Define corporate governance as set out in King IV
Corporate governance is defined as the exercise of ethical and effective leadership by the governing body towards the achievement of the following governance outcomes
a. Ethical culture
b. Good performance
c. Effective control
d. Legitimacy
Explain ethical leadership
Ethical leadership is exemplified by integrity, competency, responsibility, accountability, fairness and transparency. It involves the anticipation and prevention, or otherwise, amelioration, of the negative consequences of the organization’s activities and outputs on the economy, society and environment and the capitals that it uses and affects
What are the governing body’s primary governance role and responsibilities?
- Steers and sets strategic direction with regards to both
a. the organization’s strategy, and
b. the way in which specific governance areas are to be approached, addressed and conducted - Approves policy and planning that give effect to the strategy and the set direction
- Oversees and monitors implementation and execution by management
- Ensures accountability for organizational performance by means of, among others, reporting and disclosure
What are the objectives of King IV?
- To promote corporate governance as integral to running an organization and delivering governance outcomes such as an ethical culture, good performance, effective control and legitimacy
- To broaden the acceptance of the King IV by making it accessible and fit for implementation across a variety of sectors and organizational types
- To reinforce corporate governance as a holistic and interrelated set of arrangements to be understood and implemented in an integrated manner
- To encourage transparent and meaningful reporting to stakeholders
- To present corporate governance as concerned with not only structure and process, but also with an ethical consciousness and conduct
