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Thingle Pather The South African Insurance Industry Survey 2016 | 83
Director, King IV – the new frontier
Department of Professional Practice
Tel: +27 83 704 0064 in governance for South Africa
Email: thingle.pather@kpmg.co.za
The Institute of Directors in Southern Africa and the King Committee released the
draft King IV Report on Corporate Governance for South Africa 2016 (King IV) for
public commentary on 15 March 2016. The comment period closed on 15 May 2016 and
represents phase one of the public consultation process on King IV. Phase two of the public
consultation process relates to sector supplements to the King IV Report. The official
launch of King IV is planned for 1 November 2016.
The King IV reflects developments both locally and The application regime has changed in King IV to “apply and
internationally and refines the philosophical underpinnings of explain” as opposed to “apply or explain” contained in King
King III. At first glance, draft King IV has a different look and feel III. Therefore, in terms of King IV, organisations will have to
to King III, most notably it is much shorter and contains 16 + 1 provide disclosure of the practices that have been implemented
principles compared to King III’s 75 principles. towards giving effect to each principle, whereas with regard to
King III, an explanation was only required where a principle was
The application of King IV, as with King III, is to all organisations not applied. Draft King IV provides an example of an Application
and goes a step further with the issuance of sector Register which organisations should use as a guidance for King
supplements. The concept of proportionality is introduced IV disclosure. The King IV Application Register should be posted
and allows for adaptation based on the size, resources and on the organisation’s website.
complexity of the organisation.
The five chapters of draft King IV contain principles, practices
King IV is outcomes orientated. It places accountability on the and governance outcomes that interact as follows: the
governing body to attain organisational outcomes of an ethical application of the practices give effect to the principle, and once
culture, sustainable performance that creates value, adequate the underlying principles are fully achieved then the governance
and effective control and sound stakeholder relationships. This outcome benefits are realised. The practices are organised
becomes possible through the discharge of its responsibilities to address the strategy, policy, oversight and disclosure
relating to strategic direction, approval of policy, effective responsibilities of the governing body.
oversight and disclosure. It aims to reduce the “tick box” or
compliance approach to governance.
