Mar 20, 2009
King III will seek to correct unintended consequences of previous codeBack
© Reuse this
"Some of the principles had unintended consequences and we have tried to rectify this, as it has affected financial institutions, listed companies and private companies.
"Private companies were asked to comply but, because they were not specifically listed, decided not to comply.
"For example, if an entity or company does not have a risk committee, instead of complying, it will decide to explain the reason why it does not have a risk committee.
"The reality is that the process of risk management in that entity is compromised," said Engelbrecht.
The draft King III report was released in February for public comment and, once finalised, will be issued in September.
King III became necessary because of the anticipated new Companies Act and changes in international governance trends.
The seminar provided insight into the changes being introduced, including those related to the evolving role of the board, the management of modern key risks, risk-based internal audits, fundamental and affected transactions and alternative dispute resolutions.
Engelbrecht added that King III would be applicable to all entities.
"These codes are not rules. Corporate governance cannot be applied to a one-size-fits-all scenario. We decided to change the codes to include ‘apply' or ‘explain'. We want to move away from substantial compliance."
Last year, Prof Mervyn King, chairperson of the Global Reporting Initiative, said that he expected a 'revolutionary change' in the role internal auditors played in corporate governance within the next five years.
He added that King III would look specifically at whistleblowing and the role internal auditors played in managing corruption and fraud within companies.
He noted, however, that fraud and corruption could be managed through setting up codes of conduct within organisations, as well as through making use of internal auditors, external auditors and audit committees.
King further stated that many companies across the world were bigger than some governments and that companies were integral to society as many people spent more time at work than they did at home.
"Corruption has a rippling effect on thousands of people in a company that the corruptor might not know or see," commented King," adding that people wanted to have trust and confidence in a company.
"When there is corruption, the trust and confidence in the company starts waning, and, thus, the corruption must be stopped," concluded King.
Edited by: Martin Zhuwakinyu© Reuse this Comment Guidelines (150 word limit)
Other Trade News
Article contains comments
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
Forest products group Sappi has confirmed the selection of its 25 MW biomass-to-power project, to be erected at its Ngodwana mill, in Mpumalanga, as a preferred bidder under the South African government’s Renewable Energy Independent Power Producer Procurement...
Information and communications technology (ICT) distributor DCC is making Windows- and Android-operating systems tablets available through retailers and education equipment suppliers to provide school children with affordable, high-performance education tools. The...
Another cement manufacturer is set to enter the Ugandan market, raising hopes that prices will come down and spur growth in the construction industry. National Cement, a Kenyan manufacturer, has unveiled plans to invest $195-million in a new manufacturing plant in...
With growth rates exceeding that in the developed world – at an average of between 4% and 5% between 2002 and 2014 – African countries provide investors with ample reason to tap into booming consumer demand says Manufacturing Circle executive director Coenraad...
The South African Chamber of Commerce and Industry’s (Sacci’s) Business Confidence Index (BCI) decreased by 3.7 index points month-on-month to 89.1 in March.