Since 2001, corporate governance has received renewed interest internationally due to highprofile collapses. Increased access to capital encourages new investments, boosts economic growth, and provides employment opportunities. The enactus south africa advisory board is comprised of a prestigious group of business leaders who are committed to support the organization. Corporate governance laws and regulations south africa covers common issues in corporate governance laws and regulations including transparency and reporting and corporate social responsibility in 33 jurisdictions. The deloitte africa center for corporate governance offers a number of resources for executives, directors, and others who are active in governance. This second edition of corporate goverance in south africa. This report, referred to as king iii, was compiled by the king committee with the help of the king subcommittees. The purpose of this module is to explore the principles of good corporate governance with particular focus on the role of boards and directors in integrating company strategy with values and ethics that underpin sustainable practices. Corporate governance of ict is implemented in two different layers. Good governance africa is a research and advocacy nonprofit organisation with centres across africa focused solely on improving governance across the continent gga engages in applied research and stimulates critical debate. Nestles commitment to sound corporate governance goes back to its very early days. Dec 05, 2012 this approach is however, increasingly being questioned. It aims to ensure responsible behaviour, but its ultimate goal is to achieve maximum efficiency and sustainability. Corporate governance in south africa addresses the changes in the corporate governance landscape in south africa brought about by the companies act 71 of 2008 and the king report on governance for south africa king iii, both of which have increased the corporate governance responsibilities of boards of directors in south africa.
He is an expert in governance, law, compliance, as well as general and international business. Not only can these elements serve to hold soes accountable. The record and policies for good governance by melvin d. Undoubtedly one element of south africa s equity culture, widespread. South africa has seen a dip in corporate governance the lowest overall scoring since the indexs inception in 20. The king committee on corporate governance was formed in 1992, under the auspices of the institute of directors, to consider corporate governance. South africa, bowmans and was also a visiting attorney in the usa with the law firm, mcguirewoods. The time has come for africans to unite in the use of qualitative corporate governance as a force for change. Corporate governance purpose and functions of governance within transnet transnet soc ltd is a public company, constituted in terms of the legal succession act to the south african transport services act, no 9 of 1989, with the south african government being its sole shareholder.
The corporate governance of ict is a continuous function that should be embedded in all operations of a department, from executive authority and executive management level to the business and ict service delivery. The international framework is not intended to replace national and sectoral governance codes. The king report on corporate governance is a booklet of guidelines for the governance structures and operation of companies in south africa. General guidance note summary of king iv disclosure requirements. Corporate governance legal and governance technical. King iv report on corporate governance for south africa.
Corporate governance in south african stateowned enterprises. Sasols valuesdriven culture and code of ethics underpin its governance structures and processes, committing the company to high standards of business integrity and ethics in all its activities. Apr 19, 2016 with the recent findings of the constitutional court pertaining to the nkandla matter, the subject of corporate governance has intensified and the topic has featured in media headlines, talkshows and public debates across south africa. King sc, chair of the king committee on corporate governance in south africa. This journal is hosted by the stellenbosch university library and information service on request of the journal ownereditor.
South africa is one of the fastest emerging economies of the world and this rapid economic growth has been largely attributed to the adoption of the king codes and the various corporate governance structures. The effect of corruption in south africa has seriously constrained development of the national economy and has significantly inhibited good governance in the country. Market discipline imposed through falling equity prices has led to radical changes in corporate structure and conduct, among others the dismantling of the mining finance houses. The companys mandate is to reduce the cost of doing.
Each endorsement indicates support for the principles as espoused by this report. This commitment is reflected and explained in several publications, such as the corporate governance report, articles of association, committee charters etc. Good governance africa is a research and advocacy nonprofit organisation with centres across africa focused solely on improving governance across the continent. It is issued by the king committee on corporate governance. South africa is regarded as one of the more advanced countries in africa, although still an emerging country with huge development potentials. Gupta saga shows corporate governance working in sa fin24. Gga promoting better governance in africa to improve the. This does not mean that corporate governance was not an issue of concern. King iv application regime the application regime for king iv is apply and explain. With the surge of interest in the recognition of not only shareholder interests, but also the interests of other stakeholders, the corporate governance approach in south africa merits a deeper analysis. The king report on corporate governance 1994 evoked unprecedented interest in corporate governance in south africa. The oecd southern africa network on the governance of stateowned enterprises soes hereafter soe network for southern africa is a forum aimed at improving the corporate governance of soes, and which provides a forum for regional dialogue and cooperation. What will likely not appear on the agenda, however, are the governance challenges that are holding citizens across africa back.
