Corporate Governance

 Acts and Regulations  Common law  Sets the minimum standards  Applies to all companies  Primary legislation ◦ The Companies Act 71 of 2008 &

 The Competition Act of 1998  The Labour Relations Act of 1995  The Basic Conditions of Employment Act of 1997  The Occupational Health & Safety Act of 1993  The National Environmental management Act of 1998  The Employment Equity Act of 1998

 The Banks Act of 1993  The Short Term Insurance Act  The Long Term Insurance Act  Public Finance Management Act  Etc ……..

 Applies to all (public) companies seeking a JSE listing  JSE Listing Requirements includes compliance with King III

 Corporate Governance movement originated in UK in response to large corporate failures ◦ Cadbury Report released in 1992 ◦ Greenbury Report released in 1995 ◦ Hampel Report released in 1998

 Formed in 1992 by Institute of Directors  Chaired by Judge Mervyn King  To consider “issues of financial reporting & accountability, good practice & a code of ethical conduct for South African enterprises”

 Published 1994  Called King I or the Code  Applied to listed companies, large companies, public companies, banks, insurance companies  Set standards of governance

 Published 2002 & revised King I  Introduced concept of the “triple bottom line” ◦ Financial, social & environmental issues  (people, profits & planet)  Recommended practice for SA companies  Listed companies to comply or explain

 Published 2009 & effective from March 2010  Updated to take cognisance of 2008 Company Act and developments in corporate governance  Best practice for all business entities  No “one size fits all”  Move from “comply or explain” to “apply or explain”

 Ethical leadership and corporate citizenship  Boards and directors  Audit committees  The governance of risk  The governance of information technology (IT)  Compliance with laws, rules, codes and standards  Internal audit  Governing stakeholder relationships  Integrated reporting and disclosure