Page 20 - Nexia SAB&T Business in South Africa Guide 2024

KING REPORT AND CODE OF CORPORATE GOVERNANCE

Since 1994, there have been several versions of the King Report. Each version
has been built on the underlying principles of the previous report, and recognises
that good corporate governance and ethical leadership are essential in society
today, irrespective of the size or nature of the entity. King IV™ takes the form
of a report which includes the Code, and separate sector supplements for
SME’s, NPO’s, State-Owned Entities, Municipalities and Retirement Funds. It
is recommended that all organisations and governing bodies should follow the
principles and practices laid down in this document.
Unlike the previous King reports, which were rules-based and followed a ‘tick-box’
approach, King IV™ is principles- and outcomes-based. King IV™ encourages
organisations to have a more ‘hands-on’ approach to principles, so that practices
can be clearly linked to outcomes in an “apply and explain” approach. This gives
governing bodies more flexibility when implementing the recommended practices,
but requires them to be transparent when disclosing how they achieved their
goals.
As mentioned above, King IV™ sets out 17 principles, some of which have been
legislated (and if a conflict occurs, the law prevails).
It also includes a large number of recommended practices, to help governing
bodies and organisations achieve ‘good corporate citizen’ status and governance
outcomes. It is voluntary (unless prescribed by law or by a Stock Exchange
listings requirement).
The Companies Act, 2008 has many features which result in an alignment with
inter-national best practices and the governance principles of the King Code and
Reports.

Source:
The King IV Report on Corporate Governance for South Africa 2016, Institute of Directors S.A.
For more information, see http://www.iodsa.co.za/?page=AboutKingIV”
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