Apply and Explain: Application of the principles is assumed, and an explanation is disclosed on the practices that have been implemented and the progress made towards governance outcomes. Comply or Explain: Entities are given a set of standards to follow, but they’re not mandated to comply with everything. If a company did not follow the standard, it is bound to explain why it chose not to do so. Apply or Explain: Similar to ‘Apply and Explain’ but differ in that the application of the principles is assumed but an explanation for exceptions to recommended practices is required. However, ‘comply’ denotes mandatory. Approaches that ask companies to comply call for the government to enforce the law, while the apply-or-explain approach call for the shareholders to enforce the Code.