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Corporate GovernanceCorporate governance and corporate reporting is no longer what it used to be. The draft King III Code and Report was released by the Institute of Directors in Southern Africa (IOD) in February 2009. A revised version of King III is expected to become available later this year and will come into effect in 2010. King III, as the third Report on Governance in South Africa, became necessary because of the new Companies Act, 71 of 2008 and certain changes in international governance trends. King III entails significant implications for companies and boards of directors, with regard to, for example, directors' duties; integrated sustainability reporting; shareholder remuneration policy; risk-centric internal audit; the role and function of sub-committees; the role of the lead independent director; IT governance and security; alternative dispute solution; internal training; assessment of internal controls; the duty to act as a responsible corporate citizen; risk management; share options and stakeholder relationships. Together, the new Companies Act and King III are set to promote more stringent standards of corporate governance and greater director accountability. [ Go to Top ] Cliffe Dekker Hofmeyr's Corporate Governance Compliance and Risk ServicesThe Corporate Governance compliance and risk team at Cliffe Dekker Hofmeyr can help you and your board members ensure that proper structures and processes are established with appropriate checks and balances. We offer extensive services with regard to informing the board of directors of the new rules and regulations, identifying relevant issues for a particular company and ensuring compliance. Our services focus on:
For more information, please contact Monique du Preez. +27 (0)11 290 1299. [ Go to Top ] The King 111 ReportThe King Report was compiled by the King Committee with the assistance of nine subcommittees, namely: boards and directors; audit; risk management; internal audit; integrated sustainability reporting; compliance with laws, regulations, rules and standards; managing stakeholder relationships; fundamental and affected transactions and business rescue. The King Committee believes that "there should be a code of principles and practices on an "apply or explain" basis. Boards have to comply with their duties such as acting in good faith and in doing so, have to apply their minds in the best interests of the company in regard to any recommended practice" (Draft Code of Governance: Principles for SA 2009 The King Committee on Governance page 8). "There is always a link between good governance and the law...directors and management must discharge their legal duties. These are grouped into two categories, namely duty of care, skills and diligence, and fiduciary duties. Corporate Governance mainly involves the establishment of structures and processes, with appropriate checks and balances that enable directors to discharge their legal responsibilities. In assessing the standard of appropriate conduct, a court will take into account all relevant circumstances, including what is regarded as the normal or usual practice in the particular situation...Corporate governance practices, codes and guidelines lift the bar of what are regarded as appropriate standards of conduct." (Draft Code of Governance: Principles for SA 2009 The King Committee on Governance page 10). The philosophy of the King III Report revolves around leadership, sustainability and corporate citizenship. The Report addresses the following issues:
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