The King Report in context

Corporate Governance

Acts and Regulations Common law Sets the minimum standards Applies to all companies Primary legislation

◦ The Companies Act 71 of 2008 &

Legislation

The Competition Act of 1998 The Labour Relations Act of 1995 The Basic Conditions of Employment Act of

1997 The Occupational Health & Safety Act of

1993 The National Environmental management

Act of 1998 The Employment Equity Act of 1998

Other Legislation

The Banks Act of 1993 The Short Term Insurance Act The Long Term Insurance Act Public Finance Management Act Etc ……..

Specific Legislation

Applies to all (public) companies seeking a JSE listing

JSE Listing Requirements includes compliance with King III

JSE Listing Requirements

Corporate Governance movement originated in UK in response to large corporate failures◦ Cadbury Report released in 1992◦ Greenbury Report released in 1995◦ Hampel Report released in 1998

The Background

Formed in 1992 by Institute of Directors Chaired by Judge Mervyn King To consider “issues of financial reporting &

accountability, good practice & a code of ethical conduct for South African enterprises”

The King Committee

Published 1994 Called King I or the Code Applied to listed companies, large

companies, public companies, banks, insurance companies

Set standards of governance

The King Report (King I)

Published 2002 & revised King I Introduced concept of the “triple bottom

line”◦ Financial, social & environmental issues

(people, profits & planet) Recommended practice for SA companies Listed companies to comply or explain

King II

Published 2009 & effective from March 2010 Updated to take cognisance of 2008

Company Act and developments in corporate governance

Best practice for all business entities No “one size fits all” Move from “comply or explain” to “apply or

explain”

King III

The Triple Bottom Line

Ethical leadership and corporate citizenship Boards and directors Audit committees The governance of risk The governance of information technology (IT) Compliance with laws, rules, codes and

standards Internal audit Governing stakeholder relationships Integrated reporting and disclosure

The issues covered by King III