a particular code or standard will not be in the best interest of the company; that such a Board may apply a different practice or apply the recommendation differently, provided that the practice being adopted will still achieve the objective of the overarching principles of corporate governance. It also means that in such a case, the Board will explain the need for such a deviation; detailing how the principles and recommendations were applied and the results. Where this procedure is followed, the company will be deemed to be compliant with the particular code or standard concerned.


Law Insider Apply or explain definition