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The King Code on Corporate Governance has guided South African business practices for over three decades, establishing global benchmarks for fairness, transparency, and accountability. The 5th iteration of the King Code (published 9 years after the King IV Code), the King V Code, introduces a standardised disclosure framework, mandating the online publication of governance practices and explanations for any deviations.
The framework is structured around 13 principles set out under the Code.
The King V Code simplifies and improves the language, structure, and format of the framework developed under previous iterations of the King Code, as is evident in the straightforward manner in which each principle is framed. Each principle addresses 3 overarching themes: (i) steering and setting direction, (ii) policy and planning, and (iii) oversight and monitoring.
In addition, the King V Code streamlines the requirements imposed under the Code with those prescribed by the Companies Act. This alignment is illustrated in respect of:
- remuneration principles – the King V Code simplifies voting procedures and introduces flexibility in its language to accommodate recent amendments to the Companies Act; and
- social and ethics committee ("SEC") principles – to enhance the amendments made to the SEC by the Companies Act, the King V Code introduces recommendations that strengthen the composition of the SEC.
Lastly, the King V Code clarifies key principles by:
- mandating the adoption of the principle of double materiality, in line with international best practice standards;
- strengthening the criteria relating to independence; and
- addressing the ethical and compliant use of emerging technologies by setting out principles that emphasise accountability, transparency, and human oversight of automated systems, including artificial intelligence.
The King V Code aims to strengthen governance resilience, align with global norms, and safeguard against technological and environmental risks. While it enhances clarity and consistency, compliance with this framework may require additional resources, and Governing Bodies may need to be receptive to cultural change.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
