King v: The New Blueprint For Corporate Resilience

Introduction and Objectives

The King Code on Corporate Governance for South Africa has been a north star, guiding business practices for more than three decades. While the report principally sets out the standards of performance expected of South African companies, the benchmark it creates for fairness, transparency and accountability has informed corporate governance standards globally. Now in its fifth iteration, it continues to play an important role in ensuring that the internal culture pursued by businesses promotes resilience and strives to deliver robust returns for investors.

The Institute of Directors in South Africa and the King Committee of South Africa published the most recent iteration of the report, King Code V Report ("King V" or the "Code"), on 31 October 2025. It comes nine years after the publication of King IV.

The Code was updated to reflect the significant changes to the corporate governance landscape which occurred during the last decade. With an increasing focus on competitive sustainability, stakeholders (ranging from regulators to employees, shareholders, customers, and society at large) are expecting significantly more from boards. This is further compounded by the growing number of jurisdictions worldwide which impose mandatory sustainability, climate and supply chain reporting duties on boards of directors.

King V builds on the framework created under King IV and presents the Institute of Directors of Southern Africa's response to the current world order. In comparison to King IV, King V:

• proposes a framework and mechanisms that are practical and easier to apply. It does so by using simpler language and following a format and structure which is easier to navigate;
• updates the principles prescribed under the Code to reflect South Africa's current regulatory and governance framework (including shifts in sustainability reporting);
• introduces standard disclosure processes and requirements to enhance accessibility, transparency and consistency; and
• clarifies key concepts used in the document, including those relating to materiality, independence, data, information and technology as well as remuneration.

King V is not an Act of Parliament or Regulation published by a Minister. It therefore does not – on its own – impose legally binding duties on companies or boards of directors. As a framework document, it reinforces the legal requirements imposed by common law and under South Africa's corporate regulatory framework by providing guidance on best practices for directors and organisations from a corporate governance perspective.

In the remainder of this blog, we consider the most notable changes introduced under King V in a bit more detail.

Simplification and improvement of language, structure and presentation

The King V framework now comprises four documents: (i) foundational concepts, (ii) glossary, (iii) disclosure template, and (iv) the Code itself. The four documents jointly create one overarching framework and should be read together.

• Foundational concepts – this document defines corporate governance as ethical, effective leadership fostering an ethical culture across the business, high performance, conformance, and legitimacy to the business' operation. It explains governance roles, disclosure requirements, and philosophies underpinning King V, guiding organisations toward sustainable value creation within economic, social, and environmental contexts.
• Glossary – sets out the defined terms that are used throughout the Code.
• Disclosure framework – sets out a practical framework as to how entities should set out the disclosures that are required by King V. The disclosure framework must be used by organisations that claim to apply King V. Businesses can deviate from the proposed framework but must do so on an "apply and explain" basis. The primary purpose of the disclosure framework is to ensure that all material information is provided by organisations to stakeholders, thus enabling stakeholders to make informed assessments about the governance of an organisation.
• The Code – sets out the thirteen principles against which businesses must report and related recommended practices. The Code has consolidated various principles that were duplicated under King IV. King V now creates a unified framework which promotes clarity and certainty. Key examples include:

1. Principle 1 (Leadership - "the governing body leads ethically and effectively as the focal point of corporate governance in the organisation") now incorporates King IV's Principle 6 that positioned the governing body as the focal point of governance.
2. King IV Principle 2, which concerned institutional investors, has been deleted owing to its limited applicability and overlap with the Code for Responsible Investment in South Africa.

The recommended practices provided for under King IV have likewise been streamlined and reorganised around the governing body's core functions. These are (i) steering and setting direction, (ii) policy and planning, (iii) oversight and monitoring, and (iv) accountability.

Finally, King V introduces flexibility to recommended practices in that organisations may adapt the practices based on their organisational size, complexity, and impact, thus preventing governance from becoming a compliance burden.

Streamlining the requirements under the Code with those prescribed under the Companies Act, 2008

King V aligns and enhances the principles set out under the Code with the amendments that were introduced under the Companies Act, 2008 in 2024 (some of which are yet to enter into force). Important examples include amendments to the Companies Act, 2008 in respect of:

• Remuneration: the amendments to the Companies Act introduces reform around remuneration. King V, in response, simplified its practices in relation to voting. It has, however, introduced flexibility in its language to address circumstances before and after the amendments become effective; and
• Social and Ethics Committee: King V recommends that each of the risk committee and social and ethics committee ("SEC") should be composed of majority non-executive members including one independent member. This recommendation exceeds the minimum requirements set out in the Companies Act, 2008 (as amended). Consequently, the Code further entrenches its objectives of effective oversight and integrity in governance by fortifying the composition of the SEC.

Standardisation of disclosure

King V introduces a standardised disclosure framework, mandating online publication of governance practices and explanations for any deviations. The framework is structured around the thirteen principles set out under the Code. For each principle the disclosure framework sets out the specific disclosures which the company is expected to make.

The purpose of the disclosure framework is to ensure that there is meaningful and qualitative accounts of the implementation of King V. These changes move governance beyond compliance and embed it into strategy and operations to enhance resilience and legitimacy.

Clarification of key principles

Different from the International Sustainability Standards Board's IFRS S1 and S2, King V mandates the adoption of the principle of double materiality. By doing so, it goes beyond the global norm and follows the framework introduced under the European Union's Corporate Sustainability Reporting Directive.

It also introduces specific criteria for independence by (i) addressing related parties, (ii) providing additional guidance for cooling off periods, and (iii) including the threshold of 9 years as a member of a governing body as a factor to be considered.

Finally, owing to the increasing focus on artificial intelligence, King V addresses ethical and compliant use of emerging technologies. Specifically, it sets out the terms under which governing bodies ought to ensure accountability, transparency, and human oversight of automated systems, including artificial intelligence.

Way Forward

King V will be effective from 1 January 2026. On the one hand it may strengthen independence of governing bodies, create better alignment with global standards and legislative amendments as well as enhanced protections and control over the advancements in technology and proliferation of data and information. On the other hand, King V places a greater burden on boards of directors by requiring additional resources that will result in increased costs, to ensure compliance (such as the publication of the disclosure framework).

Ultimately, King V will require a change in mindset in some key areas. This may result in slow uptake. As organisations navigate the new framework, they should be reminded of Lewis F. Powell Jr.'s memo from the 1970s (Attack on the American Free Enterprise System) – it is only when boards and executive leadership teams truly understand the risks arising from a business' external resource and relationship dependencies that they can create a robust operating model that can withstand external shocks.

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