Onward and Upward: New Revision of the King Code on Corporate Governance Needs Your Input, Too
Governance is of crucial importance to organizations of any size. Those who are invested in issues of governance have followed the developments from South Africa over the last decade since the ground-breaking release of the original code on corporate governance in 1994 by the King Committee on Corporate Governance.
The most recent development is the official exposure draft of the revised King Report on Corporate Governance in South Africa (King IV), published in March 2016 by the Institute of Directors Southern Africa (IoDSA). I strongly urge those who are interested in good governance to read King IV and submit comments to the IoDSA.
According to the draft, the objectives of King IV are to:
- Promote good corporate governance as integral to running a business or enterprise and delivering benefits, such as:
- an ethical culture;
- enhancing performance and value creation by the organization;
- enabling the governing body to exercise adequate and effective control; and
- building and protecting trust in the organization, and its reputation and legitimacy;
- Broaden the acceptance of good corporate governance by making it accessible and fit for application by organizations of a variety of sizes, resources, and complexity of strategic objectives and operations;
- Reinforce good corporate governance as a holistic and interrelated set of arrangements to be understood and implemented in an integrated manner; and
- Present good corporate governance as concerned with not only structure and process, but also on ethical consciousness and behavior.
IFAC has actively supported the revision process, which has resulted in arguably one of the most advanced governance codes, one that is fully aligned with the objectives of integrated thinking and integrated reporting.
In Professor Mervyn King’s own words in the press release about the revised code, “King IV breaks new ground by offering an integrated approach to corporate governance, encompassing the economic, social, and environmental spheres as well. It also impacts on sectors other than listed or large companies, such as state-owned enterprises, local government, non-profits, small- and medium-sized entities, and retirement funds, among others.”
Project leader Ansie Ramalho, with whom IFAC worked on this revision, added, “The overriding message of King IV is that good corporate governance practices help any organization improve its ability to sustain itself and the social and environmental context in which it operates.” This is very much in line with the ideas and principles of the many materials IFAC has published on governance.
Please consider submitting a response to IoDSA. The public commentary on King IV will remain open until May 15, 2016.