While we acknowledge that most organisation suffer from regulation fatigue, we welcome this version of the King Report that incorporates both global public sentiment and regulatory change since King III was issued in 2009. King IV’s bold and practical approach is expected to instil greater levels of ethical behaviour and sound corporate governance.
In our view, King IV is bolder than ever before. Firstly, the Code is principle-based and follows an outcome-based rather than rule-based approach. This is in line with current international sentiment which promotes greater accountability and transparency. It speaks to the expressed view that the application of the Code should contribute to the performance and health (sustainability) of the company. In this regard it is clear that King IV aims to establish a balance between conformance and performance.
The Code is further bold in its relentless effort to reinforce corporate governance as a holistic set of arrangements that concerns itself with ethical leadership, attitude, mind-set and behaviour. This echoes global developments in the conduct risk arena and also seeks to address and prevent recent examples of corporate failure.
Lastly, the boldness of the Code is evident in the clear focus on transparency and targeted disclosures in all areas, specifically in the introduction of far more extensive executive remuneration disclosure than ever seen before. While we believe that this matter still warrants debate in the South African context, we acknowledge that the suggestions are in line with global developments and perhaps more relevant than ever before in a country where the income differential remains higher than desired.
You can read the full report on our assessment of what is different and what is new, both in underpinning philosophy and principles, here. King IV Report on Corporate Governance
For more insights on Corporate Governance topics, visit the Deloitte Africa Centre for Corporate Governance. http://www.corpgov.deloitte.co.za/
For further information, contact:
Dr Johan Erasmus
Tel +27 (0)11 806 6292