The Institute of Directors in South Africa (IoDSA) and King Committee have issued the draft sectoral supplements for the new King Code of Corporate Governance (King IV) for comment. The King IV Supplements will be open for comment from 11 May to 11 July, and all comments should be submitted via the comment platform on the IoDSA’s website.
 
Prof Mervyn King, chair of the King Committee, says that the supplements are aimed at providing state owned entities, small to medium-sized enterprises (SMEs), retirement funds and other institutional investors, non-profit organisation and municipalities with guidelines on how to apply the King Code for their particular circumstances.
 
“Traditionally, corporate governance has focused on listed companies. However, this does not take into account that corporations all exist in a bigger ecosystem. The ecosystem is made up of the relationships and interactions amongst companies, investors, SMEs within supply chains, civil society and state owned entities, which supply essential infrastructure,” says King. “To bring about large-scale change, one has to address governance across the whole of this ecosystem.”
 
Ansie Ramalho, the King IV Project Lead says that this inclusive, systemic approach breaks new ground for the King Codes, and for corporate governance more generally. She emphasises that the supplements are not standalone codes, and must be read in conjunction with the main King IV report. They also do not seek to provide detailed guidance, but rather to provide each sector with examples of some of its corporate governance challenges, and how to respond to them. These challenges might include relevant legislation, ownership structures, board composition or simply the nature of the business they are in.
 
“We have not attempted to provide exhaustive examples of challenges and solutions, but rather to provide insight into the kind of thinking that should be used to apply King IV to a particular sector. In this way, we hope to provide organisations with the tools they need to craft their own sound governance response to any challenge when applying the principles of King IV,” says Ramalho.
 
The main King IV draft has been open for comment since 15 March and no further comment will be accepted after 15 May. The King IV draft document and link to public commentary platform is available at http://www.iodsa.co.za/page/KingIVcommentary

ENDS
 
MEDIA CONTACT: Cathlen Fourie, 082 222 9198, cathlen@thatpoint.co.za, www.atthatpoint.co.za
 
For more information on the IoDSA please visit:
Website:  www.iodsa.co.za
Twitter:  @The_IoDSA
LinkedIn: The Institute of Directors in Southern Africa group  ​

​The Institute of Directors in Southern Africa (IoDSA) and the King Committee have made the draft version of the latest King Report—King IV—available for public comment today. Those wishing to comment will be able to access the document via an electronic portal, which will also provide a mechanism for submitting comments.
 
The King Committee under the leadership of Prof Mervyn King and the King IV task team, led by Ansie Ramalho, the former CEO of the IoDSA, have been working on the new document since late 2014. Ramalho says that a number of developments in corporate governance made a new version necessary. Among these developments are the increased focus on executive remuneration; the key role of social and ethics committees, the regulations for which only came out after the launch of King III; and the continuing development of Integrated Reporting, which was first recommended in King III.
 
“The King Codes have helped make South Africa a global leader in corporate governance—subjecting King IV to the rigor of public comment is thus important,” says Prof Mervyn King. “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, SMEs and retirement funds, among others. Quality and effective corporate behaviour offers a way out of many of our current economic and sustainable development challenges.”   
 
King IV differs from King III in a number of ways. The Code is now integrated into the Report, with a clear differentiation between principles and practices, with the latter linked to outcomes—these and other innovations are designed to make it easier to use. Especially noteworthy, King III’s “apply or explain” has become “apply and explain”. The intention here, Ramalho explains, is to help organisations move beyond a compliance mind-set to describing how implemented practices advance progress towards giving effect to each principle - the application of which is assumed due to it being basic to good governance.
 
The process of obtaining public comment will take place over two phases. The current first phase will cover the King IV Report (bar the Sector Supplements), which sets out philosophy, concepts and the foundational principles. Comment on the Sector Supplements, which are dependent on the main report, will be sought in phase two.
 
While the main report is in the public domain for comment, this approach will allow Ramalho’s team will solicit further specialist comment on the sector supplements before they are released for public comment. The main report has already had the benefit of comment from institutional members of the King IV Committee, corporate governance specialists, directors, preparers, users and academics.
 
“Too many people see corporate governance as a compliance issue whereas it is actually a critical tool for strengthening all our public and private institutions, to the benefit of the whole economic system. The overriding message of King IV is that good corporate governance practices help any organisation improve its ability to sustain itself and the social and environmental context in which it operates. The process of public input will also help to drive buy-in across the various stakeholder communities,” concludes Ramalho. “The more difficult the external circumstances are, the more valuable a strong corporate governance culture is.”
 
Any member of the public may comment, either in a personal capacity or on behalf of an organisation. Comments may be made on any aspect of the Report, but the drafting committee has also posted a list of questions to which it would particularly value input. However, no anonymous contributions will be entertained, and the details of each commentator and their comments will be in the public domain. The comment period for each of the two phases is two months.

ENDS
 
MEDIA CONTACT: Cathlen Fourie, 082 222 9198, cathlen@thatpoint.co.za, www.atthatpoint.co.za
 
For more information on the IoDSA please visit:
Website:  www.iodsa.co.za
Twitter:  @The_IoDSA
LinkedIn: The Institute of Directors in Southern Africa group