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)
Creamer Media Senior Deputy Editor
Other News This Week News
Updated 4 minutes ago Emerging markets face another wave of ratings downgrades next year, with Brazil at risk of a cut to junk and the Africa/Middle East region potentially given a 'negative outlook', Fitch Ratings' top sovereign analyst said in an interview. Depressed commodity prices...
Updated 17 minutes ago Consulting Engineers South Africa (Cesa) has appointed ITS Engineers director Lynne Pretorius as president for the next two years. “South Africa is on a dynamic trajectory that requires visionary leadership and flexibility from all stakeholders and role-players to...
Updated 2 hours 17 minutes ago African Equity Empowerment Investments (AEEI) announced on Thursday that it has completed the R125m deal to acquire a 25% plus one share stake in Saab Grintek Defence (SGD). SGD is the South African subsidiary of Swedish defence and civil security company, Saab and...
Recent Research Reports
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
This Week's Magazine
Additive manufacturing, better known as 3D printing, has the potential to completely change the relationships between individual consumers, professional designers and manufacturers. So argued Loughborough University Reader in Computer Aided Product Design Dr Ian...
Airbus Defence and Space: Military Aircraft has highlighted that its A330 Multirole Tanker Transport (MRTT) has significant commonalities with the Airbus A330-200 commercial airliner, upon which it is based. The South African Air Force (SAAF) once operated a fleet of...
Financial services provider Nedbank launched the second edition of its Carbon Footprinting Guide earlier this month, which is aimed at demystifying carbon footprint approaches and help readers grasp the main concepts of carbon measuring, monitoring, reporting and...
This year marks the thirtieth anniversary of Caterpillar’s first backhoe loader. This also coincides with the worldwide release of its latest-generation F2 series backhoe loader, which was launched at supply chain services company Barloworld Logistics’ Big Dig Day in...
A shortage of software engineers is leading to fewer information technology (IT) projects in private and public sector organisations. This also places a dampener on the economy, as IT is an integral part of business and civil service, says University of Witwatersrand...