Which of the following best describes the structure of the UK Corporate Governance Code?

The UK Corporate Governance Code is best described as a set of principles for effective governance. This code sets out the standards of good practice in relation to board leadership and effectiveness, accountability, and the relationship with shareholders. It emphasizes the importance of high ethical standards and accountability in companies to ensure that they operate efficiently and responsibly.

While the code applies primarily to companies listed on the London Stock Exchange, it is not a mandatory document for all companies; instead, it operates on a "comply or explain" basis. This allows companies the flexibility to either follow the principles laid out in the code or to explain why they have chosen not to adhere to a particular aspect, fostering transparency and accountability without imposing strict legal obligations. Therefore, the character of the Code as a set of principles makes it a guiding framework rather than a mandatory set of rules.