The draft of the new version of the King Code – which positioned South Africa as a global leader in corporate governance just over three decades ago – is now available for public comment. The King V Draft is a revised and streamlined update of King IV. The King Committee and the Institute of Directors in South Africa (IoDSA) invite comments until the close of business on 4 April 2025.
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“King V considers both local and global developments since King IV was launched in 2016, and incorporates critical shifts such as the recent amendments to the Companies Act, evolving practices in remuneration governance, global developments in sustainability reporting, and the rapidly advancing technological landscape,” says Ansie Ramalho, Chair of the King Committee. Corporate governance is a critical tool for strengthening public and private institutions, to the benefit of the entire economy. She says it’s therefore crucial to update the guiding standards for corporate governance to ensure they remain relevant and effective.

As another key objective, King V intends to make it easier for organisations to interpret and apply the outcomes, principles and practices of good governance. Simplifying the Code will render it more user-friendly and accessible to a wider range of stakeholders. This involved, among others, the use of plain language, streamlining content and changes to the presentation of the Code and its supporting and ancillary documents. For example, the 17 principles in King IV have been reduced to 12. Also, the use of graphics and design elements has been cut down to help reading-impaired individuals and to align the style with regulatory drafting conventions. In addition, the King V Code will be presented as a stand-alone document and no longer as part of a report with the Code and its ancillary documents accessible from a single website.

The final objective was to develop a standardised approach to the disclosure of the Code's application to assist organisations with internal monitoring and disclosure of implementation of practices as well as to enhance accountability and comparability across different organisations. “This is helpful to regulators, shareholders and other users of reports on corporate governance,” says Parmi Natesan, CEO of the IoDSA. “However, we are also of the view that the newly established disclosure template provides organisations with the added advantage of facilitating and clarifying their disclosures on their governance practices on an apply and explain basis.”

Apart from these objectives, there are no significant deviations from King IV, adds Ramalho. Organisations that are already applying King IV should find the transition to King V relatively straightforward.

King V continues in its application beyond listed companies, to include state-owned enterprises, local government, non-profits, SMEs, and institutional investors such as pension and retirement funds and life insurers.

An open and transparent King V consultation process is important to ensure diverse input from business leaders, government and the public. Members of the public may comment in their personal capacity or on behalf of organisations, on the understanding that their comments will be published and attributed accordingly. All comments are to be submitted using the online form available on the IoDSA website, and no hard copy or late submissions will be accepted.

ENDS
 
MEDIA CONTACT: Stephné du Toit, 084 587 9933, [email protected], www.atthatpoint.co.za
For more information on the IoDSA please visit:
Website:  www.iodsa.co.za
Twitter:  @The_IoDSA
LinkedIn:  Institute of Directors in Southern Africa Company Page  

​The 2025 State of the Nation Address (SONA) showed touches of Groundhog Day, the film that replays the same scenario over and over again. President Cyril Ramaphosa’s promise of “a state that is capable and competent, underpinned by a professional public service” sounded like a repeat. While the Institute of Directors in South Africa (IoDSA) welcomes these intentions to restore good governance and professionalise the public sector, it notes that the President has now promised the same thing in many successive years. “This track record of empty promises makes us feel like we will just hear the same again at next year’s SONA without seeing any change,” says Parmi Natesan, CEO of IoDSA.

In this year’s SONA, Ramaphosa spoke of building a state with “leaders who are prepared to serve our people with complete dedication, and public servants who are ethical, skilled and properly qualified”. He added, “To achieve these objectives we are strengthening the role of the Public Service Commission in the appointment of the key people who direct the affairs of our state such as Directors-General, Deputy Directors-General, Chief Executive Officers of SOEs and board members and other senior positions.”

However, this approach is unlikely to bring the desired improvements in leadership and governance, because the Ministers will still have the power to make board appointments, which historically has seemed to be according to political lines and patronage. To ensure that SOE board members are indeed “ethical, skilled and properly qualified”, the IoDSA strongly recommends thorough due diligence in the appointment process, in line with the principles of King IV.

“King IV advocates for a competency-based approach to board composition, ensuring that directors collectively have the knowledge, skills, experience, and personal qualities necessary for effective governance and oversight,” says Natesan. “Furthermore, the IoDSA’s formal Chartered Director and Certified Director designations provide a framework for directors to acquire and demonstrate the specialist skills, experience and integrity needed to discharge their duties with mastery, in line with its Director Competency Framework.”

The IoDSA has, over many years, advocated for improvements to the nominations process, as well as the professionalisation of board members in the public sector in general. SOEs, in particular, play a critical role in the South African economy and society; and need to be governed well. “We even provided extensive input to the Department of Public Services and Administration many years back on a guide to the appointment of SOE directors – a step we were confident would make a positive difference – but unfortunately we are not aware of it ever being approved or applied,” says Natesan.

“South Africa cannot afford another cycle of unfulfilled promises. Instead of annual SONAs filled with familiar commitments, the country needs tangible action,” she cautions. “Professionalising the public sector and enforcing rigorous, competency-based board appointments is a crucial step towards realising the capable and competent state that the President envisions. Without decisive implementation, governance failures will persist, and trust in leadership will continue to erode. It is time for action, not just words.”

ENDS

MEDIA CONTACT: Stephné du Toit, 084 587 9933, [email protected], www.atthatpoint.co.za
For more information on the IoDSA please visit:
Website:  www.iodsa.co.za
Twitter:  @The_IoDSA
LinkedIn:  Institute of Directors in Southern Africa Company Page