KING IV™ DRAFT REPORT RELEASED FOR PUBLIC COMMENT

The Institute of Directors in Southern Africa (IoDSA) and the King Committee has invited public commentary on the draft King IV^TM Report on Corporate Governance for South Africa 2016. As a proud partner and sponsor of the King IV^TM Report, Adams & Adams will be conducting commentary sessions in May. The King IV^TM Report is the fourth edition, setting out the philosophy, principles, practices and outcomes which serve as the benchmark for corporate governance in South Africa. An update of the previous version became necessary as a result of various developments in corporate governance since King III came into effect in 2009.

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The King IV^TM Objectives

The intention of King IV^TM is to:

• promote good corporate governance as integral to running a business or enterprise and delivering benefits such as (i) an ethical culture; (ii) enhancing performance and value-creation by the organisation; (iii) enabling the governing body to exercise adequate and effective control and (iv) building and protecting trust in the organisation, and its reputation and legitimacy;
• broaden the acceptance of good corporate governance by making it accessible and fit for application by organisations of a variety of sizes, resources and complexity of strategic objectives and operations;
• reinforce good corporate governance as a holistic and inter-related 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 an ethical consciousness and behaviour.

Some King III and King IV^TM differences

• The 75 principles in King III have been replaced with 17 principles in King IV^TM.
• The “apply or explain” requirement will now be “apply and explain”.
• The test for the independence of directors has been widened.
• Sector supplements have been included with specific corporate governance guidance to SMEs, non-profit organisations, public sector organisations and entities, municipalities and retirement funds.

View THE KING IV CODES | INSIGHTS – Article Published | 19 July 2016