Page 51 - The Corporate Report Pack

e King Report and Code: An integral and important part of South
Africa’s common law
Michael Judin
e King Report on Corporate Governance has been cited as ‘the most e ective summary of the best international practices in corporate governance’.
A corporation is a gment of the legal imagination. It is a mark in a registrar’s book, a creature without a physical being or substance. You cannot taste, feel or smell a corporation. It is a ghost, a phantasm.
Corporate law has to choose between collisions of the four main interests:
1. creditors;
2. shareholders;
3. management; and
4. the board of directors.
is is not just a functional choice; it is a moral choice. In addition, some people believe that companies owe special duties to the public in the nature of altruism or charity beyond those owed by ordinary individuals.1
had been approached by the Institute of Directors in South Africa (IoDSA) to chair a committee on corporate governance. is was viewed as an opportunity to dra guidelines for our fellow citizens on how to direct and manage corporations, having been deprived of doing so because of our discriminatory apartheid laws.
e King Committee’s report was the rst report of its kind in South Africa and the copyright in same, as also the copyright in all subsequent King Reports and Codes vests in the IoDSA.2
Mervyn King directed the King Committee away from a shareholder-centric governance model to an inclusive stakeholder model. It changed the thinking of corporate boards around the world.
e King Code on Corporate Governance is non-legislative, based on good governance principles and practices
Both Nelson Mandela (also known as Madiba) and retired Supreme Court of South Africa Judge, Professor Mervyn E King, must have had this in mind when Madiba persuaded Mervyn in 1992 to write a corporate governance code for the new South Africa. Mervyn King
e King Code on Corporate Governance is non- legislative, based on good governance principles and practices but is a listing requirement of the Johannesburg Stock Exchange (JSE). It is o en included in contractual arrangements between
1 R Wood ‘ e rise of the lawyers’ (2016) 17:2 Business Law International.
2 Wikipedia ‘King Report on Corporate Governance’ and the references therein referred to, available at
https://en.wikipedia.org/wiki/King_Report_on_Corporate_Governance (accessed 15 July 2016).
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