Author: Jeff Buckland
Nearly nine years after the publication in November 2016 of the King IV Code on corporate governance in South Africa, a draft King V Code was published last week on 25 February 2025 by the King Committee under the auspices of the South African Institute of Directors (IoD) and is available for public comment until close of business on Friday, 4 April 2025.
King IV was published in 2016. It was aimed at among other things making the 17 principles of good corporate governance contained in King IV expressly applicable to organisations in both the private and public sector, and to both profit and non-profit organisations, including municipalities, state owned companies, non-profit organisations, SMEs, and institutional investors such as pension funds.
In addition, King IV had simplified and reduced the 75 principles of good corporate governance in King III to 17 basic principles. Currently, one of the 17 principles in King IV applies to institutional investors only, while 16 of the 17 principles apply to all organisations.
King IV also moved from an “apply the principles or explain why not” approach in King III to the “apply the principles and explain how they are being applied” approach in King IV, which “apply and explain” approach has been retained in the draft King V.
Any conscientious and ethical individual on a governing body of an organisation worth their salt who is really grappling responsibly with the realities of ethically leading, directing, organising, managing and governing an organisation, ought by now to be familiar with the concepts of ethical and effective leadership, and applying and explaining as may be applicable to their organisation the 17 basic principles of good corporate governance contained in King IV, and their achievement or not in form and substance of the four desired outcomes of good corporate governance aspired to in King IV. These individuals will also now be reviewing with professional interest the changes to King IV contained in the draft updated streamlined King V, and how these changes may impact on the corporate governance vision and aspirations of their organisation.
In the IoD’s Media Statement of 24 February 2025 announcing the availability of the draft King V Code for public comment, the King Committee confirmed that King V is a revised and streamlined update of King IV reducing the 17 principles in King IV to 12 principles in King V, and including changes to take into account:
local and global developments since 2016;
critical shifts, such as recent amendments to the Companies Act, 2008;
evolving practices in remuneration;
global developments in sustainability reporting;
the rapidly advancing technological landscape;
the need to update the guiding standards for corporate governance to ensure they remain relevant and effective;
the need to make it easier for organisations to apply the outcomes, principles and practices of good governance;
the need for a simpler and more user-friendly King V Code expressed in plain English and accessible to a wide range of stakeholders; and
the advantages of having a standardised disclosure template to assist organisations to “apply and explain” and report on the application by the organisation of the 12 principles of good corporate governance contained in King V, and demonstrate achievement or not of the four desired outcomes of good corporate governance.
In conclusion, while King V is still open for public comment until the close of business on Friday, 4 April 2025, and therefore still subject to change, governing bodies of organisations that are or ought to be aligned with the aspirations, purpose and objectives of ethical and effective leadership, applying as applicable to their organisation the 12 basic principles of good corporate governance in King V, and achieving in form and substance the four outcomes of good corporate governance as outlined in King IV and the draft King V, should if they have comments, comment on the draft King V before Friday, 4 April 2025 and in any event begin gearing up to address the changes and the requirements of the anticipated King V Code.
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