Page 56 - The Corporate Report Pack

King IV Report: A summary of what’s to come
Grant Wilkinson
It has been realised that there are various forms of capital, including nancial, manufacture, intellectual, social and human capital, and that there is a need to ensure that these are properly addressed in King IV.
While a number of organisations have dragged their feet and are still getting to grips with the implications of the King III Report and the Companies Act, the Institute of Directors in Southern Africa (IoDSA) recently launched the King IV Report, which is open for public comment.
In this article, the writer attempts to summarise some of the important points arising out of the IoDSA’s recent launch of the King IV Report in Cape Town.
Why King IV?
e need for a change was prompted by local and international developments that occurred post-King III, some of which have led to the King Report being out of step with good practice.
Aspirations and areas of importance
It has been realised that there are various forms of capital, including nancial, manufacture, intellectual, social and human capital, and that there is a need to ensure that these are properly addressed in King IV.
King IV takes a stakeholder-inclusive approach, which broadens the vision of corporate governance in South Africa.
Capitals that require attention
King IV highlights capitals that require attention: • leadership
• organisation in society
• sustainable development • shareholder inclusivity
• integrated reporting.
King IV echoes King III and is not a new report. What remains relevant in King III is incorporated in King IV.
The aspirations in King IV are to move from:
• box ticking (with no appreciation of the value the Report’s recommendations add) to mindful
application
• grudge compliance to an appreciation of the value
added
• listed companies to all organisations (for example,
public investment corporations and civil society). is is because corporate governance is a small system within a bigger system. Corporate governance in one entity a ects the corporate governance of the other entity (for example, an SME in the Nike supply chain).
Benefits of sound corporate governance
Sound corporate governance leads to healthy organisations and is about ethical and effective leadership.
Corporate governance involves:
• strategy and direction
• approving policy for putting strategy into e ect
• oversight and implementation
• disclosure, by being accountable and by reporting.
32 The Corporate Report