Page 20 - Profmark BSA Guide 2025

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.
Key Concepts of King IV ™
Because of the interdependence of organisations and wider society, board decisions
should not be made in isolation. Integrated thinking, where the board of directors
considers all issues affecting the organisation when making decisions (and not just
the economic bottom line), is fundamental to the long-term sustainability of the
organisation through the sustained creation of value for stakeholders. Integrated
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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