Corporate Governance

Under South African corporate governance best practices, a board of directors is responsible for leading the company ethically and effectively while acting in its best interests. The board sets the company’s strategy, oversees risk and compliance, and ensures proper accountability and transparency through reporting and disclosure. Directors must also exercise due care, skill and diligence, and avoid conflicts of interest in line with the Companies Act. The board is also responsible for monitoring management performance and ensuring sustainable long‑term value creation.

King V recommends that a board’s charter, and committee terms of reference, be approved and reviewed periodically, and whenever circumstances or requirements change. Practically, many boards align reviews to the annual governance cycle, but King V emphasises proportionate, context‑driven timing rather than a rigid interval. Regular review supports accountability, good decision‑making and regulatory compliance.

King V is South Africa’s leading corporate governance code, built around outcomes‑based principles with an “apply and explain” disclosure regime. Its principles are stated to be universally applicable across types and sizes of organisations, with practices scaled proportionately to context.  While it is a voluntary code (save for listed companies having to comply with certain practices as required by the JSE Listings Requirements), courts consider generally accepted governance practices, and King V can inform the standard of care and the business judgement rule under the Companies Act. As such, adopting it meaningfully can reduce governance risk.

Companies should set the board’s strategic direction for ethics, approve an ethics programme and policies, and embed training, fair consequences and protected whistleblowing channels. They should also strengthen transparency by issuing an integrated report at least annually, approving reporting standards and frameworks, and publishing governance disclosures on their websites. Finally, companies should periodically seek assurance over ethics management to demonstrate accountability and build trust with stakeholders. 

Cliffe Dekker Hofmeyr advises boards and directors on corporate governance, directors’ duties and regulatory compliance under the Companies Act and King V. We assist with board and committee charters, governance policies, “apply and explain” disclosures under King V, and integrated reporting alignment. In disputes and investigations, we advise on directors’ duties, conflicts, s76 business judgement protections and potential liability under the Companies Act, helping boards act on an informed, independent basis.