Although King III is not legislation or regulation, it cannot be unhinged from the law. It has legal consequences.
Directors have legal duties that consist of the fiduciary duties and the duty of care, skill and diligence. Governance play a dual role in relation to these duties. It firstly, enables the execution of these duties by providing guidance and secondly, it influences the objective standard of conduct of directors.

Providing guidance

King III provides directors with guidance as to the establishment of the appropriate structures, policies and processes with the necessary check and balances in order to enable them to discharge their legal duties.
The appropriate structures, policies and processes include those that will assist with the oversight of compliance with legislation.

Standard of conduct

In addition to compliance with legislation, the criteria of good governance, governance codes and guidelines will be relevant to determine what is regarded as an appropriate standard of conduct for directors. The more established certain governance practices become, the more likely a court would regard conduct that conforms with these practices as meeting the required standard of care. Corporate governance practices, codes and guidelines therefore lift the bar of what are regarded as appropriate standards of conduct. Consequently, any failure to meet a recognised standard of governance, albeit not legislated, may render a board or individual director liable at law.

Enforcement

As far as legislation is concerned, enforcement takes place through the regulators. Enforcement of King III will be driven by shareholder and other stakeholders’ activism. 

Harbinger of legislative changes

As King I and King II have proven, governance codes often influences legislation. There were for instance, matters that were recommendations in King II which have subsequently been incorporated in legislation.