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
The king 4 report does not cater sufficiently at all under section 5 on I.T requirements. It talks much about cybersecurity which is not sufficient. Organisations in both public and private sector are becoming driven by a digital era and yet we don't have something concretized prescriptively on I.T. Board of directors
need guidance on what to ask and what to be at comfort levels on, in order to provide that level of comfort to the shareholders on a critical aspect of one of the critical levers of the business which is digital. Board, members are not technical people to ask these questions around information technology , they need a holistic guideline that will apply to what they need to ask.this helps the board not be reactive when things go wrong in I.T and it's too late, whereby there could be consequences such as mission critical systems or backups etc that fail. There needs to a lot more focus on I.T in king 4. I am working on a position paper. Dr. Denisha Jairam (PHD in I.T)