King V Draft is open for public comment

The draft of the new version of the King Code – which positioned South Africa as a global leader in corporate governance just over three decades ago – is now available for public comment. The King V Draft is a revised and streamlined update of King IV. The King Committee and the Institute of Directors in South Africa (IoDSA) invite comments until the close of business on 4 April 2025.

“King V considers both local and global developments since King IV was launched in 2016, and incorporates critical shifts such as the recent amendments to the Companies Act, evolving practices in remuneration governance, global developments in sustainability reporting, and the rapidly advancing technological landscape,” says Ansie Ramalho, Chair of the King Committee. Corporate governance is a critical tool for strengthening public and private institutions, to the benefit of the entire economy. She says it’s therefore crucial to update the guiding standards for corporate governance to ensure they remain relevant and effective.

As another key objective, King V intends to make it easier for organisations to interpret and apply the outcomes, principles and practices of good governance. Simplifying the Code will render it more user-friendly and accessible to a wider range of stakeholders. This involved, among others, the use of plain language, streamlining content and changes to the presentation of the Code and its supporting and ancillary documents. For example, the 17 principles in King IV have been reduced to 12. Also, the use of graphics and design elements has been cut down to help reading-impaired individuals and to align the style with regulatory drafting conventions. In addition, the King V Code will be presented as a stand-alone document and no longer as part of a report with the Code and its ancillary documents accessible from a single website.

The final objective was to develop a standardised approach to the disclosure of the Code’s application to assist organisations with internal monitoring and disclosure of implementation of practices as well as to enhance accountability and comparability across different organisations. “This is helpful to regulators, shareholders and other users of reports on corporate governance,” says Parmi Natesan, CEO of the IoDSA. “However, we are also of the view that the newly established disclosure template provides organisations with the added advantage of facilitating and clarifying their disclosures on their governance practices on an apply and explain basis.”

Apart from these objectives, there are no significant deviations from King IV, adds Ramalho. Organisations that are already applying King IV should find the transition to King V relatively straightforward.

King V continues in its application beyond listed companies, to include state-owned enterprises, local government, non-profits, SMEs, and institutional investors such as pension and retirement funds and life insurers.

An open and transparent King V consultation process is important to ensure diverse input from business leaders, government and the public. Members of the public may comment in their personal capacity or on behalf of organisations, on the understanding that their comments will be published and attributed accordingly. All comments are to be submitted using the online form available on the IoDSA website, and no hard copy or late submissions will be accepted.