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