Public service corporate governance of information and. Before applying this dis tinction to the practice of corporate governance in south africa, a brief overview of the corporate land. The company complies with the jse listings requirements, applicable statutes, regulatory requirements and other authoritative directives regulating its conduct. South african governance will help the student understand the conceptual and contextual frameworks essential for establishing a sound foundation for south african governance, and allows the student to acquire knowledge of the constitution of the republic of south africa. The underlying thesis is that a crisis of governance is basically a crisis of board of. Corporate governance under the south african companies act.
Sound risk governance practices isbn 9789264208629 26 2014 01 1 p risk management and corporate governance. Arm subsidiary teal houses arms non south african exploration portfolio. More information about the centers activities and programs, including contact. In south africa, king iii is the recognised code of governance. Boosting the performance of the soe sector through improved governance arrangements can potentially lead to better economic and social outcomes in southern africa. A number of lessons can be drawn from the collapse of steinhoff.
Southern africa, south african airways saa, eskom, telkom and transnet. In 2002 dr motsepe was voted south africa s business leader of the year by the chief executive officers of the top 100 companies in south africa. Corporate governance is about making your business work better while abiding by the rules. This research provides a cross sectional examination of corporate governance disclosure practices in the. Pdf a comparative analysis of corporate governance. Corporate governance also contributes to development. Corporate governance july 2015 capital structure and nonfinancial objectives that soes are expected to deliver. This does not mean that corporate governance was not an issue of concern before the release of this historical report. Debate over the role of company boards invariably intensifies when things go wrong on a grand scale, as has happened in recent years. In south africa, the king commission on corporate governance was developed and subsequently modified for state owned enterprises soes.
The companies act brought about a wholesale overhaul of south african company law and it seeks to introduce best practice and promote transparency and accountability in the south african corporate sector. The module develops competencies to apply an integrative approach to good governance. The corporate governance framework and practices relating to risk management annex a. I believe this document will serve to stimulate such change. Corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals. Arm owns ferrous and base metals, platinum and coal operations and holds a significant interest in the gold mining sector through its shareholding in harmony. This document and any map included herein are without prejudice to the status of or sovereignty. More information about the centers activities and programs, including contact information, can be found below. This article primarily focusses on the latter, which are subject to a more demanding corporate governance, disclosure and transparency regime. The aim of this paper is to provide insight into corporate governance and risk management from a south african perspective. Government corporate governance framework june 2008.
The stellenbosch university library and information service takes no responsibility for the content published within this journal, and disclaim all liability arising out of the use of or inability to use the information contained herein. In reality, much of company law is ultimately about corporate governance. Scant regard for corporate governance in south africa hr pulse. Throughout the author makes clear how the relevant principles can be practically. The corporate governance framework and practices relating to risk management chapter 4. Gcis cape town the positive spin from the gupta saga is that corporate governance in south africa is working as it indeed should and that is worth a great deal for the future. Despite the progress noted, the soes environment remains in distress as boards and management struggle to maintain a balance between legislative compliance and performance. To the contrary, corporate governance in its broader sense has been at stake since the inception of the first publicly owned companies in south africa. This article intends to give an overview of corporate governance in south africa. The institute of directors in southern africa and the king committee on corporate governance in south africa acknowledge with appreciation those who support king iv and corporate governance in south africa through their endorsements. Three reports were issued in 1994 king i, 2002 king ii, and 2009 king iii and a fourth revision king iv in 2016. The 2018 cgi survey questionnaire was aligned to the king iv code of governance.
It is also visible in nestles daytoday business behavior. South africa should be complimented for its king code on corporate governance, the companies act and johannesburg securities exchange. This document sets out the african development banks the banks strategy in promoting corporate governance reform in africa. However, the story of south africas corporate governance begins with breaking away from the past and looking forward to position the country in the corporate governance map globally.
Good management is, of course, critical for the operation of a company. Thats according to the institute of internal auditors sa whose corporate governance index report revealed that the overall ranking of ethics, compliance and assurance dropped 6. South africa s complex political design is a contributing factor to the rise of corruption, which has adversely affected stability and trust and which has damaged the ethos of democratic values and principles. It highlights the respective roles of the key stakeholders and calls for full partnership with actors operating in the field. The aim of good governance in the public sector international framework is to encourage better service delivery and improved accountability by establishing a benchmark for good governance in the public sector. Enron and worldcom in the us and saambou bank and fidentia in south africa are examples of prominent corporate collapses. The regulation of corporate governance in south africa. Oecd network on corporate governance of stateowned enterprises in southern africa.
Corporate governance was institutionalised in south africa through the king. The book builds on theory by discussing the current state of governance. They are ambassadors and champions of enactus mission, and leverage their expertise and networks to provide strategic advise, manage and assist with business development activities. The two main corporate entities in south africa are private companies and public companies typically listed on south africa s main exchange, the stock exchange operated by the jse limited jse. Ifc works with firms to attract and retain investment by promoting the adoption of good corporate governance practices and standards. This edition, the sixth for the iia sa, was developed through the technology and research assistance of the university of south africa. Good governance in the public sector consultation draft. Each endorsement indicates support for the principles as. All our work is based on exploring and advancing the key governance principles of democracy, accountability and transparency, and combining these with upholding the rule. We view developments and governance trends as opportunities to continuously improve and entrench corporate governance practices.
