Google, Nest, and other ventures. Alphabet supports and develops companies applying technology to the world’s biggest challenges. It what is corporate governance pdf issued by the King Committee on Corporate Governance. King Report on Corporate Governance and the King Code of Corporate Governance.
The King Report on Corporate Governance has been cited as “the most effective summary of the best international practices in corporate governance”. He viewed this as an opportunity to educate the newly democratic South African public on the working of a free economy. The committee’s report was to be the first report of its kind in South Africa. Committee members included Phillip Armstrong, Nigel Payne, and Richard Wilkinson.
Unlike other corporate governance codes such as Sarbanes-Oxley, the code is non-legislative and is based on principles and practices. It also espouses an apply or explain approach, unique to the Netherlands until King and now also found in the 2010 Combined Code from the United Kingdom. The philosophy of the code consists of the three key elements of leadership, sustainability and good corporate citizenship. It views good governance as essentially being effective, ethical leadership.
King believes that leaders should direct the company to achieve sustainable economic, social and environmental performance. South African constitution and should operate in a sustainable manner. It established recommended standards of conduct for boards and directors of listed companies, banks, and certain state-owned enterprises. It included not only financial and regulatory aspects, but also advocated an integrated approach that involved all stakeholders. It defined “large” as companies with shareholder equity over R50 million, but encouraged all companies to adopt the code. This revised code of governance was applicable from March 2002.
In addition to those types of organizations listed in King I, it was applicable to departments of State or national, provincial or local government administration falling under the Local Government: Municipal Finance Management Act, and public institution or functionary exercising a power or performing a function in terms of the constitution, or exercising a public power or performing a public function in terms of any legislation, excluding courts or judicial officers. As before, it encourages all companies to adopt the applicable principles from the code. As before, the code is not enforced through legislation. However, it co-exists with a number of laws that apply to companies and directors including the Companies Act. In addition further enforcement takes place by regulations such as the JSE Securities Exchange Listings Requirements. In an interview with Mervin King, he considered the King II report was wrong to include sustainability as a separate chapter, leading companies to report on it separately from other factors. The report recommends that organisations produce an integrated report in place of an annual financial report and a separate sustainability report and that companies create sustainability reports according to the Global Reporting Initiative’s Sustainability Reporting Guidelines.
In contrast to the earlier versions, King III is applicable to all entities, public, private and non-profit. King encourages all entities to adopt the King III principles and explain how these have been applied or are not applicable. The code of governance was applicable from March 2010. Fundamental and affected transactions in terms of director’s responsibilities during mergers, acquisitions and amalgamations. Again, the code of corporate governance is not enforced through legislation. However, due to evolutions in South African law many of the principles put forward in King II are now embodied as law in the Companies Act of South Africa of 2008. In addition to the Companies Act, there are additional applicable statutes that encapsulate some of the principles of King III such as the Public Finance Management Act and the Promotion of Access to Information Act.
There have been significant corporate governance and regulatory developments, locally and internationally, since King III was issued in 2009 which need to be taken into account. The other consideration is that whilst listed companies are generally applying King III, non-profit organisations, private companies and entities in the public sector have experienced challenges in interpreting and adapting King III to their particular circumstances. The enhancement will aim to make King IV more accessible to all types of entities across sectors. King IV was published on 1 November 2016. Providing for a 2-year period in respect of the drafting process and another year grace period to allow organisations to implement, King IV will probably become effective from middle 2017.