King IV Report
Prepared by:
Thandolwethu Singwane
21626078
29.09.2022
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Corporate Governance
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Lecturer:
Matthys Johannes Swanepoel
THE KING IV
Introduction
The King IV Code sets out the philosophy, principles, practices and outcomes which
serve as the benchmark for corporate governance in South Africa.
o A set of voluntary principles and leading practices.
o Drafted to apply to all organisations, regardless of their form of incorporation.
o Sector supplements explain how the King IV Code™ should be applied by certain
organisations/sectors.
o Proportionality is explained and advocated.
o King IV™ focuses on outcomes. The King IV Code’s™ principles and practices are
linked to desired outcomes, therefore articulating the benefits of good corporate
governance.
o The Code™ differentiates between principles and practices. Principles are achieved
by mindful consideration and application of the recommended practices.
Key new or enhanced features of King IV™ relate to:
o Fair, responsible and transparent organization wide remuneration;
o Responsible and transparent tax strategy and policy;
o Balanced composition of governing bodies and independence of members of the
governing body;
o Delegation to management;
o Delegation to committees;
o Corporate governance services to the governing body;
o Performance evaluations of the governing body;
o Audit committee disclosures;
o Risk governance;
o The combined assurance model;
o Social and ethics committees;
o Performance evaluations;
o Responsible institutional investors; and
o Technology and information.
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THE KING IV
OBJECTIVES OF KING IV
o Promote corporate governance as integral to running an organisation and delivering
governance outcomes
o such as an ethical culture, good performance, effective control and legitimacy.
o Broaden the acceptance of the King IV by making it accessible and fit for
implementation across a variety of
o sectors and organisational types.
o Reinforce corporate governance as a holistic and interrelated set of arrangements to
be understood and
o implemented in an integrated manner.
o Encourage transparent and meaningful reporting to stakeholders.
o Present corporate governance
What are the consequences of non-compliance with the King IV code?
King IV is a set of voluntary principles and good practices of corporate governance. If
King IV conflicts with any legislation, the legislation will prevail. However, for entities
with a primary listing on the JSE Limited Securities Exchange certain aspects of King IV
are binding by virtue of the listing’s requirements imposing obligations on issuers to
comply therewith.
The fact that King IV is not legally binding in itself does not mean that there are no legal
consequences arising from non-compliance. A court will consider King IV when
evaluating what is regarded as practice in a particular situation, especially where
governance duties are involved. Failure to meet corporate governance practice, and by
implication the principles set out in King IV, may invoke liability of the board in certain
circumstances.
A court will consider King IV when evaluating what is regarded as practice in a
particular situation, especially where governance duties are involved.
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THE KING IV
DISTINGUISHING FEATURES OF KING IV
o King IV advocates an outcomes-based approach. Achieving the principles, and
therefore ultimately good
o governance, optimizes the organisation to realize the intended governance
outcomes: ethical culture, good
o performance, effective control and legitimacy. (Refer to Part 3: King IV
Application and Disclosure for further
o explanation and to Part 4: King IV on a Page.)
o Clear differentiation is made between principles and practices. Principles are
achieved by mindful consideration
o and application of the recommended practices. (Refer to Part 3: King IV
Application and Disclosure for further
o explanation.)
o King IV has been designed and drafted to make it more accessible to users, and
also to reinforce governance
o as a holistic and integrated set of arrangements. (Refer to Part 4: King IV on a
Page as a demonstration of
o this point.)
o Broader forms of address are used in King IV, namely “organisations”,
“governing body” and “those charged
o with governance duties”.
o Supplements are provided to help organisations across a variety sectors and
organisational types to interpret
o and implement King IV as is suited to their particular circumstances. (Refer to
Part 6: Sector Supplements
King IV encourages organisations to move beyond compliance to crafting actions that are
appropriate to the organisation's context, and which will move them closer to achieving
the goals enshrined in its 17 principles. In so doing, King IV is helping organisations
realise the benefits of corporate governance
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