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Principles of Good Governance

October 5, 2017

 

There has been plenty written about poor governance in South Africa. Ranging from corrupt government officials to unethical behaviour from reputable international service providers to the state. As Directors of companies we need to be aware of our roles and responsibilities. We have prepared an extract from King IVTM for your perusal. If you feel you need further information as relates to your roles from a governance perspective, please do not hesitate to contact us.

King IVTM Principles of Good Governance 

The board of directors should:

  • Lead ethically and effectively

  • Govern ethics and establish an ethical culture

  • Ensure responsible corporate citizenship

  • Appreciate that the company’s core purpose, its risks and opportunities, strategy, business model, performance and sustainable development are all inseparable components of the value creation process

  • Ensure that reports allow stakeholders to make informed assessments about the organisation’s performance and its short, medium and long-term prospects

  • Serve as the focal point and custodian of corporate governance

  • Have the appropriate balance of knowledge, skills, experience, diversity and independence

  • Delegate within the board to promote independent judgement, and assist with the balance of power and effective discharge of duties

  • Evaluate the board’s performance and support continued improvement and effectiveness

  • Appoint and delegate to management in a way that contributes to role clarity and the effective exercise of authority and responsibilities

  • Govern risk in line with strategic objectives

  • Govern information and technology in line with strategic objectives

  • Comply with applicable laws and adopted, non-binding rules, codes and standards

  • Remunerate fairly, responsibly and transparently

  • Use assurance services and functions to enable an effective control environment which supports the integrity of information

  • Adopt a stakeholder-inclusive approach

  • Practise responsible investment which promotes good governance and the creation of value (applies to institutional investor organisations)

    
Source: The King IVTM Report on Corporate Governance for South Africa 2016, Institute of Directors S.A. For more information, see http://www.iodsa.co.za/?page=AboutKingIV”

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