Corporate Governance

What Is Corporate Governance?

  • As defined by the Cadbury Report, 1992, Corporate Governance at its simplest level, can be described as the system through which organisations are directed and controlled.
  • Monks and Minow defines Corporate Governance as the relationship amongst various participants (shareholders, management, and the board of directors) in determining the direction and performance of corporations.

CORPORATE GOVERNANCE IN SOUTH AFRICA:

Currently the King Report on Corporate Governance in Southern Africa, 2009 (‘King III’) together with relevant legislation, sets the standard and principles for Corporate Governance in South Africa.

King Report on Corporate Governance in Southern Africa, 2009 (‘King III’)

King III has 748 assertions not all of which are applicable to every environment. King III has therefore opted for the more flexible ‘Apply or explain’ approach to its principles as appose to King II’s ‘Comply or explain’ approach.

Some of the area’s covered in King III include:

  • Sustainability
  • Stakeholder interest
  • Board composition
  • Audit committeecomposition and duties
  • Internal Audit
  • Risk management
  • IT governance
  • Director development andperformance management
  • Remuneration, disclosure and shareholders’–votes
  • Alternate Dispute
  • Resolution (ADR)