Apr 10, 2016 oakbay chair atul gupta and president jacob zuma at a protea vs india t20 cricket match in johannesburg in 2012. Standards are not the same in respect of certain elements of good government. Worstever score for corporate governance in sa index. The international framework is not intended to replace national and sectoral governance. It starts by making a distinction between broad and narrow conceptions of corporate governance. The mainstay of the south african environment was isolation. This paper critiques the corporate governance approach under the companies act 71 of 2008. The most basic function of corporate governance is to see that a business strategy is made effective by the companys executives and workers, as deloitte explains in a report. The following text have been directly extracted from the king iv report on corporate governance for south africa 2016, for the purposes of summarising the disclosure recommendations found within the king iv code.
The notable governance failures by some parastatals and corporations is a clear sign that south africa is a risky investment destination which results in increases in the countrys costof. What we learned about corporate governance and code. In addition, serious questions have to be asked about the external auditors who signed off. South african centre for corporate governance deloitte. Data and research on corporate governance including guidelines for multinational enterprises mnes and stateowned enterprises soes. Iv code on corporate governance as set out in the king iv report on corporate governance for south africa, 2016 king iv and applies all of the applicable principles of king iv. All our work is based on exploring and advancing the key governance principles of democracy, accountability and. Jun 25, 2018 the king iv report on corporate governance for south africa 2016 king iv is the most recent version. Gga engages in applied research and stimulates critical debate. It replaces king iii in its entirety and is effective in respect of financial years commencing on or after 1 april 2017. Sasol applies sound corporate governance structures and processes, which the board considers pivotal to delivering sustainable growth in the interests of all stakeholders. The corporate governance setup in south africa has undergone fundamental changes during the past decade, with the country today being responsive to most corporate governance issues. Not surprisingly, theres been a renewed focus on improved corporate governance.
The book combines a detailed exposition of the governance requirements of the companies act of 2008 and regulations, the jse listings requirements and the brand new fourth king report on corporate governance for south africa king iv with over 30 recent case studies of corporate governance failures, from fifa to wells fargo, the libor scandal. Good governance in the public sector consultation draft for. The book combines a detailed exposition of the governance requirements of the companies act of 2008 and regulations, the jse listings requirements and the brand new fourth king report on corporate governance for south africa king iv with over 30 recent case studies of corporate. It sets out the pathway, governancewise, from where we are now, to where we would like to be. Undoubtedly one element of south africas equity culture, widespread. South africa should be complimented for its king code on corporate governance, the companies act and johannesburg securities exchange listing requirements which. Corporate governance an essential guide for south african. The king code is premised on 16 principles having universal applicability, with only the implementation being different. Corporate governance in south africa progress and challenges.
The third report on corporate governance in south africa became necessary because of the new companies act no. However, should corporate governance and risk management principles be lacking. It considers best practice in corporate governance based on global trends and experience. Corporate governance in south africa was institutionalised by the publication of the king report on corporate governance king report 1994 in november 1994. The most important force for corporate governance reform in south africa has been the market. African rainbow minerals limited arm is a niche, diversified south african mining company with excellent longlife, lowcost operating assets in key commodities. Corporate governance, integrated reporting, and stakeholder. The soe network for southern african provides a forum for regional dialogue and cooperation. However, the reader is encouraged to consult the full king iii report and the code of governance principles, now available from the institute of directors in southern africa. Given the diversity amongst smes, corporate governance principles should be applied in a pragmatic and. King iv is a guideline for best practice and provides the main standard for corporate governance in south africa. Lexisnexis is proud to bring you the third edition of this popular reference work on corporate governance. With international comparisons comprehensively addresses the changes to corporate governance in south africa introduced by the king iv report of 2016. Corporate governance of stateowned enterprises in southern.
Icgn recognises the progressive contributions to corporate governance best practices that have come from the four king reports andor codes on governance in the. The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of these resources. The rollout of the government corporate governance framework in the western cape. Steinhoff is a classic case of corporate governance failure, while the collapse also shows the danger of an allpowerful chief executive, and the limitations of a twotier board structure. This research examines corporate governance disclosure in nigerian and south african banks using the unweighted disclosure index technique. The king iii report on corporate governance 2009, and the companies act 71 2008. It discusses the requirements of the companies act, the recommendations of the 2002 king report and recent requirements for directors of publicsector enterprises. It complements the g20 oecd principles of corporate governance and can be used by.
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