What changes when a company goes public
In a private company the owner and the manager are often the same person, and decisions are taken quickly and informally. After an IPO new shareholders own part of the company without any say in daily management. They rely on the board, on published rules and on disclosure. Corporate governance is the set of bodies and procedures that gives them that assurance.
Exchanges and regulators approach governance in two ways. Some set hard rules, for example a minimum number of independent directors or a mandatory audit committee. Others require a governance code to be applied on a comply or explain basis, so the company either follows each provision or explains publicly why it does not. Either way, governance has to work before the prospectus is published, because the prospectus describes it.
The board of directors
The board supervises management, approves strategy, budgets and major transactions and appoints the chief executive. Before an IPO the board of a founder-led company usually needs three changes: a clear split between the chairman and the chief executive or a documented reason not to split, a mix of executive and non-executive directors, and a written board charter with a schedule of matters reserved for the board.
Independent directors are the core of the change. An independent director has no material business, family or employment relationship with the company or its controlling shareholder. HKEX listing rules require at least three independent non-executive directors. AIX requires an applicant to show independence from a controlling shareholder holding 30% or more. The Premium category of UZSE requires an independent board member. Gulf exchanges apply the governance rules of their regulators: the CMA for DFM and ADX companies, and the QFMA Governance Code, in force since 17 August 2025, for QSE companies.
Board committees
| Committee | Main tasks | Who usually sits on it |
|---|---|---|
| Audit | Oversees financial reporting, the external auditor, internal audit and internal controls | Mostly or only independent directors, at least one with financial expertise |
| Remuneration | Sets pay policy for directors and senior management, incentive plans | Majority of independent non-executive directors |
| Nomination | Board composition, succession, selection of new directors | Chair of the board and independent directors |
| Risk | Risk appetite, key risk register, compliance | Common in financial and regulated businesses |
| Related party transactions | Reviews deals with shareholders and their companies | Independent directors only, sometimes part of the audit committee |
Committees need terms of reference, a meeting calendar and minutes. Investors and underwriters review these documents during due diligence, so committees formed a few weeks before the prospectus without any record of work raise questions.
Policies a listed company needs
- Disclosure policy: who decides what is price-sensitive and how it is announced.
- Insider dealing policy: closed periods, lists of insiders, approval of trades by directors.
- Related party transactions policy: thresholds, approval by independent directors or shareholders.
- Dividend policy, which also appears in the prospectus.
- Anti-bribery, anti-money laundering and sanctions compliance policies.
- Code of conduct and whistleblowing procedure.
- Delegation of authority: which decisions management may take and which go to the board.
Disclosure and related party transactions
After listing the company must publish inside information promptly, report results on fixed dates and disclose major transactions. That needs an internal process: the finance, legal and investor relations teams know what has to be reported and who signs off. For many groups this is a new discipline, and a dry run before the IPO helps.
Related party transactions deserve particular attention in founder-owned groups. Leases from the founder's property company, loans between group companies and shareholders, supply contracts with relatives' businesses: all have to be identified, priced on arm's length terms where possible, approved under the policy and described in the prospectus. Some transactions are better closed or restructured before the IPO.
Differences between markets
Rules are not uniform. AIM rules effective 5 August 2026 replaced the requirement to follow a recognised corporate governance code with five prescribed disclosure areas. KASE expects issuers on its Alternative Market to adopt a corporate governance code. On Nasdaq and NYSE, foreign private issuers may follow home-country governance practices with disclosure, subject to certain mandatory requirements such as the audit committee. The adviser team usually maps these rules early so that the governance model fits the target exchange.