The framework recommended by King III is principles-based and there is no ‘one size fits all’ solution. Entities are encouraged to tailor the principles of the Code as appropriate to the size, nature and complexity of their organisation. This is good news for companies in South Africa as it avoids some of the pitfalls seen in the United States where a ‘one size fits all’ approach was initially adopted. * New Companies Act and changing trends in international governance * Annual reporting to include how the company affected the economic lives of the community * Report on Corporate Social Initiatives
* organisation voluntarily monitors its own adherence to legal and ethical standards, is far preferable to having an outside * Implement sustainability reporting
* In contrast to King I and King II, King III applies to all entities regardless of the manner and form of incorporation or establishment. Principles are drafted on the basis that, if they are adhered to, any entity would have practiced good governance. Some of the new requirements introduced by King III include: * The need for an annual integrated report that focuses on the impact of the organisation in the economic, environmental and social spheres * A statement by the audit committee to the board and shareholders on the effectiveness of internal financial controls to be included in the integrated report * The consideration of the strategic role of IT and its importance from a governance perspective * The positioning of internal audit as a strategic function that conducts a risk-based internal audit and provides a written assessment of the company’s system of internal control, including internal financial controls * The governance of risk through formal risk management processes
New Companies act
New features - old act vs new act
The Act provides for a number of new features, including:
* The classification of companies into either profit or...