Page 58 - The Corporate Report Pack

King IV allows for situations where a speci c situation is not dealt with. is allowance then gives the organisation the ability to not conclude a tick box exercise, but to have the King IV nd practical application to the organisation’s practical circumstances.
• allows organisations to ensure the practical application of the report in a form applicable to business.
Supplements will be issued shortly and will deal with how to adapt practices in speci c organisations.
Sound corporate governance leads to healthy organisations and is about ethical and e ective leadership.
Sound corporate governance has the following critical governance outcomes:
• ethical culture
• performance across the triple context and value
creation
• e ective and adequate control
• trust, good reputation and legitimacy.
King IV sets out normative statements of what organisations want to achieve. Once this is done, practices are set in place. is takes the process up a level and is fundamentally di erent from King III.
What sets King IV apart?
King IV:
• is outcomes- and norms-driven
• caters for all organisations
• has been reduced from 75 principles to 16 + 1 • is less prescriptive but more transparent
ey will be between six and eight pages long. By introducing these supplements, King IV provides for proportionality, in other words, how to scale the practices to the size of the organisation.
Apply AND explain
e Commission’s view is that there is no explanation for non-adherence to King IV because the normative statements can be applied to everyone, whereas the practices fall within the discretion of the company. A controversial point of discussion and comment is the involvement of the Social and Ethics Committee on remuneration.
The King IV chapters captured
Chapter 1: Leadership, ethics and corporate citizenship
Chapter 1 from King III has been carried over to King IV.
Ethical leadership (members need to have certain characteristics – inner focus)
Organisation values, ethics and culture (external to the company)
Responsible corporate citizenship (is and is seen to be – outer focus)
34 The Corporate Report
King IV Report: A summary of what’s to come
Ethical culture