Abstract
The UK Alternative Investment Market (AIM) was launched in 1995 and has been a great success with over 1200 companies now listed. In this article, we examine the development of AIM as it reaches its 15th year and discuss the potential pitfalls of the light touch regulation that is one of the attractions of AIM and identify potential corporate governance and ethical issues that may arise as a result of light touch regulation. We examine the central role of the nominated advisor (NOMAD) and draw on the findings of in depth interviews with 25 AIM participants including AIM company directors, institutional investors, nominated advisors and brokers. We highlight the influence of the NOMAD on these participants and potential governance and ethical implications. We also discuss some of the concerns that AIM participants have about the market. We examine some of the recent scandals on AIM to determine why these scandals occurred – were they, for example, attributable to corporate governance weaknesses? Finally, we offer some concluding comments to discuss the future of AIM. The findings of the article have important implications for investors and policymakers alike.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Baker Tilly and Faegre & Benson: 2009, Taking AIM, Annual Survey 2009 The Big Picture, Baker Tilly and Faegre Benson, London.
Becht M., C. Mayer and H.F. Wagner: 2008, ‘Where Do Firms Incorporate? Deregulation and the Cost of Entry’, Journal of Corporate Finance 14, 241-256.
Bonn I., and J. Fisher: 2005. ‘Corporate Governance and Business Ethics: Insights from the Strategic Planning Experience’, Corporate Governance: An International Review 13(6), 730-738.
Cadbury Sir A.: (2000), Family Firms and their Governance: Creating Tomorrow’s Company from Today’s, Egon Zehnder International, London.
Carcello J.V.: 2009, ‘Governance and the Common Good’, Journal of Business Ethics 89, 11-18.
Cassell, C., P. Johnson and K. Smith: 1997, ‘Opening the Black Box: Corporate Codes of Ethics in their Organizational Context’, Journal of Business Ethics 16, 1077-1093.
Colombelli, A.: 2009, ‘Entrepreneurial Dimensions of the Growth of Small Companies’, Working Paper Series, Dipartimento di Economia “S. Cognetti de Martiis” LEI & BRICK – Laboratorio di economia dell’innovazione “Franco Momigliano”, Bureau of Research in Innovation, Complexity and Knowledge, Collegio Carlo Alberto. WP Series from University of Turin.
Colombelli, A: 2010, ‘Alternative Investment Market: A Way to Promote Entrepreneurship’, Journal of Industry, Competition and Trade 10(3), 253–274.
Holder-Webb L., J. Cohen, L. Nath and D. Wood: 2008, ‘A Survey of Governance Disclosures Among U.S. Firms’, Journal of Business Ethics 83(3),543–563.
Jenkinson T. and T. Ramadorai: 2010, ‘Does One Size Fit All? The Consequences of Switching Markets With Different Regulatory Standards’, ECGI–Finance Working Paper No. 212/2008.
Kalbers L. P: 2009, ‘Fraudulent Financial Reporting, Corporate Governance and Ethics: 1987-2007’, Review of Accounting and Finance 8(2), 187-209.
Lin H-Y.: 2010, ‘The Agency Problem in Taiwan’s Corporate Governance’, The Journal of International Management Studies 5(1), 38-47.
London Stock Exchange: 2010, AIM Statistics February 2010, London Stock Exchange, London.
Mallin, C.A., and K. Ow-Yong: 1998, ‘Corporate Governance in Small Companies - the Alternative Investment Market’, Corporate Governance: An International Review 6(4), 224-232.
Mallin, C.A., and K. Ow-Yong: 2008, Corporate Governance in Alternative Investment Market (AIM) Companies, Research Monograph published by the Institute of Chartered Accountants, Scotland.
Mallin, C. A., and K. Ow-Yong: 2010, ‘Factors Influencing Corporate Governance Disclosures in Alternative Investment Market (AIM) Companies’, Working Paper, Birmingham Business School.
Mansell S: 2008, ‘Proximity and Rationalisation: The Limits of a Levinasian Ethics in the Context of Corporate Governance and Regulation’, Journal of Business Ethics 83(3),565–577.
OECD: 2009, The Role of Stock Exchanges in Corporate Governance, Directorate for Financial and Enterprise Affairs Steering Group on Corporate Governance, OECD, Paris.
Parsa S. and R. Kouhy: 2007, ‘Social Reporting by Companies Listed on the Alternative Investment Market’, Journal of Business Ethics 79(3), 345-360.
Quoted Companies Alliance (2004) Guidance for Smaller Quoted Companies - The Combined Code on Corporate Governance. QCA, London.
Quoted Companies Alliance: 2005, Corporate Governance Guidelines for AIM Companies, QCA, London.
Quoted Companies Alliance: 2007, Corporate Governance Guidelines for AIM Companies, QCA, London.
Rockness, H, J. Rockness (2005) ‘Legislated Ethics: From Enron to Sarbanes-Oxley, the Impact on Corporate America’, Journal of Business Ethics 57(1): 31-54.
Treadway Commission: 1987, Report of the National Commission on Fraudulent Financial Reporting.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Mallin, C., Ow-Yong, K. The UK Alternative Investment Market – Ethical Dimensions. J Bus Ethics 95 (Suppl 2), 223–239 (2010). https://doi.org/10.1007/s10551-011-0855-4
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10551-011-0855-4